The plan


Now here’s an interesting pattern for you.

Alberta is wallowing in debt and apparently pissed away the oil boom. Sigh. Was it only a year ago crude was $140 a can?  Do I smell a retail sales tax on the wind, or did your horse do that?

BC is wallowing in debt, and has apparently pissed away the Olympics boom. Hard to believe the reversal in fortunes – now a carbon tax, soon the HST – and a massive tax on citizens in the form of speculative house prices.

Ontario is wallowing in debt, and pissed away its headstart as the financial and manufacturing hub of the nation. Now it’s in record deficit and also about to jump citizens with that honking new sales tax.

And, yeah, Canada’s wallowing in debt. New borrowings this year alone will be north of $55 billion, a record. Hard to believe a surplus of $15 billion in 2006 morphed into a deficit of $55 billion in 2009. The consequences of that are obvious, despite the fact nobody’s paying attention.

Meanwhile oil prices have solidly entrenched above $70 – basically doubling in a matter of months – and the banks are raking it in again. RBC profits zipped 24% higher, which proves some people have figured out how to make billions from an economy in recession with 1.5 million people unemployed and interest rates in the dirt.

At the same time, our dollar is rising along with oil, and the central bank is all but powerless to stop it (any immediate rise in interest rates will send the loonie flying to par). That means more serious troubles for manufacturing, tourism and natural resources.

I guess that leaves the nation in the hands of bankers and realtors. Praise be.

While this pattern continues, most folks are following the politicians – borrowing and spending. But unlike governments, they can’t issue bonds, tax their neighbours, increase the money supply or goose inflation to relieve their debts. In fact, they just get squeezed. Higher interest rates over the coming years make existing debts harder to pay, while the underlying assets depreciate to nothing (cars) or slowly erode (real estate). Some plan.

But this is the price of financial illiteracy.

Case in point is Kate. You might have seen her posting here a day or two ago, trying to make the argument for buying a house now at low mortgage rates instead of later when prices fall, at higher rates. As proof she offered amortization tables showing payments on a 3% mortgage over 25 years to buy a $400,000 house with $50K down were less than the total cost of a mortgage at 10% over 25 years on a home valued 30% less.

What she forgot was that a 3% rate is VRM, and will be higher by this time next year; that mortgage terms are renegotiated at least every five years; that rates could triple and still be lower than the historic norm; that house prices will fall as higher rates kill demand; that buying at the top of the cycle could easily result in negative equity; and that buying later with a lower debt profile – even at a higher rate – is the far less reckless path.

Sadly, Kate don’t care. And neither do most buyers, especially the newbies. Long ams have now made paying back mortgage money irrelevant. Instead, the idea is to rent capital to get what you want – real estate. As prices rise, you just sell, pay the rented capital back, and keep the profit. It’s exactly the strategy that a few million subprime mortgage borrowers in the US did so well with…

So, here’s the point of me typing these 700 words: When I wrote ‘Greater Fool‘ and started this blog 17 months ago I had big doubts about the direction of the economy, and the momentum of the housing market. But at least almost every government in Canada was in surplus.

When I published ‘After the Crash’ seven months ago, I was seriously worried about a deflationary spiral. But at least the feds were in the black.

When I finish this and go for a midnight ride, it’s a new game. More government debt than ever before, and no roadmap out. A personal borrowing binge, and no grasp of the consequences.

Enough to make a boy want to stuff his saddlebags with cash, head to southern Cal and vultch. At least their bomb’s already gone off.

But I’d miss you. You too, Kate.


#1 Michael on 08.27.09 at 11:15 pm

Poor Kate.

In other news…I’m still trying to decide whether to list with a Realtor or stay put.

Damn you Kelowna RE.

Rent and head to Thailand? I think so.

#2 squidly77 on 08.27.09 at 11:20 pm

its kinda funny and kinda sad just how many people will have been wiped out from the housing bubble

i say funny because fools thought that they would become rich..and its sad that ordinary families have been sucked in by the realtor hype

its enjoy watching realtors go broke
and its sad watching families getting evicted
and its sad watching seniors and students unable to pay even the basic rent

but in the end
when all the madness is over and we are left with massive and i mean massive debts everything will return to normal..and recovery will begin
in the end everything returns to its long term median price values always

the above link shows 4 charts as proof that reality is returning and that the sun will shine again

#3 My_view on 08.27.09 at 11:32 pm

“At the same time, our dollar is rising along with oil, and the central bank is all but powerless to stop it”

What if the BoC printed a heap more $?

#4 Eduardo on 08.27.09 at 11:37 pm

Yeah Garth, Alberta is just wallowing in debt… all zero of it before this year.

We also have a 14 billion $ Heritage fund.

We also get pillaged for all our money in good times via transfer payments. We probably still won’t get anything this year.

‘Before this year’ are the operative words. And kiss that fund goodbye. — Garth

#5 Eduardo on 08.27.09 at 11:45 pm

Alberta also has 18 billion in short term savings… yeah we pissed away everything all right… except for 32 billion between the Heritage fund and short term savings. All of a sudden a 6 billion deficit doesnt sound like the end of the world with NG at 17 year lows. You love talking about returns to trendlines and oil at 100.


#6 Kelly McMae on 08.27.09 at 11:46 pm

You paint an interesting picture of the conundrum that the BOC finds itself in. Makes me wary to do anything with my cash, as I lack the hutzspa to jump into equities. You’re scenario makes me think that low rates will be around for quite awhile, giving even more fuel to the reckless real estate market. I’m thinking that I’ll continue paying down debt, and hoarding cash. Perhaps when the time is right I’ll benefit from either lower RE prices or higher interest savings rates.

On the Victoria RE front people are consistently paying above asking for places that pretty much suck. This goes for SFD and apartments, though I’m only tracking properties under 500K, as I do fully understand my proletariate placement in the pecking order. I’d be curious to find out what the rich and wannabe rich are doing.

#7 Typhoon on 08.27.09 at 11:51 pm

I completely agree with your real estate discussion, but you’ve got the bank thing wrong. The reason banks are doing so well here in Canada and didn’t go through the devastation the banks in the US went through is because of the mark to market rule. About 6 months before the markets crapped out worldwide Canada allowed banks to keep their loans on their books at the historical costs that they issued them at. Previously they had to mark to market these loans to the lesser of the fair value or net realizable value (as a result of future expected income streams). This allowed a bunch of soon-to-be bad loans to continue to be recognized at cost values and not written down to net realizable value (effectively realizing the unrealized loss now). Thus the banks are posting earnings that are, at best, using deceitful accounting policies that they have just recently been allowed to do. I think they spoke to our Government in advance of this and knew darn well that they were about to implode so the government did all it could do to fix the problem… simple.. just change the accounting policies.

Thank god they still have to record the losses once they are realized (once sold). The effect of this is to have lower earnings over time as the loans mature and have to be realized. This spells doom for bank earnings over the next 5 years or so that the average mortgage/loan is made.

#8 Crash on 08.27.09 at 11:51 pm

I’ve come to the conclusion that everybody running the economic show and the various governments in general are incompetent. Unfortunately, we all pay the price.

#9 roial1 on 08.28.09 at 12:00 am

This column shows that others see it like Garth does independently. And a world apart.

#10 Shawn Allen on 08.28.09 at 12:03 am

Garth said:

the underlying assets depreciate to nothing (cars) or slowly erode (real estate).

And that is correct, houses get old and need upkeep.

(We bought in ’95 at $135k, a 1982 built house. since then we paid that off and also spent about the same in renovations, cosmetic renovations and upkeep, not structural.)

Why would we expect the price of a rotting away asset to rise ever upward?

Why should your be an investment?

It gives you rent-free living but replaces that with the cost to borrow money or forgone investment income on that equity.

A house in fact is a consumption item, like a car, food clothing…

Those other consumption items are not investments they are expenses.

So too is a house, an expense, not an investment.

Even if you bought at $100k and now its wortg $500k, where is the gain when if you sell, you need to buy another one which will now cost $500k instead of a $100k.

House prices in the U.S. have crashed. In Canda not so much. Me thinks we will see some drop, becasue we had the bubble and we need to have the crash to cleanse things.

#11 Kate on 08.28.09 at 12:07 am

Wow! The entire post is about me! That’s an honor! If I keep writing nonsense, will you devote your posts to me, at least once a week?

Anyway, I didn’t try to prove anything. I do not even have an opinion;) All I do for living is I read your blog every evening;) Actually no, I did something.

We wanted to buy a house in Coquitlam, BC last year (first time home buyers) but stopped ’cause I found your blog and it supported my ideas of housing inaffordability. The idea that the RE could drop even… in Vancouver (whispering) seemed attractive, so we didn’t buy and I keep absorbing your ideas and arguments. This is what I did. It is just that I was under impression that you projected the more drastic price fall and 15-20% doesn’t look so dramatic. I know, I know this is our downpayment and it is still big but…

And I care. I do.

#12 Alberta_Teacher on 08.28.09 at 12:09 am

I’m a high school teacher in Alberta. I remember a few years back, it was difficult to keep some of the seats filled. A lot of students quit school to go ‘up north’ to work on the rigs. I told them to finish school as this boom won’t last. They laughed at me. Called me ‘negative’. I remember those days not too long ago.

– People were making money hand over fist in Alberta. Not just execs but high school drop outs.
– Almost every store had a ‘help wanted’ sign hung out front. Some stores just took theirs down because the positions would just have to go unfilled.
– Ferraris and Lambo’s didn’t turn heads in Calgary. Just too many of them. Had to build a Bentley dealership to pique people’s interest.
– Everyone had a get rich plan or scheme.
– Total employee market. (ie. if you were late more than three times IN A WEEK at co-op, you got terminated. It would clear at the start of each week. Ie.2 Superstore would pay you 1000 cash if you stayed at the job for over half a year. etc.
– Rents went up and up some more. Many apartments kicked tenants out and converted the suites into condos.
– Cranes. Everywhere. Cranes brought in from Europe because there was an insane demand to grow.
– Stampede parties with money to burn.
– Mulit-million dollar homes springing up. (ie. Bearspaw, Elbow Valley Estates.
– Kids dropping out of school.
– Thousands of ‘temporary workers’ flown in from overseas.
– Bidding wars on houses. On labor. On land. On a head of cabbage.
– Gold diggers.

It’s quieter now. A lot of the arrogance is gone. Alberta is without a doubt the cocaine junkie of Canada going in and out of rehab every decade. How long until it tries hitting the pipe again?

#13 Joseph on 08.28.09 at 12:26 am

Interesting to note that Gerald Celente of Trends Analysis research is now pushing back his call for the Greatest Depression to take place in the USA by another few years. He now states that the economy will not start to unravel until all of the bailout money injected into the economy has run its course, seriously indebting the USA to even greater levels, making the US economy that much more susceptible to the next economic downturn, which is far more likely to be fatal. What happens to Canadian real estate in the interim if this is the case?

#14 Aizlynne on 08.28.09 at 12:29 am

Sounds like a Liberal in Conservative clothes to me Garth.

Personally, I would like to get rid of parties and elect individuals as is done at the local level.

Most politicians have forgotten that they are PUBLIC SERVANTS … emphasis on the SERVANT.

#15 Nostradamus Le Mad Vlad on 08.28.09 at 12:46 am

“BC is wallowing in debt, . . .” — and are shutting down social programs left, right and centre. Winter will be a very good indicator of where this province is headed.

“. . . despite the fact nobody’s paying attention. . . . oil prices have solidly entrenched above $70 – basically doubling in a matter of months . . .”

See link below for gas shortages. If nobody’s paying attention, then who is running the country? Oh, the NWO!

“. . . his saddlebags with cash, head to southern Cal and vultch.”

Whaddabout “Blazing Saddle[bag]s With Cash” and stay in Canuckville? Our loonie is almost as strong as their loonie!
Keeping in eontext with the “October Surprise” of H1N1, this is additional. —
Canada is mentioned in this article about energy (quote below). —
“First, China warned us to not protect our industries or stop the flood of imports pouring into the US. Now, Saudi Arabia warns us to not even think of trying for energy independence. . . . And Canada is set to expand gas production.”
Further to Iran, Iraq and Israel. —
The second sentence of the first para. is not for the faint-of-heart; comments at end are also good. —
Probably goes with the link before re: Obama and the NWO. —
“. . . the World Trade Center and Pentagon were attacked in 2001, the Bush/Cheney administration, which had already planned to overthrow the government in Iraq, launched an attack on Afghanistan, . . .”

And is this the lead-in to another US (and possibly Cdn.) draft? It would shrink the unemployment totals. —

“. . . state leaders opposed to a Pentagon proposal involving control of how part-time military troops are used in any state.”

The planet hasn’t finnished the first downturn yet! —

#16 kc on 08.28.09 at 12:50 am

What poverty and budget cuts/deficits are doing to the people of the USA.

Growing Poverty and Despair in America

a lengthy report on july/august US data.

Stock Market Rally Engineered by the Government

#17 Happy Renter in North Van on 08.28.09 at 1:30 am

Kate is one of those great linear thinkers who contributes, in her own small way, to every great economic disaster… “Things in the future will be a linear function of the past…”

Interest rates will keep on going down in the future, because they have in the past and real estate prices will continue to go up for the same reason…

Reversion to the mean is as inevitable as death and taxes…

#18 Barb .. a reader in Calgary on 08.28.09 at 1:41 am

“But I’d miss you”

We’d miss you too, Garth. Thanks for thinking of us.

(Do you have to ride that thing at night? What about the neighbours?)

#19 Munch on 08.28.09 at 2:19 am

Brilliant Garth, brilliant!

No, really!

Great stuff, and you keep it up day after day after day!

You’re a better man than me!

You are providing a fantastic (free) service!

Thanks again


#20 Sam Mcboldon on 08.28.09 at 6:25 am

Japan unemployment hits record high

#21 robert on 08.28.09 at 6:36 am

Higher interest rates and taxes = large brake on consumer spending. Not to mention wages hardly seem to be rising. If ordinary folks (non rentiers) can only afford the essentials a lot of businesses will be in trouble. Didn’t the banks extend loans to a lot of these businesses?

On banks’ ability to make money in a recession/depression I think more time is required before declaring victory. Let’s see how well they do when the stock market goes against them. Oh wait, I forget, they’ll all be shrewdly shorting their own shares.

#22 ca on 08.28.09 at 6:48 am

Garth —

You write that “When I published ‘After the Crash’ seven months ago, I was seriously worried about a deflationary spiral.” Do you think we are still headed there in the short to intermediate term?

#23 Samantha on 08.28.09 at 6:49 am

The fiscal pas des deux danced by government and our citizens with debt cannot continue. The debt has become too heavy and difficult to carry. Someone will fall, quite ungracefully, upon the floor and this dance will end in a mess.

There is too much reactionary thinking on both sides, government and citizens. Common sense (shared wisdom) has been displaced by a linear approach and formulated responses.

Despite economics as a field of study, quotation, and source of debate between schools of economic thought, when I think of the word ‘economics’, it brings to mind thrift, saving money, time and motion, and unfortunately, the ghost of home economics class past where we were forced to cook and eat the most unappetizing tapioca pudding I have ever ingested. But, that pudding issue was easy to solve. I just never cooked nor ate the stuff again.

We need fewer economists and lawyers in government and instead, more engineers and business people if we want to construct a way out of this mess. Practical people who can deal with probabilities and build sensible solutions. People who ask of lot of questions that start with ‘why’ and ‘why not’. People who can actually make a plan without the incessant need for costly studies and statistical data that merely complicate the obvious and delay the solution.

Bailing out a leaky boat with a leaky bucket and throwing the bailed water overboard is a fruitless exercise. It simply slows down the inevitable. That is my perception of what is taking place.

We know (again common sense = shared knowledge) that home prices have outpaced earnings. Reliance on two incomes to purchase has become ‘normal’ in the same way that buying a grossly over priced home without a substantial down payment and income to pay for it now implies long term leasing. Expectations have shifted and people are willing to pay more and settle for less in return.

Affordable housing is an issue that has haunted Canada for far too long. Look at average earnings in this Country. Young people, single parent homes, seniors and people with disabilities all need a safe, decent place to live. Is it so hard to just build the damn housing? Oh no, we need another study, more research, more committees and of course lots of debate before yet another half-baked measure is proffered, if at all.

Don’t like the high price of groceries? Stop supporting big box stores and buy from alternate sources. It takes effort to source alternate suppliers for food, but think of the impact if all of us did this. Even if it isn’t possible to procure every single item from an alternate source, it would still make a substantial impact on the corporate monopolistic stranglehold over our food supply and its’ cost.

Don’t like the high price of houses? Stop buying them. Rent and send a message to the government, media, realtors, banks and anyone else involved in that market that you want to actually buy a home and enjoy the experience of living in it while you are paying off the mortgage.

In this pas des deux, we are the other party who will be hurt by this foolishness. We can choose to continue to follow along or we can choose to lead, and change the dance and the outcome.

#24 Who Is Your Daddy? on 08.28.09 at 6:52 am

Condo implosion in the Glebe, Ottawa:

Buyers forced to renegotiate contracts after developer goes kaput (some bought 5 years ago and ‘poof’, there goes their equity):
I hear Brad Lamb makes a mean Squirrel stew.

#25 JO on 08.28.09 at 7:02 am

I get “the rates are so low you should buy now, who cares if prices drop 20 % if rates go up” nonsense all the time. In fact most of the time, it is better to wait out a significant price drop and buy then even if rates rise to a reasonable level.

Many of these greedy first timers are buying based on this fallacy. Tragically, they will come to realize the mistake at renewal time. Imagine, having bought a house at 4 % fixed or very low ARM and having the renewal letter come in. Rates go to 6.5 % (modest, but notable increase and totally doable at some point in the next 1-2 years – inflation or deflation). Payment jumps 30-40 %. Ooops, that massive debt now needs an extra 400-600 / month. Want to sell ? Good luck. So do many of your idiot neighbours. Go ahead, but be ready to have 50-70K in cash to payoff the bank on the difference between the after commission sale price and your mortgage.

Or, if you’re less lucky, your job disappears, and you face the prospect of having to keep paying large mortgage payments, or sell at a major loss, or more likely, letting the home go into POS and then getting sued by the bank for the difference. What a plan, buy a massively inflated house on debt and wiping out whatever meagre savings you had before, then either lose your job and/or renew in a year or two at much higher rates, then be forced to sell the home well below your mortgage and/or get sued by a bank while being jobless and on EI, then be bankrupt.

All the while, you could have rented for a very decent rate in most areas of the country, kept your measly 20-30 K in the bank, had no worries about upkeep and routine homeowner headaches, and moved if you needed to for a new job futher away. If you lose your job, not so much to worry about. Just use your life savings to buy food/pay rent for much longer than if you’re a homeowner. Oh, and of course, you will buy a home for maybe 30-40 % less in 3 yrs or so.

After all, humans are rational, aren’t they ?

#26 dd on 08.28.09 at 7:48 am

“Alberta is wallowing in debt and apparently pissed away the oil boom. Sigh. Was it only a year ago crude was $140 a can? Do I smell a retail sales tax on the wind, or did your horse do that?”

You easterners know little about the west. Alberta depends on Natural Gas to feed its coppers not oil.

Would that be the $2 gas? BTW, it’s ‘coffers,’ as in ‘choke.’ — Garth

#27 Les on 08.28.09 at 7:50 am

The ‘tragedy’ resulting from these economic and financial circumstances may be the many who think they are/were truly part of the ‘middle class’ financially but are now sliding backwards and mostly unable to do anything to prevent it.

Your comments Garth?


#28 dd on 08.28.09 at 7:52 am

“our dollar is rising along with oil, and the central bank is all but powerless to stop it”

The BOC is just warming up the printing presses as we speak. They intent to fload the market with the CDN beaver and lower the buck.

#29 dd on 08.28.09 at 7:59 am

#4 Eduardo

“Before this year’ are the operative words. And kiss that fund goodbye. — Garth”

There is a “rainly day fund” that is being used for the next two years that will soften this downturn. However it is going to be difficult no matter which way you look at it.

The Heri fund is not for deficits. Only the interest is used to fund projects.

#30 Finanzkrise on 08.28.09 at 8:00 am

Garth, you’ve probably seen this one, but just in case:

According to the G&M, some freshman university students are supposedly buying condos instead of “wasting hundreds of dollars on residence,” and “hope to turn a profit” while going to school. Sounds more like a dangerous double whammy of long-term student & mortgage debt enslavement.

Meanwhile, back to the real world, sobering deflation and jobless numbers in Japan:

#31 dd on 08.28.09 at 8:06 am

#22 ca

“I was seriously worried about a deflationary spiral.”

Read David Rosenberg. Deflation still is the main concern going forward for the next couple of years.

#32 Jonathan on 08.28.09 at 8:40 am

HAHA 30% less.

If interest rates went up to 10% home prices would fall well over 50%. A 15% fall in home prices right now means that 80% of all home buyers from the past three years would go into negative equity.

At 10% your mortgage payments almost triple. Then factor in the effect of negative equity, as home owners are locked into their homes and defaults skyrocket. A 50% fall in home prices would be very optimistic given the record home prices and economic fundamentals of today.

#33 artisuseless on 08.28.09 at 8:41 am

What I really loathe most as I watch this train wreck that will occur at some point in the future while these greater fools jump aboard the debt train is that someone financially responsible, who has no debt, who has some savings and below median income will be the one who has to pay for all this – whether it be in higher taxes or inflation later on. Morans like these are basically pointing a gun at the rest of us and forcing us to jump on board. Unless the bankruptcy laws & CMHC regs are changed pronto.

Why should people smart enough to see this all coming (no, I just lived with in my means – I’m not someone who offloaded an 800K house in Vancouver and is sitting on the cash) be punished along with these idiots

#34 The 'VULTURE' on 08.28.09 at 8:43 am

House For Sale But Who Is Buying??

Peter Wiener:

You asked a couple of blogs ago as to where I was looking at investment real-estate deals. Sorry, I could not respond as I became tied up in work. Anywhere in Canada is fair game…some of the properties on interest that I have had my team look at (I am called a vulture for a reason!) are truly disgusting!

One guy had, as I do recall, upwards 4 mortgages on his run down property. He barricaded himself in his home by parking one of his pickup trucks sideways in his drive way. There was a workbench out on the front lawn, rusted car parts, children’s broken toys, a dissembled bar-b-q, women’s underwear and panties (my agent laughed her head off on that one…must have been a terrible fight), a broken TV and plenty of litter.

The windows were barricaded on the ground level which I believe is illegal to do (anti-organized crime legislation) and all the blinds were down. Spooky place to my agent but a possible dollar maker to the Vulture! The funny thing is: how come they had a big screen TV in their living room, tons of toys for their 8 kids, video games, DVD’s, CD’s, leather couch, cell phones, microwave, stainless steel appliances yet no one except the father works; when he has work (construction)????

The man was in the process of power of sale. He followed us through the house all the while swearing at my agent and myself (the most vile and wicked words) and said that he would rather burn the place down then lose the home (really scary dude). Luckily, nothing happened and we left the property unharmed but visibly shaken and never to return. I may be a Vulture but I am sure not a masochist!

All of this occurred in a very respectable middle class neighborhood! The house looked like such a blight spot in an otherwise beautiful area. Whatever banks (mortgage companies) gave this guy the money were crazy. Don’t believe the MSM. Subprime loans happen here in Canada as well, not just the states. I have seen several properties of interest like this but this one was unbelievable. I even have some street shots of the front yard taken on municipal property.

One last thing;

RBC profit up it seems….Maybe be giving me the 5 basis points on my RE investment deposit money and then amplifying it many times over for mortgages, credit cards (18.5-24.5%!) etc. Yes, the banks are definitely were the money is….

#35 Justin on 08.28.09 at 8:51 am

Alberta’s in debt?

Wow…that must have been some kind of party goin’ on out there over the last decade! In truth it’s embarrasing and the day will soon come when young Albertans will not forgive their forebears for their lack of financial discretion. Same goes for Ontario and B.C…..Canada in general.

Saddest part is we are just now entering into the financial twilight of the Western World and a very reduced standard of living.

#36 robert on 08.28.09 at 8:55 am

#10 Shawn Allen
At last, someone who intuits (or maybe has even read) the 232 year old wisdom of Adam Smith.

“A dwelling-house, as such, contributes nothing to the revenue of its inhabitant. If it is lett (sic) to a tenant for rent, as the house itself can produce nothing, the tenant must always pay the rent out of some other revenue.” Therefore Smith concluded that although a house can make money for its owner if it is rented, “the revenue of the whole body of the people can never be in the smallest degree increased by it.” (‘The Wealth of Nations’, Glasgow Edition, pg281)

Parts of this book are a tough slog but I highly recommend the chapters on money, commodities, labour and stock. Hs views on the effects of government meddling are also quite instructive. Interestingly the “invisible hand” quote appears only once in passing towards the middle of the book. A good blog to read on the relevancy of Adam Smith and the rampant misinterpretation of his work is “Adam Smith’s Lost Legacy.”

#37 miketheengineer on 08.28.09 at 8:57 am

#23 Samantha

Growing up Italian, meant we canned everything. Peaches, pears, pickles, tomatoes, etc. Dad had a huge garden. We grew up in a modest home, in a safe area. We rarely went on vacation or ate out.

Mom and Dad taught me how to shop. Wait for the sale price. Never buy it at regular price, unless you have to, ie bread and milk. Every store has something on sale that week. Buy the sale item and work with it and plan your meals around it.

My parents would go to 4 or 5 different stores to buy stuff, and all of it on sale. DON’T BUY REGULAR PRICED STUFF. We used to shop at the farmer’s market for the produce to can. My parents would only buy the prime peaches, pickles, tomatoes, sometimes paying a bit more for the quality of the product.

When you see stuff on sale, stock up, and keep a stock in your fruit cellar….this is the only way to do. Paying more for stuff is crazy.

#38 Herb on 08.28.09 at 8:57 am

Your evil twin in the Senate! Don’t know what that does to you, Garth, but it sure rots my socks.

Good thing politics does not have anything to do with anything, such as the economy or real estate.

#39 Albertaboy on 08.28.09 at 9:10 am

Excellent post Garth – I went back and re-read it just to absorb all the points touched.

AB Teacher nailed it on the head. I too remember places like 7-11 offering signing bonuses and kids bragging they could do as they felt because jobs were a dime a dozen. I had one acquaintance whom I had met a couple years ago (a philosophy major no less) ask me to find him work in Oil & Gas as he wanted to do something different. Not only did I get him a company vehicle and a $25/hr job with no skill or experience, but he was offered the prospect of gaining a free education.

Mr. Know-it-all decided the work was beneath him & quit the job I had pulled strings to get him. He then advised me by email that I should find him something more suited to his liking. I’m sure by now he’s still living at home and still unemployed.

As far as oil prices go – while they will continue to climb natural gas won’t for the forseeable future. As the majority of AB’s royalty revenues are based on NG – we’re screwed and don’t even know it. Over the past two years, the US has managed to triple their reserves of NGL due to new technology. They now have over 750bcf of known reserves. Goodbye royalties!

#40 Al on 08.28.09 at 9:18 am

#7 Typhoon,

I think you might be mistaken regarding mark to market not being used here. I did a search and found a reference that Canada decided to stay with mark to market when the US dropped it. It’s a Financial Post article from 7 Apr 09. Unless things have changed since then, we still use mark to market.

#41 PTDBD on 08.28.09 at 9:27 am

Yogic Flying & Canadian Budgets

Headlines proclaim that Harper believes that our deficit will be eliminated once the recession is finished without tax increases or cutbacks. That’s kind of miraculous don’t you think? It’s equivalent to the YesWeCan levitations of Yogic flyers.

He also said that he wanted an elected Senate. Yesterday he appointed 9 new senators at a salary of $132,000 and staff budget of $151,000.

Tinkerbell lives…Canada dies. (sigh)

#42 Calgary_rip_off on 08.28.09 at 9:29 am

“It’s quieter now. A lot of the arrogance is gone. Alberta is without a doubt the cocaine junkie of Canada going in and out of rehab every decade. How long until it tries hitting the pipe again?”

What a load. Tell that to the mls site with the overpriced shacks in Calgary.

#43 lili on 08.28.09 at 9:35 am


A couple things. At this point, I would be interested to see if you can produce a short book that discusses first time homebuyers in this real estate cycle with some historical context. A couple of case studies would be interesting, say from the last cyclical boom and now. In the US, home price recovery is already taking place driven by first time buyers; they are indeed a powerful force (and can be your undoing, prediction-wise).

Such a study would be interesting and informative if it can be a little more fact-based also. Many of your books throw quotes, pseudo-facts and charts around willy nilly, as journalists do, but miss adding some due academic sobriety to acknowledge the interplay of underlying issues and uncertainty in the outcomes.

Also, educating working people often consists of showing the merit of taking a measured approach. i.e. don’t tell people things like the DOW could go to 40,000. Although you personally can shoulder the risk of large bets, if you really care about Canadians, you should not demand that we all abandon prudence for a speculative hot deal. You do this quite often, forgetting or just plain neglecting your own good fortune (financial and otherwise).

Hmm… if that’s not compelling then how about this: We need less Harry Dent, and more Pierre Burton.

Additionally, the whole “I predicted a 10% drop, it happened, I’m right, nuff said” thing has got to go. Anyone in my area that gambled and sold out of their real estate (a.k.a. their HOME… you know… where the heart is?) is kicking themselves HARD in the butt right now, and has no idea what to do now.

Also, when you avoid dogma (so often couched in run-on sentences starting with “In a time when….”), you do offer an interesting and enlightening perspective… for a rich dude. And all pot shots aside, I’m definitely here for a reason; there is interesting stuff being discussed.

Anyway, just an idea (the first-time homebuyer study). And hey!, I’m REALLY just someone with an opinion.

#44 Concessionman on 08.28.09 at 9:42 am

Once people realise that a house is no longer a way to make a living and is a place to live, we’ll all be a lot better off. Too many youngins have head the stories from thier parents/elders of buying a house, flip it in 3-5 years, put a few hundred K in your pocket, do it again. Looks like thats all over (for the next decade or so anyhow probably). The only ones that should be buying now are the ones that just want the white picket fence and can afford it. All the others are going to lose dearly…

#45 Devil's Advocate on 08.28.09 at 9:44 am

I believe what Garth is saying all along is that a real estate price correction of 15 to 20% has the highest probability of occurring. Certainly it could be a whole lot graver, it could also be less. The highest probability rests, and I believe to a great degree, with a price correction in the 15 to 20% range. Consequently any prudent person would take precaution to hedge against such a price correction. This does not mean that you should also hedge against a catastrophic 50% price correction which is not likely to happen, possible but most unlikely.

Many who frequent this site seem hopeful of a 50% decline in property values. Such a dramatic decline would afford them opportunity to buy real estate themselves which they clearly currently do not own. Such vultures are speculatively gambling no less than he who bought a presale condo to flip late last year after the peak had come and gone – a classic greater fool maneuver. Might get lucky but the odds are against it.

The dilemma is; many who foresee a “need based move” in the not too distant future are facing an obvious opportunity to sell now, at the peak of the market, and buying again when prices hit the floor (what ever and when ever that might be). If your home today has a market value of $500,000 and the home you want to change to has a similar $500,000 market value, selling today for $500,000 and waiting for that probable 17.5% decrease in RE values will net you an $87,500 savings when you buy again that then more suitable property for $412,500.

The problem is; not everyone can do this… not every Babyboomer who wants to downsize to a nice view walkout rancher on the foothills of Kelowna overlooking the lake can sell their McMansion at the same time hold and wait for prices to fall. Many Boomers are 5 years out from such a move. What, are they all going to rent? Who are they going to sell their McMansion to? There are not enough Echo-Boomers moving up the demographic ladder which is the real crux of this current economic fiasco in the first place.

So many will sit put… live their lives in the home they raised their family in… host their daughters wedding reception dinner… host Christmas dinner with the kids and their children visiting Mom and Dad, Grandma and Grandpa… and all that “HOME” has come to be. Yes Grandma and Grandpa will loose something in the order of 80 grand in equity. Yes, the demand for that walkout view rancher in the foothills overlooking the lake will keep its price relatively high just as it has over the past 5 years. Mom and Dad (Grandma and Grandpa) will stay put in that lushly landscaped white Cape Cod with ample room for the kids and grandkids to visit and stay a few days. The economic world will not end as we know it… it will plug along just fine… provided we don’t see much more than the most probable 15 to 20% decline in RE. More than that will be an indication of something quite serious for which you will want to hold onto your hats. But if you preoccupy yourself with such unlikely events you might want to avoid crossing the street… just stay safe at home.

#46 DaleFromCalgary on 08.28.09 at 9:45 am

“Alberta is wallowing in debt and apparently pissed away the oil boom. Sigh. Was it only a year ago crude was $140 a can?”

As others have mentioned, Alberta depends on natural gas for revenues, not oil. Conventional oil production is one-third what it was in 1976 despite three times as many producing wells (data at Most oilsands pay very little in royalties due to start-up exemptions.

” Do I smell a retail sales tax on the wind, or did your horse do that?”

That would be political suicide for any party in Alberta, and it is not on the radar screen. The deficit is currently being made up from the Heritage Trust Fund, so it is not actual debt like Ontario. The problem is over-spending by the government during the boom years, but they can’t cut it back too much now because it has become stimulus spending.

#47 Wealthy Renter on 08.28.09 at 9:46 am

My parents would go to 4 or 5 different stores to buy stuff, and all of it on sale. DON’T BUY REGULAR PRICED STUFF. We used to shop at the farmer’s market for the produce to can.


I couldn’t help but smile at your post because my parents were the exact same way! My parents are now very well off in retirement, but my dad still shops at five stores each week. He always says to me, “Son, you realize your mom and I wouldn’t eat as well as we do if I only shopped at Loblaws.”

I always had a roof over my head and good food, but my parents never gave me a penny after I turned 14, nor a penny towards my university education. I would have been naked in grade nine had I not bought my own clothes with my car wash job.

What a marked difference our parents were from the parents described in the link just posted by Finanzkrise. There has been a marked change in our lifetimes. There is no fear of debt, and high tolerance for financial speculation.

Hope the job search is going okay.

#48 pez on 08.28.09 at 9:48 am

When hostesses at Cactus Club are telling me it’s a good time to get into the RE market it’s officially not a good time to get into the RE market.

#49 Boombust on 08.28.09 at 9:48 am

What I find interesting here in Lotus Land, is that people never learned anything from the price “dip” we saw last fall.

They have that glazed look in their eyes. Again.

#50 lili on 08.28.09 at 9:53 am

#37 miketheengineer: “Paying more for stuff is crazy.”

All you have illustrated in your post is that you and your parents maintained the immigrant mindset (which I shared for a long while) to suffer and suffer to achieve an ounce of upward mobility/stability.

You can not save pennies on groceries to achieve a firm middle class status. You must work in a “certified” profession, which is basically anything the elite have placed their limited trust in for the moment.
Engineering was one of these professions, financial engineering is more recent, and may have legs still.

Paying more for stuff is not crazy if, in aggregate, people are able to support sustainable patterns of consumption and standards of living. Case in point, taxes. We used to have a measure of social democracy in Canada when we taxed more progressively, and it was worth the cost, in my view.

Be careful when you decide to become a market mercenary, because it is a game that we all lose. Education, community and healthy living are all paramount.

#51 Live Within Your Means on 08.28.09 at 10:18 am

#10 Shawn

Even if you bought at $100k and now its wortg $500k, where is the gain when if you sell, you need to buy another one which will now cost $500k instead of a $100k.

So true. We have, at times, actually thought of selling and moving into a smaller, newer place which, normally, requires less maintenance. But, we’d probably end up paying the same price for a less well built place. And new home warranties are a crap shoot. Better the devil you know ……. And where would hubby store and work on two of his loves – old BMW bikes :-). Plus, we still love the area we live in. When he retires in 9 years it might be a different story.

#52 Denis on 08.28.09 at 10:19 am

Canada’s current account deficit widens

Our exports are taking a real hit … That means our REAL economy is shrinking. Means less people buying our goods which leads to less people needed to make said goods = Higher Unemployment. Yet, the markets keep going up (better than expected earnings which doesn’t necessarily translate to REAL growth in corporate earnings!) and the RE Markets are being fueled by cheap money.

It’s the REAL economy, Stupid! ( Focus on it!

#53 Small Business on 08.28.09 at 10:24 am

I’m from Alberta.

I do not have a problem with my province going into the red a little this year.

In Edmonton we have infrastructure construction progressing on our major ring road in addition to all the other desperately needed major projects currently underway.

I prefer that we spend money now while labor is cheaper.

If we have a severe downturn — it won’t bother me. I was living before the boom, I lived during the boom, and I will be fine after it.

In fact, the boom has hurt my generation. Unless you have a rich uncle you are stuck with being house poor if you want a habitat to call you own.

#54 Cash is King on 08.28.09 at 10:28 am

Gov’t of California Yard Sale

In an effort to close the gap of thier multi-billion dollar budget gap the state of california is having a garage sale.

Some items up for auction – Xbox 360, jewellery and a surf board. Strange but are these items necessary to run a government? No wonder they are heavily in debt.

As an added bonus you can buy an Arnold autograph car visor and a pair of Maria Shriver’s leg warmers.

I now know what is at the bottom of the barrel.

#55 ally ally oxycontin free on 08.28.09 at 10:37 am

Geithner Says Unemployment May Peak in Second Half of 2010

By Steve Matthews and Susan Decker

Aug. 2 (Bloomberg) — The U.S. unemployment rate may not peak until the second half of 2010, possibly necessitating another extension in unemployment benefits, U.S. Treasury Secretary Timothy Geithner said.***

“I think that is something that the administration and Congress are going to look very carefully at as we get closer to the end of this year,” Geithner said in an interview today on ABC’s “This Week” program.

***The problem is much different in Canada because 50% of the UNEMPLOYED can’t access unemployment insurance benefits.

#56 ed_pet on 08.28.09 at 10:40 am

we’re screwed…now they gov of canada props the usd

#57 Live Within Your Means on 08.28.09 at 10:41 am

#7 Typhoon on 08.27.09 at 11:51 pm

I think the real reason the banks are doing so well is because citizens now own the potential mtg. debt. I came across this site today. I know Garth has posted about CHMC before. Also some interesting comments.

We’re still holding our mutual funds, tho we did change to more conservative ones. We’ve been too nonchalant about cash sitting in accounts, to the bank’s advantage. Now looking at putting some money into bank preferred and those Real Return Bonds.

I think Harpo is living in a dream world, or, as usual, he’s just not being honest.

“Yet as signs of recovery emerge – and with a possible fall federal election on the horizon – the prime minister has brushed aside questions about whether the government might have to raise taxes or cut programs.”

Canadian budget will balance, Harper says
Insists no spending cuts or tax hikes are needed
Canadian budget will balance, Harper says

#58 Denis on 08.28.09 at 10:50 am

Interesting Strategy… Sell USD-backed Canadian Bonds to make sure people are buying USD’s to make them stronger and our CAD will hopefully ease in strength.

Canada to issue bond in U.S. dollars

#59 Makeorbreak on 08.28.09 at 10:52 am

#60 alberta ed on 08.28.09 at 10:56 am

Something smells ‘bullish’ all right, but it’s not the economy. Especially when CanWest, teetering on the financial brink, says so.

#61 Live Within Your Means on 08.28.09 at 10:58 am

#12 Alberta_Teacher on 08.28.09 at 12:09 am

I’ve read so many similar stories about the boom times in AB. You were the wise one. I went to a recyclable depot last week to return items on which we have to pay a deposit and get half back. A young chap, early 20’s, said he came back from AB as his job had been cut. I’m assuming, and I don’t mean it to be derogatory, that he’s likely either a HS dropout, or that’s the only kind of work he could find. He did say he was glad to be back in NS. Many of those former workers were also from the Atlantic provinces.

#62 Eduardo on 08.28.09 at 11:01 am

RE 30 and 32: You guys didn’t even read my links.

We have 18 billion in short term savings ON TOP OF the Heritage Fund. That 18 billion will be used to continue infrastructure spending to keep people employed and to try to avoid health care and education cuts.

We could run a deficit like this for 3 years and still have no debt. The government is CHOOSING to take on 1 billion in debt for the next 3 years because it’s so cheap and we have a AAA rating not because we have no money.

Unless you think NG is going to stay at prices that are uneconomic across North Ameria (except for hedged producers) for the next 3 years (if you do you don’t know what you’re talking about) then Alberta is fine.

I think the markets are pricing NG at 5-6 bucks in 2010 futures.

#63 Eduardo on 08.28.09 at 11:13 am

Garth, I’ll bet you 2500 bucks that Alberta will have more cash/short term investments in 3 years than debt.

#64 mikef on 08.28.09 at 11:22 am

Americans said the same thing in 2006 #48 pez
when Playboy playmates started investing in Crazyforn-i-a
real estate

#65 Live Within Your Means on 08.28.09 at 11:31 am

#30 Finanzkrise on 08.28.09 at 8:00 am

My niece whose going to Carleton for her MA had a hard time finding a place in Ottawa. She’s renting a 10X10 ft bedroom in a new condo in Hull for $400 plus utilities. If she has to take public transport, it’ll take her 1+1/4 hrs to get to Carleton. Sick. A 30 yr old gal bought the condo and is renting out the 3rd bedroom to a BC’er for more. At least my niece has to only give 1 mo.notice. BTW, she’d been looking for months for a place online.

#66 kc on 08.28.09 at 11:35 am

43 lili

“In the US, home price recovery is already taking place driven by first time buyers; they are indeed a powerful force”

These magical “1st time buyers” are actually vultures buying up homes at auctions/forclosure sales. The magical housing rebound in the US is actually a smoke and mirrors game.

read this…

a lengthy report on july/august US data.

Stock Market Rally Engineered by the Government

#67 Iguana on 08.28.09 at 11:43 am

At the same time, our dollar is rising along with oil, and the central bank is all but powerless to stop it (any immediate rise in interest rates will send the loonie flying to par). That means more serious troubles for manufacturing, tourism and natural resources.

I imagine Carney does, but gee Garth, do you really want to tie the Canadian dollar to that dropping US stone. If you haven’t already, try this from <a href=

The world is shrinking and the sooner we look to producing for our own needs the better, IMO.

#68 Iguana on 08.28.09 at 11:46 am

Oops sorry, link is Zero Hedge

#69 X on 08.28.09 at 11:46 am

I had a patient in the other day who works for CIBC in Toronto, she told me that they are having alot of people file for bankruptcy, much more than normal. Hard to believe really with rates being so low.

When rates dropped to basically 0, I figured it would take rising rates or the HST to be the tipping point for our RE market. Now I am not so sure. Perhaps the tipping point will come sooner, via unemployement numbers, olympic hangover spreading, stock market taking a dive… thing it won’t be is people coming to thier senses on their own.

#70 kc on 08.28.09 at 11:50 am

48 pez

“When hostesses at Cactus Club are telling me it’s a good time to get into the RE market it’s officially not a good time to get into the RE market.”

LOL that reminded me of the stories of the “shoe shine boys” giving stock tips during the 20’s…


#71 Two-thirds on 08.28.09 at 11:53 am

“When I published ‘After the Crash’ seven months ago, I was seriously worried about a deflationary spiral.”

So. Pray tell us, Garth, when you wrote this blog post, were you still seriously worried about a deflationary spiral?

#72 kc on 08.28.09 at 11:58 am

43 lili

I will make it easier for you…

“July existing home sales were better, but this is the center of the home buying season, much Fed money has been poured into the economy including an $8,000 first time buyer tax credit. Single family homes sold fell 5,000 units, as Northeast condo sales rose.

The big problems are fewer and fewer qualified buyers and massive inventory, which grow every day, plus all the houses lenders haven’t even listed yet. First-time buyers and foreclosures, short sale buyers, the distressed investors, represent 61% of the estimated July sales. The $8,000 incentive is similar to the Cash for Clunkers. It just takes sales away from the future. The home selling season peaked this month. Then you have the foreclosure flippers, who if they cannot get a buyer have to rent the dwelling out. The problem is the rental market is loaded with inventory as well. The percentage of properties in foreclosure or delinquency has hit a high of 13.2% of all single-family mortgages. Making matters worse is that there has been a steady jump in foreclosures in prime mortgages and FHA insured mortgages most of which are the result of a resumption of subprime lending 1-1/2 years ago. The Fed trying to put a floor under the market will end up being a loser to be added to their long list of fascist policies.”

#73 merrymary on 08.28.09 at 12:08 pm

I would love to take off as well to a place where the bomb has gone off.

Any idea, where else one can go to besides the U.S. since they don’t want Canadians there as full-time residents.

But I would go elsewhere, if they don’t require us to have pensions beyond the CPP, so please don’t suggest Malaysia. However, we don’t expect to be flat broke either.

I would love to get some suggestions.

#74 Calgary_rip_off on 08.28.09 at 12:08 pm

Alberta turning Bullish(THe latest crap from the Herald)

#75 bigpictureguy on 08.28.09 at 12:18 pm

LOL sorry Kate for making you the Garth’s “Punching” Bag for the Day. It’s all in good fun and serves as a valuable educational lesson for first time buyers.

Take your lumps today and save yourself tomorrow from making a bad decision.

#76 Live Within Your Means on 08.28.09 at 12:24 pm

#37 miketheengineer on 08.28.09 at 8:57 am

“Growing up Italian, meant we canned everything. Peaches, pears, pickles, tomatoes, etc. Dad had a huge garden. We grew up in a modest home, in a safe area. We rarely went on vacation or ate out.”

I can totally relate to your youth Mike. My Mom did lots of preserves and, for nostalgia, I still have a 68 yo jar of foxberries that my Mom preserved when my eldest bro was born. It’s travelled many thousands of miles and about 35 moves. Its just a reminder to me of times past.

“Mom and Dad taught me how to shop. Wait for the sale price. Never buy it at regular price, unless you have to, ie bread and milk. Every store has something on sale that week. Buy the sale item and work with it and plan your meals around it.”

I think because we had little growing up, I’ve become a hoarder. When I see a good deal, I buy lots of it – too much actually. I think we could live for at least 6 months, other than fresh fruits and veggies, on what we’ve got in our pantries.

“My parents would go to 4 or 5 different stores to buy stuff, and all of it on sale. DON’T BUY REGULAR PRICED STUFF. We used to shop at the farmer’s market for the produce to can. My parents would only buy the prime peaches, pickles, tomatoes, sometimes paying a bit more for the quality of the product.”

Unfortunately few families seem to have the time to do this today. We did years ago – Upick, etc. and spent days at my Mom’s making jams, preserving veggies, etc. We’re just 2 now and even tho I have a good quality vacuum sealer, things still get lost in the bowels of even the upright freezer. Its rare we go out for dinner. Not worth the price as I do enjoy cooking. I saw Julia & Julie last week. Really enjoyed it. I’ve had Julia’s first book since the early 70’s – rather tattered now. I also love Italian food & Sat afternoons I spend watching cooking shows on PBS.

“When you see stuff on sale, stock up, and keep a stock in your fruit cellar….this is the only way to do. Paying more for stuff is crazy.”

My PIL’s in France make a ‘desert’ in large mason jars. Add alcohol and as each fruit of the season is ripe, they keep adding them to the jars. What better way to preserve them! Yummy, but you only need a bit.

Unfortunately, this year our veggie garden either got rained out while we were in France or our 2nd/3rd generation ground hog ate almost everything. He ate everything, apparently in our neighbour’s garden! He’s now eating all the clover and violets now in our lawn :-)

My I’m verbal today.

#77 PTDBD on 08.28.09 at 12:24 pm

@Al & Canadian “mark to market” accounting:
This later announcement states that accounting rules will be changed to help companies deal with impaired assets.
Canada mulls shift closer to US accounting rules

Info about it actually occurring is almost impossible to find.

Maybe Garth knows? Garth, are Canadian Banks using “mark to market” accounting? TIA

#78 New Rich Report on 08.28.09 at 12:25 pm

#10 – “So too is a house, an expense, not an investment.”

Exactly. Personal real estate is not an asset, it’s a liability:

#79 Happy Renter in North Van on 08.28.09 at 12:33 pm

#48 PEZ – Good Post…

I used to work with a Portfolio Manager whose claim to fame was selling out all his gold position in 1980…. Asked why… He answered he was watching Citytv – a reporter was interviewing people in a lineup to buy gold and they hit upon someone he knew – “the dumbest girl in high school” who said it was a great time to buy gold.

#80 jess on 08.28.09 at 12:33 pm

whose checking the checkers?

al rosen

#81 jess on 08.28.09 at 12:38 pm


June 22, 2009
Ottawa, ON, Doug Hyndman:
“The current securities regulatory system has served Canada well, and we have made vast improvements in recent years”

#82 Live Within Your Means on 08.28.09 at 12:56 pm

#I always had a roof over my head and good food, but my parents never gave me a penny after I turned 14, nor a penny towards my university education. I would have been naked in grade nine had I not bought my own clothes with my car wash job.


Me too. I actually started babysitting at 11 – yep – up the street – no TV, no treats, etc. I was more mature than my years. At 13, babysitting during the summer days and later working at Laura Secord stores and Eaton’s in Mtl. every weekend/school holidays and during summer vacations. I lied about my age as I looked much older. In grade 10 I got a full time summer job in the Invoice Dept. The Mgr. called me into the office one day to convince me I should go back to school. I told him I would seriously consider it & thanked him. Little did he know that I had no intention of quitting school. It was a way of finding a ‘decent paying’ job for the summer. Two weeks before school started I told him that I had seriously considered what he said and judged that he was correct. He was flattered. I later worked for Eatons for 3 years in a buying dept.

I don’t have a degree tho I’ve taken MANY university courses over the years at various universities as a mature student. What I did have going for me, I believe, was the desire to learn on the job and take on challenges.

#83 Men With Hats on 08.28.09 at 1:07 pm

Declining commercial real estate values are shattering the RE market .
Unlike residential real estate in Canada, which has rebounded sharply in recent months – residential resale activity jumped 18.2 per cent in July from a year earlier – commercial real estate, mainly the office building sector, is still struggling.
Vacancy rate for office space across Canada rose to 8.3 per cent in the second quarter compared to 6.4 per cent a year earlier.
Banks have become more reliant on revenue from their corporate clients, which is of lower quality and more volatile than revenue from the more stable consumer banking segment.

Various sources

#84 FY on 08.28.09 at 1:13 pm

As usual, Geoff Castle (who wrote “Sell Canadian Banks”) did a great piece here on Van RE.

#85 Daystar on 08.28.09 at 1:19 pm

#11 Kate on 08.28.09 at 12:07 am

Lets think it through. Interest rates have nowhere to go but up and when they do, as Garth has said accurately,

“that a 3% rate is VRM, and will be higher by this time next year; that mortgage terms are renegotiated at least every five years; that rates could triple and still be lower than the historic norm; that house prices will fall as higher rates kill demand; that buying at the top of the cycle could easily result in negative equity; and that buying later with a lower debt profile – even at a higher rate – is the far less reckless path.”

And having said that, the big question is the timeline through the coming course of events. When will interest rates pop? What is that golden timeline? We know what will happen, we know the who, the what, the where, the why even, we just don’t know when. But when… we pretty much all know now, when will come.

The second thing to consider is currency. As the dollar is forced to rise against the Greenback under current conditions due to their 30 years and last 5 years of extreme deficits, Canada can actually get away with rock bottom fed interest rates as Garth again atests, a rise in fed rates will create a rise in the looney. (of course, no one actually gets away with anything, we just think we do…)

So when will those interest rates rise? When the will the feds raise them… already, the winds are changing. I read somewhere that housing valuations have actually risen nationally in the U.S. for the first time, the first quarter since 2006. If that turns into a trend and U.S. housing valuations correct to more normal realities, because they are nationally undervalued in my own humble and sometimes wrong opinion… then what will be the fallout to rising housing valuations and hence rising personal equity, borrowing power and all the rest that goes with rising real estate nationally in the U.S.?

But this is just pure speculation at this point. What we essentially know is this. U.S. governments have to get a handle on their debt and if they don’t, their currency will take a fall on the international stage forcing the looney upwards and what can the Bank of Canada do to keep the looney down? Interest rates are pancaked… they sold 75 billion worth of bonds in the last year (or something like that)… what else can they do? Borrow more money? Egg the Feds onto running more big deficits? They can get away with it today… seems in keeping with what the U.S. wants us to do… and when we are used to running big deficits and the U.S. dollar pops and their economy recovers and our looney tanks and we keep running deficits dumbly and jack rates sky high in panick to our own collapsing dollar, is this Harpers plan? The great sale of Canada with the loonie worth 60 cents to their Greenback?

What else can the Bank of Canada do… I”d really like an answer to that question, lil’ help (I think I know, but…)

Its simple, Kate. If the U.S. economy recovers and the Greenback becomes popular, led out of recovery by the economic kickstart to their economy of higher realestate valuations there, then Canada has no choice but to jack up interest rates or let the loonie fall and it could fall hard and fast. Then we have choice number two. The feds have to stop borrowing money and balancing their books to support the dollar from falling to fast. If they don’t jack taxes and cut spending and keep borrowing at record rates, then what happens to the loonie? The loonie could fall hard even if the feds stop borrowing and the BoC raises rates, it could still fall hard under serious pressure from a true U.S. recovery…

We saw all this play out in the 80’s and 90’s, its nothing new, but when one really thinks about it, again, we know the variables, we pretty much know the who, what, where and why thanks to blogs like this one, we just don’t know when and unless there are prophet/ess’s and phycics kicking around to fill us all in on that golden timeline, then we are left to make what science calls, a hypothesis or “an educated guess”. And sometimes, maybe not so educated and in so doing, we get an education.

With Vancouver, their re market is poised to fall. The biggest reason of all? Way overvalued to begin with. And 50 K isn’t much of a deposit when its 10% of a down payment. A 500K house could, within 3 years, be worth 300. Now the payments are still 1.5 times higher if rates more than double and still remain below historical norms… and your 50 K is gone and your equity is 150 in the red and your neighbors, the ones that bought high with 10% down, they are in the same boat and its subprime all over again and its a true buyers market.

The big question is when, Kate. And when one truely knows the who, the what, the where and why, this last when scenario doesn’t come to those who are paying attention, people like yourself. But just on spec, just from absorbing everything and looking ahead myself personally, I’d say when the Olympics come. Thats when things go badly for Vancouver. The international buyers everyone had hoped for won’t surface. The “visitor’s visa” on international flyers passports will hold true. The market will begin to fall during the Olympics and tank right after and stay there for some time. It will do the opposite of what everyone now thinks more than any other reason, because the entire market is a large bubble to begin with, supported by a belief that isn’t grounded in reality. As one uses pure logic and fantasy turns to myth, one doesn’t have to have a crystal ball or chum it up with a host to spirits (or lord of hosts) to see it coming.

#86 TiredofWaiting on 08.28.09 at 1:25 pm

I’m with Kate… Except I have been reading your advice a lot longer… Started reading your financial advice in the Spec. We moved to BC about 6 years ago and didn’t buy in because you said we were in a bubble and housing prices seemed ridiculous compared to Ontario… After a year of waiting for the crash we were pretty much priced out. After 5 years we finally bailed and moved back to the Big Smoke a year ago… Everyone on here said “Wait a year… You will be so happy if you just wait one more year.” Ha ha so here we are one year later and still waiting. So like Kate I’ve been wondering if it really is so bad. Our preapproval for a 5 year fixed mortgage at 3.59% is just about up and if we bought well within our means we could accelerate the payments and pay a big chunk down in the next 5 years… Quite tempting when you look at how much faster you can pay it off with low interest rates… We’re not looking at our home as an investment, just a place to live. Our landlord wants to put our house up for sale when our lease is out so hence the big debate whether to move the family to somewhere temporary again… OR bite the bullet, hopefully find something we really like and settle down.

P.S., we have moved 9 times in 13 years and with 3 kids we starting to worry what all this moving around is doing to them – never mind us!

We just want to feel settled but at the same time we don’t want to be screwed!

Next time get a 5-year lease. And I never wrote for the Spec. — Garth

#87 Eduardo on 08.28.09 at 1:50 pm

Re 80: The dumbest people are the people who don’t have any gold exposure the second dumbest are the ones with only gold exposure.

#88 Typhoon on 08.28.09 at 1:51 pm

RE: Al post #40

No, we don’t mandate that mark to market is used anymore. WE changed this rule about 6 months before the crash and the US only changed this because the banks were forced to market to market which resulted in huge losses. We would be right there with them if we didn’t change our rules in advance. It’s fun to see people actually believing that the banks are so secure though. They are believing the lie. It’s no wonder our consumer confidence is so high. Not too hard to imagine people being confident if fed a bunch of crap. But then comes the upset stomach afterwards.. whuups.

#89 Boombust on 08.28.09 at 1:56 pm

Garth and Friends,

You really MUST visit “” and see how a person earning 49.00/hour can own a house WITH NO DOWN PAYMENT in beautiful Surrey, BC.

Easy sneezy.

#90 Kate on 08.28.09 at 2:12 pm

#bigpictureguy – Please keep talking about me! I enjoy the popularity!

Seriously I am not that “linear thinker” as depicted from the several sentences I wrote and I haven’t made my real estate mistake yet and yes, I am renting, saving, investing and reading this blog for now. And I understand that once Garth writes about you, you are not real anymore. You are an educational punching bag;)

#91 Men With Hats on 08.28.09 at 2:16 pm

Praise be.Hallelujah !

#92 Jan Etter on 08.28.09 at 2:18 pm

Re #43 Lili’s comment about butt-self-kicking, my wife and I sold our fully-paid off home about a month ago and are selfishly hoping for a price correction of some sort sooner rather than later as we haven’t bought a house yet. However, our butts are not yet bruised as we sold not on a speculative basis that the correction is nigh, but for various reasons including weighing the pace of sales, inventory and prices in our current neighbourhood versus those in the neighbourhood we are hoping to move to. We are ready to buy when we find the right house because we do not want to rent long-term for personal reasons, and our decision is not outweighed by the possibility (probability?) that a correction happens in the next year to five years. If it works out that we don’t find the right house until the market corrects, then that’s great and we’re farther ahead than if we bought at what turns out to be the peak. However, if it ends up that we bought at the peak, we can sleep at night since we were moving for personal reasons and not financial reasons. (If the correction is severe enough that the financial impact outweighs our personal reasons, then as a society we’ll all have more to worry about than our net worth statements.)

The point of relating our story is to emphasize the danger in trading in RE strictly on a speculative basis, whether that be on rising prices or declining prices. If buying and selling RE is strictly for investment purposes, then that’s another story, and that risk can be weighed against the risk in speculating in other investments (e.g. gold, GICs, stocks, bonds). However, if you are living in the asset in which you are investing, you are mixing investing with your own personal comfort, peace of mind, family responsibilities and overall quality of life, and most people are not comfortable with risking the latter for the potential benefit of the former.

I can see kicking one’s own behind if one sold on the gamble that RE prices in your area would correct enough within a certain time period to make it worth the trouble, cost and stress of selling and moving, and the time period you were hoping for or counting on has or will soon come to an end. That’s why it’s a dangerous proposition to sell and rent on the basis of a prediction or gamble unless you are prepared for the consequences of your expectations not being realized, and can afford it, not only from a financial perspective but from a quality of life perspective.

#93 Al on 08.28.09 at 2:18 pm


Thanks for the link.

Based on the profits the banks have been making, I would have guessed that mark to market had already been suspended (like Typhoon #7), but couldn’t actually find anything to clarify. Yet the article you found indicates the change could happen in the fall. It raises the question, are the banks really making that much money, or are they playing some other tricks?

My favourite part of the article:

“But Cherry said the proposed changes are not a magic tonic to cure the ills of corporate balance sheets.

“Accounting is great fun, we can change the rules. But no waving of an accounting wand converts a bad investment into a good one and it doesn’t create capital when there isn’t any,” Cherry said.”

#94 David on 08.28.09 at 2:23 pm

The financial problems that Alberta is now facing have been brought up for discussion many times in this blog in the past. History offers no lessons for the Government of Alberta. It takes a generation to forget the hard lessons of the previous generation. It is different this time and the next generation will ignore the warning signs until it is too late. A high Loonie and weak commodity prices spell disaster for Alberta, this theme has been repeated time and time again. Much better to kick the can down the road and hope for another commodity boom. The modest sovereign wealth fund will get used up paying for yesterday’s bills. Sad really. Albertans can reflect on the parable of the prodigal son on the Third Sunday before Great Lent.

#95 Al on 08.28.09 at 2:23 pm

I just saw your #88 Typhoon. Do you have a link? PTDBD provided a reference showing MTM could be suspended in the near future, but it’s possible we’re talking about slightly different rules, ie. MTM for Tier 2 vs Tier 3 assets or the like.

#96 My_view on 08.28.09 at 2:28 pm

However, the equation (Kates) does not factor in RENT while waiting for the correction. Also the banks were offering fixed 5 years in the 3.4% area (early spring 2009). To each their own, figure it out if its worth it. The majority of people on this blog just want a home to live. At the same time we cant all just walk around this glorious planet as if impending doom is around the corner.

Buy anything at the top of the cycle and the odds are it will not work out well. — Garth

#97 X on 08.28.09 at 2:55 pm

Sports celebrities are honored by way of “bobble-head” dolls … For Greenspan and Bernanke maybe we could get “bubble-heads”.

#98 PTDBD on 08.28.09 at 2:56 pm

@TYPHOON – Do you have a link that supports your assertion that Canada changed from “mark to market” before the crash?

Something as momentous as this should be easy to find in the financial news releases but surprisingly, it isn’t being trumpeted. Shortly after the Americans changed their accounting rules I read that Canada would not conform. Then I heard that the Banks were protesting that they would be disadvantaged by this and were lobbying to have it changed. Then, immediately I heard that it was indeed being adopted to conform more with International Standards.
:-) going forward :-)
It looks to me that they are using “Fair Value” accounting for products on the books that are not being traded and are expected to reach ?fair value? at maturity. (I wish some of my stocks could be evaluated like that)

You would think that people who have recommended Bank Preferred’s here would know for sure. But they are keeping mum.

#99 Makeorbreak on 08.28.09 at 2:57 pm

Good thing this ‘recession’ is over!

#100 Live Within Your Means on 08.28.09 at 3:03 pm

#73 merrymary on 08.28.09 at 12:08 pm

Years ago I looked into a place outside of Guadalajara, Lake Chapalla, IIRC. Apparently it had about the best climate in the world. One could live for about 1/4 the cost of life in Canada and the health care system was great. Lots of Americans and Canadians were buying/renting there. Prices have undoubtedly increased tremendously since then.

#101 PTDBD on 08.28.09 at 3:08 pm

Negative Interest Rates

Thanks to The Automatic Earth Blog for this heads up for all of you that expect interest rates to go up like historic patterns. We are not in Financial Kansas anymore. We are in paperprestidigitizer fantasy money land.

Sweden is first central bank to introduce negative interest rates on bank deposits.

#102 Greg W., Oakville on 08.28.09 at 3:24 pm

Hi #15 Nostradamus Le Mad Vlad,

For anyone that doesn’t know yet,
See link at bottom if you want to try and stay as healthy
as possible. It’s just one more thing to look out for that was not told to you at public school.

Thanks for your stuff.

One of the links lead me to this on YouTube,
In Lies we trust part 1 of 16

What are you drinking?

Do you really know about what is being added to our drinking water?
It is not begin, as I found out at the Aug 2008,

‘World fluoride conference, it’s effect on the brain and soft tissue of the body’.
That was held at University of Toronto, for 5 days of science paper presentations.

See list of scientist and professionals, including Nobel prize winners calling for the end of water fluoridation.

This site also explains the newest science based evidence as to why it need to stop adding fluoride that includes arsenic, lead, cadmium to human beings drinking water supples.
The good science based evidence clearly links it’s practice to disease in human beings.

See free information video’s and read free NRC 2006 report.

Also, do you know about the other exposure sources you may have, so you can take step to reduce yours?.

#103 FY on 08.28.09 at 3:33 pm

Here is our Canada’s Ground Hog Day – we are going in circles now.

Remember in early 90s, after years of deficit spending, Canada’s reputation was in tatters, and bond yield soars, loonie dove. To reduce the cost of borrowing, Canada had to issue foreign currency bonds. Foreign currency bonds eliminates the risk of currency fluctuations from the bondholders, thus they demand less in yield.

Foreign currency bonds are often the last straw of emerging market countries to reduce their funding cost. But it has the effect of doubling a country’s debt load overnight, as the local currency crashes.

The latest victim is Iceland.

10 years later, Canadians are back at it again! Unbelievable!

#104 Seilfworcehtsa on 08.28.09 at 3:42 pm

#70 KC

You are lucky that the hostesses at the Cactus Club give you the time of day….they would probably ignore me. The advice that they gave you is probably the best advice you will ever get…you just gotta know how to use it. As for the shoe shine boys; their advice was invaluable. These people tell you which way the herd is running… to increase your wealth run with the bulls but know when to say bye, bye rather than buy, buy.
A lot of people made a lot of money listening to shoe shine boys…why do you think so many of them got their shoes shined a dozen times or more a day? And a lot of shoe shine boys retired rich. Then again, in the last year or so, a lot of people left a lot of money on the table because they listened to the experts.

#105 lili on 08.28.09 at 3:57 pm

#72 kc – the paragraph you posted sounds like a desperate perma-bear talking. The tone I mean. Of course government intervention is in lieu of free market activity. It is to spur demand and confidence.

Then I checked the link: Robert Prechter (famed permabear) and gold adverts everywhere.

Garth, this is what you are reducing yourself to. Lord!

That was not my link. — Garth

#106 Elli on 08.28.09 at 3:59 pm

I did a quick search on the Globe and Mail for ‘canadian mark-to-market rules banks’ and got the following headlines –

Banks pressure watchdog to ease ‘punitive’ rules – Apr 24

Accounting compromise brings rules closer to those in U.S. – Apr 30

Banks applaud planned mark-to-market rules – Apr 30

Canada’s banks applaud accounting rule change – May 1

I couldn’t read the stories since I’m not a subscriber, but the story seems to be told in the headlines… I would have appreciated it if recent news reports about the banks’ record profits had mentioned this accounting change. It seems as though we have to do our own investigations and take nothing at face value!

#107 jussupow on 08.28.09 at 4:10 pm

#101 PTDBD Of the frequent posters on the blog I find you are most informed.

Forecasting interest rates to go up is rather obvious. And wrong.

I am on the record predicting (months ago) negative interest rates in this country.

From my (deleted) post. Hope Garth is going to let this one through:

…The interest rate is going to stay where it is. 5 years of statistically insignificant movement (+-150 points). This board adopted the same mantra as they guys on the other side: Rate has one and only one way to go – up. Hmm… I’ve hear that one before… oh here it is – RE it is always going only one way – up. One would think (by staying off kool-aid and applying an ounce of critical thinking) that rates may actually have other paths of development. Like staying the same. Or going down. But no – only one way. Look here – FED’s think tank, policy making machine. Read. Pay attention to the model they are following for so many years in regards to rate policy. So many years. Fanatic following. See what the model is predicting. It actually predicts a rate of –(minus) 5 percent till the end of the year. Do you sense how the guy is salivating the prospects of such a scenario? And the disappointing resignation – argh… but we can’t go bellow zero (ya think!?- jussupow)! And latter the build up for a near zero rate for a long long time. Everything goes. If Sweden already made it public to stay on NO rate by 2011 and beyond– so can the fed. The guys that read wikipedia last night and come here armed with the infinite wisdom of the long term bonds market shall not be bothered.

Deflation/stagflation is here to stay. For many years – decade. No inflationary pressure, no inflationary expectations, no inflation.

Tsx will correct. Likely this year and volatile the next. Duno by how much but the bear market is alive. Afterwards tsx flat

RE will be going down in real terms (in real terms) but in no hurry at all. 15-20 years of bleeding until at last we get aligned with historical metrics. The poor shmacs that sold and are begging an abrupt correction from Garth (from time to time) should keep a good eye in their overall health. You see stress is not good for you. Take up a hobby….

#108 Eduardo on 08.28.09 at 4:26 pm

Ontario has been issuing foreign currency debt for a while… Why don’t we focus on the province with boatloads of debt instead of the one with no debt and cash in hand. Remember guys, cash is king.

Alberta’s financial disintegration is dramatic. Worthy of noting. Stemach may wear it. — Garth

#109 robert on 08.28.09 at 4:41 pm

You forgot about those of us who are building short positions in gold, particularly gold shares. I guess we must be literally brain dead.

#110 Eduardo on 08.28.09 at 4:51 pm

Why is it dramatic? You thought the budget would be balanced with a complete collapse in NG prices. How would you suggest they balance the budget in the current energy price environment?

I agree Stelmach doesn’t know his head from his ass. Wildrose Alliance!

I guess when you’re Ontario and you’ve had a steady meltdown and increase in debt it’s really no surprise when a deep recession hits and it gets worse.

Isn’t Ontario one of the provinces who always give transfer payments. If that’s the case they shouldn’t have been raking up debt.

#111 Eduardo on 08.28.09 at 4:53 pm

Take my bet above if it’s so bad. We can do escrow and have a lawyer and everything.

#112 Albertaboy on 08.28.09 at 4:57 pm

Alberta’s financial disintegration is dramatic. Worthy of noting. Stemach may wear it. — Garth

That would be not only an astute statement, but IMHO a grossly understated one. Anyone who thinks NGL prices are headed back to the $5-$6 range within the next 5 years are delusional. To put it in prospective, in 2006 NG hit a peak of $14/GJ, now its under $3. In 2007, the US had about 240bcf of NGL reserves – now they have about 780. It’s not rocket science folks. Just look at towns that were hubs for drilling – now quiet, bare and all but locked up.

#113 kc on 08.28.09 at 5:02 pm

104 Seilfworcehtsa

As far as my knowledge only 1 person actually made any money from listening to a shine boy; it is rumoured that Joe Kennedy sold all his positions after a shine boy told him a tip. His logic was, If this kid knows more than I do about the markets it is time to get out.

#114 stevep on 08.28.09 at 5:03 pm

actually with 50k down and interest rate 10% same payment as 350k mortgage at 3% mortgage would be paid off in 11years vs the 25 years

#115 Samantha on 08.28.09 at 5:04 pm

This in today re Japan. Not good.

#116 kc on 08.28.09 at 5:05 pm

105 lili

Computers with certain people can be dangerous. I never said to hit a pretcher link.

#117 Men With Hats on 08.28.09 at 5:14 pm

Alberta is in a world of hurt . Health care will certainly be downsized .
They are talking about retiring hundreds of doctors and nurses .
Once again the pea-brains have squandered massive amounts of money on nothing .
These cretins provide some fifty million a year to the horse racing industry .
Ever see a poor person own a horse ?It is a rich mans racket .Period.
No secondary industry . No R&D .
Zilch .
And the morons keep electing con governments ad nauseum .

#118 Nostradamus jr. on 08.28.09 at 5:14 pm

1/To my Vancouver, North Shore skeptics/critics who happen to be renters/unemployed or welfare recipients…..very shortly you will need a special pass to enter our privately gated community.

2/…I need a nanny for my three puppies….free room and board, free schooling incl University, summers off, 4 one week free trips home per year.

Age requirements 22 – 24…pictures must include your CV.

Start next month.

Nostradamus jr.

#119 Just a Girl on 08.28.09 at 5:16 pm

#37 miketheengineer wrote: “My parents would go to 4 or 5 different stores to buy stuff, and all of it on sale. ”

Not to criticize your parents Mike, as it sounds like they worked very hard to provide for their family.

However, something inside me always winces when I hear about people driving all over town, to get a bargain. Does it really make up for the other costs and impacts? I mean, are they riding their bicycles or walking?

Always remember a colleague of mine saying she drove from the north side of town to the south side (30 kms), because a pack of batteries was a whole dollar cheaper.

I mean, that makes my brain hurt!

#120 The 'VULTURE' on 08.28.09 at 5:36 pm

Quantitative Easing?

Is this a new type of Vaseline, toothpaste, hair gel?

Is it sold only by bankers?

I heard it makes house prices go up really high and stay high.

Maybe quantitative easing is a type of Viagra for the housing market. It keeps the price of houses up.

Where can one buy this stuff??

#121 Chillax on 08.28.09 at 5:48 pm

#107 Jussupow

The maintenance of low interest rates does not preclude a deflation of RE valuations.

In Metro Vancouver, home prices FELL 14% between February 08 and December 08, despite having the lowest interest rates in history (at the time of course). And of course this deflation took place PRIOR to the current economic situation, when times were still relatively good.

The price correction was due in part to a severe disjuncture between current valuations and historical economic fundamentals. That, and the fact that future years of FTBs had already thrown their hat into the market, while inventory swelled to double their norm during the boom years.

The current increase in prices in that market (we are still down 6% Y-O-Y) was simply attributed to a further cut in interest rates, which made it attractive to buy for even the 21 year old “Subway Sandwich Artist.” Once those FTBs are used up, we are right back to where we were in Feb 08.

And please, no commentary on how Vancouver is the next “financial, leisure, Triad favoured” capital, as immigration is anemic at best.

The point – even IF interest rates remain low, regional and city wide bubbles can still deflate.

#122 Cordoroy Cowboy on 08.28.09 at 5:53 pm

#47 My parents were the same way! And I thank them for it. We never asked our parents for a dime because you knew you weren’t getting one. I started babysitting at 12 and from then on i bought all my own clothes, etc.
Being the frugal people that they were they had saved all of my/their baby bonus cheques and at 18 gave me a thousand dollars of it (which is a lot considering those cheques were maybe 20 or 30 bucks a cheque)to go towards a car. They wanted to make sure that I could get to work and maintain my self sufficiency. They were hard working people and i have the greatest respect for them. My own kids work hard and live within their means. They starting working and saving young. I cringe when i talk to other parents who are doling out the coin to their offspring, who overspend, are underemployed, are lazy etc. You are not teaching them anything. A kick in the ass would go further.

#123 dd on 08.28.09 at 6:01 pm

#96 My_view

…The majority of people on this blog just want a home to live….

Ummm no. It is estimated that people move once every five years. If that is the case and housing prices are going side ways at best, it is better to rent than to own because the real estate fees will break you.

#124 dd on 08.28.09 at 6:17 pm

#73 merrymary

…I would love to take off as well to a place where the bomb has gone off….

Sure: Windsor, Port Albernie, Prince Albert, Prince Rupert ….

#125 Samantha on 08.28.09 at 6:20 pm

#37 Miketheengineer

Enjoyed your post. It’s a good way to grow up and the skills are wonderful to have.

I grew up on a mixed farm (dairy and we produced our own feed off a 1/4 section of land). We ate what we grew or hunted. No time to fish with dairy cows, so we bought fish from the local commercial fisherman. My Mom canned vegetables from our garden. Wild fruit became jams, jellies and pie fillings.

No vacations for us as well. My Dad never owed a cent for anything on that farm. He ran very old equipment that he meticulously maintained.

My parents were diligent savers. My Dad lived through the Great Depression, then went overseas in WWII and spent 6 years there. My Mom survived childhood poverty and the Depression only to face WWII in occupied Holland.

She never forget those years and it is from her, especially, that I keep stocks of food and other items ‘just in case’. I learned from her that your world can change in a heartbeat.

Every cent you can save on any purchase makes a difference, if you save it. And, today I save much more than pennies because of the ridiculous pricing games played by big box stores.

Shopping from farmers and local producers puts money directly in their pockets. It is also a healthier way to eat – less refined food. Properly stored food can last for many years. Wheat, stored correctly, will keep for 10 years and beyond. A grain grinder with a roller attachment will provide flour for bread and other baking as well as cereals that are more nutritious. It takes a bit of extra time, but well worth the effort.

I sourced suppliers of dried legumes, pulses and cereal crops just by running an search on provincial suppliers of those items. We have a local abattoir and butcher shop in our town. The local Hutterite colony will sell surplus vegetables.

There are many sources for food outside the big box stores across Canada. Urban dwellers can get organized with family and/or friends to share the cost of travelling to a supplier and shop cooperatively.

It is worth the effort for the money saved, producers supported and peace of mind that if adversity strikes, food and water are on hand.

Mike, I don’t know if you saw my reply to you way back about jobs. If you didn’t see it and are still looking – check out Manitoba Hydro. They have a website with employment opportunities specifically listed for engineers. If you have trouble finding it, let me know and I’ll back track for the old post with the info.

#126 cashman on 08.28.09 at 6:21 pm

Old mcdonald bought a farm, ei ei oh, the bank said no down payment no problem, ei ei oh, with a squirt squirt here and a squirt squirt there, everywhere a squirt squirt, old mcdonald was raking in the dough, ei ei oh, and then one day the bank came a knocking, ei ei oh, and the bank said “we’re calling in your loan” ei ei oh, old mcdonald coulnd’t pay it back, ei ei oh, so the bank repo’d his farm with thier fiat money, ei ei oh. The bank sold his farm and made a killing, ei ei oh. The bank borrowed from Mark Carney, a tidy sum at 0.5% and loaned it to old mcdonald at 4.49% for 5 years.

Welcome to the New World Order, believe it or not. But wait there’s more, if you buy this new toaster oven, we the int’l bankers are going to have our way with you who are not part of the elite rich.

#127 dd on 08.28.09 at 6:21 pm

#71 Two-thirds

…you still seriously worried about a deflationary spiral?…

Listen to the news. When there is a “cash of whatever” in the states, or when the government is thinking about easing credit “they” are worried about deflation. If they were not worried about it interest rate would not be 0.5% (Bank of Canada).

#128 Nostradamus Le Mad Vlad on 08.28.09 at 6:22 pm

#154 Joshua on 08.28.09 at 12:03 am — Much appreciated!
Re: the link from Thurs. night — — could be one reason why China cashed in on US$25 bln. worth of debt in June. They (and the US) know something is up, and that is the largest monthly amount the Chinese have cashed in.
#23 Samantha on 08.28.09 at 6:49 am — “. . . this dance will end in a mess.”

Unfortunately, the mess has to be cleaned up. Will the so-called “Entitlement Generation” — I Want It All And I Want It Now! — on centre stage now be prepared to show their mettle and true grit? It’s gonna be one helluva wake-up call.
#28 dd on 08.28.09 at 7:52 am — and — #56 ed_pet on 08.28.09 at 10:40 am — “The BOC is just warming up the printing presses as we speak.” — “we’re screwed…now they gov of canada props the usd” — combined with #77 PTDBD on 08.28.09 at 12:24 pm — “. . . changed to help companies deal with impaired assets.”

Are Carney, Bernanke, Paulson, etc. doing something naughty behind our backs, working in tandem to take the continent down, flood the market with useless paper then bring in a new currency which will profit the rich? I wouldn’t put it past them.
#72 kc on 08.28.09 at 11:58 am — “. . . but this is the center of the home buying season, . . .”

The Eye Of The Hurricane or The Calm Before The Storm, n’est-ce-pas?
A link on Mish’s site was quite curious — — not so much the income taxes going up, it’s Calif.’s federal status is in question.

Either they are a state or not, but there is secession talk in a few states. Check links on left side. —

#129 kc on 08.28.09 at 6:40 pm

118 Nostradamus jr.

You my friend are giving us out in the West a bad name. I have held off on commenting on your trolling posts till this one… you are an idiot.

#130 Boombust on 08.28.09 at 6:55 pm

“Joe Kennedy sold all his positions…”

Yeah? He was also an asshole.

#131 Live Within Your Means on 08.28.09 at 7:09 pm

119 Just a Girl on 08.28.09 at 5:16 pm

Yep – pound foolish & penny wise or vice versa. Some how I doubt that Mike’s parents drove miles to save a few cents.

#132 Eduardo on 08.28.09 at 7:12 pm


Natural gas is low because everybody is maintaining production due to hedging, once hedges fall off in 2009 and 2010, prices need to climb.

Low prices fix low prices.


People who think new wells are economic are fools. People who think declines in shale gas are not severe are fools.
People who think these lows will be maintainted for extended periods of time are fools.

Yes gas could hit 2 bucks but the further it falls the more severe the climb will be.

#133 Torquemada on 08.28.09 at 7:13 pm

What are you drinking?

Do you really know about what is being added to our drinking water?
It is not begin, as I found out at the Aug 2008,

‘World fluoride conference, it’s effect on the brain and soft tissue of the body’.
That was held at University of Toronto, for 5 days of science paper presentations.

Great Garth. Your blog has already been infiltrated by the gold bugs and the New World Order nuts. Now the Flouride conspiracy nuts are here.

As much as I love the real estate stuff, the nutjobs are really too much. We’re a month away from having to skip over posts from the flat-earthers.

C’mon guys. Stick to economics and real estate. Otherwise find some other dark corner of the net to congregate at.

#134 NKVD Black Raven on 08.28.09 at 7:16 pm

The slots at the end of the aisles pay out more often to garnish the attention of passersby.

#135 Live Within Your Means on 08.28.09 at 7:18 pm

#50 lili on 08.28.09 at 9:53 am
#37 miketheengineer: “Paying more for stuff is crazy.”

All you have illustrated in your post is that you and your parents maintained the immigrant mindset (which I shared for a long while) to suffer and suffer to achieve an ounce of upward mobility/stability.

Stuff it Lili. Most of the immigrants to Canada after WWII survived & prospered because of their frugal ways and their children & grandchildren reaped the benefits due to the sacrifices their parents made.

#136 Eduardo on 08.28.09 at 7:23 pm

I’ll admit to being wrong that gas could make it up to 6 by the end of the year… Could take until next year.

#137 Peter on 08.28.09 at 7:23 pm

Here are detailed earning stats from BMO :
BMO Reports…

BMO BMO announced its earnings yesterday. Among the mortgage-related highlights…

* BMO’s net interest margins were up quite a bit last quarter. Part of that was due to securitizing low-margin mortgages, part was due to “deposits outpacing loan growth,” and part due to “favourable prime rates relative to BA rates.”
* That last point suggests BMO has been making ample spreads on their variable-rate mortgages. It also hints that BMO’s variable rate premiums can still be easily reduced further.
* BMO’s Readiline LOC product is their baby. BMO said Readiline is “driving” loan growth, which rose 15% YOY.
* BMO mentioned in its earnings report that its stated income mortgages are “no longer in use.” (This isn’t really news to BMO followers but it may be of interest to competitors who don’t know.)
* BMO’s market share in mortgages continues to slide. In this most recent quarter, BMO’s share dropped 0.86% from a year ago. Its decision to stop lending through the broker channel has been the root of the problem.To this effect, company spokesperson, Ralph Marranca, says:

“One of the primary reasons for exiting the mortgage broker channel was that our customers were confused about BMO products being in the market at different prices. This was not consistent with our Brand Promise of making money make sense for our customers. We understood and expected that market share declines would follow in the short term but our spreads have been improving, we continue to invest in our proprietary sales force and expect higher mortgage growth in the future.”

#138 Eduardo on 08.28.09 at 7:24 pm

Look at that timing. Fresh article on the discussion!

#139 Peter on 08.28.09 at 7:25 pm

Basically everyone beside me who has a mortgages right now are VARIABLE. As I told you, banks are all telling you go variable instead of fixed and BOC will only raises interest rate by 0.25 basis points only !

#140 Barb .. a reader in Calgary on 08.28.09 at 7:26 pm

#123 dd,

What you said, rent vs own, is true, but the stat you wedged in there is not exactly correct.

Do you have a web site where we can verify what you mentioned: “people move once every five years”?

It’s estimated that the average person moves 13 times in their lifetime including childhood, university, marital, elder care, etc.

That generally is an overall U.S. average regarding number of times moved in a lifetime, and has no correlation to or verification of the number of years between moves.

As a child, my family lived in our owned home for over 21 years (born there, we were forced by Esso to move to an apartment when I was 17). Soon after, I went to 2 universities, did some work projects in various places and relocated out west. I “moved” roughly 12 times in 10 years. I own my present home and have lived in it for 27 years and have no plans of “moving every five years”.

Where is it written that every last one of us on average, in mid life blindly during hard times, buys and sells their houses once every five years? The stat seemed lame at best, but again, I agree with the part about rent vs own for many people right now, but only because house prices are going to be falling for awhile.

#141 barb .. a reader in Calgary on 08.28.09 at 8:02 pm

#4 Eduardo

Norway did “the fund” the right way, the responsible way.

Alberta government was, and is, greedy and corrupt. Norway has billions (HUNDREDS OF BILLIONS) saved and kept for the ENTIRE country to benefit. The ENTIRE country! Alberta should be mocked and fully ashamed of itself.. Albertans are about to lose their piddly and pathetic few millions and that’s just the way Alberta politicians do things. Stupidly, greedily and corruptly.

Alberta politicians pissed away our revenues, always have. And yet, our lying politicians here continue to fool the sheeple.. with more lies.

Norway on the other hand can say that their nation’s sovereign wealth fund owns approximately 1% of all the stocks in the world. Their Government Oil Profits Fund has kept hundreds of billions for the future of all Norwegians. Alberta politicians not only did not have the guts to do this, but they allowed us to be sold out to mostly foreign corporates. I bet many palms were greasy. And now most of our oil and gas is foreign owned. And if there’s a crisis, we are obligated to supply the U.S. first, and the rest of Canada has to buy from other countries or freeze.

So Eduardo, are you saying Alberta is hard done by vs other provinces? I’d say Alberta screws itself simply by being so greedy and short-sighted thanks to our long-standingly stinky politicians and gullible voters.

#142 TakingResponsibility on 08.28.09 at 8:17 pm

RE: Eduardo and his “Wildrose Alliance!”

Uh, oh. Must be time to start up the Watch again:

Arrrgghh….all those Republican Refugees (you know, the ones who come for the free healthcare!) and then spout off as if they represent real Albertans. And who, you ask, are the real Albertans, the ones who have been here for multiple generations – well, Garth probably met quite a few when he presented at the Agro-Show. Oooops, My bad….it is democratic that all have their say…..

But really, real Albertans are very well aware of the $20 oil called by U of Calgary Prof Verlager:

And we know Natural gas can easily go to $1…….

And, for those of us that live in the areas where these resources are extracted – we are mostly really p*o’d about environmental devastation that we have to live with….Warning…Do Not Eat Fish From the Athabasca or Peace or … , and definitely be careful about Alberta Beef (….cattle don’t seem to get the same warning about flares….)

Nope. We are not an island here in Alberta. In fact, we are more controlled by foreign financial elites than any other area in Canada.

#143 Seilfworcehtsa on 08.28.09 at 8:23 pm

#113 kc

Naa…..Us stock market took a hit on Oct 29,29 but pretty well made it all back up by April 1930. That Kennedy would make a derogatory remark about shoe shine boys was just a reflection of his nature, not his perspicacity. American bank failures, British return to the gold standard, drought in America, dooom, gloom, greed and govt. stupidity were the principal causes of the depression. The stock market was a victim exacerbated by greed and dishonesty and was a tragedy of epic proportions for the losers and the nation.
The present economic situation sends shivers up ones spine. The credit bubble caused a body blow whose effects are not yet certain and cure may be just another body blow in disguise. My mother said, “remember your ABC’s”ie., always be careful, always be cheerful.”

#144 Eduardo on 08.28.09 at 8:57 pm

Re Barb in 129:

Actually Barb, Alberta has contributed to the whole country through equalization payments. You guys just squandered the money we’ve given you.

Between 1961 and 1990 Alberta Contributed 147 billion.
From 1961 to 2002 Alberta contributed 243 billion.

Those are in 2004 dollars and exclude the 10s of billions from the past few years.

TERRIBLE argument that Alberta squandered it alone.

#145 Eduardo on 08.28.09 at 9:00 pm

When I said barb in 129 i meant 142…

All I’m saying Barb is that Alberta has contributed hundreds of billions to the country. Everybody is quick to forget transfer payments when making arguments against Alberta and remember them when they want more money. “It’s so unfair”

1$ gas is not possible.

#146 Eduardo on 08.28.09 at 9:02 pm is my wildrose hopeful at least policy wise.

#147 jess on 08.28.09 at 9:04 pm

bond sale
is this an attempt to lower borrowing costs by ”hunting” for lower-yield currencies?

#148 David on 08.28.09 at 9:07 pm

Ed is not all bad. During the last election he advocated a severe crackdown on gangs and hooliganism. I am no conservative reactionary, but I can understand the sentiments. Ed sings in the Ukrainian men’s choir so he has a good familiarity with znameny chants. Economics just is not his forte. There will be another boom in Alberta the next 20 years so everyone just relax.

#149 Eduardo on 08.28.09 at 9:07 pm

Sorry Barb I didn’t answer your final question at all.

No I don’t think Alberta is hard done by at all and I agree with the transfer payments, but please give us a break.

You’re all screaming about how foolish we are and about how we’re not the driver of Canada and how we should give more money when we have NEVER taken any equalization payments and given a HUGE sum of money. We also have no debt and won’t in the foreseeable future.

It’s also not true that we are obligated to sell to the US first, we are obliged to sell our surplus due to NAFTA.

#150 kc on 08.28.09 at 9:21 pm

143 Seilfworcehtsa

“Us stock market took a hit on Oct 29,29 but pretty well made it all back up by April 1930.”

and then what happened?

#151 Seilfworcehtsa on 08.28.09 at 9:48 pm

#150 Kc

And then what happpened? That sir, is the possibler repetition of which is the stuff of nightmares.

#152 Eduardo on 08.28.09 at 9:59 pm

I take offense to reference of me as not a real Albertan in 143 due to my name… I was born and raised in Edmonton.

#153 timbo on 08.28.09 at 10:08 pm

#149 ed,

your tone suggests that we, we, we, with the BOLD are somehow special and above all in Canada. I’m from Alberta as well and put my loyalty first in a Canadian context. If your reading this from other provinces this does not represent the norm in Calgary.

If your going to cheer for team Canada, your crossing a line and should stick within your borders.

#154 Barb .. a reader in Calgary on 08.28.09 at 10:19 pm

re: Eduardo

You referred to me as “You guys”??? I’ve lived in Calgary over 30 years. I happen to think that Canada’s resources are Canada’s resources. From my countless ancestors who arrived in what is now Canada several hundred years ago, and the dozens who came 200 years ago, I have a good sense of what this country is about. I do not appreciate people who attempt to divide my country in any way for their own greed.

Although I was born in Ontario, so too, was my 4th cousin and her husband. They came here to Calgary and he became the Premier of Alberta.

Ironically enough, he’s the very fellow who successfully negotiated the long-sought transfer of the control of Alberta’s natural resources from the federal to the provincial government. No surprise he served on the Royal Commission on Banking and Currency and in the latter part of his 2nd term his gov’t was perceived as not dealing effectively with the problems created by the Great Economic Depression.

re: your other note, I’d added NAFTA but took too much space and deleted it.

How about Canada not having a Strategic Oil Reserve..

#155 Eduardo on 08.28.09 at 10:35 pm

I fully agree with the SPR and sorry for saying you guys.

#156 $fromA$ia "Garths Nugget Boy" on 08.28.09 at 10:42 pm

Muhahaha, look where the US stimulous is being spent!!!

#157 terry on 08.28.09 at 10:44 pm

Eduardo said Yes gas could hit 2 bucks but the further it falls the more severe the climb will be.

Since housing is at an all time high, your argument that the more drastic a price goes in one direction would snap back the other way more severely means then that housing is headed for a severe drop. No? Prices are at all time hi’s. No?
Not a good thing for a realtor in Calgary to admit, but thanks for agreeing with Garth !

#158 kc on 08.28.09 at 10:45 pm

151 Seilfworcehtsa

Oh, I thought you might have said something like we entered into a 10 year deflationary period that took till the 50’s to start a new bull market.

#159 Shurle on 08.28.09 at 10:49 pm

Eduardo was born and raised in Saskabush, moved to Calgary to get a piece of the home selllers there, now runs his own blog to pat himself on the back. I hear the guy is weird…..

#160 Eduardo on 08.28.09 at 10:55 pm

Barb, I’m not trying to divide anything.

This all started by Garth saying that Alberta is irresponsible and it’s their fault for mismanaging the economy.

All I’ve been saying is that Alberta has paid it’s way in Canada, has been fiscally responsible, has no debt and has dollars tucked away for a rainy day.

See this for Alberta revenues. It’s not all oil and gas:

Keep in mind that it benefits Canada as a whole to have Alberta develop their oil and gas and you see that in the form of cheap gas at the pumps and transfer payments.

Everybody has to keep in mind that one of the reasons Alberta has no debt because Klein cut health spending (and education, etc) for 10 years (and was disliked because of it). Alberta is debt free because of spending cuts before oil prices went crazy.

I’m not going to discuss anymore because it seems like people are either missing my points and/or not really posting any facts but rather statements like “Alberta has grossly mismanaged the economy” without any facts.

#161 My Dad's deficit is bigger than your Dad's on 08.28.09 at 10:59 pm

BC’s deficit is 3 billion! Alberta’s deficit is 6.9 billion! Nyah! Nyah!

Garth, I smell PST in Alberta too! And maybe a return of health care premiums.

#162 Eduardo on 08.28.09 at 11:00 pm

Actually Terry prices in Calgary aren’t at all time highs, they are about 12-15% below last years prices.

AND, Actually Terry I have no relation to the housing industry. Especially now because I sold my condo. And I work in the EVIL, POLLUTING, REPULSIVE OIL SANDS OF DEATH!!!! *shrill screeeeaaam*

Thanks for coming out though.

#163 Eduardo on 08.28.09 at 11:05 pm

Nice quality post in 160.

Yeah! Good facts and on topic!! Please continue…

#164 Jake on 08.28.09 at 11:25 pm

I’m in Edmonton too. Alberta’s savings have given me some encouragement as well. That being said, there is no avoiding the 7 thin years that will follow the seven fat years we have had. I wish we would have done more to diversify during the good times. Let’s face it, we are still mostly hunter/gatherers.

As far as your proposed bet with Garth goes, I honestly don’t think he’ll give your $2500 dollars a second thought. It would cost more for the two of you just to get together.

#165 Peter Wiener on 08.28.09 at 11:28 pm


Lets distill this whole convoluted discussion into one simple question put into a wholly Canadian context;

Who’s judgement, economic acumen and most importantly, TRACK RECORD, would you be most likely to rely on to make the single biggest financial commitment of your life – Brad Lamb or Eric Sprott?

It’s that simple folks:

BRAD the Johnny-come-lately BLOWHARD bull


ERIC the (self made) BILLIONAIRE bear

’nuff said.

#166 Jake on 08.28.09 at 11:39 pm

You’ve totally missed the analogy by referring to the crazies on this blog as “flat earthers.” The crazies during the debate on the earth’s shape were the ones saying that the earth was round….and they were right. Stop trying to be the blog police. Let’s face it, the discussion here would get a little stale without a little crazy talk now and then. So stop trying to be Garth’s blog police and just read what you want. If you haven’t figured it out yet, the NWO has everything to do with real estate and the economy. It takes a little research, but even a fluoridated brain can figure out that something isn’t right here.

#167 Men With Hats on 08.28.09 at 11:57 pm

1/To my Vancouver, North Shore skeptics/critics who happen to be renters/unemployed or welfare recipients…..very shortly you will need a special pass to enter our privately gated community.

Thise aren’t gates moron . They are shopping carts parked,in the ally, in front of your Fridgedair cardboard box .

#168 Dan in Victoria on 08.29.09 at 12:55 am

Post #37 Mike,You’re absoulutely right.Keep your eyes peeled for the bargins.Post #50 lili So if I pay more I won’t suffer?Or I feel better?Lets take this a step further than Mike.How about my FREE new to me 4 wheel drive Chevy pick up.The truck was four years old when i got it.Heres how.(Again this is my rule of thumb calculation, get a pro involved)My wholesaler offers me 2% off my wholesale bill every month if I pay by the tenth of the month.Ya gotta pay anyhow,So an average credit is $240-$300 per month.So lets say I run that for 72 months Thats $17000-$21000 plus trade, more than enough to buy a new to me truck.Oh yeah, my wholesaler gave it to me…..right…and I get to write it off too…..really?How about every dollar you don’t overpay is more like ….mmmm a $1.30 give or take, think about it.

#169 Torquemada on 08.29.09 at 1:16 am

I happen to think that Canada’s resources are Canada’s resources.

Hmmm…the Constitution begs to differ.

#170 Dan in Victoria on 08.29.09 at 1:22 am

#82 Live with in your means and #125 Samantha,ha those stories bring back some memories.Same thing for us, two bits allowance every couple of weeks,and a paper route,and working for my grandfather doing odd jobs until one day……..we were shopping at Woolco in Victoria and the cashier was making change to a fellow in front of us,and she dropped a dime,reached into the till and gave the guy another one.So i ‘m standing there thinking holly crap!This is big!These cash registers are open underneath.So I went around and looked under a few Gold mine!My younger brother and i developed a system to sneak up against the front of the register and when i gave him the signal he would reach down onto the floor and pick up the loose change.We made a buck or so every couple of weeks doing that, as they say we were farting in silk.Never got caught,great fun.

#171 Ottawa on 08.29.09 at 12:46 pm

The post seemed to be about the short-comings of the planning of several Provinces – no need for any one Province’s residents to get their hackles up.

Fact correction; Alberta has received equalization in the earliest years of the program although it likely didn’t add up to much and the Province has been wealthy enough to never need it again. The only Province to pay each year into equalization and never collect was Ontario and that has, I believe, ended this year.

#172 Barb .. a reader in Calgary on 08.29.09 at 1:42 pm

#160 Eduardo

Klein used the Heritage fund to pay that down. Hidden in plain site.
My friend was one of the first nurses cut during the 1990’s. Those cuts were wrong, ill-conceived, had a commercial agenda behind them, accomplished nothing and forever damaged our health care system.
He was a show-boater and misinformed the public so that he would seem like he was being tough. In fact they changed the rules of the Heritage Fund then, made terrible mistakes and lost huge revenues, bowing down to the oil and gas industry and ignoring the people.
“The Fund” is now a shameful shadow of it’s former self and a terrible and embarrassing legacy for Alberta. That fund would have easily been in the hundreds of billions had the Alberta Government shown any true wisdom, guts or constraint.

Heritage Fund on hold

#173 Barb .. a reader in Calgary on 08.29.09 at 1:57 pm

I happen to think that Canada’s resources are Canada’s resources

“Hmmm…the Constitution begs to differ”
— #169 Torquemada

Torquemada – You need to learn to read.. obviously you didn’t bother to read my comment. You overlooked that I’d mentioned a cousin’s husband, was the Premier, responsible for negotiating that into the constitution.

As I said above, “Ironically enough, he’s the very fellow who successfully negotiated the long-sought transfer of the control of provincial natural resources from the federal to the provincial government.”

That’s what my comment addressed and I’m not sure of your motive for cherry picking out-of-context lines. Brownlee’s was sort of wrong-headed, short term, greedy thinking, instead of wise, long term thinking, planning and saving for the betterment of the country,that is exactly what got us into this mess.

#174 Eduardo on 08.29.09 at 4:07 pm

Barb, Klein listened to the voters and building the Heritage fund was below paying off our debt. There is no mandate for what the fund should be spent on, I agree with you that’s a problem.

#175 Manitoban on 08.30.09 at 2:01 pm

The plan
August 27th, 2009 —Excellent topic.
174-comments, all worth the read.

2-in the end everything returns to its long term median price values always.

4. We also get pillaged for all our money in good times via transfer payments.
We probably still won’t get anything this year.

8…….conclusion that everybody running the economic show are incompetent.

10.”A house in fact is a consumption item”

12-Bidding wars on houses- labor-land-head of cabbage.

14-Sounds like a Liberal in Conservative clothes. “politicians have forgotten that they are PUBLIC SERVANTS … emphasis on the SERVANT”.
My comment: Electors have forgotten to elect LAW MAKERS. Elected officials appoint wiser law makers to the Senate “ Demers -popular illiterate”??

23.” We need fewer economists and lawyers in government” People who can actually make a plan without the incessant need for costly studies and statistical data that merely complicate the obvious and delay the solution. My comment: Great solution, we could reduce # of elected officials to 15 and 95% of Public Servants, burn the current laws, eliminate the debt and balance the budget over night.

34.I may be a Vulture but I am sure not a masochist! Deserves a bravery medal.

76- My I’m verbal today.( yes,yes, My kind of person -still no tree cut today)

119- I mean, that makes my brain hurt!

154-..referred to me as “You guys”??? I’ve lived in Calgary…(I thought that expression was mostly used in “Sask.” but remembered that it was “You’se guys”)

Garth, with a group of friends & relatives, we all share our own favorite reads with this type of “critique” In some cases in the past I needed to recommend
the elimination of more than 50% of comments. We all save time and increase our range in chosen topics by doing this. Jean-Louis.

#176 steven rowlandson on 08.30.09 at 5:07 pm

Garth the problem is obvious. It is legal for governments to borrow money.