Myopia

condo1

As my recent ‘Bubble Busting’ posts underscore, sellers are gods.

Despite the bleats of protests from the over-extended, the newly-bought, the lenders and the agents, current real estate conditions have a short shelf life. As a medium-term hold, residential housing is in the process of peaking and, in some markets, is past the summit. But you know that. It’s just common sense. Reality awaits.

Thus, selling beats buying. In fact, homeowners who missed cashing in their chips in late 2007 have been given a rare second chance at bubblenomics, thanks to the inflationary Mark Carney. I’d say this might be the last one for years to come.

Hence, my encouragement to ‘short’ the market with the Bubble Busters. (I know these are not true shorting strategies, but to follow one you’d have to borrow a house and then sell it. Apparently that’s still illegal.)

Think dot-coms. When the share prices of companies without track records, profits or the prospect of earnings soared just cuz everybody wanted some, the jig was up. There was little true value in those equities, and yet their innate sexiness drained off billions of investment dollars from more sensible investments.

Real estate carries a similar premium now.  It worries me that we have over 80% of our family net worth in homes. It worries me more that housing myopia has once again blinded people to the options before them.

Cue Dennis:

Garth,    five years ago I bought a new condo in Vancouver. I found out from a realtor that I can list a place for sale to investors only. Well i just listed it that way and it sold in a day for about $12,000 less than what the height of the market was. I got what I wanted. I am so happy cause i now rent it back from the investor, and I stay living here, and i have all my money. What would you now do with the money from the condo?????? One idea i have is to buy a cheaper house for cash in a cheaper part of Canada and then rent that out and use that money to pay my rent here. Thus i would be living in my same condo that i love here in Vancouver for free. Would you do that or what would you do?

You get half marks, dude. Selling your condo to a greater fool investor was a great move, especially in Vancouver where the premier can’t count and you can now take a fast train to Richmond. (And how many of us have dreamed about that?)

Yes, just as people lined up to snap Nortel at $130 a share, so they’re eager now to grab overpriced boxes in the sky with dank parking garages at near-record prices. Thank God for such investors. They save us from consequences.

But when it comes to your idea to buy a cheaper house to rent out for income to pay for the rent on the apartment you still occupy, is that just the drugs asking? The best you could hope for is to tie up all of your capital in a home someplace beyond your ability to care for it, to subsidize your living expenses. Why go through all that hassle and expense, instead of investing the money in liquid assets to accomplish the same thing?

As I’ve spelled out here before, it’s no big deal to get a steady and virtually risk-free 5-7% on your money these days, which is a decent real rate of return. You can even earn it in tax-advantaged ways, through dividends or capital gains. Or invest through a tax shelter, wiping out current year’s income taxes while you buy income-producing assets. If you haven’t heard of preferred shares, ETFs, real return bonds, funds, TFSAs, options or RRSPs, then it’s time to start.

You need to get out more, Denny. Way out. Even past Richmond.

117 comments ↓

#1 Nostradamus jr. on 09.02.09 at 11:36 pm

1/

Garth, we know you….you will run as a Lib….then switch to Independent.

2/

You know Canada is dead, sooner than later.

3/

I suggested months ago on this blog that you would be better off running in Provincial Politics.

4/

Stop deleting my germane posts.

#2 Nibbly on 09.02.09 at 11:50 pm

“Yes, just as people lined up to snap Nortel at $130 a share…”

Wow! Isn’t hindsight 20-20. May I remind you that you pumped Nortel all the way down. As I recall, it was a ‘steal’ at $50. Must I remind you of how that call worked out?

But I’m sure your crystal ball is working better this time.

#3 winnipeg on 09.02.09 at 11:53 pm

I disagree. Buy a house in winnipeg……it will cash flow and the economy is the best in the country. No recession and growth on the horizion.
But it won’t sound sexy at those downtown clubs in Vanc.

LOL

#4 Dave on 09.03.09 at 12:23 am

what’s the virtually risk free 5-7%? I’m looking for something like this.

Thanks in advance for anyone who knows information or has a contact.

#5 Gord In Vancouver on 09.03.09 at 12:32 am

Garth – excellent post and answer to Dennis’ question. The “get extra cashflow by being a long distance landlord” approach isn’t for everyone, especially if you have a busy work schedule and/or a family to attend to.

Global BC’s real estate hype machine is now in full swing (Hmmm… did Remax threaten to pull its advertising money?) . Fortunately, we have Garth’s blog to provide us with a realistic, I mean alternate, perspective.

#6 Jody on 09.03.09 at 12:42 am

Dennis,

You might want to buy some gold, I heard Garth is into that. Hahaha!!!

5 – 7% in an RRSP, yea right.

Questrade and buy some gold and metals stocks to, when gold shoots up to $5000 an ounce you’ll be laughing.

Seriously though, an equal division among stocks, bonds, gold, and cash. That covers an investor in times of prosperity (stocks), inflation (gold), deflation (bonds), and recession (cash). So if it’s hyperinflation that arrives, and stocks and bonds are tanking, the gold part of your portfolio will go through the roof — if the great depression comes back, the bond part of your portfolio will skyrocket. Whatever happens, the overall value of your portfolio should move gradually upward. But don’t trust me, I live in Calgary where retards pay $500,000 for a cardboard box because we are apparently running out of room and do nothing when city council spends $25 million on a footbridge designed by some tosser from Spain. Say Garth, you gonna say to to your MP pension if you get elected again?

#7 Nostradamus Le Mad Vlad on 09.03.09 at 12:50 am

“Reality awaits.” — I would be delighted if someone offered $500K for our postage-stamp sized lot, then a bidding war leading to an ultimate net cheque of $725K. My reality is kinda skewed, ‘tho!

“. . . you’d have to borrow a house and then sell it. Apparently that’s still illegal.”

Breaking the speed limit, grow-ops and smoking dope are illegal but people do them anyway.

A small percentage are caught, get their wrists slapped, toke up, grow more then speed off again. What’s the diff?!
——
Greed is good! Or, maybe not. — http://ncane.com/8lu
“. . . how CEOs who downsize, outsource and cook their corporate books have consistently collected bigger paychecks than even the average overpaid U.S. top executive.”
——
This is the approx. monthly cost in US dollars for their stint in Af’stan; does not include costs for Iraq and Pakistan.

Out of interest, how much is the real cost to Cdn. taxpayers for our military stay?
http://downwithtyranny.blogspot.com/search/label/Afghanistan%20War%20spending
http://ncane.com/eigzhttp://ncane.com/95llhttp://ncane.com/ykx
Last link is interesting, as Russia (USSR) was there for seven years or so and lost (with 500,000 ground troops), it’s right next door to Iran and they know the US is increasing personnel there.

Things are getting toasty with Israel keeping mum — both countries may try and take Iran’s oil, which would explain why the Russians want back in — to protect Iran.

Speaking of the Middle East — http://ncane.com/f93 — comment by wrh.com.:

“The Lebanese Armed Forces (LAF) has accepted an offer by Iran to provide it with weapons produced by the Iranian defense industries, a newspaper in Lebanon reported on Wednesday. According to Al-Akhbar, the proposal was sent from the Iranian Embassy in Beirut.

[ “The Jerusalem Post could not independently confirm the report.” ]

Webmaster’s Commentary: “OK, Jerusalem Post, if you cannot confirm this, why are you running this article, except to demonize Lebanon and Iran?”
——
Curious that the UK freed the Lockerbie bomber (creating a possible rift with the US), supposedly in exchange for oil. What happened to all the black gold in the North Sea — gone dry?

Or, would it be part of a bigger plan to take Russia’s and Iran’s oil?

#8 timbo on 09.03.09 at 12:55 am

http://market-ticker.denninger.net/

Very good read and to the point. Nothing is fixed and pushing credit to the max only prolong’s the solution which is a contraction.

“Stop listening to the media idiots – they have not and will not discuss this facet of the crisis because doing so means admitting that their corporate parents are a huge part of how we found ourselves in this mess, along with all the advertising they’ve stuck in your face for the last 30 years to “go on, buy now, pay later!”

When are we going to stop living in lala land and really face reality. Start saving and bring back manufacturing instead of ponzi bubble stimulation.

#9 nonplused on 09.03.09 at 1:12 am

I posted this here because it’s the new thread, but it was a popular topic on the last two.

Derivatives: Do they cancel out?

The answer is yes, assuming the loosing counterparty (i.e. the one with the loss) can make good on the money they now owe the winner.

But the real problem with derivatives is that so many companies are counting on the credit worthiness of their counterparties in one derivative to provide them with the cash to pay the counterparty in another derivative, that if one company goes down a bunch more now have serious problems.

For example, why did the US Gov or Fed however you look at it, bail out AIG, which was an insurance company???? It wasn’t a bank. But they had sold lots of CDS’s to actual banks that the banks were counting on to hedge loan performance. So when AIG went down, due to losses on those CDS’s, the banks that were expecting payment were also at risk.

Goldman Sachs did the slam dunk. They hedged their credit risk with AIG by shorting them, made good, and then got paid a second time when the Gov bailed out AIG. Sweet! US taxpayer money at work!

The moral hazard here now is exponentially higher than it’s ever been. With the government backstopping all loosing parties in derivative transactions in an effort to save the winners, eventually most losses on most derivatives will end up being backstopped by the taxpayer. But the problem is the Gov has bitten off way more than the taxpayer can chew and the net result, mark my words, will be a premature collapse of the US financial system, which is underpinned by tax receipts.

The reason Paulson gave the US banks $700 large (billion, not thousand, it’s the new paradigm), was to save the winners in derivatives long enough so the losers could be identified, bought out and recapitalized. But it still amounts to the largest bail out ever in the history of everything.

And they still bit more than they can chew.

I predict, not liking to put a “what” and a “when” in the same sentence, that Q4 will be interesting.

Trading tip: buy everything you think you might have a need of in the next 5 years now if you have the money and the space to store it. Just a precaution. And anyway you need it anyway.

What happened to Xurbia.ca?

#10 Dean-oh on 09.03.09 at 1:17 am

Here is a list of properties in the Okanagan that sellers are trying to unload privately. I’ve been watching this list for quite some time and have only seen one place over $600,000 sell. Hardly any of these listings are being sold. I’m thinking it might be very advantageous for these sellers to list on the MLS. If the re market is doing so well then why are these listings not moving? Could it be under exposure, over pricing, or is the market lethargic in the Okanagan?

http://www.okhomeseller.com/Content/Okanagan-real-estate.asp

#11 Vancouver IS Immune on 09.03.09 at 1:23 am

Looks like the Vancouver “crash” is now over. It took 13 months for the prices to fall 15%, and less than 5 months to erase all those price declines. Gee, waiting certainly paid off for all those savers and sideliners…

Looks like Vancouver really is immune and “different.” No where else have you seen this type of rebound – certainly, in none of the US markets that saw “spring blips.”

And yes, low interest rates fueled the market this spring/summer. And yes, zero down mortgages fuelled the market in previous years. But the elimination of zero down did not lead to a collapse in this supposed “bubbliest city in North America”, and the now over recession failed to touch the market.

Onwards and upwards for the RE market. All of those people waiting 5 or 6 years for the “collapse” or “correction” can keep on waiting. The worse has been thrown at the market, and it comes out ahead…

#12 Vancouver IS Immune on 09.03.09 at 1:24 am

Proof of the strength of the Vancouver market:

http://www.vancouversun.com/business/Mortgage+rate+rush+helps+push+Lower+Mainland+prices/1955808/story.html

#13 Vancouver IS Immune on 09.03.09 at 1:25 am

The stats to support my assertion the Vancouver market is immune.

http://www.vancouversun.com/business/Mortgage+rate+rush+helps+push+Lower+Mainland+prices/1955808/story.html

#14 Mike (Authentic) on 09.03.09 at 2:22 am

Could it be that people are being “forced” into buying homes?

Most people think GIC’s, bank savings accounts and Canada savings bonds. Some even think mutual funds or stocks, but remember the pain of losing 50% last year in the stock market (and still hasn’t recovered despite all the green shoot talk).

So, that leaves the average joe a 1% cash bank account or gamble in a “detached from reality” stock market or a $500k shack in the housing market bubble.

They all are losing options if you ask me. Pick your poison.

Myself, I’ll pick cash at 1%. But I’m looking into the “virtually risk-free 5-7%” Garth options. That’s a winner.

Mike

#15 Munch on 09.03.09 at 3:27 am

“Even past Richmond”

BWAHAHAHAHAHA

Classic stuff!

#16 NOBODY on 09.03.09 at 4:46 am

So…..
If we all list our properties for sale tomorrow – even folks like me who now owe less than $40K on my mortgage and rent upon selling, this flood of new homes for sale will unbalance the supply & demand and thus prices will go down in a heartbeat, right?
Then this would be kind of self inflicted “price crash”, no?

#17 CD on 09.03.09 at 7:42 am

I read two blogs every day to keep focused on saving and not spending. This one and Gail Vax Oxlade’s. She has an excellent blog today on buying a home. Check it out.

http://gailvazoxlade.com/blog/

#18 Mike (Authentic) on 09.03.09 at 7:43 am

#16 NOBODY So…..If we all list our properties for sale tomorrow – Then this would be kind of self inflicted “price crash”, no?”

Yes it would and it would do wonders for a drop in price, raise DOM and turn the market into a very strong “buyers market”. Just put your home up for some huge amount it would never sell (’cause you don’t want to sell it!) for and leave it on the mls for a year.

When prices fall through the floor, pick yourself up 2, or 3 cheap homes from those who have to sell. Then take your home off the market when you close and convince others to do the same.

That truely would be messing around with the market for your own gain.

Mike

#19 Cash is King on 09.03.09 at 7:50 am

# 12 & 13 – Vancouver is immune

What happens when all those transient construction workers move on to the next big build in some other city or country? Then shortly thereafter a boat load of new “Olympic” Condo’s come onto the market plus 6 months later an increase in interest rates?

Less people + more condo’s + increased finance cost = collapse. And it will be ugly

But I’m sure the Vancouver Sun, BC mortgage Brokers and the local MLS leaders will publish a positive spin to the collapse.

#20 Gord In Vancouver on 09.03.09 at 8:28 am

#11,12,13 Vancouver IS Immune

Interesting – the article you made reference to told me to stay on the sidelines:

Sales set records in July and stayed hot in August. The question now is whether the market can keep up the pace.

“Before I would call this a complete recovery I would want to see a couple of months of data,” Robyn Adamache, a market analyst with Canada Mortgage and Housing Corp. said in an interview.
__________________________________________

Sales volume more than doubled but prices still dropped on a year to year basis, a metric that most media outlets have overlooked. This tells me that people are selling into this “rally”.

http://www.news1130.com/news/local/more.jsp?content=20090902_165100_13140

#21 Nostradamus jr. on 09.03.09 at 9:21 am

# 19 Cash is King

“”What happens when all those transient construction workers move on to the next big build in some other city or country? Then shortly thereafter a boat load of new “Olympic” Condo’s come onto the market””

…They will be scooped up by World Buyers and Sport enthusiasts who will recognize Vancouver for what it has become…

The next Financial, Trade, Cultural and LEISURE capital on North America…maybe even the world.

In a 900K population city…all you will have in place are…every World Class Four Season Sport Venues, airport sky train, and the sea to sky highway to whistler.

Did I mention the Gateway between North America and Asia?

Did I mention West Vancouver will be known as North America’s Cote d’Azure?

Did I mention West Vancouver & North Vancouver aka the North Shore, will become the largest private gated community in North America?

You heard it here first from me for a very long time.

Nostradamus jr.

#22 S on 09.03.09 at 9:47 am

Re: 2 Nibbly
“As I recall, it was a ’steal’ at $50. Must I remind you of how that call worked out?”

It was a steal at $50 if you held it and then sold at $100 ;)

Re: #21 Nostradamus jr

North America’s Cote d’Azur? I really hope you are being sarcastic :)

#23 Men With Hats on 09.03.09 at 10:01 am

Vancouver is immune alright . To people with intelligence.
Come the reckoning there are going to be hundreds of homeless idiots .
There is no vaccine for stupidity .

#24 X on 09.03.09 at 10:05 am

American stock market rally or are buyers about to have the carpet pulledout from under their feet.

http://www.gainspainscapital.com/index.php?option=com_content&view=article&id=129:just-who-was-buying-this-rally-again

#25 Men With Hats on 09.03.09 at 10:11 am

Nostrodumbass is a blithering idiot .

#26 Investor on 09.03.09 at 10:19 am

Extraordinary Popular Delusions & the Madness of Crowds.

#27 pezzazz on 09.03.09 at 10:35 am

http://www.vancouversun.com/business/Mortgage+rate+rush+helps+push+Lower+Mainland+prices/1955808/story.html

Vancouver is not that “different”. When is this honeymoon going to end in violent divorce.

#28 D in London on 09.03.09 at 10:36 am

#9 – nonplused

Thank you for your excellent (and easy to understand) post.

This is “the elephant in the living room” that, for the most part, people in the financial world (and especially M$M) don’t want to talk about. We need more talk about this sort of stuff here.

#29 Vancouver IS Immune on 09.03.09 at 10:48 am

Say what you want, but the stats prove the point. Even Garth cannot dispute the facts that the Vancouver correction has come and gone.

As for a flood of unemployed construction workers leaving, or an oversupply of condos, that could have materialized last year. Yet, housing starts declined sufficiently to goose demand, and now they are increasing again in line with the revitalized market. Nothing like having a hot RE market before the Olympics to capitalize on international investment interest :)

#30 JoeCalgary on 09.03.09 at 10:50 am

#9, nonplused, thank you. Anyone can google “derivatives cancel each other out” and find all sorts of links to those who have stakes in the game.

China is leaping ahead of the game, seeing the writing on the wall.

#31 Calgary_rip_off on 09.03.09 at 10:51 am

Garth,

Your post illustrates that many people have leveraged much of their finances in houses. What you do not illustrate in your post is that this is not necessarily by choice. Buyers are faced with the certain dilemma that renting leaves them options certainly, and oftentimes is almost as expensive as owning. So because interest rates are low and persons are able to buy, they do. What other option is there? Pay off another person’s mortgage for $1600 a month? Oftentimes the landlord holds less education and has a lower paying job than the renter. Something seriously wrong with that situation. Hence the bubble.

There are no solid reasons out there as to why housing prices should or will decline. Interest rates are tied to other economies. Unless China calls in the debt on the USA and Canada, interest rates are unlikely to skyrocket. There simply is no reason other than that one why the Bank of Canada would raise interest rates. The equation is a complex one, and political leaders dont have answers. The newspapers dont have answers.

If a person deems a property worth what it is advertised for and is in a position to comfortably buy now and factors in possible higher interest rates(like 10%) and they wouldnt be unable to pay the mortgage given those increases, then they should buy. One of the main problems is gathering the down payment so the amortization period is not lengthy and the principal is also not too high.

There isnt any solution to the above problem, especially in Calgary. In Calgary new persons to this city should be expected to be priced out-FOREVER. There isnt any hope of this bubble bursting and prices decreasing-too many variables to upset the status quo.

There are many options a person has though:

1)Train and train some more in your job to get performace increases and diversify your skill set so you can work more(Including weekends and when others are on vacation).

2)Dont worry about comparing yourself to others financially or otherwise-there’s always someone better or worse than yourself.

3)Ignore the media. Most of the people in the financial sector are scrambling to protect their jobs-they have to publish-something-so they gather what looks credible and present it as news. They know no more than the persons who are watching/reading their inaccuracies. Its truly amazing the amount of people actually getting paid for the drivel they present as news in the business sector. They should all be fired and get a real job-working in housekeeping at a resort or at a fast food joint. There they would actually be producing something.

4)Save your money-boycott spending. Easier said than done, but to be in control of your emotions is one cornerstone of solidity.

If you look at current MLS stats, especially from Calgary, you will see prices still at double what they should be, and for those prices laughable properties. What should housing cost? A good reference value for any housing anywhere would be Katy or Houston, Texas. Houses in that area are priced appropriately. Compare that to Calgary or anyplace else in Canada and it will be crystal clear why Canadian real estate requires finances of the person/family.

#32 PTDBD on 09.03.09 at 10:56 am

Mytopia

Interest for student loans go negative – wait for it, mortgages are next.
http://www.guardian.co.uk/money/2009/aug/31/student-loans-interest-rate-rpi

It’s the new paradigm. Save, work hard, pay off, and you lose. Go nuts into debt and you win.

#33 Jan Etter on 09.03.09 at 11:04 am

Vancouver IS Immune,

I’m not sure if you realize that your posts are a classic example of the type of thinking that Garth is alluding to in the title of this blog – myopia, or short-sightedness. Looking at only short-term data does not provide much support for a broad-based assertion about the long-term (or even medium-term) characteristics of the Vancouver real estate market. The same data could have been used in the first 3 quarters of 2008 (when the Canadian real estate market continued to climb after the US market crashed) as “support” to an assertion that the Canadian market is “immune”. Well, in the Fall/Winter Canada experienced a correction so that mere fact wasn’t a valid proof of such an assertion then, and it’s still not valid now.

While Nostradamus jr.’s posts are annoyingly and consistently boosterish, I don’t quarrel when someone expresses their opinion, but it bugs me when I see such an obvious misuse of data to support an opinion.

First, it’s not entirely clear from your post what you believe Vancouver is immune to, but it appears you are suggesting that it is immune to the deep and persistent decline in the US housing market, as well as less severe and less persistent declines elsewhere in Canada. If that’s the case, immunity is a relative term – are you looking at it like the real estate equivalent of a day trader, buying and selling based on short term data and trends, or do you mean immune from a long-term perspective of the ‘buy and hold’ real estate owner? Many on this blog (including the host) argue that the long-term prospects are shaky but I dare say that most refrain from making absolute pronouncements about the short-term prospects for real estate, because most realize that making such predictions are a mug’s game.

If you look short-term either forward or back in time, MLS data supports your general assertion that the decline in prices that started last fall have rebounded – in a number of markets, I might add and not just Vancouver. For example, in the GTA prices rebounded very quickly once the spring hit, so offering the fact that the Vancouver market rebounded as proof that the Vancouver market is “immune” is a logically flawed argument; at best, and the assertion that the Vancouver market is “different” from other Canadian markets is a matter of degree, not absolutes.

The next logical flaw is to assert that the newspaper article is “stats to support [your] assertion that the Vancouver market is immune”. The article essentially states that average resale prices have reached the previous highs, so I don’t understand how that statistic leads to your conclusion. As an aside, it also quotes ‘experts’ who suggest that the price increases are due to many buyers taking advantage of historically low short-term (there it is again) borrowing rates. Garth has, many times in this blog, provided valid and relevant suppositions to support his assertions that the increase in demand due to the low rates is not sustainable, and ever-increasing prices outpacing both inflation and wages cannot last forever and, over time, reverts to the mean. The real debate is over how long it will take, how high will the mean get adjusted upward and what will happen after it reaches that statistical point… will it continue to decline and thus pull the mean down further, and for how long, or will it bounce back and pull the mean up, and for how long? The statement that “Vancouver IS Immune” without any temporal context is meaningless.

#34 NoFreakinClue on 09.03.09 at 11:04 am

Hi Garth,

Thanks to recent boom in RE, the condo I pre-purchased in 2007 in west for 200k (10k down), and tried to sell this Jan-March for 235k (no luck) sold and closed yesterday for 270k.

Someone has to teach these kids who buy houses now, that your monthly payment is not what that matters. It is the price you get in that does. Interest rates and 5 year mortgage terms in canada make your loan like an Adjustable-Rate-Mortgage that reset in 5 yrs.

It is very hard to know if you are inherent pesimistic or just realistic bear when you see people rush for Nortel shares at 130. It is only obvious after the crash… Sweating goes on till then.

#35 jess on 09.03.09 at 11:20 am

Derivatives: Do they cancel out?

all of them? what about insolvency and “Herstatt risk”
didn’t the central commanders of finance still warn about currrency risks?

#36 John Warnock on 09.03.09 at 11:24 am

What interested me from the Allentuck piece on the Vancouver couple in the Globe last Saturday, and posted by Garth, was this:

(1) Residential mortgage $813,883 with an interest rate of 2.25%
(2) Rental property mortgage $229,668 with an interest rate of 1.45%.

Joint annual income of “owners”: $96,000.

What does that tell you? Smoking too much B.C. bud.

The orchard I used to own and operate in the Okanagan some time ago sold a few years back for $1.5 million. Amazing.

#37 Boombust on 09.03.09 at 11:24 am

“You know Canada is dead, sooner than later.”

What do you mean, Nostradamus? Care to elaborate?

#38 GTA on 09.03.09 at 11:32 am

Hey guys,
I have found a builder who has actually Lowered their prices right now!!!!
The one I looked at is a 2600 SQF detached house on Young and Jefferson Side road (I believe it is still Richmondhill) on a 45 by 89 feet lot for 462K
Anyone here can argue that this price is not resonable?
They only have one lot left and I am seriously thinking about it.

Any thoughts guys?
Thanks

#39 PTDBD on 09.03.09 at 11:34 am

Albertatopia Booming

$1.2M severance for Alberta former Deputy Minister

$22.5 million total in severance payouts for Health Services employees last year

No wonder certain people are heard to say…”recession? what recession?”

#40 Live Within Your Means on 09.03.09 at 11:54 am

#25 Men With Hats on 09.03.09 at 10:11 am
Nostrodumbass is a blithering idiot .

Or, aka Harry S. Always looking for attention in his parent’ basement.

#41 TheComingDepression on 09.03.09 at 11:57 am

Nastrodumbass where do you get these idiotic notions? People in the film industry hate dealing with the red tape attached to Vancouver. THEY HATE IT HERE. The laws are insane. There is no investment in Vancouver. No Manufacturing, no banking,no fashion design, no fishing industry anymore. There are leaky condo repair companies, gang dealings, drug dealers, police corruption squads,window cleaning companies, construction workers, empty retail stores, empty restaurants and 100’s of Asian jaywalkers..

#42 Mike in Etown on 09.03.09 at 11:59 am

I grew up in Richmond and always dreamed of one day when the train would could down Three Road instead of sitting at the bus stop at Richmond Centre and then another bus stop at Granville and 41 Ave.

But now I live in Edmonton and have bigger and better things to worry about.

But, it was a dream of mine at one point!

#43 kc on 09.03.09 at 12:02 pm

Look out below… you know things are getting bad when…

Greyhound ends service in Manitoba, eyes other cuts

“Greyhound Canada said Thursday it has made the “very difficult decision” to shut down all operations in Manitoba and some in Ontario, blaming the federal and provincial governments for ignoring problems in the bus industry.”

http://news.globaltv.com/story.html?id=1958774

#44 Westcoaster on 09.03.09 at 12:05 pm

All G7 economies will grow in the third quarter, except for those of Canada, Britain and Italy, organization says in new outlook 12:20 PM EDT 61 8
Canada: A ‘long and winding’ road to recovery
Europe: Expect ‘uneven’ recovery: ECB chief
Employment: It’s a longer wait between the firing and the hiring
Canadian housing on brink of rebound
Improving resale market, lower inventory levels should boost residential construction, CMHC says 9:44 AM EDT 17 1
Nice juxtaposition of headlines here: the first few warning of slow economic recovery, continuing unemployment, the latter regaling us with the notion that we are on the brink of a housing rebound – I think not.

#45 ginner on 09.03.09 at 12:33 pm

Perfection of the short sale in 1980’s…

Garth, I have been enjoying your ideas on selling real estate short and how to profit on that. I have been discussing the smae thing with some friends for the past few months. Of course there are lots of options out there which include short ETF’s, shorting bank stocks with plenty of exposure to the Canadian real estate market (hello CWB), doing what one smart hedgie did in the U.S. in shorting derivatives two years ago, or what you have been proposing here.

I would like to make one ammendment to your strategy for those that want to monetize their gains but don’t want to uproot their families. In the 1980’s my father saw the potential for a real estate correction and was going through a divorce and needed capital. He took his second property, a farm, and found a speculator to sell it to. The deal he made was to sell the property (not sure of the exact prices, but this should give you an idea) for 200K, got the person to agree to rent it back to him (see sale and lease back agreements) and added an option for repurchase. The buyer had the right (and he had the obligation), to sell the property back to him after two years for 150k. Well, it turns out that is exactly what happened. The market tanked, and he stayed on the same property while banking a cool 50k. For those wanting to sell, but not wanting to move, it’s a great way to reduce your risk of a collapse.

I actually like it a bit better than the long closing period with a large deposit. At least it gives you, and the buyer, another option. It also gives the buyer some comfort that they know precisely what their downside is…they have an insurance policy.

#46 Evangeline on 09.03.09 at 12:35 pm

#32
PTDBD

((It’s the new paradigm. Save, work hard, pay off, and you lose. Go nuts into debt and you win.))

Like the Won told Joe the Plumber, gotta spread the wealth around.

#47 D in London on 09.03.09 at 12:54 pm

# 43 – kc

Even Greyhound wants a bailout! (“…has asked for assistance to cover its losses”). Now I’ve heard everything.

And to think that people scoffed at Larry Flynt when he asked for a bailout. Soon the Grow-Ops are going to start asking too.

#48 Nostradamus jr. on 09.03.09 at 12:56 pm

Men With Hats

…Anyone mentioning Vancouver seems to hit a nerve for you.

…What’sa matter…..Regret selling your home 14 years ago, thinking that was the top and now your broke?

Hey, you still have a hat.

#49 Avi on 09.03.09 at 1:00 pm

Hi Guys!

What you talking about real economy !
Everithing is under control, long time ago.

or just watch on YOU TUBE videos from
Death persons:

-The President Who Told The TRUTH
-Aaron Russo – Rockefeller Reveals 9/11 FRAUD to Aaron Russo
-Reflections and Warnings: An Interview With Aaron Russo (All 10 parts)

And about Evils guys:
-Criminal Rothschilds
-The Rothschilds Exposed (3 parts)
-The House That Rothschild Built part 1
-THE ROTHSCHILD
-THE ROCKEFELLERS

http://geraldcelentechannel.blogspot.com

You should watch those videos and see where is going world economy…

#50 Vancouver IS Immune on 09.03.09 at 1:10 pm

33#

In terms of a classic case of short term thinking, all I can say is that people have been calling for the “bubble” to burst since 2004 in Metro Vancouver.

We are coming up to 2010, so this inevitable “bubble burst” has yet to materialize. And if it materializes in say, another 3 or 4 years, is it really a “bubble” if it lasts almost a decade?

And if it takes say 5 years to deflate, is it really a “bubble.” Certainly this “bubble” is not comparable to other “bubbles,” which lasted a few short years. If you have been sitting on the sidelines, that is potentially a DECADE of waiting – potentially 15 if you wait until the “bottom.” Imagine the dent you could have put in a mortgage if you invested during that time, and the amount of rent wasted for 15 years.

The government has consistently taken measures to backstop the RE market, so that each time it looks like it might be going soft, it gets some support. First, we had minimum downpayments reduced from the traditional 25% down; then relaxation of income standards from rental income; then changes in the amortization periods; then relaxation around income declarations from the “self-employed”; then the introduction of zero down/40 year mortgages; then negative downpayments with 5% cashback mortgages; then a lowering of interest rates; now banks are quietly providing mortgage relief to troubled lenders, then….[insert next action – 45 year mortgages, 15 year fixed mortgages, homeowner bailout packages, first time buyer grants, etc. ??? ]

It is pretty clear at this stage of the game that this RE market is “just too big to fail,” and the government will do what it must to support it. When home ownership rates hover around 70%, and 80% of Canadians net wealth are in their homes, homeowners are an electorate that you cannot afford to piss off. Even if interest rates rise, some means will be employed to keep the market buoyed.

That latter statement is based on past precedent of interventionist policies that we have witnessed since 2002, just as “bear” predictions of massive interest rate hikes and comparisons to “bubble crashes” are based on past precedent.

People can keep waiting on the sidelines, hoping, wishing, and praying for a “crash” or “correction”, so that they can afford a piece of real estate. However, the fact of the matter is that bubble predictions have been around since 2004, and all of them have been proven wrong. You can take the long term perspective #33, and we can reconvene on this site in 2013, and discuss the inevitable decline :)

#51 Samantha on 09.03.09 at 1:26 pm

#43 kc

I just finished listening to an interview with a Greyhound rep on CBC.

Funny how the rep didn’t know the number of passengers served in Manitoba (she said she would have to get back to the interviewer), however she did state it “was a large number”. Large number of people served but not lucrative?

Greyhound just built a new terminal near Winnipeg airport. Why would they do that if business in Manitoba was so bad?

And, they also have courier service as part of their bus service, which is widely used in rural areas. What about the profit from that service?

This is a huge issue for people in rural Manitoba, particularly for accessing specialist health care, testing and treatment in Winnipeg or Brandon.

And, off this topic but carrying on with health care, here’s one from England that made my blood run cold. Is this happening because of financial issues in health care?

Before I post the link and to bring this issue closer to home, several years ago my Mother who lives in the same town as me, was admitted to our small hospital for a minor issue. She was 84 at the time.

The nurse who attended had a form she wanted my Mother to sign. Luckily I was there to intervene.

This form was basically a DNR (do not resuscitate) with some options. The patient is supposed to tell them if they want heroic measures in order to be revived.

I told this nurse that my mother was not palliative and why on earth would she want to sign a declaration stating DNR?

Is this the solution – just have elderly people sign a DNR and let them die? At what age is someone considered “too old to live”? Or, too expensive to treat, too much of a ‘burden’?

If we go that route, then why stop there? Accident – gone. Brain injured – gone. Disabled – gone. Cancer – gone. Never mind treatment and fighting for your life – it’s over from the moment of diagnosis and/or injury.

If our civilization is not inclusive of all our citizens, then we are not civilized. We cannot use global economic conditions as an excuse to forget that.

Here’s the link for the UK article:

http://www.telegraph.co.uk/health/healthnews/6127514/Sentenced-to-death-on-the-NHS.html

#52 pbrasseur on 09.03.09 at 1:37 pm

Vancouver IS Immune (#50)

What are you talking about, housing has failed before, many times. Why would it be different this time?

Because it’s too big to fail and governement will bailout?

First, governement is already doing that through the CMHC:

http://americacanada.blogspot.com/2009/07/cmhc-and-our-government.html

Second, any market that’s unsustainable will eventually correct, even more so if governement action aims at making it even more unsustainable.

That’s how markets work, in the end the markets always win.

It’s just a matter of time.

#53 Crash on 09.03.09 at 1:38 pm

#50
Your smugness is typical of a bubble mentality. Also just because the “all knowing” government central bank steps in to support an economic sector with artifical stimulus does not mean it isn’t still a bubble. What it really means is once the stimulus is removed the legs will be knocked out from under the market and it will still come crashing down. And the longer the artifical stimulus exists, the worse things will be when it ends.
A rubber band can only be stretched so far.

#54 rubberduckie on 09.03.09 at 1:55 pm

Here’s the really sad thing about living in Vancouver. You watch shows like Big City Broker and you lust after the Toronto pricing. Seriously. I don’t know what they’re whining about in Toronto! If we could get that pricing for real estate in Vancouver I’d be hitting the Buy It Now button.

#55 Munch on 09.03.09 at 1:59 pm

Hi

I told you on Monday to “Sell! Sell! Sell!”

You ignored me so now you pay the price. Gold [howdy Garth] is telling you something. In South Africa, we make that there gold “stuff”, so heed what I say when I tell you that something BIG is afoot – Dr AU knows all!

But feel free to ignore me again – I don’t have any feelings left to hurt!

regards to all

Munch

#56 jess on 09.03.09 at 2:04 pm

“bubble predictions have been around since 2004, and all of them have been proven wrong”

Deferred by law suits?

#57 BBC on 09.03.09 at 2:10 pm

Jan Etter – excellent post! Sadly, I think that ‘Vancouver IS Immune’, is immune to logic and common sense. Oh yeah, he/she is probably in the real estate industry too…ha ha ha!

#58 kenken on 09.03.09 at 2:17 pm

RE picked up big time… prices and sales
this has been aided by lower supply of houses and historically low mortgage rates – bidding wars!!!
On this blog, everyone is waiting for the collapse!! but there will be not so much of a fall that will make those waiting benefit

Since the peak of last year, prices has gone up 5-6% yoy in Toronto!!!
we all believe an increase in rates will case prices to go down…YEAH…so?? prices will go down 5-10% and with rates up, ppl will be worse off when buying!
+ the govt and BoC know that increased int rates will ruin the market and cause decrease in housing wealth, etc… why would they increase rates then?? they wont!!
Carney (BoC) ‘committed’ not to increase rates before June 2010…some economists believe the low rates will stay till 2011….

SO!!!!!?????????????
by that time, the country will be out of recession – so will US and others…hence boosting demands, revenues etc… hence increasing housing demands but not lead to that much of housing price decrease!

All logic pointed out to a housing bubble explosion in Canada…but that has been averted by the govt/BoC
those who did not buy early 09 when prices were indeed down 5% have missed out!!

the RE bubble is here to stay!!!!!!

#59 S on 09.03.09 at 2:22 pm

#50 Vancouver IS Immune

What happens when the BC government can’t afford to keep the RE market in Vancouver afloat? The BC government ignored capital investments for decades, so they will have schools, hospitals, etc all needing serious capital funding (Olympics havn’t done those much good). Add in a post-Olympic recession and Olympic debt, and they might not be in a position to keep the housing market afloat. Do you also not see that all of these measures to make it more “affordable” that you mention, are exactly what lead to this whole mess in the first place? It’s just not sustainable. Salaries are much too low compared to housing prices, and renting is so much cheaper, that something does have to happen. It’ll be interesting to see what happens after the Olympics!

#60 Vancouver IS Immune on 09.03.09 at 2:30 pm

57 BBC

Ah, so typical. When presented with a contrarian viewpoint, supported by stats and analysis, you chalk the person up to being a realturd. Sorry to disappoint…I am not in that weasel profession, or in any way connected to its equally vulgar sister, the development industry.

#61 Evangeline on 09.03.09 at 2:33 pm

((Is this the solution – just have elderly people sign a DNR and let them die? At what age is someone considered “too old to live”? Or, too expensive to treat, too much of a ‘burden’?))

Samantha, the bureaucrats who run our health care system don’t have an unlimited budget to work with so they do have to make difficult decisions. What do you propose as a solution to their problem? Should we pay more tax?

#62 S on 09.03.09 at 2:38 pm

#54 rubberduckie

I felt the same way, so I moved to Toronto where I could afford a place ;)

#63 Rick on 09.03.09 at 2:53 pm

Hey look…warnings of a Garth-style bank holiday

http://www.tennessee.gov/tdfi/banking/bulletins/B-09-1.html

#64 Nostradamus jr. on 09.03.09 at 3:04 pm

Stocks and Gold ready to drop from here…big time.

…U.S. Dollar will be the safe haven.

Nostradamus jr.

#65 jussupow on 09.03.09 at 3:07 pm

Do you actually get what #50 is saying? If you are a young fella waiting (for say 5 years) for the bubble to burst… you may die in your bed by old age with that hope alive. The point is not that the bubble does not exist. But that it is hopelessly impractical to wait it out. How can one talk about “timing” being everything and still not get it through his skull? And why oh why one is labelled as a “RE shill” by articulating such a (non negligible) probability?

#33 Do you have enough ‘temporal context’ now? You are very welcome to come with your own ‘temporal context’. To our collective shock and awe. Otherwise come along round 2013 and tell us one more time bout the imminent utter bubble bursting inevitability. Lost count how many times you mentioned ‘short time’, ‘long time’, super-duper time… refusing to define any of these but still complain about ‘temporal context’. Gibberish pedantic nonsense.

#66 $fromA$ia "Garths Nugget Boy" on 09.03.09 at 3:09 pm

“Experienced politician Garth Turner is seeking the federal Liberal nomination in Dufferin-Caledon.”-Garth.ca

You have done what you said you wouldn’t do to me.

You said you would not forsake me.

Your a perfect politition. :P

#67 Vancouver_bear on 09.03.09 at 3:10 pm

#21 Nostradamus jr. on 09.03.09 at 9:21 am

haha…..nice one…..Have you ever thought of becoming a clown?

#68 Live Within Your Means on 09.03.09 at 3:38 pm

#51 Samantha on 09.03.09 at 1:26 pm
I’m not sure if you quoted that article or you’re responding to a previous poster.

When I and my husband did up our wills we chose to go with a DNR, even though its not totally legal in our prov & maybe in the rest of Canada. However, most Drs, with a 2nd Dr’s opinion, will agreee. Plus it has gone on for years, just under the table. I happen to believe in euthanasia. We threat animals who are suffering better than we treat people. For all those so called libertarians what say you?

#69 Live Within Your Means on 09.03.09 at 3:42 pm

#66 $fromA$ia “Garths Nugget Boy” on 09.03.09 at 3:09 pm

Based on your name, why should Garth care what you think. That goes for many other posters on this blog.

#70 Jan Etter on 09.03.09 at 3:57 pm

#50, thanks for the additional post, I was truly interested in the reasoning behind the general assertions in #11, #12 and #13 (BTW I’m not being facetious or sarcastic…thought I should clarify since tone is always hard to discern in a blog posting).

Although I sold my house over a month ago, I am actively looking to buy if I find the right house at the right price (a big caveat, I acknowledge) so I don’t put myself in the camp of those waiting on the sidelines praying for a “crash” or “correction”, although for purely selfish reasons that would be great! I certainly agree with you that predictions of a bursting “bubble” have not come to fruition due to government intervention in natural market forces, and that counting on a crash or correction may be a long time coming.

Also, if there is a gradual decline in inflation-adjusted
average home prices over 15 years I agree it would be difficult to classify as a bubble or even a correction (I have noticed the terms “crash”, “correction”, “bubble”, etc. are sometimes used loosely on this blog, which has on more than one occasion led to confusion as each can mean different things to different people).

In fact, I am willing to take the radical position that although government has recently taken steps to soften what would probably have been hard landings, government in the future might design policies to try and achieve a gradual deflation of average prices!

Real estate-related government policy is one component of many that makes up the broader economic policy required to achieve moderate inflation and steady economic growth, given the alternative (Let’s be like Zimbabwe! No, let’s be like Japan!), but how they achieve this is part of the balancing act between market forces they cannot control, actions of other governments and world events they do not control, and government policies they do control, like the CMHC targets. I’m open to the possibility that they get it right and see that a gradual, gentle deflation of housing prices is a large component of ensuring overall economic stability, and that either rapid inflation (“bubble”?) or sudden deflation (“crash”?) in values will be more damaging in both the short and long term. In one sense I agree that from a reigning government’s perspective real estate values are “too big to fail” based on Garth’s statistic that 80% of family net worth is tied up in their homes. However, I don’t think removing interventionist policies (save for the principal residence capital gains exemption) or failing to implement new ones would be seen as a government’s betrayal of the electorate. I don’t recall a great hue and cry when maximum 40 year ams were reduced to 35 year ams. Like the ever-increasing proportion of taxes that the government has been taking from your paycheque, when something is done gradually over the years you don’t notice it’s happening to you.

That said, I also don’t discount the possibility of the forces beyond the government’s control overwhelming the government’s ability to moderate a “bubble”, “crash” or “correction”. It has happened before, there is a good chance it will happen again. As for what will happen in the future, I think it will take at least until 2019 to give a good assessment of what the unexpected “recovery” in real estate prices in 2009 was – a true recovery to pre-economic crisis levels and growth, the beginning of the crash from which we will never recover, or something inbetween. See you then, same time same place!

#71 Bill-Muskoka (NAM) on 09.03.09 at 4:10 pm

Stop deleting my germane posts.

#1 Nostradamus jr.

First of all…You forgot to say ‘Please Sir’ and second, what germane (or should that be German?) posts?

#72 Bill-Muskoka (NAM) on 09.03.09 at 4:14 pm

Whoeeeeeeeeeeee, I am going to don a Tyvek suit before coming back into this pissing contest!

#73 Vancouver_bear on 09.03.09 at 4:24 pm

#21 Nostradamus jr. on 09.03.09 at 9:21 am

At least kids will be entertained when you start a serious clown’s career. Not just a career of blog’s clown….think about it….Also there will be some pennies left to sponsor that nanny for your puppies.

The reality will be unfolding on it’s own, despite of what ppl say on this blog……we are in for years of financial turmoil beleive it or not. That will afect our lives in an unprecedented way. All aspects will be affected including the “safest” investments in RE.

#74 TheComingDepression on 09.03.09 at 4:27 pm

The more debt you have the wealthier you are. Its true, the US GOVERNMENT said so:
http://thecomingdepression.blogspot.com/2009/09/bigger-national-debt-better-we-are.html

#75 rory on 09.03.09 at 5:11 pm

#55 Munch …errr I mean Dr. AU (good cover)

“I told you on Monday to “Sell! Sell! Sell!” ”

I sold half my gold stocks some weeks ago and now they are up 25 to 50% …jeez …so sell what? …already sold most non-gold, I mean AU, stocks …so are you saying to also sell all the AU stuff as well?? …you say “BIG is afoot” …wrong – ‘afoot’ is 12 inches, big can be more than that (sorry, bad joke)…also Nord Jr is agreeing with your sell, sell, sell …a real dilemma for us all esp. dd & gang …rofl.

#76 Samantha on 09.03.09 at 5:16 pm

#61 Evangeline:

“Samantha, the bureaucrats who run our health care system don’t have an unlimited budget to work with so they do have to make difficult decisions. What do you propose as a solution to their problem? Should we pay more tax?”

Your response refers to an issue outside of the point(s) I made in my post. My mother was not critically ill. She was in (and continues today) to be in excellent health. She was in the hospital for a minor health issue (bladder infection).

Any infection at any age can cause anyone to become “confused” and I don’t know about you, but that is not the time I would be asking a patient to sign a DNR order.

However to address your points, Evangeline, one of the phrases in the first sentence I quoted from you, “bureaucrats who run our health care system” is a good starting point in the solution you inquire about.

We (in MB) have regional health authorities and resulting bureaucracy that creates needless additional expense. This system further creates difficulties for the nurses and physicians who must work within it. There is a movement currently to eliminate this system in Manitoba.

Why is it that techs in Northern Manitoba can knock off 20-30 ultrasounds per day (this is from people doing the job) while the same techs in other areas have a 5 person cap so they can avoid carpal tunnel syndrome?

Why is my small local hospital overstaffed in the administrative area? I can go in there any time and have yet to ever once see the people there hard at work. They are so relaxed it feels like entering a spa. If I wasn’t so furious over what their salaries are costing, it would be laughable.

Why did some health care graduates chase beau coup American bucks instead of living and working in Canada? Greed.

There is nonsense happening on both sides of the fence from administration and health care workers. It needs to stop before our health care system collapses from sheer stupidity.

No one has an “unlimited budget”, for business or personal operations. So, any budget must be administered sensibly, with appropriate planning for the future.

The population graphs existed 50 years ago with demographic implications. The planning should have been done then, with appropriate changes as other considerations became apparent, as in the case of our health care graduates’ Southern migration.

As to the tax issue, I don’t give a rat’s behind if I pay more taxes. What I do care about is how my tax dollars are being administered.

If you want to see an example of a highly taxed Country with excellent health and social services, take a look at the Dutch system. They have made mistakes, but they learn from them and continue to innovate.

#77 My_view on 09.03.09 at 5:19 pm

“I’d say this might be the last one for years to come.”

How long Garth? 5-10 yrs? 10-20yrs? Never-ever-ever again?

#78 Barb the proof reader on 09.03.09 at 5:21 pm

#51 Samantha,

DNR is very common. It came up with my mom in the months before her illness won, and with my dad, before his cancer surgery (he’s now 92), and with my father-in-law (who unexpectedly died in hospital last month). In each case, the doctor talked to them, or the family member, and gave them the option of signing the paper.
In each case, DNR was their, or their caregiver’s decision. It’s just shocking at first, but when you look at it from their perspective they know what they’re doing. The decision has nothing to do with the hospital, nor the doctor, nor cost, it’s purely a personal decision left up to you, and in each case I’ve seen so far, I ‘get’ their reasons, even though I selfishly wanted them around longer. I also believe we should revive everyone who wants to be revived, and cost should not be a factor.

#79 rory on 09.03.09 at 5:28 pm

FYI to all since politics was blogged on yesterday …

I just finished Ezra Levant’s new book on the Canadian Human Rights organizations …Ezra’s savior was the blog world or digital democracy …kinda parallels or follows in the spirit of GT’s Sheeple book.

GT, you may have already read but in case you have not it will be a good read as you are entering the political fray where democracy and digital democracy need to rule.

As a note – all should read this book whether left, right, Con, Liberal, or of any religion.

Visit his website at erzalevant.com …it is a heck of an eye opener on how these organizations operate…very scary stuff …it is titled – Shakedown: How Our Government is Undermining Democracy in the Name of Human Rights.

Before some get to excited, this was not a Conservative initiative that just started. These organizations have been around for 20+ years.

#80 Two-thirds on 09.03.09 at 5:39 pm

Further job losses to come in the oil patch:

“CALGARY, Alberta (Reuters) – Suncor Energy Inc said on Thursday it expects to cut 1,000 jobs by the middle of next month as it consolidates operations and reduces costs after its C$22.7 billion ($20.4 billion) acquisition of Petro-Canada last month.”

http://money.ca.msn.com/investing/news/breaking-news/article.aspx?cp-documentid=21516461

#81 Nostradamus jr. on 09.03.09 at 5:41 pm

“””In a profile of Liberal leader Michael Ignatieff, Canadian expat Adam Gopnik followed the Canadian ex-expat to Stratford, Ontario. Ignatieff later revealed to the Goppers that: “Seeing William Hutt do King Lear [at Stratford] in 1964 was one of the three or four shaping experiences of my life; I don’t think I’ve ever written a book without mentioning Lear.”

…There’s only one problem with Ignatieff’s story and that’s that William Hutt didn’t play King Lear at Stratford in 1964. John Colicos played King Lear at Stratford in 1964. Hutt didn’t play Lear at Stratford until 1972.”””

…Garth….distance yourself from these Liberal fools before it’s too late.

If you are your own man you are a Political Independent or leader of a new Political Party.

….Think, “”The Eastern Canada Party””

Take Vancouver Bear, dd and Men with Hats with you, they can be your bodyguards.

Nostradamus jr.

#82 eddy on 09.03.09 at 5:52 pm

i don’t agree, buying rental property is a great ideal, if you know what you’re doing

He doesn’t. Nor does (almost) anyone buying s SFH. — Garth

#83 jess on 09.03.09 at 5:53 pm

“U.S. District Judge Shira Scheindlin in New York rejected the ratings firms’ arguments yesterday, forcing them and Morgan Stanley, which was also sued, to respond to fraud charges in a class-action by investors claiming the raters hid the risks of securities linked to subprime mortgages.

“It’s the first major ruling upholding fraud allegations against an arranger and the rating agencies on the instruments that are at the heart of the financial crisis,” said lawyer Patrick Daniels of Coughlin Stoia Geller Rudman Robbins LLP, the San Diego-based securities litigation firm that represented investors in the case.

“In previous cases,” Daniels said, “the ratings companies would hide behind First Amendment protection, saying they were merely reporting their opinion.”
…bloomberg
By Joel Rosenblatt and David Glovin

#84 X on 09.03.09 at 6:05 pm

A couple of threads on http://www.canadianmoneyforum.com about RE opinions.

http://www.canadianmoneyforum.com/showthread.php?t=956

http://www.canadianmoneyforum.com/showthread.php?t=948

#85 Samantha on 09.03.09 at 6:30 pm

#68 Live Within Your Means

Sorry for the confusion. Part of #51 was a response regarding the Greyhound issue. The Palliative Care issue and related news link should have been addressed in a separate post.

I am very distressed over the news from England as I have palliative care training. The “death pathway” policy used by the NHS is not palliative care and further, the way in which this policy is being used can cause people not only to die prematurely, but also to die when they are not terminally ill and are in fact recovering from their illness.

The DNR order presented to my Mother, at a very inappropriate time, in our local hospital was a new policy according to what the nurse told us. When this sort of “new policy” is launched, I always wonder why.

A DNR order is not the same as a “Living Will”.

My Dad had a DNR (which is not transferable between health care institutions) when he was diagnosed with a terminal and aggressive cancer.

We found out about the nontransferable part of this document when he was taken to another hospital to receive palliative chemotherapy (to reduce pain). His heart stopped in the elevator and despite my brother’s protests and citing of his DNR order, they revived my Dad.

Palliative care and euthanasia are two different issues. I had an aunt in Holland who chose euthanasia for liver cancer when the care she received was no longer sufficient for her to die peacefully at home.

Properly delivered traditional palliative care can help people die with dignity and peace and addresses issues of proper pain management, so there is no need for suffering.

What I believe can be best summed up by a quotation from Dame Cicely Saunders, pioneer of the modern Hospice movement:

“You matter because you are you.
You matter up to the last moment of your life,
And we will do all we can,
Not only to help you die peacefully,
But also to live until you die”

p.s. “We threat animals who are suffering better than we treat people.”

I wish we treated animals and people better. A surge of animals in rescue is another part of the foreclosure fallout and tough economic times.

#86 Devil's Advocate on 09.03.09 at 6:42 pm

The Okanagan’s housing market is poised to start recovering on a number of fronts in 2010, says the Central Mortgage and Housing Corporation.

New home construction, total sales, and average sale prices are all showing signs of rebounding next year, the CMHC says Thursday in its latest outlook for B.C.

Total housing starts for Kelowna area are forecast to be 750 in 2010, up from 600 this year but way down from 2008, the last hot housing market year when 2,257 structures were started here.

Total multiple listing sales for the Kelowna area should increase to 3,700 (3,300 in 2009) while the average selling price will rise to $405,000 from $390,000 this year, the CHMC predicts.

The 2008 figures were 3,445 homes sold through multiple listing at prices that averaged $430,755.

“Key drivers of housing demand are showing signs of improvement,” noted a CMHC market analyst in explaining the optimistic forecasts. These include low mortgage interest rates, population growth, and tighter resale market conditions.

http://www.castanet.net/edition/news-story-49300-1-.htm#49300

Ya right… SPIN, SPIN, SPIN.

#87 Increasing that 1% on 09.03.09 at 7:03 pm

#43. kc and #51. Samantha, regarding Greyhound bus lines decreasing/ eliminating service

I’d just called them about going to east coast (from Ont), and all together it would cost @ 1000$ for two adults -(child only goes up to age 12), round trip- but this involves 5 buses, and 3 buslines to get there.

Greyhound would only go up to Ottawa.
Just to get information accurately to plan the trip involves calling the three different bus lines…plus to get the tickets- I don’t even know- as didn’t pursue

– Yes, I was told if planned 21 days in advance it’s cheaper, but what happened to just hopping on a bus to go somewhere when you know you can…

According to the link, from kc, Greyhound thinks they’re reasonably priced – as compared to Air Canada?!! Air Canada is not cheap to start with…
The example of bus ticket being less than half price of Air Canada flight, if booked 21 days in advance, being a good thing is to me to be expected that it’s that much less!!
It should be morrrre less – one would be on the bus for 3 days vs 5 hours!!! There’s much less overhead needed…

Why would Canadian taxpayers subsidize this company?!
Of course good bus service is needed in this country, and it would be used a LOT more if the prices were more reasonable- so I hope some major competition -from Canada- does start up- grassroots- whatever- there are lots of people who I’m sure could think up something to fill this opportunity.

#88 Barb .. a reader in Calgary on 09.03.09 at 7:36 pm

#9 nonplussed, good post.

and..

http://www.Xurbia.ca/

#89 David on 09.03.09 at 7:41 pm

The best posts are always the one that state it will not happen here and this time it is different. Rest assured that people who ignore these truisms have at least a fighting chance of financial survival. The housing bubble hit a plateau this summer and no amount of hype and helium will keep the bubble inflated. It wouldn’t happen in wonderful Alberta either we were told. Let us all hope that the peddlers of that falsehood are well stocked on macaroni recipes. There is a big Texas sized hail storm coming to the housing market in Canada. The best escape is selling now, renting and sitting on the sidelines, because the game will be getting really rough from here on in and the losers will vastly outnumber the winners. People holding 35 year minimal down payment mortgages will NEVER see their money back and be stuck holding a perpetual income sucking debt instrument. Home ownership is priceless RIGHT?

#90 PVC on 09.03.09 at 7:56 pm

When is Garth gonna come out of the Gold closet?

When the oil’s gone. — Garth

#91 Onemorething on 09.03.09 at 8:17 pm

Does any one of you posting here look at the global economy outside Canada and the USA?

Do you understand the contraction of Global GDP?

What is Canada going to look like when all demand for it’s exports is dead or is being sold at below cost to foreign countries for what they can afford or negotiate, and Canadians couldn’t neg themselves out of wet paper bag!

Jobs lost in Canada will never come back. Those who keep them will have a 20-30% haircut minimum not unlike the ROW (REST OF WORLD). 50% USA.

Contraction in spending by the consumer, retrenchment by everyone and constant deflation caused by the continuing ponzi bubble means a manipulation just the same as Japan. Some say it will be shorter 5-7 years. I say no way, this is a global thing not just a Japan thing.

Too many cooks in the USA accomplishing nothing and CANADA taking a number just like everyone else.

DONT DO RE!
DONT DO GOLD!
LOOK AT OIL!
LOOK AT USD!

PAY OFF ALL OF YOUR DEBT!

DEBT IS A CONSTANT – VALUATIONS ARE VARIABLE!

Vancouver is a particularly strange place which will have the strangest outcomes. Once the Circus comes to town (Olympics) and gone, so will the love for VAN finally turn the other direction.

It’s not just the pattern and or fact that Olympic destinations have always faltered post games, but VAN also supplies the most unaffordable RE in the WORLD!

WOW this BUBBLE is gonna blow!

#92 john m on 09.03.09 at 8:20 pm

The housing market is headed for a crash that will be devastating to so many people. The last year has destroyed probably millions of peoples savings.The Harper government has told us from day one we are fine..in fact since they have been elected they have made approximately 3000 patronage appointments (i have read) .Life is fine in Ottawa in fact they have not even recognized the dire straits a lot of tax payers are facing .The vote buying schemes have eaten up a 13 billion dollar surplus which they inherited before our economy hit the toilet . I can only shudder to think with an election pending the tax dollars they will throw out at every riding to keep power……..its already happening………….i hope people see whats happening…………IMO the Harper Government does not give a “rats ass” about the hardships so many Canadians are facing…………nor do they even for a minute recognize the hardships so many are facing———its all about power and has been since day one!!!

#93 Barb .. a reader in Calgary on 09.03.09 at 8:31 pm

#85 Samantha

I also wanted to add that I read your UK post and it was very concerning. Obviously some grave errors are being made there, no pun intended. Yes, they are unwittingly putting those patients in a state similar to end stage, and not doing enough independent assessment. A lot of illnesses mimic end stage, so the greatest of care and verification has to be used.

As my brother always says, ‘in the medical field.. someone had to graduate bottom of the class..’

And so it goes with decision makers.. I wouldn’t trust some of the doctors I’ve met. I’ve witnessed some knee jerk reactions to immediately wanting to put patients on pain killers, before getting to the bottom of the problem. Easy way out I guess… well, easy for those who graduated bottom of the class.

#94 miketheengineer on 09.03.09 at 8:38 pm

#63

Looks like a very nice, cover your behind, you have been warned memo.

My last employer did the same thing. Issued memos about upcoming trouble in the company. Shortly after, bam, 70% of the employees permanently terminated.

The big boys know what’s coming. I have never ever seen a memo like that before from a bank. If you are not prepared for a Quebec Type Ice Storm (ie 2 weeks of food in your home), you may be in for quite a surprise. Many people may be. I hope to God that this doesn’t happen. If you don’t have your stock, get some now, be prepared. If you are prepared, get some extra to help your friends and neighbours.

#95 Herb on 09.03.09 at 8:40 pm

Rory,

your #79 certainly is partially correct. The Human Rights Commissions were not a “Conservative initiative”. Only the attacks on them were.

As to Ezra, I have watched the young man cultivate his own relevance since a certain spot of bother about a party nomination years ago. I would not value his opinion on the time of day, but to each his own.

#96 Live Within Your Means on 09.03.09 at 9:00 pm

#85 Samantha on 09.03.09 at 6:30 pm

Samantha – Thank you for your clarification. I’ll have to do more research on the DNR position in the UK & your statement about it’s non-transferability among hospitals. I’m assuming your talking about Canada. Its rather late for me. Am just trying to stay awake later so I, hopefully, can sleep through most of the night. Its an age affliction :-)

Agree, its sad that animals are also feeling the brunt of this recession. I’m animal lover tho we’ve not chosen to replace our beloved dog. Now I just feed all the wildlife in our backyard – our groundhog devistated my veggie garden, but at least he’s eating the darn Labrador violets :-) No, I don’t live there.

#97 PVC on 09.03.09 at 9:24 pm

When is Garth gonna come out of the Gold closet?

When the oil’s gone. — Garth

Time to stock up your bunker/dungeon with more lube then Garth?

#98 rory on 09.03.09 at 9:36 pm

#95 Herb

Facts are facts …if I see hear or see evil it can only come from the right …jeez Herb get over it and read the damn book …your intolerance is showing …perfect qualifactions to work for the HRC’s.

#99 rory on 09.03.09 at 9:37 pm

ooops …qualifications

#100 Michael on 09.03.09 at 9:49 pm

I’ve emailed Garth on this (no response yet), but this comment board always has a broad range of ideas. Someone pick on this and lean some advice to me.

+Bought 179k 2.5 years ago @ 5.09% fixed
+Income is 80k combined but I’m in trades school until Dec now.
+Debt is Vehicle @ 2.9% 29k remaining and remaining mortgage which is 170k and that is it.

Just paid off everything else (Student loans, small visa bill, etc) We removed CC and debit – currently live on weekly cash budget. It’s awesome, I forgot how sexy currency is. Anyways…

Ultimately we would like to purchase a newer duplex with a basement in the 300-350k range.

Should we list on mls, sell at possibly 205-210k, after fees would leave us with 30k roughly. Instinctly, I dont want to purchase now, but with low interest rates and that bloody HST, I’m not sure. Renting does not bother us, if that was the option to do until market conditions were better for the buyer, I would. Maybe we should just stay put till we have more savings and sell then? Too many variables are killing us. We are both mid 20’s.

Now this is a thread hijack.

Oh yeah, in Kelowna too, ahaha (love to hate this place)

Help a couple fools out.

#101 Samantha on 09.03.09 at 9:55 pm

#87 Increasing that 1%

This bus service issue is critical for rural areas.

Aside from access to health care, what about people who need to use the bus to travel to loved ones who are in rural hospitals or personal care homes. If personal care is full in your town, and you need it immediately, then you are placed “wherever there is room”. This creates so much hardship for both patient and family.

It is also a way for people who do not drive or have a reliable vehicle to travel to see family and friends.

It is transportation between communities for people who must commute.

For us, it is a back up system in case of an important physician appointment in Winnipeg and our van is down. Or, in the winter if the roads are poor, the bus can usually make it to our destination.

If Greyhound says that their buses aren’t running full, then why not use smaller feeder buses for routes that aren’t full?

There has to be a way for another company to step in and keep this service accessible.

This is beyond a bailout request, it is tantamount to holding rural people hostage. How could they operate all those years without a problem, through all kinds of fuel increases, and now it’s a big problem and they just can’t do it any longer without subsidy? Maybe the company invested in other things and lost? I haven’t checked that out, yet, but I will be doing so tomorrow.

There was also an update on CBC with concerns expressed by Yukon residents.

#102 Samantha on 09.03.09 at 10:21 pm

#93 Hi Barb –

“grave errors” – good pun (no coffee to spew this time).

I really think that the UK situation is rooted in money. And when our situation is considered here and in the USA, it is plausible that we could face a similar development in our health care.

I now check the credentials of any physician involved in my health care through the Manitoba College of Physicians and Surgeons.

Unfortunately, I have crossed paths with a few of the bottom of the class crowd, and it appears now to be costing me dearly.

#96 Live Within Your Means –

You’re welcome. I was speaking about Canada, specifically Manitoba. I am not sure if there are provincial differences, as in the case of wills and estates?

I have given up trying to sleep through the night, now I just sleep through most of the day (lol).

#103 Increasing that 1% on 09.03.09 at 10:45 pm

#101. Samantha- “There has to be a way for another company to step in and keep this service accessible.

This is beyond a bailout request, it is tantamount to holding rural people hostage. ”

– agreed

In a country such as Canada, basic bus transportation, to get anywhere, and at a reasonable cost, should be the norm.

#104 CalgaryRocks on 09.03.09 at 10:45 pm

#91 Onemorething on 09.03.09 at 8:17 pm

What is Canada going to look like when all demand for it’s exports is dead or is being sold at below cost to foreign countries for what they can afford or negotiate, and Canadians couldn’t neg themselves out of wet paper bag!

It will look way better than Malaysia, I suspect. What’s going to happen when you’re a stranger that lives in a 3rd world country with no laws, aka Malaysia, like yourself, and you accidentally cross the spoiled son of the local chief of police. Yikes, hope you don’t get disappeared.

See, it’s really easy to come up with what ifs.

#105 Dan in Victoria on 09.03.09 at 11:21 pm

Micheal,Micheal,Micheal.You are at zero.Not 30k to the good,also what is the penalty for paying that mortgage off early?You may be poorer than you think.The only diffrence for you at this stage between renting and owning is that you have a piece of paper that says you owe the bank 170k plus interest.How much do you owe the bank if you rent?And what are you doing driving around in a 30k plus truck?Go figure out what 30k put in a rrsp at a nominal interest rate will be worth when you’re 65,now how much will that truck be worth when you’re 65?Variables???No, more like no solid planning/understanding.Are you one of those monthly payment types?If you are, the banksters will suck you in as far as they can,Living on cash is a start,i’ll give you that.Go look at a mortgage calculator and see what you are actually paying off each month,and what you are paying in interest.Then do an accelarated caculation,might be an eye opener.So you think that truck is only 2.9% do you?Think about it…………

#106 D in London on 09.04.09 at 8:19 am

#87 Samantha

Don’t you think that all of the recent bailout requests are “tanamount to holding people hostage”? Isn’t that the implied threat in “too big to fail” (insert banks, insurance, automakers, etc. here…). Unless they get our ransom money (oops – I mean tax $) they will go down hard and take much of the economy with them. Food for thought anyway…

And speaking of food, has anyone seen the classic movie “Soylent Green”?

(http://en.wikipedia.org/wiki/Soylent_green)

Since about age 12 I have been preparing myself for the very real possibility that my elders and maybe eventually me might be coerced into some sort of euthanasia program because collectively the old and infirm have become a burden in the eyes of those doling out the ever-shrinking resources of this planet. I hope that day never arrives, and I don’t think it will, but it sure seems like we are started on the slippery slope about 20 years ago.

I am not one of the tin-foil hat crowd (not yet anyway – I have a roll of Reynolds Wrap on standby though). I am just a student of politics and power, by training and as a personal interest.

#107 Onemorething on 09.04.09 at 10:52 am

Calgary Rocks, sounds like you have no idea! It’s okay! Live and learn!

#108 CalgaryRocks on 09.04.09 at 1:28 pm

Calgary Rocks, sounds like you have no idea! It’s okay! Live and learn!

Watch out for the fundamentalists. They make our conservatives look like peacenicks. Hopefully you won’t expect the Canadian government to save your ass if you land yourself in trouble over there.

#109 CalgaryRocks on 09.04.09 at 1:53 pm

Go figure out what 30k put in a rrsp at a nominal interest rate will be worth when you’re 65

I’m guessing 15k, before paying your taxes, judging by recent and no so recent history.

But this doesn’t apply to most readers here as they are all psychic market timers that can flawlesly hit every top & bottom. Lol.

I’m still perplexed as to why Goldman makes their billions with high frequency trading, yet the banks tell us that the way to riches is to hand them our money and forget about it for 40 odd years. You’d think the Goldman boys would like to get in on a sure thing like this…

#110 Tony on 09.04.09 at 4:30 pm

Buying stocks without insurance is far too risky. The stock markets have been manipulated to unbelievable levels by the US government and hedge funds. On fundamentals alone the Dow should still be at or below 6,500. The next shoe to drop will commercial real estate. Bank shares will get destroyed the next three months. Either you day trade or pick stocks and offset them with insurance that being puts on the S&P 500, the DOW or the NASDAQ. If you can’t out pick the markets by at least a two to one ratio you shouldn’t be buying stocks in the first place.

How’s the tinfoil? — Garth

#111 palebird on 09.04.09 at 10:15 pm

Hurrah to the Conservatives to not bowing to the Yankee carmakers and enacting a “cash for clunkers” program like Obamawama has done, The people who understand it know, the others, well…

#112 Future Expatriate on 09.05.09 at 9:30 am

#110 “How’s the tinfoil? — Garth”

Now Garth, if he’s even half right, tin foil is going to be worth far more than any stock certificate on the planet.

And more than any $500 bill, for that matter.

The market should be left to insiders and multi-millionaires, who can then prey on each other. There are far too many “little people” suckered into the market like it’s not gambling.

Folks. It’s gambling.

As opposed to buying a house at its historic high with 95% leverage? — Garth

#113 Bill-Muskoka (NAM) on 09.05.09 at 9:46 am

Watch out for the fundamentalists. They make our conservatives look like peacenicks.

#108 CalgaryRocks

Greater Truth has not often been posted here. Harper and inner circle are playing the Funnymentalist cards with the skill of a Sideshow Barker. The Sheeple would rather live in FUD than thought. There we have the Harper Agenda in a nutshell.

I watched this played out in the U.S. over the course of 30 years and it has ended in the current mess, two wars, and eight years of George W. Bush and Dick Cheney. Canada dare not tread on that path.

When first I heard Preston Manning, Stockwell Day, and Harper speak I thought I was listening to the American Extreme Right Wing. I was right and they present the greatest threat to Canada’s way of life possible. They used the same play book written by Karl Rove and the Funnymentalist Christian Right.

Now we see another case of the Harper gamesmanship in the latest environmental plan. which raises the question ‘Why are we paying for Jim Prentice to hop-scotch across Canada at taxpayer expense selling this latest vision when it should be VOTED ON in Parliament by OUR representatives in a democratic process?

New climate plan would favour oil sands

#114 Bill-Muskoka (NAM) on 09.05.09 at 9:48 am

#111 palebird

Obviously, you are a Troll! Go back to the States and play in their sandbox.

#115 Future Expatriate on 09.05.09 at 8:03 pm

#112 – Garth, buying a house right now isn’t a gamble… it’s lighting your money AND your future on fire. So we’ve always been on the same page there. I just have far less faith in governments and central banks and especially the investment industry than you do and far more faith in the long-term genius, practicality, and pragmatism of the Chinese. Who are the only folks on the planet to seem to learn from OUR mistakes.

And I’m just a fossil who believes that a gold standard would return the planet to the natural and much needed cycles of boom and bust, and get the controlling minds and sticky fingers out of the equation completely, until they can figure out a way to subvert and pervert the natural system once again. If the Chinese can pull off a return to the gold standard, God bless ’em. Lord knows I do all I can…

#116 JET on 09.06.09 at 8:29 am

If this is not a mistake, then it must be a bubblelicious Freudian slip!

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=8673176

#117 Future Expatriate on 09.06.09 at 9:56 am

#116- Someone has to tell that moron that you have to BUILD the hi-rise condo buildings FIRST to get that kind of money. Even if you’re completely surrounded by hi-rise developments on all sides.

What an idiot.