What bubble?

Junker1
It sits on a 24-foot lot, on a laneway, in the
'Trendy Queen Street West and Trinity Bellwoods
Park!' area. Semi. Alum siding. Laminate floors.
Fridge, stove, light fixtures included.
Oh, and blinds, too. Some 'newer' windows.
'Great starter home.'
$449,900
Plus $10,196 land transfer tax.

Who says Toronto
lacks humour?

…and the North Van edition…

.

Panorama
This one-bedroom abode is described as 'liveable.'
That's always a nice touch.
'Fabulous location. Nestled in the middle of
Panorama Park. You can almost touch the cove
waters... in the heart of the action, yet
surprisingly private.'
Surprisingly cheap, too.
$999,000

Are we there yet?

187 comments ↓

#1 Gonzo on 09.05.09 at 7:56 pm

You forgot the garage door opener AND remote

#2 Onemorething on 09.05.09 at 8:01 pm

looks like something you would find at the cemetery!

Speaking of cemeteries, might be a good industry to play given an aging, heath care starved population coming our way for the next 15-30 years.

#3 absinthe on 09.05.09 at 8:35 pm

That’d be a STEAL in Vancouver…

#4 anon09 on 09.05.09 at 8:38 pm

Labor Day Picnic

#5 Repatriated Expat on 09.05.09 at 8:40 pm

Plugging in the $10,196 land transfer tax into an amortization calculator using 30 years at 8% – nets you $16, 742 in interest payments, or 162% in interest of principle.

Total real cost of the land transfer tax in this case is $26,938.

And we haven’t even got to the mortgage yet.

#6 Aaron on 09.05.09 at 8:41 pm

See it’s all relative… I look at that and think, boy, Edmonton isn’t that bubbly. But then I take a look at some real estate ads from 2004 in an old newspaper and wonder what the hell happened.

#7 Aaron on 09.05.09 at 8:44 pm

I just noticed in that house the kitchen is located in the basement… heh

#8 Chris L. on 09.05.09 at 8:48 pm

And a pretty slick front yard! You could watch cars go by from the front stoop!

#9 RM in Oakville on 09.05.09 at 8:50 pm

The point of Garth posting this is, I believe, that this is a piece of shite, and anyone who would pay the better part of half a million dollars for this shack is a moron, I don’t care where it’s located. And for that price it’s arrogantly listed as a “starter home”.

I realize that comedy and tragedy are often two sides of the same coin but come on.

#10 Repatriated Expat on 09.05.09 at 8:55 pm

Actually, since it is such an apparently good time to buy houses in this “buoyant and sustainable” housing market, let do the calcs on the sticker price:

Same deal, zero down at 8% over 30 years is $1.32 million to be paid back to the bank.

I guess a million doesn’t go as far as it used to when you talk about housing.

#11 seanmhair on 09.05.09 at 8:59 pm

The living room is 9′ X 7′? What are you supposed to do…sit on top of the telly? $450G They are out of their minds. (Betcha someone will pay that..perhaps more?)

#12 Real Estate Deal or No Deal on 09.05.09 at 9:05 pm

We all know the bubble is here … but sadly, do the newbie young kids.

#13 Nostradamus Le Mad Vlad on 09.05.09 at 9:09 pm

The bubble will pop, and there ain’t nuthin’ the govts. can do about it (they know it, too). Everything runs its’ course.

Curious to see why the present owner(s) are moving it — over their heads in debt and / or lost their job(s), or mebbe just a good time to cash in. There are plenty of Greater Fools to step up to the plate!
——
#151 Evangeline on 09.05.09 at 8:14 am — “. . . translated by anti-zionists as as ‘deceit’ is usually translated as ‘counsel’, ‘guidance’ or ’strategy’ . ‘For by wise counsel thou shalt wage thy war’ is the actual ‘motto’ of Mossad.”

Thx. for the info. Two quotes, neither of which has anything to do with the Mossad but both come from Israeli leaders:

“Once we squeeze all we can out of the United States, it can dry up and blow away.” — Benjamin Netanyahu. A comment made by Netanyahu to Jonathan Pollard (convicted traitor and spy) upon exiting Pollard’s jail cell.

“Every time we do something you tell me America will do this and will do that . . . I want to tell you something very clear: Don’t worry about American pressure on Israel. We, the Jewish people, control America, and the Americans know it.” — Israeli Prime Minister, Ariel Sharon, October 3, 2001

Ron Paul wants to cut off all funding to Israel (and Muslim countries), and that is why he will never be elected President, whereas Mike Huckabee, probably running in 2012 will maintain, or increase Israeli funding (but not Muslim countries).

Meanwhile, US vets and citizens live, eat and sleep in dumpsters and on streets because there is no help for them. Obama can always stop signing the cheques, just as dubya and a few before could have done; that would make a major dent in a disintegrating empire.

Of course, Dimona — http://ncane.com/wk2z and http://ncane.com/51s — is Israel’s not-so top-secret nuclear weapons facility, built and paid for by others. Dimona is less than 50 miles from Gaza, and there is plenty of oil / gas off the coast of Gaza.

No one else in the Middle East has WMD, yet Israel has more than enough nukes to obliterate that part of the world. It is almost impossible to comprehend the annihilation that will happen when / if WW3 breaks out, especially if Dimona is blown up.

Speaking of the upcoming war, these may be of interest. — http://ncane.com/vlys and http://ncane.com/aph3
——
Economic clock is ticking a little slower — http://ncane.com/j4x — Comment by wrh.com:

“Traditionally, the US has managed, in previous decades, to get out of its financial woes by getting into some kind of war.

“One has to wonder just what kind of war the US government is “cooking up” for the American people to swallow whole in the near term.”

#14 saanichtonian on 09.05.09 at 9:09 pm

Slightly OT

A movie that discusses and shows the ties between the politics, banks and currency system of Canada very accurately. “Canada in a nutshell” literally.

It also kinda fun to watch some of the politicians in action, and surprising to hear what they know, but do not say in public.

So…this weekend, blow some money on ‘beer and popcorn’, kick back and watch

http://www.ohcanadamovie.com/

This vid is so riddled with factual errors nobody should take it seriously. So high school. — Garth

#15 PVC on 09.05.09 at 9:17 pm

What do these property prices say about the Cbone(Canadian dollar)?

It’s quickly becoming freakin worthless!
Think about it. It’s buying less and less.

In the US prices are dropping faster(deflation) than the value of the USD.

Oh, and by the way Garth. Gold and the USD are going up in unison of late.

Do a post on the property prices relative to gold.

For us bullion bunnies and real estate freaks.

#16 hal smith on 09.05.09 at 9:24 pm

I live in Kelowna and that looks like a bargain to me.I’d snap it up right away ‘cept I already own 2 houses and 3 condos and I’m between jobs right now but I expect to hear back from 7-11 next week so I might snap it up after all . Hope there’s no bidding war over the weekend cause I don’t wanna go higher than 1.6 on that cause the pontoons for the old bridge are goin’ up for auction next week and I don’t wanna jam up my cash flow.

#17 OttawaMike on 09.05.09 at 9:28 pm

Saturday Sept. 5/09 , Toronto Star business section page B4, What They got column:
5 Bedroom semi , centretown on 19 x 113 ‘ lot, asked 499,000$ got 605,400$.
It all seems quite reasonable to me. The agent listed it below market and the purchasers paid above market.

#18 OttawaMike on 09.05.09 at 9:32 pm

Happy Labour day to all of our American friends and plenty of Canada’s workers to:
http://www.bloggingstocks.com/2009/09/04/1-3-million-to-lose-jobless-beneifits-by-years-end/

#19 YoggerBlogger on 09.05.09 at 9:39 pm

Wow. I wish I could find an investment like that in Edmonton!

#20 JET on 09.05.09 at 9:49 pm

Lot: 22ft x 44ft!

No backyard and no frontyard to speak of! I guess this is what they would call a “condo alternative”.

It’s no wonder there are so many bubble tea shops in Toronto!!

#21 Gord In Vancouver on 09.05.09 at 10:05 pm

#12 Real Estate Deal or No Deal

We all know the bubble is here … but sadly, do the newbie young kids.
____________________________________

Did George W Bush have a 90% approval rating in 2008?

#22 Patel on 09.05.09 at 10:08 pm

But its different in Toronto……….

#23 Patel on 09.05.09 at 10:09 pm

Ofcourse, its different in Vancouver……..

#24 Were different in Canada right? on 09.05.09 at 10:26 pm

As hopefully most people realize, the only thing keeping the great Canadian Real Estate Bubble alive and well are historically low interest rates. People will be in utter shock to see what will happen to house prices once interest rates inevitably head higher. That nice little affordable and manageable 500,000 dollar mortgage at the 3% floating rate will be a household financial disaster at 7% or higher.

#25 Glenn on 09.05.09 at 10:30 pm

“Do a post on the property prices relative to gold.” – PVC

Thou shalt not mention the g-word, under pain of death. So sayeth Saint Garth.

#26 Ghost of Tom Joad on 09.05.09 at 10:34 pm

BC was a great place to buy a house 6 years ago. Complete joke show now.

#4 labor day picnic — Hope you all are saving $$ for the days ahead because the jobs are going, going, gone.

Buy gold now … 1 billion Chinese just jumped into the market.

#27 Nostradamus jr. on 09.05.09 at 10:46 pm

Your hyping again Garth.

Taxes: $5,061…for a starter property???

Land value…it’s in the heart of Deep Cove…

…This property is surrounded by + $1.5 million homes

You are too funny.

QUESTION FOR YOU GARTH

…So is it possible that Canada could keep mtge % rates down for a decade if it wanted?

tia

Nostradamus jr.

#28 Blobby on 09.05.09 at 10:48 pm

HOLY HECK!

I was in deep cove on thursday and i drove past the “for sale” sign for the 2nd house.

I genuinely thought it was a shed for sale!

Its got a great location, so no doubt the buyer will bulldoze it and build something nice there.. but….

#29 Jay Currie on 09.05.09 at 10:52 pm

Our landlord’s genius RE Agents had an open house here (Oak Bay BC) today. (Because everyone knows the Labour Day weekend is hot for houses.)

No one came.

#30 Best place on meth (aka NJ's Analyst) on 09.05.09 at 10:52 pm

Is anyone aware of the fact that the Home Reno Tax Credit doesn’t actually exist?

http://www.theprovince.com/life/Election+would+kill+home+reno+credit+Tories/1956172/story.html

That is Conservative spin. All parties support this, and it will survive any potential election. Surely you are not that gullible. — Garth

#31 homeless on 09.05.09 at 10:56 pm

I don’t know if this housing bubble would burst or not but all i know is that new homes at Mavis and Eglinglinton (Mississauga ) have gone up from 5-10% as compared to May this year. I don’t know which investment would yield so much in a matter of months.
It is so sad that i have been saving money to buy my first home for a growing family buy my savings are literraly washed away by increasing house prices.

#32 taxpayer like you on 09.05.09 at 11:05 pm

hello? Nosty? You in there??

#33 nonplused on 09.05.09 at 11:10 pm

I think my RV is bigger. A loy nicer too. And probably better insulated. It might be a better idea to spend a grand on fuel and tow it down to Arizona for the winter. Hey, that’s what a lot of retirees do!

#34 rory on 09.05.09 at 11:13 pm

From MoneySense magazine, June 2009 …Financial future: 10 numbers you must know.

Good article to re-visit the basics as all apply to this blog and everyday life.

http://www.canadianbusiness.com/my_money/investing/article.jsp?content=20090601_20012_20012&page=1

#35 Jon B on 09.05.09 at 11:14 pm

Sellers of these types of run down properties should just be upfront about their asking price as that of “lot value”.

#36 wb on 09.05.09 at 11:30 pm

I live a short distance from the Panorama Park property. It’s worth the asking price. And it will be worth more next year.

#37 Midtown on 09.05.09 at 11:45 pm

Re #13, I must ask again how ‘Le Mad Vlad’s posts are related in any way with real estate in Canada. Last time I checked, Israel is very far from Canada (Mad Vlad seems to have a soft spot for that area of the world).

Let’s focus on the topic of real estate – I am sure that there is no shortage of blogs that would welcome unsubstantiated claims and personal pet peeves passed as news.

#38 Future Expatriate on 09.05.09 at 11:48 pm

How long is it before they’re going to be selling public park garbage cans as $100,000 condos? With “free” maid service.

And park benches as $50,000 “garden apartments”?

#39 rp on 09.05.09 at 11:59 pm

It’s real-estate – you can always add another zero! They’ll just cut interest rates to -10% so buy now and your mortgage will be *paying you*.

#40 Peter Wiener on 09.06.09 at 12:03 am

General comment.

I’d really like to hear a housing / real estate bull that reads / posts on this site defend the asking prices of these two “dwellings” and explain how this is a sustainable situation economically?

Anyone?

Btw, I drove by the above Toronto listing late tonite for a giggle. In most cities it would be kindly referred to as a ‘squat’. Google the term if you don’t know what it means.

#41 Calgary_rip_off on 09.06.09 at 12:32 am

Garth,

It’s a given that anyone in Calgary or Vancouver is priced out forever. There is no evidence anywhere that says the bubble will deflate anytime soon.

A person must have a massive down payment and a substantial income to sustain a decent place in Calgary. Forget it in Vancouver.

It doesnt matter anymore-if you didnt buy before prices skyrocketed….it’s over. There is no evidence anywhere for increasing interest rates or implosion of Calgary or Vancouver.

I dont put my hope in ever buying a place in Calgary-who can afford to get a down payment with the rents being a mortgage? Is a person to live off of top ramen and not have any life to accumulate a down payment and then have a mortgage and keep living that way to pay it? This is whacked!!!

Its best to accept the lifestyle that’s better than that of a professional musician-no layoff hanging over your head, yet, and renting the same ready to be on the move…..and practicing music incessantly to try to rid frustration of an unchangeable situation….I wonder if the reason why so many talented musicians come out of Scandinavia is due to the massive and utter depth of frustration of living in a system where there is no way out….a person learns to accept the futility and underlying class system and learns quiet coping strategies….The more I read about people in business and the housing industry, the more I realize people are like dogs….In dog I dont trust….

#42 Cendrine on 09.06.09 at 12:36 am

Why do I feel like Alice in Wonderland?

#43 Calgary_no_dogs on 09.06.09 at 12:40 am

Here is the link for what housing frustration can produce in Sweden: Surprising talent from massive frustration:

Jens Johannson the keyboardist:

http://www.youtube.com/watch?v=LtIVgdofHQo

#44 Vancouver_bear on 09.06.09 at 1:35 am

Time to move south of the border to snap houses there for nothing. The freacking stupidity of canadian RE kills me. Stuff and food is way cheaper south of the border as well….don’t know why I am stuck in this country?

#45 kc on 09.06.09 at 2:27 am

Garth, you missed this gem from the same site….

http://www.deepcove-homes.com/listing/V754518.html

This 2 level seaside cottage decorated in warm natural colours has wood flooring, up-dated electrical and plumbing and good storage down. A perfect home to enlarge or rebuild with off street parking. Perfect for couples or small families, a 5 minute walk to forest restaurants, parks and the ocean.

Listing Price: $918,000 Floor Area: 940 SqFt no bubble here that is as close to $1,000 a sq. foot as you are going to find… on the lakes in Ont, do the cottages sell for that?

cheers

#46 Einsam Solo on 09.06.09 at 3:45 am

By comparison, this property in Cranbrook is an absolute steal!

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=7119969

“Don’t let the outside throw you. You must see the inside of this little home to appreciate the work that has gone into it so far.”

#47 David Bakody on 09.06.09 at 5:46 am

Thanks Garth …… we here in the deafest East are feeling better already …..

#48 wjp on 09.06.09 at 6:23 am

The beginning of double dip?
http://www.reuters.com/article/newsOne/idUSTRE58424420090905

#49 Grantmi on 09.06.09 at 7:59 am

Midtown!

Re #13, I must ask again how ‘Le Mad Vlad’s posts are related in any way with real estate in Canada. Last time I checked, Israel is very far from Canada (Mad Vlad seems to have a soft spot for that area of the world).

I agree! I’ve been saying for over a year now.. that Vlad is a nutbar. Not sure why Garth keeps him on with his endless rants and links to no where!!!!??!?

#50 pbrasseur on 09.06.09 at 8:42 am

rory (#34)

Very nice article, thank you!

Reassuring too, I find the usual target of over 1 million in savings for retirement is unrealistic and discouraging.

#51 Jonathan on 09.06.09 at 9:01 am

Wow that’s a sweet deal for 450K in Toronto these days. What do you want to bet that someone crosses your blog and starts a bidding war over it? All MLS prices for Toronto homes are underpriced in order to induce just that.

Another great blog from Mish on Unemployment – some highlights:

1. 65% of companies still cutting staff
2. Lowest manufacturing employment since 1941
3. Bureau of Labor statistics reported that an unprecedented 1 million jobs were lost in August.
4. U6 unemployment jumped 0.5% in August to reach 16.8%. In 2000 the U6 was at 7%.
5. US wages have fallen 5% YOY.

http://globaleconomicanalysis.blogspot.com/2009/09/how-many-rabbits-are-left-in-hat.html

#52 Seilfworcehtsa on 09.06.09 at 9:11 am

These are Con-does houses or” Con-does” for short so called because the Cons are doing everything they can to inflate Realestate. As long as prices stay high they have friends on both sides of the equation and when the bubble pops, they will lose a few disgruntle voters . Its enough to make Nicolo dei Machiavelli roll over in his grave with envy. No wonder Harpy looks in the mirror every morning and says,”mirror, mirror on the wall who is the cleaverest SOB of all.” You are, you are answers the mirror and Jimmy isn’t so far behind and the Canadian people?….why they are just sheeple.

#53 JET on 09.06.09 at 9:58 am

Ooops, I put this link in the wrong post:

Bubblelicious Freudian slip:

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

#54 daystar on 09.06.09 at 10:05 am

$41 Calgary Rip off
“There is no evidence anywhere that says the bubble will deflate anytime soon.”

The evidence to support increasing interest rates is staring at you in the form of Record federal deficits and large former issues of bonds (75 billion worth of bonds sold to bail out CMHC/banks) that has made a dent in pent up demand. Its a matter of time before this pent up demand for bonds is met. How much time it will take is uncertain as the demand for Canadian bonds is unknown, but the longer the feds run record federal deficits and run trade deficits forcing the need to borrow, at some point demand for Canadian bonds will be met with cheap rates and the feds will have to raise interest rates to intice investors to buy government bonds in the future.

I’ll explain it much more thorougly when I have the time, but the evidence is there.

#55 Popeye the sailer man on 09.06.09 at 10:24 am

ATB Financial has GIC spring board rates that go up each year, this should highlight the fact they expect rates to rise dramatically in the coming years. The rates are shocking in today’s terms. Current GIC’s currently are .25-.5% and will be 6% in 5 years. What would that make mortgage rates? 8% 10 % more?

http://www.atb.com/Dev/investing/inv_seasonal_springboard.asp

Also the ATB Financial is also offering 4.25% on a fixed 5 year GIC called “ATB ALBERTA GROWTH NOTE” if they feel comfortable to offer this rate over a 5 year term what do they think rates will get up to? Makes you think!
http://www.atb.com/Dev/investing/inv_alberta_growth.asp

#56 Lala on 09.06.09 at 10:40 am

I’m having sudden flashbacks to my California trip in 2006.

How’s that state doing these days?

#57 Finanzkrise on 09.06.09 at 10:57 am

I live around Deep Cove, and can attest to the bubble here…

Another fine example: almost half a million for a condo in a leaky building (‘rainscreen upgrade in progress’) on leasehold land. According to the realtor, you are saving ‘thousands on this one.’

http://www.realtor.ca/propertyDetails.aspx?propertyId=8578901

#58 Bill-Muskoka (NAM) on 09.06.09 at 11:01 am

One word for such prices and those willing to pay them INSANE!

#59 Cash is King on 09.06.09 at 11:02 am

By comparison, look what $189,000 US (soon at be at par) can get you on a quality, fish filled, wake restricted lake. 3.5 hours from the Windsor/Detroit boarder, 15 miles from Lake Michigan.

http://lakehouse.com/page-68709.html

or for $299,000

http://www.westmichiganhomes.com/HomeDetail.aspx?MLSID=739673&MLSProviderID=40&ListingNum=1516&SearchType=0

Place those properties in (name your over valued lake property in your area here) and the selling prices easily triples.

It is never a bubble in your area until you see the prices of non-bubble areas are selling at.

Saving Cash for the Crash.

#60 Investx on 09.06.09 at 11:26 am

“I agree! I’ve been saying for over a year now.. that Vlad is a nutbar. Not sure why Garth keeps him on with his endless rants and links to no where!!!!??!?”

I concur.

#61 BOB on 09.06.09 at 11:39 am

#52 Seilfworcentsa

Please stop with your nonsence about the Cons. Do you think the Fibs would be doing anything differently? Really? LOL that’s what I thought.

#62 Robert1 on 09.06.09 at 11:46 am

Garth:

Interesting video on your political blog. I have to admit that even though Mr. Ignatieff is wearing a blue shirt, he looks and speaks infintely more Prime Ministerial that this current, blue sweatered buffon we have allowed to destroy our country. After toying with the idea of making a contributuion to the Anyone But Harper Party, I feel that I now should put my money where my mouth is. Here’s the deal …. you get the nomination and I will contribute a minimum of 100 CDN to your local Liberal Association. Hopefully, I will get a tax deduction is return, after all this pissing away of my tax dollars, I think that I should be due a few back.

respectfully,

Yours In Canada

Bless you, dude. — Garth

#63 TS on 09.06.09 at 11:55 am

Hi Garth! Great post as always. The following web link will take readers of your blog to an interesting piece about recent financial moves by China: i.e. becoming a NET SELLER of US treasuries.

The implication of this is obvious… since China is losing it’s appetite to buy long term US treasury bills the Federal Reserve will have to raise interest rates to entice other buyers to take up the slack to fund the soaring US deficit. That will mean higher interest rates in 2010 and beyond.

Typically consumers watch the wrong indicators when making financial decisions and focus on short term interest/mortgage rates (as many bloggers here have been writing about in rather uninformed ways) rather than look for the underlying foundational issues that drive longer term interest rates.

http://www.moneyandmarkets.com/china-is-now-a-net-seller-of-us-treasury-notes-and-bonds-2-35365

#64 lex on 09.06.09 at 11:57 am

#13 Hey Nostradumbass, take your Nazi propaganda to Stormfront. This blog is supposed to be about the Canadian real estate bubble, not your stupid Jew hating conspiracy theories.

#65 NKVD Black Raven on 09.06.09 at 12:02 pm

With the high cost of home ownership now I realize why we have bike lane advocates. Add to that thrift shops and food banks…

#66 My_view on 09.06.09 at 12:48 pm

As for the Toronto dump, long live the burbs! For the same price what you can get in Peel/Durham region is a palace in comparision IMO. I would rather own new construction then old, but lets not go there.

#67 My_view on 09.06.09 at 12:52 pm

BTW, the varible rate is now prime, (2.25%) there is even talks that prime minus – is coming back.

Talk by whom? Nobody in the know. — Garth

#68 JoeK on 09.06.09 at 1:16 pm

Anecdotal evidence.

Moved out from my old property following my divorce at the end of January to Coquitlam (suburb of Vancouver, across the inlet from Deep Cove) to be close to work.

Started looking at property values in this neighbourhood around July 2008 as my ex was adamant she wanted non-commitment. At that time, there were no properties below $500K, the cheapest at 499K for an 80 year old 3BD on a main arterial (that’s still on the market even now).

By the time if became apparant that SHTF, no new properties properties were listed, a virtual dearth of listings.

By April, when it looked like things were going to improve, properties started to sprout like mushrooms in the sub $450 range and lasted on the market about 3-4 weeks.

By May it was a built up deluge with a marginal price increases, average on the market 2-4 weeks.

By July, the prices started to climb and now the only properties sub $500K are the same dumps on the main 4 lane arterials. In fact, the only properties sub $500K are the ones that are still listed for sale in $420ies that haven’t sold since last winter.

Most of the sub $500K are 2-3 bedroom 40-60 year old bungalows on 6-9K sq. ft lots. – which is what I’m looking for.

However, with me renting a 1200 sq. ft. basement suite with 13 ft ceilings from my friends for 20% of my take home, I think I’d be stupid to commit to anything. I’ll wait for that “larger” correction.

#69 taxpayer like you on 09.06.09 at 1:18 pm

34 Rory/50 pbraseeur

I usually grab a moneysense mag once or twice a year. Though a lot of it seems to be some basic common financial sense, I have noted the following two issues that the industry doesnt mention too much

1) The million $+ RRSP myth
2) Excessively high management fees on mutual funds.

Not only did (1) frighten people, it can also be poor tax planning. There are rules dictating the amount that must
be withdrawn from the RRSP/RRIF according to age. The
million$ figure was always based on a “low rate” GIC of
about 5%, with the capital never diminshing. But actually,
at the time you withdraw the money, the amount could put you into the same tax bracket as when you contributed, eliminating the original tax saving (though keeping the compounding and deferral). The CRA also loves large RRSPs at the time of death, as it can ALL be
taxed in the estate in that year. Ouch!

As far as the MF fees go, I prefer a few basic index funds,
then maybe a couple more specialized. You do have to watch them all though, and not be afraid to take a profit if it helps you sleep better.

But even the fund managers are grumbling about the high frequency trading of the investment banks. Ya just cant win…..

Anyone with their RRSP funds in GICs is not paying attention. — Garth

#70 saanichtonian on 09.06.09 at 1:25 pm

#54 daystar
“The evidence to support increasing interest rates is staring at you in the form of Record federal deficits and large former issues of bonds (75 billion worth of bonds sold to bail out CMHC/banks) that has made a dent in pent up demand.”

Hmmm. perhaps a little more than 75 billion.

According to the SEC listing for Canada (http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000230098&owner=include&count=40 ), and to their annual report
( http://www.sec.gov/Archives/edgar/data/230098/000120621209000008/m53341a1exv99wcv5.htm )

“Committing an additional $50 billion to the Insured Mortgage Purchase Program, increasing the overall size of this program to $125 billion. ”

The other question is, why does Canada have a SEC listing with a business address at the Canadian Embassy in Washington DC?

A U.S. Corporation?

Garth?

As an aside, keep posting Vlad, some will be dragged spittin’ and kickin’ into reality sooner or later (or at least have to start asking questions).

#71 $fromA$ia "Garths Nugget Boy" on 09.06.09 at 1:29 pm

“Did George W Bush have a 90% approval rating in 2008?”

*********************************************

Let me give you my political take on the USA and how Canada is different.

In the US, Americans voted Democratic because they were in desperate need of a change that the Republicans brought about after all their housing market was already correcting. In Canada, last October, the Conservatives already had seen the economic turmoil in the USA. The Conservatives most underhandedly and opportunely called an election before Canada’s housing market was going to take a hit from the tremors of what was happening in the USA. Flaherty knew that he was responsible for this housing bubble.(intro of zero down and 40 year amortization) Now this Conservative government holds on desperately to power and continues reckless loose lending in a time when a proper correction is needed.

Here we are, I stand unemployed. My mortgage lender has told me if I can land a job at my regular pay that I can get a mortgage of $535,000. The thing here is that all I need is my first pay stub and a letter of employment.

Sorry Garth, I know I have been ranting about this for a while now here on your blog but other fellow bloggers need to realize that Canadians and Canadian banks are not immune to the financial economic melt down. Canada is still continuing the loose lending problem that the US has ran into. Our problem is that our current Government is perpetuating the problem to keep Canadians happy with their high home values. This is wrong. It’s false and Canadians are being misled. Interest rates will inevitably force a house correction.

Again we stand at housing prices justified by run away inflation or a correction.

The American people got their correction and a new President after.

Canada has yet to recognize the true underlying problem at stake and the same Government is perpetuating it to stay in power.

Sick!!!!! Conservative party is feeding on Canadians and Canadians don’t even know it.

#72 JoeK on 09.06.09 at 1:43 pm

It’s been interesting following the recurring economic sub theme throughout the blog posts.

It’s been interesting because now I’m noticing the same ‘news’ starting to surface in the mainstream press.

I’ve noted a number of stories being posted that the Chinese have been on buying binge for a few years buying commodity assets/companies across the world. This is apparantly to lower their ownership of US debt & currency and build up hard assets.

Then a number of stories that the Chinese are now encouraging their populace to invest in gold, and that the Chinese govt. has been stockpilling the same.

Lastly, a number of stories that the Gov’t of China instructed state owned companies that have hedges with US banks to default on the moneys owing on derivatives – which is in the neighbourhood of $200 billion.

If these stories are substantiated, then the US$ may well go into the septic tank, as the US$200 billion default by the Chinese could be the next tipping point. I do not underestimate the Chinese – smart cookies for sure. How would you ‘screw’ the US who are trying to devaluate the US dollar to easy their debt repayments and at the same time try to change the world currency standard?

As for the discussion that CAD interest rates will have to rise, I’ve a feeling that CAD$ may rise high above the US$ because of commodities Canada has that will still be in demand to the east (at least we will still have something to sell, does the US?).

If that happens, I do not think the CAD Govt. will be able to do much to keep the CAD$ low, except keep the interest rates at near 0%.

I am a virtual neophite in my understanding of the economics we are dealing with, but does the above seem plausable? Is it possible that there can be a de-coupling of the US & CAD currency from what the CAD Gov’t wants?

#73 Barb .. a reader in Calgary on 09.06.09 at 1:52 pm

I noticed quite a few little “slits” of land with mountain or city views had sold for well over a million at the height in Calgary. Many were “tear downs”. It’s interesting what people will pay for just a lot, with only a hint of a “view”.

Or…. “location” …. check out this empty lot in Calgary for $1.4m (as I recall it flooded in 2005) mls C3382560. Why that price? The “area name” is elite as well as being “trendy” of late.

#74 David on 09.06.09 at 2:18 pm

Those pictures and prices are amusing. Shacks with homes of distinction prices in an economy that is now barely generating low wage service sector McJobs. This house of cards is set to tumble and there will be many bubble losers down the road. Make that big losers. The only out will be foreclosure and it is not any different here than anywhere else where home prices become disconnected from fundamentals like income and price to rent ratios. Any one that can offer a convincing counter argument is welcome to do so, but one should have serious doubts as to how convincing that argument will prove. End of the party, the wieners are all burned, the buns are dried up and the condiment containers are empty.

#75 Live Within Your Means on 09.06.09 at 2:35 pm

#61 BOB on 09.06.09 at 11:39 am

Nobody could do worse than the cons.

#76 Mike in Etown on 09.06.09 at 2:53 pm

#73, Barb – You get Iggy as a neighbour! Who wouldn’t want Elbow Drive for that price?

#77 Live Within Your Means on 09.06.09 at 2:59 pm

In our little part of Canada I see a neigbour’s house is still on the market since May for the same price. He’s has had an Open House every Sunday, but he also had one yesterday too. They haven’t reduced the price. The only pics are of the outside (which they’ve totally neglected) and a few of the inside which they did a cheap reno. And, the dimensions are wrong. Its 2 ft. shorter than advertised. They bought it at a firesale price of $219. last June, added about $30+ and now asking $319.00 a year later. But says the RE agent – all the first time buyers love it. So why haven’t they bought it if its such a good deal? Maybe the RE agent is lousy or buyers don’t think its such a fabulous deal.

Actually, it is a well priced home, but the reno guys screwed up. They neglected/destroyed the landscaping (granted not great after elderly owners let it go for a few years) and turned a traditional interior style home into a ‘cheap’ open concept one.

#78 JoeCalgary on 09.06.09 at 3:03 pm

Actually, #67, Sweden already has a negative interest rate. However, Australia is considering raising rates in November.

#79 Ghost of Tom Joad on 09.06.09 at 3:06 pm

Midtown, Grantmi, Investix — maybe there’s a little more to the world than meets the eye. You all want to talk just about real-estate in Canada. Well guess what, real estate in Canada is impacted by things that are happening around the world and it never hurts to get a different perspective. As for Vlad being a racist, I doubt it — he’s just putting out information that he’s come across — so don’t give me any of this politically correct nonsense. Personally, I find the comments by 99% of the bloggers here to be tired and irrelevant. Hasta la vista sheeple — have a great sleep.

#80 taxpayer like you on 09.06.09 at 3:08 pm

Anyone with their RRSP funds in GICs is not paying attention. — Garth

My point was that was how the RRSP industry was calculating the need for $1M. Safe, low return requires
largest amount of capital.

I believe in a diversified portfolio, and while I dont see
much sense to having GICs in a non-registered account, I
believe they have a place in your RRSP.

There is no adavantage to dividends/cap gains in your
RRSP. If you make irregluar but reatively large RRSP
contributions you avoid the issue of market-timing. You
also know the exact nominal value of the investment on the date of maturity. Also excellent protection against deflation. (My GIC made 5%, while my MFs lost 25%!).
It is important to stagger the terms to minimize effect of inflation and take advantage of higher interest rates when available.

But yes ultimately the idea is to realize maximum returns
at the end of the day.

#81 Nostradamus jr. on 09.06.09 at 3:37 pm

1/
# 72 JoelK

“””Chinese are smart cookies”””???????

Ummmmmm….don’t think so Joel

…For decades the Chinese have taken their profits and bought US Treasuries.

…Recently they started buying/investing in commodities worldwide.

…Chinese citizens told to buy Gold.

China has screwed the world economies for decades…paying their labour only 10 cents on the dollar.

…Payback is coming soon…

U.S. will nationalize China’s debt.

U.S. and Canada will nationalize China’s investments in North America.

Gold will collapse in value as India and Chinese will sell their gold for food.

Watch and Learn

2/
Nostradamus le Vad is the second most valuable poster here.

Dummies here who criticize le Vad may not even be Public School graduates.

Nostradamus jr.

#82 Live Within Your Means on 09.06.09 at 3:43 pm

#50 pbrasseur on 09.06.09 at 8:42 am
rory (#34)

Very nice article, thank you!

Reassuring too, I find the usual target of over 1 million in savings for retirement is unrealistic and discouraging.

Agree pbrasseur. Personally I think it was the banksters, mutual fund companies and all those so called business analysts/financial advisors/ accountants that spooked the average Cdn. that they’d better invest or else they’d end up living under an overpass. Its in their best interest to scare you so that you’ll invest & they’ll earn the the most on your investments – not you the average naive investor. Even 30 years ago I thought their scare monger attitude was wrong. Why, if 30 yrs ago you were a fairly frugal homeowner & consumer would you ever need more than 50% of your salary to live on in retirement?. Only reason could be hyperinflation or if you wanted to live the life of Reilly. Many people at 60/65+ are wise enough to realize they don’t need to replace their old appliances with stainless @ 2 or 3 X the price. And, we paid off our mtgs. , lived within our means, then invested what we could & many of us got screwed. But, we older ones have lived during harder times & will be the ones who will survive!

#83 young & foolish on 09.06.09 at 3:58 pm

crazy prices ….. !
but wait! soon, prices will come down dramatically… and everybody will be able to buy in hot, trendy neighborhoods for cheap

#84 bigpicture on 09.06.09 at 4:07 pm

Banish Nostra VladMad or Nostra from North Vancouver?

Who is the most stupidly irritating?

VladMad stupidly irritating and incoherent.

NV Nostra is at least stupidly irritating and funny on topic. LOL

#85 daystar on 09.06.09 at 5:04 pm

#70 saanichtonian on 09.06.09 at 1:25 pm

Appreciate that, sannichtonian. I’m playing catchup with what has happened and is still happening with bonds. I wasn’t aware of the last 50 billion the Conservatives added to CMHC, but now that its a full 125 billion worth of new bonds, its safe to say that the Conservatives have grown our national bond debt by… oh! Oh, my!! Oh my God….

This Conservative government really is that bad to do what they have done in the bond markets… I can’t believe they are that incompetant… its far worse than I thought.

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

If these numbers are correct from this link below:

http://www.canadiancapitalist.com/how-large-is-the-canadian-bond-market/

The $1,143 trillion Canada owed (Dec 2007) includes:
Government bonds: $734 billion
Financial institutions: $276 billion
Corporate bonds: $132 billion

The size of the Canadian equity market was $2,186 trillion in Dec of 2007.

The canadian bond market value is roughly half that of the stock market.

However, this is not exactly the case for the US.

As of december 2007
US bond market value: $24,7 trillion
US stock market value: $19,9 trillion

We should know, readers, that since Dec of 2007, the U.S. bond market cap value has substancially grown since then and when we look at why the “world financial crisis” came into existence, its precisely because of the U.S. bond market in the form of mortgage backed securities and municiple bonds, but even so, one must heavily question the sheer size of their bond market value as being too large a burden for them to continue without a major currency correction or worse…

And, by the way, Japan isn’t far off for those who think Canada can be the next Japan and simply keep rates at or near zero… (I really have to shake my head at the knowitall’s knowing F all on that one) and why are they still able to keep their interest rates so low? Ask yourselves which nation is their best customer (true answer, each other. I know, I know, its frightening).

Its safe to say that this current Conservative government has grown the size of our national debt in the bond market from 734 Billion in Federal bonds (Dec 2007)to a whopping 974 Billion or more by the end of this year. Readers, we’ve added at least 25% worth of new national debt from Conservative born policies in just 2 short years. By the way, thats 240 Billion dollars worth of new debt, not counting the federal deficits they are going to run this year and any other years they might still be in power.

Is there a one of you after reading and digesting whats contained in these links who still thinks this extremely bad, incompetant, borderline traitorous government doesn’t need to be replaced?

Just read the first link, readers… thats all I ask.

#86 unbalanced on 09.06.09 at 5:10 pm

Its funny that you don’t see ” Freedom Fifty Five ” commercials or advertisements anymore !!!! The big mers on mutuals are killing your investments. Im also glad I came here to learn and thank everyone for their contribution.

#87 Nostradamus Le Mad Vlad on 09.06.09 at 5:12 pm

#79 Ghost of Tom Joad on 09.06.09 at 3:06 pm
#81 Nostradamus jr. on 09.06.09 at 3:37 pm

Guess I must have struck a nerve somewhere, ‘coz that’s the most responses I’ve ever had — I’M A STAR!

There are times when we may agree to disagree, but that is expected. There is something strange happening in the Far East — the delicate interactions with the west — but also in South America as well (the US may be starting trouble there to try and get rid of Chavez).

To each their own. Interesting that sheeple (including posters here) get themselves so wrapped up in their own little bubbles (egos), they won’t bother to look at the bigger picture, namely all the pieces of the jigsaw that are happening the world over (not all financial), falling into place even as we speak and, one way or the other, affecting all of us in some way.

BTW, Infowars.com and plenty others of said ilk are great sites to briefly scan. Lotsa stuff taking place that the controlled m$m won’t report. And now . . .
——
If this war is ‘unwinnable’ (like Vietnam), what is the purpose of loading up on troops there? Would it not be better (at least for Canada) to cut its losses, and come back ASAP? — http://ncane.com/pkg
——
Further for Evangeline — http://ncane.com/jd0
“Here is one of the stories about the Professor’s remarks in January, 2003
“Israeli Prof Suggests Israel Can Destroy All European Capitals — By Nadim Ladki”

#88 jmcanuck on 09.06.09 at 5:19 pm

#14 saanichtonian

Thanks for the link. It’s so fun to watch politicians try to explain things they know nothing about like where money comes from and how inflation works (if I have a pair of glasses…what a joke!). The only person who seemed even remotely intelligent on these subjects was Elizabeth May. I wish that movie would be aired on the CBC so average Canadians could see that democracy as we know it in Canada is an illusion.

#89 bigpictureguy on 09.06.09 at 5:26 pm

#79 Ghost of Tom Joad on 09.06.09 at 3:06 pm

No kidding sherlock that that there are many factors that impact RE and economies. You just have to list them one time and everyone will get it instead of doing repetitive a cut and paste dump with content written like a incoherent third grader. You can’t book mark his URLs and refer to them yourself or does Vlad need to spoon feed you every day? LOL

So tell us something new that we don’t already know?

#90 bigpictureguy on 09.06.09 at 5:35 pm

Nostradamus Le Mad Vlad why don’t you create your own blog for your “fans” with your delusional star status?

I forgot that without spamming Garth’s site daily you would count the # of visits on 1 hand. LOL

#91 bigpictureguy on 09.06.09 at 5:45 pm

#87 Nostradamus Le Mad Vlad on 09.06.09 at 5:12 pm

Your joking right?

Vlad has blessed and grace us all with lessons and insights on how geopolitical events, epidemics and war, impact world economies.

Wow Vlad that’s incredibily profound! LOL

#92 Nostradamus jr. on 09.06.09 at 5:58 pm

To the brilliant “Vancouver Renters” on this blog who are waiting for the bottom of the real estate crash.

1/
Hate to bust your balloons but the bottom came in 9 months ago.

2/
…Vancouver RE prices will not correct lower for another 70 years.

3/
…Better to relocate to small town B.C or Alberta….there will be jobs in the commodity sector.

But Real Estate prices there wont begin rising until after the break up of Canada into two or even three….Western Canada, Ontario and Quebec. (The Maritimes will be sold to Europe for $100 Billion Euros plus the future rights to Carl Brewer.

Quebec’ers are begining to show their true colours again regarding Federalism…and they will get much more avid if their province has a mild winter.

4/
Garth Turner will become Ontario’s next Prime Minister.

5/
The North Shore will be known as North America’s Cote d’Azure.

Nostradamus jr.

#93 daystar on 09.06.09 at 5:59 pm

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

Had to take another break from harvest just to read it all. I’m blown away that our current government could be this stupid/corrupt/ignorant… and still neck and neck with the opposition.

And none of this is in the news. Sad state of affairs our media has become, combined with the lack of voter awareness… sad indeed.

#94 bigpictureguy on 09.06.09 at 6:03 pm

Once the Olympics is over or even before as sellers take profits. The decline will begin rapidly.

BC $2,775,000,000 in the red

http://www.theglobeandmail.com/report-on-business/crash-and-recovery/2775000000-in-the-red/article1276901/

As with the U.S., British Columbia is grappling with soaring numbers of unemployed. B.C. has lost 67,000 jobs since August, 2008 – nearly 21/2 times the number lost in Alberta. At its peak, fully 10 per cent of the provincial work force was employed in construction – a proportion that’s “off the charts,” said economist Douglas Porter at BMO Nesbitt Burns Inc.

#95 Calgary_rip_off on 09.06.09 at 6:42 pm

Garth,

interesting posts from your readers about seeing higher mortgage interest rates ahead. One problem: The Bank of Canada wants people to borrow-if they increase rates, people are less likely to buy homes. Higher interest rates lead to decrease in values, but still make it harder to buy. Some have written that the Chinese could call in their loans creating catastrophy. This is unlikely to happen.

There is no justice for real estate in Canada, although the housing looks good in Thunder Bay-but no jobs.

Here’s a link about the Bank of Canada not changing rates:

http://www.google.com/hostednews/canadianpress/article/ALeqM5gJrJwZHYzT-HztOZSy_zST6AIVag

Hard to believe I have to point this out so many times, but tehe BoC is powerless to prevent an increase in rates prompted by currency markets, debt markets or other more influential central banks. Rates will rise. That is not conjecture. It is certainty. You can argue about the timing. But there is no doubt about the impact. — Garth

#96 Patsan on 09.06.09 at 6:47 pm

Sorry for OT, just cannot resist…pardon my French…

North America’s Cote d’Azure Sous La Pluie

#97 kc on 09.06.09 at 6:48 pm

87 Nostradamus Le Mad Vlad

I also follow what is going on around the world, I used to try and post a few things here and there of importance, however, you nailed it on the head….

“Interesting that sheeple (including posters here) get themselves so wrapped up in their own little bubbles (egos), they won’t bother to look at the bigger picture,”

sometimes when the dots get connected you can stand back and see what is the underlying forces that drive circumstances. The intersting “new” revelation in the 9/11 saga of the Obama advisor “needing” to step down just gives more weight to the cover-up theory… Monday night on cbc newsworld’s passionate eye will be showing a episode about the “7th Tower” for those who question wht was real and what was fiction.

cheers

#98 john m on 09.06.09 at 7:06 pm

Wow the prices of those properties are shocking to say the least………..god help the sheeple by next spring IMO….Happy Labour Day Everyone…enjoy our beautiful country and hoard your cash…reckoning day is coming.

#99 conan on 09.06.09 at 7:20 pm

Coming September 11
The return of The Blog.
We’re not making this up.

Garthinator getting ready for the big blog move.

What are the chances we are having a fall election?

It is looking very electionish.

#100 Charles T. on 09.06.09 at 8:07 pm

Since “politics” is back on this site Garth, please read the following before you decide to seek the Liberal nomination in your riding. The cause of our current and unprecedented financial crisis is debt, debt, and more debt. I think Pierre Trudeau got the ball rolling on our “empire of debt” in this country. (to borrow a phrase from Bill Bonner)

“When Pierre Trudeau took power in 1968 he was handed a net debt-load of $19 billion. By the time he left office in 1984, the net debt stood at $172 billion.
Even though his successor, Brian Mulroney, ran operating surpluses for most of his time as prime minister, the interest payments on the Trudeau debt were so enormous ($20 billion in 1984, climbing as high as $45 billion in 1991) the federal government continued to be dragged into the red every year. By 1993, the net federal debt stood at $487 billion.

In recent years, the government began to keep track of physical assets (bridges, buildings, roads and submarines) and then subtracts these assets from the net debt. After deducting out the value of physical assets, Mulroney passed on a federal debt of $449 billion.

Under Jean Chretien, the federal debt peaked at $563 billion in 1996-97 and a 10-year stretch of surpluses allowed the federal government to reduce it to $458 billion by the end of 2007-08.

There has been great fanfare over the amount of debt that has been paid down in the last decade. Reducing the federal debt by $105 billion is indeed an accomplishment.

However, the government never issues press releases proudly proclaiming how much money it has spent on debt service charges over this same period. That number is $421 billion. Going back to 1984 is even more sobering: since that time the federal government has spent $942 billion in interest payments to service its behemoth debt.

Last year alone, debt service charges consumed $33 billion in government revenues –two times the total amount collected in employment insurance premiums last year. Put another way, if there were no debt and no interest payments the government could cut personal income taxes by 30 per cent across the board.”

http://www.canada.com/calgaryherald/news/theeditorialpage/story.html?id=e004d39c-1d94-48a3-b1ca-8ca7b8f84429

That’s a one-sided view which does nothing to help our current circumstance. Almost all previous governments avoided hard decisions once in office, catered to public demands and exacerbated the situation. Two exceptions would be Mulroney’s, which committed suicide by doing the right thing (the GST paved the way for deficit elimination) and Chretien’s, which kept the tax in place, reined in spending and turned the deficit into a surplus. Since Mr. Harper ascended, government spending has exploded (even before last fall’s meltdown). The result has been the turning of a $15 billion surplus into a $50 billion deficit in three and a half years – an all-time record shortfall, in an unprecedented length of time. Now the Parliamentary Budget Officer tells us PMSH will add $200 billion to our national debt. Another record. So, be as revisionist as you want, but we still need this crap cleaned up. — Garth

#101 Chaostrology on 09.06.09 at 8:14 pm

Get a grip Jr.

WhiteRock is North America’s Cote d’Azure.

Everyone knows this to be fact.

#102 bigpictureguy on 09.06.09 at 9:21 pm

#97 kc on 09.06.09 at 6:48 pm
87 Nostradamus Le Mad Vlad

Ah Yes it’s the conspiracy theory believers. Alex Jones and Jeff Rense – connect the dots – Oil, Bush/Cheney, Zionist, 9/11 staged, Profits, Power !

I’m now totally enlightened! :)

Is there a 9/11 conspiracy? My favorite answer is from Richard A. Clarke who was part of the Bush White House for a while and then discredited by Bush’s cronies: “The government is not intelligent enough to pull off this kind of conspiracy and eventually someone would talk.”

#103 Jake on 09.06.09 at 9:52 pm

#102 bigpictureguy,
Will you please try to stay on topic. You’ve had at least 5 spam posts today. For the guy making the rules for Garth’s blog, you sure seem to be breaking them a lot.

#104 char on 09.06.09 at 9:53 pm

#’s49,37,60,64…Guys…

…it seems running a blog where a contributor can continually slag a certain country, but where you can’t criticize other groups, will make a guy very popular these days. You haven’t noticed ? Hey, an election is coming !

#70–THAT’s reality.

And btw Vlad, I go to Infowars all the time. A frequent guest is “historian” Texe Marrs , who quotes the Protocals of the Learned Elders of Zion as if genuine (also sees The Devil and penises everywhere, see his site, it’s a riot !) I think we need to shine a light on this stuff, because it’s becoming more mainstream.

What has this to do with real estate? Well, historically when an economy tanks, a certain group (which is associated with a certain country and banking i.e. ‘moneylending’) is always blamed. This stengthens my conviction that what we’ve been seeing is not a recovery but a bear market rally.

#105 Nostradamus jr. on 09.06.09 at 10:18 pm

Sous La Pluie…is good for the skin…and no drinking water shortage either.

#106 cashman on 09.06.09 at 10:52 pm

Don’t worry about the current real estate bubble, eventually the interest rates will have to go up. Besides, even at the current rates of interest, affordability is quickly becoming out of reach for a lot of purchasers now. Who could afford the two houses listed on todays blog? Something’s gotta give. However, I am sure there are a few sheeple out there that will buy those houses at their current prices.

I sold my house, located 30 mins north of T.O. in February of this year for $295,000 and it was a bungalow. Gee, if only I had waited a few more months, I could’ve gotten way more. Who knew? I sold it because I had had enough of renting it out and the tenants had left anyways, so it was like a sign from Jesus saying it’s time to sell.

#107 Best place on meth (aka NJ's Analyst) on 09.06.09 at 10:55 pm

#92 NJ,

My dear patient, why do I bother prescribing you medication if you’re not going to take it?
You know how batty you get if you miss even one dose, what with your crazy delusions about North Vancouver and all.
Please, I beseech you – take your dose every 6 hours like I asked you to.

And to all who whine about Mad Vlad, maybe Garth can have an ignore button installed so you can ignore his posts and I can ignore yours.

:)

#108 NoFreakinClue on 09.06.09 at 10:59 pm

Just spoke with a realtor in To, said it is best time to buy and worst time to sell, b/c rates are starting to go high, which means banks are now confident that economy is gonna be HOT… so you should buy too as prices will start to go hi in TO…

you go figure…

#109 PVC on 09.06.09 at 11:22 pm

Rates in Canada could rise sooner than most think

From Bloomberg

Rate-Increase Bets

The yield on March bankers’ acceptances futures, a barometer of short-term interest rates, fell as much as seven basis points yesterday, the most in a month, as traders ratcheted up bets the nation’s central bank will raise borrowing costs sooner rather than later, according to David Love, a trader of interest-rate derivatives at Le Group Jitney Inc., a Montreal brokerage. The yield on the futures moves inversely to expectations for interest rates.

#110 MONEYMANH on 09.06.09 at 11:28 pm

Thank you to Popeye the Sailor for the link to ABT.

Would you by any chance know what the CHMC chattel loan insurance program might be?

Would you also know who insures the ABT notes. They say they are fully insured.

#111 kftcic1 on 09.06.09 at 11:30 pm

Everybody please lay off Nostradamus le Vad’s postings. You can’t see the articles he/she posts they have to do with the price of real estate in Canada?
It’s Garth’s blog and if he does not have a problem with the post, who are you to complain? The internet police?

As somebody said on an earlier blog, learn to look beyond your nose! If you can find it, that is!

Here’s a hint: What happens to the price of oil if there is an attack on Iran or further turmoil in the Middle East? Think your shack in lotus land will be worth a million then? Given the economic situation the world is in, any scare anywhere is liable to shatter your dreams of R.E. riches.

#112 jmcanuck on 09.06.09 at 11:39 pm

http://www.ohcanadamovie.com/

This vid is so riddled with factual errors nobody should take it seriously. So high school. — Garth

No more high school than most of our MP’s and the former PM in that video. Those guys couldn’t pass their grade 10.

#113 Nostradamus Le Mad Vlad on 09.06.09 at 11:43 pm

Good article which compares the dates shown. — http://pragcap.com/1929-or-1873
“. . . looks to be the depression which started in 1873, which lasted more than five years and was ultimately referred to as the Long Depression.”
——
Light-hearted interview with Hank Paulson and Satan. Apparently, they are two separate entities! —
http://ncane.com/2th
—–
Marc Faber 9:16 clip. Next 12-18 months should be good for eqities, followed by inflation then war. —
http://eclipptv.com/viewVideo.php?video_id=7196
——
#97 kc on 09.06.09 at 6:48 pm — “. . . the “7th Tower” . . .”

BBC reporter — on air and bubbling with excitement — gleefully said the 7th had collapsed; just behind and to the right of her shoulder the tower was still standing, not due to come down for another 20 minutes.

Larry something or other (forgotten his last name) later admitted that WTC7 was deliberately imploded. He was the one who, a few weeks prior had taken out a nice insurance policy against terrorism and other acts; bought at the right time, for the right price and for the right reason — instant cash!

Cheers!
——
Might be something here! —
http://www.informationclearinghouse.info/article1154.htm

“Creveld: We possess several hundred atomic warheads and rockets and can launch them at targets in all directions, perhaps even at Rome. Most European capitals are [ targets for our air force ] .

“Interviewer: Wouldn’t Israel then become a rogue state?

“Creveld: We shall have to try to prevent things from coming to that, if at all possible. Our armed forces, however, are not the thirtieth strongest in the world, but rather the second or third. We have the capability to take the world down with us. And I can assure you that that will happen, before Israel goes under.”

#114 bigpictureguy on 09.06.09 at 11:47 pm

Hard to believe I have to point this out so many times, but tehe BoC is powerless to prevent an increase in rates prompted by currency markets, debt markets or other more influential central banks. Rates will rise. That is not conjecture. It is certainty. You can argue about the timing. But there is no doubt about the impact. — Garth

There is a lot of people who believe gov’t control rates at will and it’s bloody scary. Whenever I bring up the topic of interest rate hikes risks I get this “are you crazy” the government would never do that and force millions losing their house.

These people are too young to remember early the 80s, OPEC oil shock, when interest rates were 18%.

#115 Men With Hats on 09.06.09 at 11:48 pm

Coming September 11
The return of The Blog.
We’re not making this up.

Good grief ! There goes the neighborhood .

#116 Future Expatriate on 09.06.09 at 11:50 pm

#102 – Don’t be ignorant. Cui bono? Who benefitted the MOST from 9-11? That’s who are your true perpetrators. In EVERY crime. Logic, Spock, logic.

Hint 1: NOT a guy in dialysis on rags in a cave, or his nutty patsies.

Hint 2: NOT a Mideast country ally of the US (that begins with “I”) that wouldn’t have cast in with Bush and his Saudi pals if they were the last conspiracy on earth. But sure as heck documented it every step of the way once they realized their multiple warnings were being completely ignored so they wouldn’t be the last patsies on a very short list.

There. Everything you need to know about 9-11. The truth is out there Mulder.

#117 Men With Hats on 09.06.09 at 11:59 pm

Fire up the ‘Death Star ‘ . Have your habitués launch daily broadsides against all things Liberal .
Start haunting and shadowing Garth’s every move .
Launch your threats .
Man, this is gonna be fun .

#118 Joseph on 09.07.09 at 12:44 am

I see alot of people referring to carrying costs of houses based on mortgage rates at 7 or even 8 percent. I understand Garth’s point of view that mortgage rates have to rise, but I think a US currency crisis in the near term forcing interest rates to shoot up to that level is unlikely. Anything is possible in today’s world, but I don’t see it happening for a few years as all the central bank governors that I’m reading about are still petrified of a deflation trap.

#119 daystar on 09.07.09 at 2:21 am

Boy do I feel foolish. Some stuff I put out a couple posts ago is all junk. (I’m quite embarrassed). it has to do with what I said here:

“Its safe to say that this current Conservative government has grown the size of our national debt in the bond market from 734 Billion in Federal bonds (Dec 2007)to a whopping 974 Billion or more by the end of this year. Readers, we’ve added at least 25% worth of new national debt from Conservative born policies in just 2 short years. By the way, thats 240 Billion dollars worth of new debt, not counting the federal deficits they are going to run this year and any other years they might still be in power.”

My big flaw here is in mistaking securitized mortagages from CMHC for actual federal bond sales which is a pretty big error. (that was dumb. Explained by my being rushed, but it was dumb. The Cons instead, added 126 billion in new bonds issued, not counting what they will need to keep running federal deficits)

Nevertheless, the link I did provide does ring major alarm bells, particularly in the area of how much exposure CMHC has to a real estate bubble bursting, especially in the areas of insured mortages (Est. 440 billion by the end of this year and mortgage backed securities (Est. 372 Billion by years end). Should a major real estate correction occur over the next couple years, CMHC losses could go well past 125 billion:

http://2.bp.blogspot.com/_0YOsyi5WbLY/SmTNYtBpAWI/AAAAAAAAAGs/9s9CqLuAMKI/s1600-h/CHMC+growth+in+insured+mortgages.Bmp

Which leaves me to ask… why would a Conservative government create a real estate bubble with 40 year nothing down mortage regs… for the wealth effect and to be popular, I know, I know, but when it runs out of steam especially in the face of a U.S. subprime meltdown, dive straight into record low interest rates to further inflate the bubble in the middle of a recession? Do they not know what rising rates will later do to Canada’s economy facing a real estate bubble and particularly, CMHC in terms of losses if and when interest rates rise and this bubble bursts?

I’m still trying to get over why they would do something so stupid, but they did it. Was there kickbacks in the sale of bonds somewhere? Kickbacks by developers? Who benefits… where is the kickback, what is the angle, there is always an angle, I still don’t get it unless the plan is something far more sinister than a simple wealth effect scheme and personally profiting off of knowing whats coming…. like to ruin this nation’s economy for the sole advantage of another nation…. or maybe it comes back to the sale of bonds, but I cannot believe that a government would be so stupid as to create a real estate bubble knowing what has happened over the last 3 years to the U.S. real estate subprime bubble and fiancial/bond market fall out there and to put the taxpayer on the hook for so much in losses, especially in the area of mortage backed securities.

And lets piece it together. When Harper was telling everyone the economy wasn’t that bad back in Sept of 2008, that it was no time to panic, Flarehty was selling 75 billion dollars worth of Canadian bonds to buy up mortages through CMHC, listed as “investments”. And then this year, they borrow another 50 billion in bonds and take the proceeds straight to CMHC. 125 billion dollars to shore up expected losses if and when those rates rise but will it be enough?

Fellow taxpayers, this is our money and I’m too overwelmed by the stupidity (including some of my own) to be angry right now but this will quickly pass. These idiots are still in power!

And for those who still think interest rates won’t rise:

http://americacanada.blogspot.com/2009/07/interest-rates-have-no-ways-to-go-but.html

#120 Mike (Authentic) on 09.07.09 at 2:21 am

#73 Barb .. a reader in Calgary “check out this empty lot in Calgary for $1.4m (as I recall it flooded in 2005) mls C3382560. Why that price? The “area name” is elite as well as being “trendy” of late.”

We looked at that lot about 14 months ago (still has not sold I see), it was $2.2 million then.

$800,000 off in 14 months thus far.

Mike

#121 mikef on 09.07.09 at 7:07 am

Couldn’t agree more patsan #96

Ca mouille comme asti en Vancouver

Why anybody independantly wealthy would
blow $800k-1M on dumps in the Van
when homes in Caliphony,Florida,Hawaii,
and various Caribbean islands are selling
for half just boggles the minds.

Don’t get me started on income taxes

#122 Herb on 09.07.09 at 8:12 am

Garth, there is an implosive connotation attached to 9/11 that does not provide the best of augeries. How about restarting the political blog on 9/10 or 9/12?

#123 OttawaMike on 09.07.09 at 9:09 am

#107 Best place on meth (aka NJ’s Analyst) on 09.06.09

“”And to all who whine about Mad Vlad, maybe Garth can have an ignore button installed so you can ignore his posts and I can ignore yours.””

Amen.

I especially liked the one post/rant that described 99% of the content here as tired and mundane. Begs the question why is the person even bothering to post that comment let alone read the content?

#124 piccaso on 09.07.09 at 9:39 am

“Sellers of these types of run down properties should just be upfront about their asking price as that of ‘lot value’.”

I think it’s pretty much a no brainer, lol

#125 Robert1 on 09.07.09 at 9:50 am

* Happy Labour Day To All *

– including ( but not limited to ):

1. the official statscan 8.7 % who are unemployed in Canada
2. the unknown number of unemployed who are not part of the above 8.7 % in Canada
3. the under-employed ( numbers not known ) in Canada
4. the part-timers ( who cannot get full time employment ) in Canada
5. the employed who have taken wage reductions over the past year in Canada
6. those who are now part of work sharing schemes with reduced hours and salary in Canada

yes indeed ….. * Happy Labour Day * to ALL my fellow Canadians !!!

#126 popeye the sailor man on 09.07.09 at 9:59 am

#110 moneymanh

I posted the link to the ATB just to show the banks are comfortable offering higher interest on GIC’s in the years to come. To me they are betting that interest rates are going way up over the next 5 years. I don’t know who insures them, sorry.

http://www.atb.com/Dev/investing/inv_seasonal_springboard.asp
http://www.atb.com/Dev/investing/inv_alberta_growth.asp

#127 bigpicture on 09.07.09 at 10:05 am

113 Vlad

Garth why are you allowing Vlad to promote racist overtones on your site with comments below and reference links to rense.com (anti jew site)?

“Larry something or other (forgotten his last name) later admitted that WTC7 was deliberately imploded. He was the one who, a few weeks prior had taken out a nice insurance policy against terrorism and other acts; bought at the right time, for the right price and for the right reason — instant cash!”

Before you pass off your lousy research and connect the dot BS perhaps you should validate your sources of information.

http://screwloosechange.blogspot.com/2006/06/larry-silverstein-evil-jewish-landlord.html

P.S I’m not a Jew but a concerned citizen who sees a fringe group of conspiracy theorist followers looking for a scape goat to satiate their anger.

I try to catch all objectionable links. Some slip through, regrettably. — Garth

#128 popeye the sailor man on 09.07.09 at 10:13 am

#114 bigpictureguy

I get the same thing every one thinks the government controls interest rates and they wont raise them to cause people to lose there homes. Granted the government will do as much as they can to keep them low and the BOC rate may stay low for a bit. But the bond rates will go up like they did a couple of months ago. A few months ago the best 5Y fixed rate was 3.6% then the 5 y bond rates rose near 3% so the mortgage rate went to 3.99% then 4.29% in only a few days. Over 70 basis points and the BOC rate was still @ .25% Proof the government had no control over the lending rates.

#129 Joshua on 09.07.09 at 10:36 am

#108 NoFreakinClue

actually buying now isn’t necessarily the best time to buy for everyone. The positive thing about higher interest rates means that the price of houses has to go down which also indicates that you would have to pay less of a mortgage.

Therefore, if you have a fat downpayment, higher interest rates may be to your benefit and buying now may be detrimental to many as many have said on this blog that alot of purchasers today are only looking at their payments now and not the future.

So purchase wise and Live within your means.

As for Vlad nostrodomis, let the guy/girl blog away. Some of his stuff is actually interesting, and those issues around the world will eventually affect Canada in one way or another.

Maybe thats why Garth hasnt deleted his blogs.

#130 rory on 09.07.09 at 10:40 am

Hey all,

Here is some good reading to rankle a few of you … think of it as a pension bubble and the implications of this bubble and that all bubbles need to pop …read the comments in Ms. Wente’s section and I think you can discern we indeed have a a mini-war brewing between the ‘classes’.

Think big picture on how this will relate …higher taxes, diminished private sector, unable to maintain the status quo, pricing ourselves out of the global market and even the one within, impact on housing, even the fairness of the system …it is all here in one item – pensions… happy Labour Day.

http://www.theglobeandmail.com/news/opinions/someone-will-have-to-pay-for-a-two-tier-job-system/article1219654/

http://fairpensionsforall.blogspot.com/

#131 Elle on 09.07.09 at 10:46 am

…..Holiday Monday morn…

just “havin a coffee” and listening to the news – it hardly makes your ears prick up anymore – same old ….
same old….
“Two more Canadian Soldgiers were killed today…”

History tells about nations in the past who would sacrifice the lives of young children and virgins, on the alter to their gods……

…two more today – the best of the land – sacrificial lambs … to the god of war! Nothings changed.

#132 Roial1 on 09.07.09 at 10:52 am

122 Herb on 09.07.09 at 8:12 am

Garth, there is an implosive connotation attached to 9/11 that does not provide the best of augeries. How about restarting the political blog on 9/10 or 9/12?

BECAUSE IT’S MY BIRTHDAY !

As for my return “gift’ to Garth. I will be sending 100$ to your campaign again Garth.

Use it wisely.

Thank you. Wise is my handle. — Garth

#133 Peter Wiener on 09.07.09 at 10:59 am

#119 daystar

First, thanks for reposting that data; – I was wondering how my own estimates could be so out of whack – now I Know that they weren’t and that they remain accurate.

The reasons why the government has acted in this CDN $125 BILLION dollar way (which incidentally is equivalent to the US $ 1.25 TRILLION move adjusted for their population size that the US gov’t did) were;

1. to avoid a “Northern Rock” type run on the banks and general depositor panic (not good for baking business that is way overleveraged – and this might come to light)

2. to avoid having to increase the Deposit Insurance above CDN $ 100,000 per account, therby instilling further ‘confidence’ in the system

3. to prevent Canadian banks from having to wholesale deleverage when everybody else was (buy them time for the markets to stabilize) and perhaps put them at a comparative advantage when the smoke cleared

4. to prevent having to perhaps nationalize CIBC or BMO and thereby admit they allowed these pricks to overleverage in the first pace (exposes poor oversight of banking by Canadian regulators)

5. to instill INTERNATIONAL CONFIDENCE in our banking sector to avoid potential withdrawals through the normal tendency for foreigners to repatriate their money in times of duress or sell foreign debt they might hold – which they would NOT have done if Cdn banks were using proper leverage

6. to make Canadian banks attractive places to deposit / buy equity to shore up Canadian bank balance sheets – using taxpayer backed strength to help private sector interests

7. to defend the oligopoly in Canadian banking (i.e. having 6 major banks in a population of 32 million relatively affluent people) and ‘demonstrate’ its advantages to try and justfy that level of concentration in the financial sector

8. to charachterize the cozy Canadian gov’t / Canadian banking relationships as protective instead of corrupt (as I believe it to be)

9. to allow the Consevatives to act UNILATERALLY and without vote (remember, PC’s held a MINORITY government) or much scrutiny for the multi-BILLION dollar gift they gave their true political masters – the Canadian banking fraternity.

10. to increase the existing Canadian bank cartel stranglehold on our economy.

11. lack of sophistication on the part of the Finance Department – they werew near panic I’m sure and were mislead and/or outnegotiated by the Cdn banks

12. to distribute windfall fees (small % on massive dollar amounts the transactions required for this “bailout”) to their cronies in the fields of banking and investment in this country who would then in turn support this course of action in their “independant” economic analysis and endorsement of it

No conspiracy here, just business as usual in this country.

#134 Men With Hats on 09.07.09 at 11:03 am

Choose wisely . Vote Liberal

#135 Weeping in Windsor on 09.07.09 at 11:47 am

My 10 year old (paid off) home just outside of Windsor that has had the annexation lowered by 10% in the last 2 years can NOT sell for 15% LESS than the LOWERED annexation rate.
Any greater fool out there wanting to purchase a 1267 sq. ft. 10 year old raised ranch from me for under $175,000?

Mind you, there are no jobs here and the bubble has truly burst in this area but who knows maybe there is one last Greater Fool out there in the rest of Canada willing to take a chance.

signed
Weeping in Windsor

#136 Gord In Vancouver on 09.07.09 at 11:50 am

…and the North Van edition…
_______________________________________

I’m a real estate bear but didn’t laugh when I saw that ad. A Lower Mainland, Okanagan, or Vancouver Island waterfront property always commands a huge premium.

#137 Got A Watch on 09.07.09 at 11:59 am

The world is still trapped in deflation. Inflation will surely follow at some point, but for this year and next the prospect of a global deflationary spiral is a much larger threat. The global financial system is still in dire straits, Banks all over are still sitting on mountains of bad paper they refuse to recognize as having lost most of their value. It’s a ‘don’t ask, don’t tell, extend and pretend’ world.

Deflation Worries Looking More Credible is a good round-up of the current situation. Governments are ham-strung by deflation, as the normal “policies” (low interest rates and Friedmanite “money printing” monetarism, for instance) they rely on do not seem to be denting the problem.

Right now this “recovery” is built on a river of easy Government credit, which has all but run out now. Thus you had many talking heads making speeches about the danger of “withdrawing stimulus too early” – this is code for “the economy is still on Government life support (crack), if we turn off the machines the patient will expire”.

Seen in this global context, the present irrational exuberance in the Canadian real estate market is, well, simply delusional. Idiots can post about “how it’s different this time in ______!”, which only proves once more that it is not, in fact. Blow that bubble up as big as you want, it’s only chewing gum.

On the Sunday AM radio talk shows, a mortgage broker with many years experience said she was seeing something new of late: the “bull offer” – from a first-time buyer, a clean offer, well over the list price, with no conditions at all and a fast closing, pushed on the vendor before the date they said they would be accepting offers. So they can be sure to ‘get’ the home. It is routine now for listing brokers to say they “won’t accept any offers until _____”, to drive a fast auction process of competing bids – another sure sign of peak stupidity.

When I heard this described, the words “unsustainable blow-off mania top” came immediately to mind. The same thoughts I had when I heard about the people paid to line up for the lux condo tower opening last September in Toronto – the one they canceled recently. After the last stages of the “blow off” have exhausted themselves, there is only one place to go, and it ain’t up.

This market is now drive by foolish first-time buyers who are naively being taken for a ride by “professionals” eager to earn a commission, and their Bankster and Government enablers. Look up at those pictures and the prices asked at the top of this Blog page, and tell me with a straight face that this is a healthy market. Sure looks like tulip bulbs to me, at the top of the irrational mania, and that one did not end well either.

#138 Dan in Victoria on 09.07.09 at 12:16 pm

I throughly enjoy ALL the posters/links on here.I may or may not agree with all of it,hell sometimes I wonder where Garth is coming from,he’s made me think a few times.Some of you guys should take an anti-viagra pill and just calm down.

#139 Barb .. a reader in Calgary on 09.07.09 at 12:25 pm

#76 Mike in Etown
#120 Mike (Authentic)

Mikes, re: #73 — a Calgary lot @ $1.4 million… it’s confirmed, it’s in the floodplain and floodfringe, 9c-10.
Talk about ‘waterfront property’! :)
There was a temporary berm built 95 yards from the house in 2005 to keep the river from flowing into downtown Calgary — but the property for sale was on the wrong side of that berm!
Pics of that section, 4th St & 25th Ave. flooding 2005, Elbow, Mission, Erlton, etc.

Iggy lives nearby? Hey, I’ll buy it if you let me put it on stilts!

#140 Joshua on 09.07.09 at 12:41 pm

-Men with Hats

Choosing liberal in the next election isnt necessarily going to solve anything. Ignatieff doesn’t seem to be the most honest person. He’s all for Canada now, but when he is in power, he’s going to be like most leaders and do what protects their jobs.

Truthfully, Harper has been getting a lot of slack and Im not saying I like the guy either as he is like every other leader but put anyone in his position, include Garth, the similar outcomes would still be happening to Canada.

Like Vlad Nostrodomis says, there are higher powers that the Presidents and Prime Ministers have to order to and if they don’t, well lets just say you’ll be unemployed and hated by everyone. Look at JFK and any leader who has been assassinated.

Obama isnt doing great things in the states is he? He’s putting a whole lot of stimulus in that ecomony and its not going to get that much better soon. He said it himself when he became president “this isnt going to be easy” but with a lot of hope…yes we can. Maybe 8 years?

#141 albertaboy on 09.07.09 at 12:51 pm

#25 Glenn on 09.05.09 at 10:30 pm “Do a post on the property prices relative to gold.” – PVC

Thou shalt not mention the g-word, under pain of death. So sayeth Saint Garth.

Yes, yes, yes….don’t mention the “G” word on this site. Garth hasn’t grasped the concept that the asswipe printed by the Government isn’t real money so don’t upset him by insisting otherwise.

A few observations – Garth and those in the “Interest Rates are Going UP!” Camp are bang on the money. Once they do start to move, my guess is it will be rapidly.

The CMHC is an arm of the Feds and used YOUR tax dollars to help the banks (ie: Rich Bastards riding your coattails) to bail them out from the White Trash who couldn’t make payments on their overvalued double-wide and should have stayed living in their mom’s basement where they could continue breeding.

Am i pissed – ya – more than slightly too. I’m sick of my tax dollars being used to further line the pockets of the wealthy, politically linked jerkoffs and “assist” uneducated, lazy breeders who are parasites on society. I saw the inner workings of Government and its always the least competent with little or no common sense who “rise to the top”. Personally I’m hoping for the day when we see the Canadian version of the French Revolution – where Politicians, Lawyers & Bankers are executed in the streets while the citizenry takes control and re-establishes balance.

#142 PVC on 09.07.09 at 12:55 pm

Wall St prepares to package and securitize death.

http://www.nytimes.com/2009/09/06/business/06insurance.html?_r=1&ref=global-home

#143 Roial1 on 09.07.09 at 1:27 pm

Thank you. Wise is my handle. — Garth

Just the factoid that you are going to toss your hat into the ring again, puts that statement in to question, doesn’t it.

LOL have a good? day.

The easy thing is to do nothing. It is not the wise thing. — Garth

#144 jess on 09.07.09 at 1:30 pm

from the new york times: the factories are at it again!

The bankers plan to buy “life settlements,” life insurance policies that ill and elderly people sell for cash — $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to “securitize” these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die.

The earlier the policyholder dies, the bigger the return — though if people live longer than expected, investors could get poor returns or even lose money.

Either way, Wall Street would profit by pocketing sizable fees for creating the bonds, reselling them and subsequently trading them. But some who have studied life settlements warn that insurers might have to raise premiums in the short term if they end up having to pay out more death claims than they had anticipated.

#145 Jake on 09.07.09 at 1:35 pm

In keeping with many of today’s posts regarding the state of the economy and #131 Elle’s most recent post regarding the nature of war, here’s a short clip.

http://www.youtube.com/watch?v=JfIgSNBVlJM

#146 Barb the proof reader on 09.07.09 at 1:53 pm

re: Conspiracy theories

Are there Conspiracies? You bet. All the time. But how well run are they?

Answer: Well enough to work.

Just look at an example in another land, and one which makes an excellent point:

Vice Pres. Dick Cheney punished Ambassador Joseph Wilson by “leaking” top secret CIA info about Joe’s wife Valerie Plame to ‘ruin’ their lives and teach Joe Wilson a lesson about Whistleblowing on Bush, Cheney, Rumsfeld & Co..

..Cheney’s activity was illegal (‘traitorous’ by law actually) yet he was never charged.
It’s a little push here, a little shove there — ‘conspiracy’ job well done.

The point is, it was basically done by a very small group, men of influence, (the fall guy, Scooter Libby, went to jail). Others went along for their own reasons, be it greed, stupidity, ideology, corruption, or by being chicken and going along with ‘the vital lie’ to save their own job.

It’s very safe to say that ‘conspiratorial’ behaviour happens all the time. A little push here, a little shove or money there.. voila. Hard to say something is – or isn’t – conspiracy when it’s a few loose dots connecting. That’s not to say some conspiracy ‘theories’ aren’t overblown. But just consider… more often than not, some parts of the theory are often very true.

Never underestimate the power of subtle shaping of things by those who try to conspire to get their way. A perfect example is the reshaping of sheep’s minds by the Republicans to get their 20% of sheeple to spit, bray and protest loudly (with ugly abusive controlling behaviour) if they even hear the name Obama.

Open eyes and open minds can see that sort of thing.

And open minds in Canada know the aftermath of a mortgage house of cards co-conspired by a dumb, ideological government.

#147 dosouth on 09.07.09 at 1:53 pm

Well it has finally hit the Okanagan, Realtors spewing to the media and now we’re in the fray again!!

http://www.kelowna.com/2009/09/07/locals-offered-insights-on-the-housing-market/

#148 Denis on 09.07.09 at 2:25 pm

Canada getting some coverage by HS Dent’s Blog: “Canada Going Down With The Ship”
http://bit.ly/MGmTR

“Canada’s trade surplus with the United States has declined by 17.6 billion Canadian dollars in the last three quarters as a result of America’s plummeting consumer spending, investment, and construction. And given that Canada’s Spending Wave is in the process of peaking, the country cannot expect its domestic consumer to come to the rescue. We estimate that Canada has many years of slow growth in front of her.”

#149 TakingResponsibility on 09.07.09 at 2:29 pm

In response to Elle’s astute comment on 09.07.09 at 10:46 am:

Elle, you might be interested in the following short article “Blood Sacrifice and the Nation …”

http://www.asc.upenn.edu/USR/fcm/jaar.htm

The ‘sacrificial’ national narrative is actually very contemporary. And while the article is based on the United States’ “nationalism”, I think that we Canadians need to be very aware of Unethical acts and behavior in our name too. (… not just in real estate shilling)

Ie. Check the preview of this Canadian documentary:

http://www.wideopenexposure.com/M4P.php

Ethics …. Yes.

#150 rory on 09.07.09 at 2:38 pm

Hey all … let us assume that RE collapses across the board by 20% so what happens …

We loose 20% of our wealth – so we work longer, we live cheaper, etc. Those with less than 20% equity lose their homes driving home prices even lower…but as I go on and on one realizes that nothing changes …structurally everything is still the same …still no jobs, still high gov’t spending b…SO how does one stir the shit to make something meaningful out of all this with the objective being to create a larger private sector that produces vs consumes, as in gov’ts, that can compete worldwide and if not worldwide then provide Canada with self sustaining capabilities.

I would rather have a huge lower middle class then large pools of rich and poor with no one in the middle …in other words a fairer state without large gov’t involvement …so how to do? …this is just my opinion fraught with lots of problems that one could debate endlessly …so here goes:

-Cut all gov’t salaries, benefits, pensions & existing pensions from top to bottom by 20%. Those earning under 20K exempt.
-Cut income taxes to 20% of monies earned. Eliminate all deductions.
-Eliminate all gov’t subsidies to all industries.
-CHMC, EI, CPP, Crown corps etc must all stand on their own 2 feet.
-Eliminate the Senate
-Eliminate all gov’t guarantees to banks/insurance companies, etc except for CDIC.
-Ensure banking & investing regulations are enforced.
-20% down payment, etc on buying RE
-All defined pension plans become defined contribution so that private plans and public plans become equal.
-All gov’t payments to private business in health, drugs, dentists reduced by 20%.
-Overlap between various levels of gov’t eliminated – if education is provincial then feds butt out 100%, etc.
-20% reduction in all gov’t department spending but NO layoffs allowed except for defense and safety (for now).
-HST at 15% across the board…consumption taxes on cigs, booze, gas, gambling can be addressed later.

So whadda think? Need more or a good start.

Picking on the govt’ as lots of reports say they are paid 7 to 40% more, on average then the private sector …so in fairness the (gov’ts) need to come down. Private cannot go up because of 2.6B Chinese and East Indians.

With a 20% housing price drop many recent buyers will lose 100% of their wealth. Not inconsequential. — Garth

#151 clint on 09.07.09 at 2:45 pm

On the other hand…

http://www.realtor.ca/propertyDetails.aspx?propertyId=8665274

#152 daystar on 09.07.09 at 2:48 pm

Excellent points, Peter. Very detailed points, I might add. Without your help, I might not have truly understood why, maybe not for months, maybe not ever, having been blinded by the reality that the purposeful creation of a real estate bubble is such a stupid idea to begin with and will end badly for both home owners who bought in at or near the peak, or facing negative equity depending on how far the bubble deflates and taxpayers… who ultimately get hosed… because they breed long drawn out recessions in their wake… hurting so many at the profit of so few.

This will create alot of misery for a lot of people at the benefit of a very few. What perpetually irks me is that this was so preventable… and the Conservative way of dealing with it is, “we’ll just borrow 125 billion worth of bonds and make it all go away. We got ahead of ourselves with tax cuts and spending? We’ll just borrow another 50 plus billion per year and make it all go away. We understimated it? We’ll just borrow more and make it all go away.” Of course I’m paraphrasing. Flarehty’s words are found here:

http://www.cbc.ca/canada/story/2008/11/12/flahertyloans.html

This won’t just effect the lives of our grandchildren, our children will be directly effected by it including, first and foremost, ourselves.

I can’t believe how poorly managed this federal government is. And as taxpayers get hosed, so does this nation. This is, again, as you point out so well Peter, the equivalent borrowing/spending of a desparate U.S. nation facing far worse. How much more are we going to borrow to fix this Conservative mess when it gets messy for ourselves?

And again… will 125 billion be enough considering the ballooning exposure CMHC has to a real estate bubble correction, and considering the Cons big appetite for selling bonds to prop up their federal deficits and now trade deficits and their love to sell mortgage backed securities and the creation of the biggest North American real estate bubble of all time… is there a reader left on this thread who still believes Canada won’t be forced to borrow large into rising interest rates?

Its simple common sense. As the rest of the world eventually recovers from the U.S. bond market meltdown (along with their own bubble meltdowns), nations will become worried about inflation more than they are worried than the failing U.S. economy. As a few nations begin to raise their rates, bond investors will flock towards those nations to invest. Nations with higher interest rates will see a pop in currency. Nations with lower interest rates will see a drop in their own currrency unless they too, raise their rates…. and where will Canada be once those interest rates rise? Do we think a cheap currency is good for us? Make us more competitive… like Italy? Readers, this phenomenom is nothing new.

Where will Canada be when this world economy recovers? Reeling from a real estate meltdown? The last out of the gate, the opposite of what our PM tells us? And federal rates will rise cause in case readers missed it, we are a debtor nation thanks to this Conservative government with a big need to borrow now from freshly created record federal deficits and trade deficits and North Americas largest freshest made in Canada real estate bubble of all time and as interest rates rise throughout the rest of the world over time, so too, will they rise here unless Canada wishes to watch its currency fall, to what extreme… who knows, but what we do know is that we have large structural deficits and should the feds continue their red ink into higher rates, we will see Canada selling more bonds into these high rates and our debtload will become more and more unmanagable as debt management soars. And did I mention CMHC’s ticking time bomb?

I’m looking ahead here and this economy is majorly inbetween such a rock and a hard place… we are at the peak of a real estate bubble with mega debt piling up and the obvious catalyst for Canada’s big hurt is rising interest rates which, because the misery will be so extreme should rates rise, it is the number one reason people are giving for rates not to rise.

I’ve got news for you all… George Bush isn’t God. He couldn’t prevent interest rates from rising in his own debtor spendfree nation. All Obama has bought with his “keep rates low” mantra to the world is time. Its not decades worth… Obama isn’t God. And for all the Conservative worshippers out there, Harper isn’t God either. In truth, he’s just some self serving egomanical misfit who’s led us to the edge of a cliff. Its just a matter of asking ourselves if we want to be lemmings and follow him to the rocks below cause thats where we are at right now… on the edge of a cliff, or do a 180 and go back to sound fiscal policies once again. And what keeps me less than positive is that this will occur is that the average Canadian (and hence, the average voter) has no clue as to just how much debt this federal government has racked up over the last year. By October of this year from last, the Conservatives will have ran up over 40 Billion in federal governmental debt, 125 billion or more in bonds and T bill debt in anticipation of a CMHC meltdown (and its likely not going to be enough), and billions more in trade deficits through their spending and policies. We are easily looking at 170 billion in fresh debt that this Conservative government has put this nation in year over year… thats staggering… and it won’t be enough to fix the failed policies they’ve put Canadians through just in just over 3 years in office.

My guess is the true cost of their engineered real estate bubble will be at least several hundred billion or more to taxpayers before all is said and done. Such a waste… and for what.

I have to stop thinking about it somehow, its just too upsetting.

#153 Best place on meth (aka NJ's Analyst) on 09.07.09 at 3:00 pm

#140 Joshua,

I vote for the party, not it’s leader.

Liberals have always done a good job running the country and Conservatives have always done a poor job.

I still shudder when I think of Mulroney, and this clown is even worse.

#154 Men With Hats on 09.07.09 at 3:11 pm

Note:
I am,quite simply,diametrically opposed to any and all ultra-right wing governments .
Including the one presently, illegally occupying Ottawa .
They epitomize fascism .

#155 steven rowlandson on 09.07.09 at 3:14 pm

A one bed room home in panorama park for $999,000.00? If I felt the house was big enough and had enough land I’d buy that for an ounce of silver!
Otherwise no deal. No doubt its not big enough for my needs any way.

Steven

#156 conan on 09.07.09 at 4:23 pm

Re 144 Life settlements being taken up by the banks

The bank model being discussed has too much administration for it to ever be a going concern.

If the model did prove to be a success, the insurance industry has an overwhelming competitive advantage to offer a similar service with much lower fees.

Meaning all the Wall Street money spent trying to set up this system goes bye bye.

Interesting topic…..

#157 Future Expatriate on 09.07.09 at 4:33 pm

#127 – Rense, who I must disclose is a personal friend of mine, does NOT run an anti-semitic website. He most definitely runs an anti-Zionist website, and Zionism is a purely political movement of imperialism with adherents from all religions, no religion, atheists, Luciferians, and a handful of avowed Satanists.

The distinction is of vital importance, it must be drawn, and it does exist. Judaism is a religion; Zionism is not. Zionism is political and economic movement of imperialism. The majority of Jewish people in the US are NOT Zionists and the number of Jewish people who are is shrinking hourly.

Equating anti-Zionism with anti-Judaism or anti-semitism is not merely erroneous, it is a highly effective tactic.

#158 Barb the proof reader on 09.07.09 at 4:37 pm

#102 bigpictureguy,

Just wondering — can you please link us to where you got your “quote” by Clarke?? He could be one to say that but he doesn’t actually seem to be the one who said what you quoted from him. Can you clear that up with a link — since it’s your “favorite answer” “from Richard A. Clarke” I’m sure you’ve got it bookmarked and handy in that case.
Thanks. Looking forward to you posting that link for all of us.

#159 Peter Wiener on 09.07.09 at 6:04 pm

# 152 daystar

In my own calculations I come up with about CDN $ 200 BILLION also as a rough estimate.

It angers and upsets me also, not only because of the collasal waste of resources that could be used to great national advantage elsewhere (lower tax rates, education, etc,), but that it is being done without public or parliamentary debate. In this manner, Canadians are kept from making an informed decison regarding the success or efficacy of their government and prevented from changing things come election time.

Investigative or even responsible journalism is dead in Canada. The pathetic tatters of what passes for a ‘free’ press here has gone from national conscience to national disgrace in its co-opting and compromise to retain ‘access’ to the powersthat be. THE FIX IS IN and our politcal leaders have taken great advantage of this state of affairs and so we are poised to become a much poorer nation as a result.

But daystar, I doubt anyone other than yourself and possibly Garth gave notice to my posting due to the length of it and my ‘reputation’ on this blog. We are about to receive our just desserts as a nation for our lack of interest in our own futures and from what I gather from most Canadians, we deserve it!

I have really given up trying to talk sense to people I know in this country who are oblivious to the facts and yet are about to be profoundly affected by what is occurring.

I could go on and on, but I won’t. The collective gaze has gone glassy eyed in a spending and RE orgy without parallel. My efforts are in vain, still my nationalistic heart doesn’t want to accept it – for me it is done, over; – the sheep are led to slaughter (or at least to a life of pseudo-slavery).

For the rest of you oblivious Canadians I say “ROCK ON” and “PARTY HARDY” cause the clock is a tickin’ and the party is winding down soon.

You’ll know what I mean when it is truly too late.

#160 Nostradamus Le Mad Vlad on 09.07.09 at 6:40 pm

#119 daystar on 09.07.09 at 2:21 am — “. . . not know what rising rates will later do . . . why they would do something so stupid, . . .”
–with —
#125 Robert1 on 09.07.09 at 9:50 am — Total amount of unemployed, claiming EI and welfare;
— with —
#130 rory on 09.07.09 at 10:40 am — “. . . a pension bubble . . .”
— with —
#135 Weeping in Windsor on 09.07.09 at 11:47 am — “. . . are no jobs here . . .”
— with —
#137 Got A Watch on 09.07.09 at 11:59 am — “. . . the present irrational exuberance in the Canadian real estate market is, well, simply delusional. Idiots . . .”
— with —
#144 jess on 09.07.09 at 1:30 pm — “The earlier the policyholder dies, the bigger the return . . .”

Variety of excellent posts today. For boomers who are mortgage- and debt-free, living within our means daystar’s post is quite straightforward. We KNOW what rising rates will do, as a lot of us remember the early ’80s.

So we understand that the forthcoming ‘new’ middle-class will essentially be wiped out; then, we will be expected to bail our children out (let govts. off the hook), but with what?

In 2015, nine – 10 mln. boomers start collecting CPP / OAS / GIS, which leads to Robert1, rory and Weeping in Windsor, sort of lead to jess.

I am not sure of what the US figures are re: unemployment / retirees, etc. but with a lack of children being born my guess it’s a helluva lot, more than the ‘system’ can cope with.

Add jess’ post, about Wall Street collecting life ins. policies (another artificial bailout), introduce the pig – bird – flu virus, population reduction via wars, discord among countries, etc.

It doesn’t matter who is in charge politically anymore, as political leaders and cronies won’t / can’t do anything to stop it.
——
For those who support me — thank you; for those who take the neutral view — thank you; for those who oppose me — thank you, as we all know where one another stands.

Racist? Hardly. My wife is Chinese; I am Caucasian. We both remember the stares we got when we were dating and married in the late ’70s. Society (the “Establishment”) didn’t smile favorably on us.

Well, screw society and stuff the establishment. They are both a pair of dimwitted, jackassed, new-age and politically-correct yahoos, always prepared to make judgment calls on things they know nothing about.

Neither of us has ever bothered to waste our time listening to or paying attention to either, and we are too old to start now. Rant finito!

#161 jess on 09.07.09 at 6:53 pm

http://www.minhacasaminhavida.gov.br/

“Brazil’s government has announced a series of ‘anticyclical’ measures to boost growth since the onset of the global economic crisis. Some are no more than pay rises for public sector workers, which will remain once the crisis has gone, storing up fiscal trouble for the future. But Minha Casa, Minha Vida appears to be the real thing. At a time when Brazil’s construction industry was heading into decline after several years of strong growth, Minha Casa, Minha Vida has appeared as a lifeline.

‘‘This will provide about 70 per cent of our business this year,’ says Milton Goldfarb, president of a construction company that bears his surname. He plans to build 12,000-14,000 homes under the scheme this year alone. Given that the industry accounts for 5 per cent of Brazil’s gross domestic product, the program should give a valuable boost to employment and earnings. ‘This is a revolution,’ he says. ‘Brazil has never had a policy so clearly designed to provide housing for the poor and the lower middle classes.’

“For those at the bottom of the income scale, the program offers eye-popping subsidies. It allows people earning up to three times the national minimum wage of R$465 a month to buy flats or houses worth up to R$52,000. Subsidies vary according to earnings. For those earning one minimum wage, for example, the scheme will contribute R$46,000 – leaving the buyer to provide just R$6,000, which they will borrow from the Caixa and repay in 240 instalments of R$46.50 a month.

“Higher up the income scale, buyers will get smaller subsidies but also subsidized finance. The Caixa’s website offers a simulator to show people how much they would pay depending on their earnings and the cost of their new home. As the housing fair started, it was performing 154,000 simulations every day.
http://www.minhacasaminhavida.gov.br/

#162 bigpictureguy on 09.07.09 at 7:22 pm

#158 Barb the proof reader on 09.07.09 at 4:37 pm

Barb do a search as I didn’t bookmark it and have no interest looking for it as it’s a waste of time.

I’ve Read both sides of the conspiracy theories and debunking long ago before Vlad and ilk thought they discovered something compelling. It’s old and tired subject.

There are better things to do which one can control.

#163 Cash is King on 09.07.09 at 7:24 pm

#131 Elle

…two more today – the best of the land – sacrificial lambs … to the god of war! Nothings changed.

If you think nothing has changed, then you are talking to the wrong people. Go to your nearest Military Base and speak to those soldiers who have been in Afganistan.

or Read this:

‘Why We Fight’ – a poem by Grenon
By THE CANADIAN PRESS
The following poem, entitled “Why We Fight,” was written in
Afghanistan in 2006 by Cpl. Andrew Grenon of Windsor, Ont.,
one of three Canadian soldiers who died Wednesday September
3rd 2008 in an ambush in the volatile Zhari district. It was released
Thursday by members of Grenon’s family.

Why We Fight
I’ve often asked myself why we are here. Why my government actually
agreed to send troops to this God-forsaken place. There are no
natural resources. No oil, gold, or silver. Just people.
People who have been at war for the last 40 plus years. People who
want nothing more than their children to be safe. People who will do
anything for money; even give their own life.
I look into the eyes of these people. I see hate, destruction and depression.
I see love, warmth, kindness and appreciation.
Why do we fight? For in this country, there are monsters.
Monsters we could easily fight on a different battlefield, at a
different time. Monsters that could easily take the fight to us.
Surrounding these mud walls and huts is a country in turmoil. A
country that is unable to rebuild itself. A country that cannot
guarantee a bright future for its youth.
Why do we fight? Because, if we don’t fight today, on THIS
battlefield, then our children will be forced to face these monsters on
our own battlefield.
I fight because I’m a soldier.
I fight because I’m ordered.
I fight, so my children won’t have to.

Cpl. Andrew Grenon

#164 john m on 09.07.09 at 7:39 pm

159 Peter Wiener on 09.07.09 at 6:04 pm<<<<<<<<< i agree Peter.our countries resources have been sold off for pennies on the dollar……from raw logs to Alberta oil (etc) for eternity and this happened a long time ago.Most people when they grow a garden they fill their own freezer first.not our quick buck politicians…….we get our oil from Saudi Arabia and our manufactured goods from our exported natural resources from another country..the future in this kind of thinking will haunt us till eternity.IMO

#165 Grantmi on 09.07.09 at 7:52 pm

Ghost of Tom!!

What! Are you Vad’s – Sir Lance Alooser!!

They guy has been spouting his racist views since he got on here. If the two of you want to hold hands and discuss the nuances of world affairs other then real estate.. go somewhere else. I’m sure the rest of us could use the break!!

#166 john m on 09.07.09 at 7:52 pm

Something to think about……..
Where does Canada’s oil come from?

Canadians need a national energy strategy – one that puts citizens’ interests ahead of multi-billion-dollar oil companies. Right now, our country does not have a national energy strategy that addresses where our energy comes from, where it is going, or the high price of environmental devastation that comes with producing it.

For nearly 20 years, Canada has lived with free trade agreements and free-market rules that are used to ensure that our energy resources keep fl owing out of the country with little or no direction from government. As one of the coldest countries on earth, Canada’s energy security is decided by the whims of the United States, the markets and the big oil companies.
Importing oil from where?

Most Canadians are under the impression that we do not need to worry about our energy security. We see ourselves as a country rich in oil, and we assume that our own resources are available to us for consumption. That assumption is incorrect. Canadians do need to ask where their oil comes from because it doesn’t necessarily come from Canada!

Canada imports more than half of the crude oil it needs. We purchase around 55 per cent of our oil from countries such as Algeria, Saudi Arabia and Venezuela. We are also turning increasingly toward new sources including Russian and African producers. Canadians should question whether we can count on those suppliers for a steady supply of oil.
Where are Canadian resources and where do they go?

Not surprisingly, the biggest Canadian producer is the province of Alberta, which accounts for two-thirds of Canada’s production. Saskatchewan is next at roughly 18 per cent, and Newfoundland produces 13 per cent with its off-shore resources. Manitoba, Ontario, British Columbia and the Northwest Territories round out Canadian output with a combined share representing 2.8 per cent of production. However, around 66 per cent of Canada’s oil production is not destined for Canadians. It goes almost exclusively to the United States in the form of exports.
What if there is a shortage or crisis?

Can Canada replace the oil it imports with resources from its own territory if our suppliers become unreliable, or if an oil crisis becomes a reality? The answer is a resounding NO! Under NAFTA, we must keep sending the same proportion of our oil to the United States no matter what happens on the world stage. Article 605 of NAFTA only allows us to reduce exports to the U.S. if we cut our domestic supplies by the same proportion. Furthermore, we can’t charge the U.S. a higher price than the one in Canada and we can’t disrupt or restrict the normal channels of supply. What are those normal channels? A huge network of 16,000 km of pipelines sends Canadian oil south, mainly to the American mid-west. At the moment, no pipeline takes Alberta’s oil to eastern Canada.

Without a Canadian Energy Strategy – a strategy that will give Canadians security of their energy supplies, guaranteed access to energy reserves in times of need, and strong policies that protect our environment and focus on finding alternative, less harmful energy solutions – our country will continue to be a victim of an energy gold rush. Politicians cannot let corporations and the market set the agenda, focusing on big business needs, and privatizing public services, while ignoring the energy security needs of Canadians.
Take action!

Contact Prime Minister Stephen Harper and demand a National Energy Strategy that puts people and the environment ahead of corporate interests.

Office of the Prime Minister
80 Wellington Street
Ottawa
K1A 0A2

E-mail: [email protected]
Fax: 613-941-6900

#167 Daystar on 09.07.09 at 8:11 pm

I unfortunately have to agree with everything you’ve said, including your own $200 billion dollar estimate of year over year federal debt. My own estimate of $170 Billion was extremely conservative, factoring in only federal budget deficits for this nations first 3 quarters and 125 Billion of bonds issued for CMHC. I’d need to look at Canada’s bond market to know far past 170 Billion Harper and Co. has truly gone and haven’t done so. Again, I haven’t followed the bond markets until just a few days ago and I’m playing major catchup but the level of federal debt Harpers government has ran up within the last year… folks, thats alot of cake. No federal government that I can recall has gone past 45 Billion as a ball park guess going back to the early – mid nineties?

Just think of the sheer size of Conservative debt this federal government has rung up in this last year. The Cons have ran up more debt in the last year than Ontario’s entire provincial debt with money to spare and they did it through the bond markets and media being controlled by two families: Can west (Asper) and CTV (Woodbridges). And don’t expect the CBC to say much about it as they, in case we’ve forgotten, are a government crown corp with the Cons currently in power for over 3 years now. Can West is majority owned by Goldman Sachs now and should Can West through their own corporate bond market sales to expand their media market share just a few short years ago slip into Chapter 13, our biggest media outlet becomes controlled by bond holders (Americans) instead of Israeli’s who’s finances are still controlled by americans.

And what is their will?

To my knowledge, only the Suns (save Vancouver’s Sun which is Can West) and the Toronto Star, and local weekly & biweekly papers are independent from U.S./Conservative Control.

As for the Woodbridge family, its far more personal but even there, its all about who benefits from CRTC rulings to media market share to investing in bonds themselves. Its certainly not loyalty to Canada. You are once again, unfortunately right Peter. “The media fix is in”.

The only thing we could potentially disagree on from here is the timing of when interest rates will rise and whether or not the U.S. can recover at all. I still maintain that the U.S. economy will begin to show some life caused by a rise in real estate valuations due to cheap rates over time but even so, it will only delay what is truly a downward spiral of an economic superpower in serious decline. One only needs to see the sheer size of their bond market value in relation to the size of their economy, real estate cap and combined stock market cap to see it. I can’t see the USA being able to pay back what they owe in the bond markets at any time in the future, its too overwelming for them now.

Especially here, I’m assuming you and I both know that the U.S. bond market is a ponzi scheme as a few other bloggors have mentioned and their currency has nowhere to go but down over the coming years and decades as a result. Anyone investing in U.S. bonds will lose their shirt due to the long hard slide their currency will take in the near, mid and long term and they are pretty much done as a superpower outside of their nuclear/military capabilities which is also worrisome.

And Japan is in rough shape with their bond markets as I see it as well. The cost to running near zero interest rates in Japan through bond market debt has been extreme. Again, the numbers don’t lie. There is a major restructuring of the powers that be in this world and it would be a true shame for Canada to follow the direction of the U.S. and potentially Japan as once great nations gone bust, turning Canada’s own bond market into a ponzi scheme bubble of debt that can’t be maintained except with more debt that ends badly.

But… while it’s initially relieving to entertain the notion of giving up on the responsibility to serve others, we can’t give up on this declaration to servitude as fellow patriots, or we give up on ourselves. Nowhere is it promised that it would not come without adversity. Hence, we need to continue to evolve and mature as greater adversarial times demand it from us. Canada is facing an election and people are growing tired of Harper, needing a hard push and nudge back to reality to do whats right… even if it humbly proves them wrong for the truth ultimately sets us free. And it is within that truth told… truths known as swords throughout history, made sharp through languages that the most common of masses can understand, placed in the hands of those who know what to do with such truths for the right reasons… that freedom is ensured and shared. In short Peter, we can’t stop being who we are and note as the laws of impermance/permanence suggest, that we too, are works in progress.

#168 Live Within Your Means on 09.07.09 at 8:39 pm

#163 Cash is King on 09.07.09 at 7:24 pm

I agree with Elle and I believe that the majority of Canadians do as well. I have great sympathy for the Afghans, especially the women & children, but history has proven that the west cant win.

#169 Live Within Your Means on 09.07.09 at 8:42 pm

#165 Grantmi on 09.07.09 at 7:52 pm

It’s not your blog. If you don’t like Vlad’s posts, don’t read them or create your own blog and see how many followers you’ll have.

#170 Barb the proof reader on 09.07.09 at 8:57 pm

#162 bigpictureguy

Gee, bigpictureguy, I asked nicely for you to provide a link because I’d ALREADY spent an hour searching through Clarke’s books, etc. and found there is no such quote that you say. It is often a right wing quote though, because they’re always busy flailing around putting out conspiracy fires. So I just thought you might want to check to confirm it as I would have been interested to hear Richard say that. But, he didn’t, and that’s why you can’t provide a link… and I know you tried, thanks anyway. But if anyone else could find it, please post the link to it. But after looking for a long time, I began to wonder why you said it.

And as for suggesting that “Vlad” has recently discovered something, I dare say he has been on Garth’s blog for years (under a different name by his own admission) and he and others simply represent a different or challenging way of looking at things. You purport to do the same yet you diss him. You say you are advanced in your knowledge of what he posts, but maybe he’s just laying it out for others not quite so advanced as you report you are. So why do you beef? 99% of the people here are tolerant and enjoy the challenges of constantly learning in life and judging for themselves. Personally, I always expect people to thoughtfully judge for themselves what a message is really about..

#171 smw on 09.07.09 at 8:58 pm

Move over New York and Paris. Other dynamic global cities are on the rise.

And one of them just happens to be in Western Canada…

http://www.forbes.com/2009/09/02/world-capitals-cities-century-opinions-columnists-21-century-cities-09-global-capitals.html

#172 Live Within Your Means on 09.07.09 at 9:02 pm

#159 Peter Wiener on 09.07.09 at 6:04 pm

Re this post of yours I couldn’t agree more. I also agree wholeheartedly with #166 john m’s post. We have sold out our country to the highest bidder and the average Canadian, IMHO, is not aware of the consequences. JMO

#173 Gord In Vancouver on 09.07.09 at 9:06 pm

Global BC Hypocrisy

Global BC just spent almost 5 minutes stating how BC’s minimum wage rate will soon be the lowest in Canada and how locals are suffering from lack of buying power.

This is the same network/station that just spent 2 months pumping increasing local real estate sales volumes without making any reference to priced out folks or the unemployed. I’m not part of the former or latter.

Do they think we’re stupid?

#174 Elle on 09.07.09 at 9:07 pm

# 145 -Jake …thank you….what a powerful video!

# 149 -TakingResponsibility….all those Myths, who knew? Thanks for that also.

#163 – CashisKing…thanks for your interest & for
the heartfelt words of Cpl Andrew Grenon ………

“I fight because I’m a soldier,
I fight because I’m ordered,
I fight so my children won’t have to.”

….let me simply say this …. His children will no doubt HAVE TO! (what’s changed?) his fighting won’t make any difference, whether or not they will have to fight.
Another mislead generation, another going off to a war, decreed by lies and myth…….and continued slaughter!

#175 Barb the proof reader on 09.07.09 at 9:08 pm

#166 john m

Great post john m.. good timing.. just discussing the stunning lack of a national energy strategy the other day..

And a year ago.. and every few days on the old political blog. For instance, just for old times’ sake, here’s an old old post by TS mentioning that too.
http://www.garth.ca/weblog/2008/08/04/from-calgary-to-halton/#comment-163167

#176 kftcic1 on 09.07.09 at 9:12 pm

Hey Got A Watch, miss your comments on Mish’s blog. Your comments were among the more valuable ones there.

#177 Alex on 09.07.09 at 9:19 pm

168 Live Within Your Means

I agree with Cash is King and I believe that the majority of Canadians do as well.

#178 Grantmi on 09.07.09 at 9:25 pm

Are you Vlad, Tom and YOU – LWYMeans…. all the same guy!

I’m starting to think so!!!!

#179 45north on 09.07.09 at 10:13 pm

from CMHC:
Please allow me to explain that CMHC operates its mortgage business in a commercial capacity, and follows sound business practices to ensure commercial viability without having to rely on the Government of Canada for support in less favourable times. Peter De Barros, Director Corporate Relations

#70 saanich and #85 daystar: So you are saying that the Government of Canada has directly injected billions of dollars into CMHC? I just read Peter De Barros letter again – he never actually said that CMHC is not receiving Federal money.

William Black had a video in which he talked about control fraud at Fannie Mae and Freddie Mac – in the long term, the loans they made were bad for them and the borrowers but in the short term the loans were good for the people actually writing the loans at the GSE (government sponsored entities).

I said that CMHC should demand 10% downpayment and have amortisations no greater than 30 years. I still think that it should.

#180 dd on 09.07.09 at 10:14 pm

#166 john m

…Canadians need a national energy strategy…

The last thing Canada needs is another politician telling us what to do.

#181 dd on 09.07.09 at 10:17 pm

#166 john m

…Canadians need a national energy strategy…

The government does one thing right. Tax. Set the royalty rate and get out of the way. The last thing Canada needs is another politican telling us what to do.

#182 Men With Hats on 09.08.09 at 1:47 am

Harper Re-election Question: [Rotate] Some people think that Stephen Harper has done a good enough job to deserve re-election. Others think that he has had his chance and it is time for a change. Which of these two opinions best reflects your personal view?

* Time for a change 58.5%
* Deserves re-election 31.9%
* Unsure 9.5%

Nik Nanos

#183 Future Expatriate on 09.08.09 at 3:43 am

#163 – When one country wakes up and becomes the first to make all profit from war illegal and worthy of the death penalty, THAT is the day TRUE peace will begin to come to the planet. Wars are fought for one reason and one reason alone; young idealistic men and women are willing to throw away their lives to profiteering rich old bastards who are far more evil and richer than any human has a right to be. And have figured out infinite ways to sucker just plain folks into their endless profiteering, as they sucker their children and grandchildren into hell.

War is the greatest con game ever invented, and their is a sucker born to throw their life away every second, only as long as there is a subhuman born to profit off murder every ten seconds.

#184 daystar on 09.08.09 at 4:08 am

#179 45north

Yeah…

It began with 25 billion worth of bonds being sold in October of last year to be injected directly into CMHC. This is the Conservative spin in terms of what Flarhety says its used for:

http://www.cbc.ca/news/canadavotes/story/2008/10/10/flaherty-banks.html

In November of last year, Flarehty goes to the bond markets to borrow another 50 Billion for what he says is the same thing, calling it an “investment” for CMHC. At this point, Flarhety has borrowed 75 Billion and injected the entire 75 Billion into CMHC as the link below informs us. Flarethy doesn’t classify these bond issues as new Canadian debt, by using the sale of Mortage backed securities as an investment drawing interest. However, these mortgage backed securities are backed by CMHC should they default so this is quite interesting. The government borrows 75 billion in October and November of last year with the sale of bonds, but declares this debt as an investment bearing interest through the sale of mortage backed securities by banks. Its a scheme to make banks money in a big way as explained in this link:

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

And this link is Flarehty’s version of borrowing to create and “investment” to capitalize Canada’s banks.

http://www.cbc.ca/canada/story/2008/11/12/flahertyloans.html

So… when did this last 50 billion worth of capital get raised in the bond markets and injected into CMHC?

I can’t tell you exactly with a media link, because there wasn’t a story on it. My searches through CBC and CTV archives online revealled nothing making me wonder if its yet happened. But this link from CMHC’s website balance sheet clearly reveals as evidenced, a plan to borrow 125 Billion from the Canadian government which is simetaneously listed as an “investment”, along with the plan to add $150 billion worth of new mortgage backed securities CMHC is on the hook for in 2009 of which, all indications are will be exceeded.

http://2.bp.blogspot.com/_0YOsyi5WbLY/SmTNYtBpAWI/AAAAAAAAAGs/9s9CqLuAMKI/s1600-h/CHMC+growth+in+insured+mortgages.Bmp

75 Billion worth of the intended plan to borrow has been reported and is written in stone. I’m currently online as we speak to find evidence of the final 50 Billion being raised in the bond markets and injected into CMHC as planned to confirm what #70 saanichtonian on 09.06.09 at 1:25 pm had to say with his links, most notably Canada’s 2009 Budget which has in its intention, the want to raise the final $50 billion in bonds within the first 6 months of 2009:
http://www.sec.gov/Archives/edgar/data/230098/000120621209000008/m53341a1exv99wcv5.htm

If this is old news already and someone can provide me a link about when the last 50 Billion has been raised in bond sales, I’d like to see it. Otherwise, it was definitely planned in Canada’s 2009 Budget.

With clips from the above link (Canada’s 2009 Budget):

“Committing an additional $50 billion to the Insured Mortgage Purchase Program, increasing the overall size of this program to $125 billion. This will provide lenders with stable long-term financing, allowing them to continue lending to Canadian consumers and businesses.”

and this:

“The Government will purchase $50 billion of insured mortgage pools in the first half of 2009–10 under the Insured Mortgage Purchase Program (IMPP), in addition to the $75 billion of purchases already authorized, increasing the total size of the program to $125 billion. This will provide long-term stable funding to lenders and help them continue lending to Canadian consumers and businesses.”

Its clear in the Conservative budget for 2009 that they planned to borrow through the sale of bonds and T bills, a full 125 billion for the purpose of buying back CMHC insured loans.

Along with this:

“Adding a 10-year maturity to the Canada Mortgage Bond program to raise supplementary funding for financial institutions.”

and this:

“In the fall of 2008, the Canada Mortgage and Housing Corporation launched a new quarterly 10-year Canada Mortgage Bond maturity. Over the year, the new maturity is expected to raise up to $10 billion in supplementary funding for financial institutions.”

I have so far found an additional 18 billion to add on top of the 125 billion borrowed in question. Add this to 125 billion and what is likely to be this years budgetary shortfall of 50 billion and it comes up to 192 Billion. With digging into first time home buyers programs, it is easily fathomable that Peters estimate of 200 billion borrowed by this government is accurate.

Finally, what Flarehty is saying is this in the 2009 Budget report.

“The large increase in market debt associated with the Insured Mortage Purchase Program (IMPP) does not affect federal debt or the federal government’s net debt levels as the borrowings and associated interest costs are matched by an increase in revenue-earning assets. Other borrowings undertaken to strengthen the financial system are also offset by interest-earning assets.”

Again, he speaks of the issuance/sale of mortgage backed securities to offset the planned 125 billion worth of new federal debt in the form of bonds sold by our federal government but we have in effect sold bonds to hedge against potential mortgage default loans of which when this real estate bubble corrects is likely to be large in scale.

From there, the rest of the report from Page 281 and beyond is well worth the read, but what this last clip is essentially saying is this. As long as the feds package mortgage backed securities to be sold by banks and drawing interest on these packaged securities, it can be classified as an “investment” instead of a loan on the books. However… if these mortgage backed securities default in much the same way as subprime mortage backed securities did in the U.S. world wide, bond holders of these securities would be insured by CMHC if they defaulted. Who pays if these securities default at any length? The taxpayer, thats who. These loans are written off by CMHC and these bonds issued become debt officially if and when these numbers are of any size and our government doesn’t play a shell game with the numbers.

And what Flarehty has done through CMHC is this. Flarethy has bought back what we know of by January of 2009, 45 billion worth of mortages from banks in “pools” that the banks unloaded to CMHC. I don’t yet know if they are good assets, bad assets, toxic assets, I just don’t know. I don’t know if know how these pools have been set up. They could be, what I suspect to be anyways, like a revolving account split between all lending institutions that have CMHC approved mortgage loans. If its already old news… lil’ help?

I don’t yet know if the 45 billion already put aside for pools is simple access to credit or mortages have actually been bought…. but if I’m right, as these loans default, the the revolving accounts are drawn from. At this point, loan defaults would be marginal, but lets consider that we are highly likely to be at the national peak of a housing bubble.

If I’m incorrect with my assumption that these are not revolving accounts set up (and later to increase in size), what we are then left to assume (if we can’t find out from banks directly) is that if mortgages were were bought from CMHC directly from the banks would be the riskiest bunch of mortgages formerly held by banks in their loan portfolios. It doesn’t mean to say that these mortgages have defaulted, but it does mean to say that these mortgages would be the first to face negative equity under a real estate correction and most likely to default. The U.S. subprime meltdown gives us an exellent example of what to expect here should a Canadian real estate bubble take a serious correction and to whom (CMHC) should a serious real estate correction occur forced by the most obvious of catylists, rising interest rates.

If the 2009 budget follows through as planned, a full 125 billion worth of mortgage pools will be bought by CMHC by the end of this year either in the form of revolving accounts accessible by all lenders with CMHC loans up to 125 billion, or CMHC has on the other hand bought 125 billion worth of the riskiest CMHC approved mortages held by lenders outright.

In either case, what we know is this:

– we are at or near a record real estate bubble that is measurably more inflated in comparison to the U.S. real estate bubble in the U.S. as evidenced in this chart:

http://2.bp.blogspot.com/_0YOsyi5WbLY/SmdZWv9G3_I/AAAAAAAAAHE/tB3k1ImiFZo/s1600-h/mortgage+credit5.jpg

Home prices in May 2009 in Canada reached an all time high of $326,613 or over 7x the average Canadian income. Even at the zenith of the US housing bubble, prices peaked around $250,000 US while incomes were around $47,000 US. In Canada, incomes are $44,000 and prices are now at $326,613. Is our bubble bigger than the U.S. bubble before it deflated? In a brief word, YES. And its a record.

– we are also at record low federal interest rates and mortgage loans both fixed and variable.

– we need only to see interest rates rise by 2 or more percentage points to see a major real estate correction. I’m guessing that mortgage rates will hit double digits within 4 years.

– there will be substancial mortgage defaults with CMHC exposed to heavy losses made up by all Canadian taxpayers, but we don’t yet know the numbers or how severe the losses will be.

– The same subprime meltdown in the U.S. bond markets could repeat themselves here with mortgage backed securities CMHC is on the hook for as well as CMHC insured mortgages.

Total planned exposure by CMHC is evidence here taken from their website:

http://2.bp.blogspot.com/_0YOsyi5WbLY/SmTNYtBpAWI/AAAAAAAAAGs/9s9CqLuAMKI/s1600-h/CHMC+growth+in+insured+mortgages.Bmp

Most notably, CMHC planned exposure by the end of 2009 is:

– $440.8 Billion in insured mortgages
– $372.6 Billion in mortgage backed securities
– all indications are that these figures are minimum targets.

Again, what is interesting to compare this to is what has already happened in the U.S. bond market meltdown with their own mortgage backed securities and later, defaults in municiple bonds.

What I’ve said here is technical, but the final analysis simplified is this. The Conservative government has borrowed $75 billion worth in the form of bonds in October and November of 2008 and deposited it into CMHC with a plan in their 2009 budget to make it a full 125 billion borrowed and deposited into CMHC by our federal government with capital raised by the sale of bonds and T bills to buy mortgage securities. They borrowed this money from the sale of bonds to back insured mortgages and mortgage backed securities should they default but are not calling it debt but rather an investment that bears interest as presently, technically, it does or will by years end.

We are also in a real esate bubble and once this bubble bursts, there is a very high probability that most if not all of this money will be written off as a dead loss due to loan defaults. It hasn’t happened yet but if what has happened across the line is any indication of what the fallout of this real estate bubble bursting in Canada will be, losses by Conservative policies could total more than 125 billion. They are, after all, entirely responsible for the loosened lending practices deregulated CMHC mortage qualifiers that created this real estate bubble in Canada to begin with through expanding eligability of mortage loan approval and governmental exposure to losses passed on directly to the taxpayer much the same way the Republicans did with their own mortgage deregulation with George Bush in power, especially through Mac and Mae.

Pray for our nations sake that I am wrong about all this, but… ah, pray anyways, it can’t hurt.

#185 steven rowlandson on 09.08.09 at 7:54 am

To those concerned about the canadian federal debt.
The all time high was about 579 billion dollars in the hole and it got paid down to450 billion plus or minus 10 billion. Now Stephen Harper wants to add 156 billion to the debt and make all you canadians responsible for the evil spending practices and debt of canada’s federal government.
Since most of you are democracy and communism worshippers I suppose you deserve to get stuck with the bill. I how ever do not deserve such financial abuse. Since I have never been paid to live in canada and have been priced and legislated out of the country I don’t think I owe canada or any other country a damned thing. Hell Canada is lucky I pay taxes at all.
So once you get past the scenery,technology and some of the people is canada the best country in the world? I think at best canada has a long way to go.
The best country in the world hasn’t been invented yet.
You can’t get good government from bad politicians who spend too much and legalize and support politically correct evil. Guess what people?
They are all bad other wise they wouldn’t be allowed on the ballot.
God help you all if you must learn this the hard way.

Steven

That was constructive. — Garth

#186 TorontoRocks on 09.08.09 at 8:09 pm

http://www.realtor.ca/propertyDetails.aspx?propertyId=8512014

There is good value here…This time next year it should shoot up to a million or more. (Most rich people like their bedrooms in the basement.)

#187 Dan in Victoria on 09.08.09 at 10:39 pm

Tip of my hat to Daystar and Peter Wiener for their posts. I found them very interesting,informative and was an eye opener.Peter I can see your frustration with people not having a clue,don’t give up,they don’t know any better.Some of us get it,most don’t.Look forward to reading your posts since you changed your style.