‘I want everyone to know’

After I finished speaking on a rare rainy afternoon in dusty Kamloops BC this weekend a man in the audience spoke up.

“I am an American,” he said, “and I sold my house in 2006, just after the real estate market started to decline there. Looking back, that was the best thing I could possibly have done, even when the real estate people were saying to wait for prices to come back up.

“I have seen my middle class friends decimated over the past four years. I want everyone in this room to know that.”

A few rows away sat a guy in this thirties, windbreaker, short black hair, furrowed brow. He was listening intently, and I watched his face from the stage because an hour earlier he’d cornered me and asked what to do. My goal, he’d said, is to buy an acreage outside of town, but that will cost more than a million, and to do it I obviously need to sell my home here.

I found out he’d bought his current house for $176,000 four years ago, which was now mortgage-free and (he thought) worth at least $500,000. So why not cash out, reap the capital gain and wait for ranch values to tumble?  “Because I’ve got a young boy in school and I don’t think we’d feel stable renting for a while. Besides, prices may fall, but not for long.”

And I said, your kid’ll get over it. Quit being emotional. Your fat capital gain’s about to evaporate. Harvest it, invest it for three years, and buy the ranch with cash.

I could see he understood my points, but there was huge doubt – that Kamloops real estate prices (population 87,000) could ever actually decline; that investing was less risky that sitting on an unrealized capital gain in his home; or that renters were not economic refugees. And I was reminded again what a deadly embrace housing envelopes people in; what bad choices are made in the misguided belief a four-year-old cares how daddy provides shelter.

But as the American visitor’s words gripped the room, an unsolicited reinforcement of my speech, I could tell the doubt was maligning into worry. As it should have.

I’ve been telling people on this trip that real estate is now a very dangerous place to stash net worth, and exactly what I see happening over the next five years. First comes a correction, dropping national prices on average 10% or more by the end of the year (but with big variations depending on the market), amid a steady if uneven decline in sales as more buyers understand things will be cheaper next year. There are at least ten reliable indicators I watch that lead me to this conclusion.

Realtors, and most homeowners, understand corrections – and this is mistakenly called the normal real estate ‘cycle.’ Of course, there is no cycle. And today there’s nothing approaching normality. That’s why this event will be followed by something far more worrisome, more akin to what the mysterious American told my audience in the BC interior.

It’s called a melt. It means a steady erosion of house values through 2011 and 2012 for a variety of reasons, some economic and some emotional. Certainly unemployment will remain endemic, stuck stubbornly at 8% or above. Taxes like the insidious HST will continue to suck off family cash flow, while households struggle to deal with the historic debt loads they recently accumulated. The combination is profound, since it saps both wealth and confidence. For houses to be affordable and appealing in the absence of rising family income, prices have to drop – a lot. As they do, it creates a self-reinforcing cycle in which buyers understand it makes more sense to wait than jump in, leading to more price reductions – a phenom now defining the US housing market.

But that’s just phase one of the melt. Subsequent phases are defined by rising interest rates in 2012 and 2013 as the Bank of Canada seeks to normalize the cost of money and deal with the credit crisis it created. This ensures troubles in 2014 and 2015 as cheapo mortgages taken out in 2009 and 2010 are reset at levels which could be two or three times higher. This is identical to the resetting of ‘teaser’ subprime mortgages in the US in 2007 and the repetition with ‘ARM Alt-A’ American loans (adjustable rate – just like out VRMs) over the coming two years.

Then of course, the Boomers take over – with 2015 marking the year an army of wheezing old farts turn 65, with a consuming need to alchemy houses into cash which can provide a stream of retirement income. As you may know, there’s never been another generation with so much money tied up in housing, with so little diversification, or so great a need for income extending over elongated lives.

There’s little doubt where this is headed.

I repeat. The Age of the House is over.

214 comments ↓

#1 Old_is_Gold on 09.19.10 at 3:52 pm

“…that investing was less risky that sitting on an unrealized capital gain in his home; or that renters were not economic refugees…. Garth

I sold back early in 2008 and have been renting since. My mortgage on the house I’m renting would be at least 1.5 times what I pay in rent not to mention the property taxes and maintenance costs. Over the past two years I estimate I have saved at least 25K in carrying costs with no headaches. I am a good tenant, my landlord loves me and has already reduced my rent once just to keep me here and I am of the opinion that he could be encouraged to do a little better once word of the meltdown becomes mainstream.

My life and financial situation has never been better. In the GTA more and more rental properties keep popping and I can already see a competition building among owners to get their property rented first. In these times you have nothing to lose and all to gain by renting, and heck with the stigma attached with renting. There’s way more stigma with bankruptcy and that will be the new buzzword this time next year and going forward.

#2 junius on 09.19.10 at 3:52 pm

Alan,

You said, “So take a look at the earth from 80,000 feet and ask yourself where the direction, velocity and money is heading and you will be able to see where Vancouver is heading.”

I knew you were high but I didn’t realize you were that high.

First of all, I know where Vancouver Real Estate prices are headed for at least the next 5 years which is down. If you think someone should buy at the top of a market no matter what the future hold you are on crack (which would explain your 80,000 foot view).

Secondly, Vancouver’s long term future is not so certain – much to my chagrin. We are no San Francisco as you suggest because we lack the intellectual capital, corporate leadership and investment capital to produce a Google, Apple or Oracle. Furthermore as technology improves in the air line industry and telecommunications the value of being a geographical “jumping off point” will diminish.

Thirdly, you cannot be certain of the future. It looks like Asia will become the dominant economic center this century. That could mean more of the “wealthy” Chinese return home and stop coming all together. Climate change could bring rising sea levels and flooding. What about an earthquake?

Point is that predicting the long term future is dangerous. Especially in this age.

I will stick to the next 5 years or so. Those years I have a better handle on.

#3 Love this Blog on 09.19.10 at 3:59 pm

Garth, I hadn’t even got through the post yet when I hit this.

“And I was reminded again what a deadly embrace housing envelopes people in; what bad choices are made in the misguided belief a four-year-old cares how daddy provides shelter.”

Thank you. This hits particularly close to home for me.

#4 vreaa on 09.19.10 at 4:03 pm

HST Fit – “I am so pissed, I cannot put my thoughts into words.”

http://wp.me/pcq1o-1lV

#5 islander on 09.19.10 at 4:14 pm

People 55 and older own 85% of all assets in Canada. Think for a moment about the ramifications of that.

#6 robert in london on 09.19.10 at 4:14 pm

I rent a nice house in a nice neighbourhood for a very reasonable sum. My landlord is a nice person who appreciates the time I take to maintain the place, inside and out. I don’t understand the mentality that renting means lack of stability because I don’t think I ever felt this secure when I had a mortgage. I think renters are going to have it pretty good over the next few years, especially if our housing market follows the pattern in the US (where rents continue to fall).

#7 BC Bob on 09.19.10 at 4:21 pm

So my loan officer banker neighbor in Kelownafornia says to me “any one who comes into the branch looking for money for a rec ppty or an investment home gets turned around at the door and kicked in the back end. All we do, for months now, are amortization extensions. Nobody has any money.”

#8 Confused on 09.19.10 at 4:25 pm

Hey Garth,

In your last post, someone commented that sales in Calgary are looking up – you mentioned you addressed this issue. Can you post a link (or did you address this at your session).

Do you have plans on coming to Calgary – I would look forward to it again :) (And from reading the comments so would a lot of other blog dogs).

#9 45north on 09.19.10 at 4:31 pm

“objects in the mirror are closer than they appear”

talking about the United States: I have seen my middle class friends decimated over the past four years.

yeah, four years ago people on thehousingbubbleblog were talking about what was going to happen, now they’re talking about what is happening

notice the complete lack of discussion on the political level in Canada? Harper, Ignatieff and Layton fretting about the gun registry. What about a quarter of the GTA behind on their mortgages?

#10 april on 09.19.10 at 4:37 pm

From Bubble city – Friday post.

#9 siddelly.

You said you’ve invested in Preferred shares in BMO. Garth, I may have it wrong now as it was some mths ago but I though you said not to invest in preferred shares thru’ a bank?

#11 PR on 09.19.10 at 4:42 pm

You are absolutely right! I arrive from a fammilly get together and i was trying to explain those fact, the fammily membre almost call the police to get my out!

#12 The Contrarian on 09.19.10 at 4:53 pm

Yup…things are turning.

Good thing our media is on the ball to protect us….

http://financialinsights.wordpress.com/2010/09/15/spinsters-at-work/

http://financialinsights.wordpress.com/2010/09/18/the-media-spin-machine/

#13 Suzukimum on 09.19.10 at 5:02 pm

Garth,

Do you have any plan to speak in Ottawa? Over the past 2 months I have told several people not to buy but I couldn’t get the message across.

A neighbour who has been renting for almost 12 years is forced to move because the landlord sold the house he is renting. They decided they need more than 1100 sq. feet of space because their 4 boys are becoming teenagers and the oldest is going to university. I told them to continue renting because RE will be cheaper in a couple of years. Well, I heard they were in a “bidding war” and will be moving into a 4 bedroom house in sub-urban Ottawa.

I feel bad I did not pound on their door to ask them to go to your blog. Any way, I have talked to several people over the past couple of years about your book and blog but none listened. They all bought their half million mansions here. They think Ottawa is different.

Please come and I would love to see you featured in the Ottawa Citizen.

#14 Taxpayer like everyone else on 09.19.10 at 5:13 pm

“That could mean more of the “wealthy” Chinese return
home and stop coming all together. Climate change could
bring rising sea levels and flooding. What about an
earthquake? ”

Junius – R U talking Van or SF?

#15 T.O. Bubble Boy on 09.19.10 at 5:29 pm

2011-2012 will be the 5-year mark for the 0%/40-year experiment… Flaherty and friends better hope that there *isn’t* any kind of real recovery in Canada, because if Bond Yields and Interest Rates go higher, there could be significant problems with people renewing those ridiculous mortgages from 2006-2007.

I agree that 2014-2015 will be another key milestone: when the true “greater fools” of 2009-2010 have to find a bank that will loan them enough money to cover their underwater mortgage.

2015-2020 will represent the boomer home experiment… we’ll get to see if boomers prefer:

A) sitting in giant houses and being frugal while trying to live off of their CPP.

B) selling the giant houses, and having double the income (average house price of $400,000 with 5% returns = $20,000 income per year — more than the CPP I believe).

#16 Nervous Home Owner on 09.19.10 at 5:30 pm

Just wondering if I can get everyone’s thoughts on our situation. We bought our house in Stroud ON two years ago for 262 000, it’s a 20 year old raised bungalow 1400, sq ft, 1800 with the finished basement, 3 bed, 1 bath, large fenced yard, around the corner from a park, and walking distance to the school. It is a small community that we really love and we really enjoy our house. We are currently paying low rates on our mortgage at an accelerated pace, and will be okay when rates go up. We bought with 20% down, and have a mortgage of 185 000. I am worried we are going to end up in negitive equity along with everyone else, but am unsure if our area is as affected by the bubble. There aren’t any houses in our town to rent, and as of right now the ones in our outer area without a decent backyard are still renting for 1500/month plus utilities, which is more than we are paying for our mortgage and property taxes combined.
Just looking for some thoughts or help anyone can offer.
Thanks

#17 Devore on 09.19.10 at 5:46 pm

And I was reminded again what a deadly embrace housing envelopes people in; what bad choices are made in the misguided belief a four-year-old cares how daddy provides shelter.

Of course kids do not care. I’ve heard, anecdotaly, that kids today don’t assign status based on the clothes or shoes you wear, or what toys/cell phones you have, but by how well stocked your fridge is. Why would anyone care what kids think anyways, when they’re paying your mortgage, maybe then they can have an opinion. Whether you rent the house, or own it, children neither know nor can tell or understand the difference.

Your job is to provide them security, now and in the future, and you can’t do that with an albatross tied around your neck, no matter how fashionable it may look.

I doubt it was about the well-being of the kid anyways, probably far more worried about what his “peers” would think and say behind his back, his co-workers, friends, family. Fear of the unknown, stepping outside the known boundaries, even when there are awesome rewards at the end (an acreage, a raise, a girlfriend, financial security) is terrifying, and it is far easier and safer to do nothing.

Everything you want in life is just outside your comfort zone.

#18 Tony on 09.19.10 at 5:58 pm

You forgot as house values fall provincial deficits rise. Judging by what has happened in America and what i’ve seen in Alberta there will be a large increase in property taxes even with market value assessment. This will just make housing drop in price farther and faster.

#19 Cassandra on 09.19.10 at 6:04 pm

I echo the American. Our timing was right when we bought the house we live in, so all is good there. We bought another home in another market, thinking that we would move there. Then everything started to collapse in the US. Quickly. No jobs where we were going to move to. We consider ourselves lucky to have sold that home for over a $200,000 US loss.

My advice? Brace for the worst. Save money. If you want a home on a lot of land, then WAIT. The days of the sellers market are dying, or over.

#20 Timing is Everything on 09.19.10 at 6:05 pm

Garth – said “Then of course, the Boomers take over – with 2015 marking the year an army of wheezing old farts turn 65…”

Haven’t you heard, Garth….35 is the new 25, 45 the new 35, 55 the new 45, 65 the new 55, 75 the new 65. ;)
——————————————————————
Garth said – “The Age of the House is over.”

The Age of the North American Multi-generational House dawns. Those three level monsters may come in handy.
Good night, John-Boy.

https://www.aarpglobalnetwork.org/netzine/Industry%20News/ProductsandServices/Strategic%20Planning%20for%2050%20plus/Pages/Multi-generational%20homes%20have%20broad%20implications%20for%20marketing19935088.aspx

http://pewsocialtrends.org/pubs/752/the-return-of-the-multi-generational-family-household

#21 jess on 09.19.10 at 6:23 pm

The government officals came to Alberta’s tar sand to see about developing Utah’s ?

tar-sands mine in eastern Utah
– 32 billion barrels of oil trapped in tar sands.

http://www.allgov.com/Top_Stories/ViewNews/Deformed_Fish_Found_Downstream_from_Oil_Sand_Project__Next_Stop__Utah_100919

#22 prairie gal on 09.19.10 at 6:31 pm

#5 islander wrote:
People 55 and older own 85% of all assets in Canada. Think for a moment about the ramifications of that.
____
Do you have a source for that statistic? Which assets? If its true, its an intriguing figure.

#23 Fred on 09.19.10 at 6:50 pm

I was at Garth’s talk today in Kelowna. The most interesting part were the gasps from the audience as Garth went through some of the facts and what may be coming. I think it was the first time a lot of these people had heard the other side of all the rosy news stories the Real Estate industry regularly sprinkles in the national papers.

#24 SquareNinja on 09.19.10 at 6:56 pm

@Nervous Home Owner

I was going to say, “You’ll be fine, because Stroud sounds like it’s in the middle of nowhere… and was probably hammered by the 2008/09 downturn and never recovered – like so many middle-of-nowhere Ontario homes.”

However, I then looked at the map and saw that it’s a stone’s throw away from Barrie. Yup… and Barrie has been serving as the go-to place for FTBs that wanted a big house, but couldn’t afford Newmarket.

If you want to believe Garth, you better sell while you can and start renting.

#25 Old_is_Gold on 09.19.10 at 6:59 pm

#9 / 45 North

What about a quarter of the GTA behind on their mortgages?

Is this speculation or based on some report?

#26 Jeff Smith on 09.19.10 at 7:00 pm

>#5 islander on 09.19.10 at 4:14 pm
>People 55 and older own 85% of all assets in Canada.
>Think for a moment about the ramifications of that.

That’s staggering. Source of this info please, I got some reading to do.

#27 fu_ming_xia on 09.19.10 at 7:03 pm

Garth, I’m not giving up. I emailed this to the author of that story in the Toronto Star:http://www.thestar.com/article/862116–olive-don-t-listen-to-the-doomsayers-on-housing

“Question.

Why is your article closed for comments? What are you, or should I say the news paper you work for scared of?

Let me answer for you. Cause you know you’ll get bantered down buy people who don’t write for a paper that gets a large portion of their revenue from an industry that thrives on telling people it’s always a good time to buy.

You should be ashamed of yourself.

I know people that purchased 3 months ago (with 5% down) and are already in negative equity.

Listening to “professionals” like you is what gets people into trouble financially.

#28 T.O. Bubble Boy on 09.19.10 at 7:25 pm

@ #18 Tony:

Aren’t property taxes paid to the city? (not the province)

#29 Timing is Everything on 09.19.10 at 7:39 pm

‘growing self-sufficiency.’

“The cigarette industry can make us self-sufficient,” said Rick Louis Diabo, a Kahnawake tobacco wholesaler. “We don’t need handouts.”

‘They [Kahnawake Mohawkalso] represent $2-billion a year in lost federal and provincial revenue.’

Read more: http://www.nationalpost.com/news/Native+made+cigarettes+bringing+wealth+disapproval+reserves/3542001/story.html#ixzz101Xo486d

What’s a citizen to do? ‘Go to ground’, of course.

I know, not really RE, but a sign of the times. Citizens WILL find a way to prosper, in spite of their government and Big Biz. Stay below the radar. Garth, any opinion on this?

#30 "A-sharp" Accountant on 09.19.10 at 7:46 pm

I chuckle to myself when people say “my kids deserve that i own a home”

I was recently chatting with my parents about all the homes we’ve lived in over my life…some of them were owned, some were rented. I had no idea.

The ironic part was that my absolute favorite place I’ve ever lived turned out to be a rental.

Food for thought.

#31 Taxpayer like everyone else on 09.19.10 at 7:46 pm

9 – 45 North – what evidence is there that 1/4 of the GTA
are behind in their mortgages? Source?

#32 Wise Guy on 09.19.10 at 7:53 pm

In Toronto, in addition to the HST, we have to pay a land transfer Tax on Home Sales.

Rob Ford, who is leading in the mayoral polls by a landslide proposes to get rid of this Land Transfer Tax. I personally think that Rob Ford is the worst possible candidate for mayor, but it looks like he is going to win.

Do you think if this tax is scrapped, it would prolong a downturn in Toronto housing, perhaps even temporarily propping it up?

#33 magoomba on 09.19.10 at 8:08 pm

Garth is dead on about the demographics shift.

Have a read of Boom Bust & Echo.
A significant amount of economic trends can be attributed directly to demographics.

Given the lack of savings of most retirees, they will
have no choice but to liquidate their single most valuable
asset, the McMansion.
Guess what, there are more of them (sellers) than us
(buyers). That’s not a prediction, it’s a fact.

Most have no idea how dearly assisted living is going
to cost them.

#34 Raps on 09.19.10 at 8:12 pm

So I bought in Toronto last year. Yeah, I know, I’m dumb apparently. The mortgage + taxes are 2k/month, but I get $600/month income from the basement apt. A similar sized home is for rent for $1600/month + utilities, has the same size yard + number of bedrooms, but is in far worse condition. The house I bought has a new furnace + roof, and needs no major upgrades. I plan on living in this house for at least 10-15 years.

I can see the attraction of selling if you have built up considerable equity in a home, and want to reap the equity in a hot area. Given that I live in a ‘non-hot’ Toronto neighbourhood where prices have not moved much and is expected to get an underground LRT ‘soon’ (I’d guess it’ll be closer to a decade), does it still make sense take a loss now by selling, or hold on given that I like the home and am comfortable with the payments (and can absorb higher payments on renewal in 4 years)?

#35 Timing is Everything on 09.19.10 at 8:22 pm

#29 ‘growing self-sufficiency.’ – “Garth, any opinion on this?”

Hmmm, ‘No comment.’ Interesting. Maybe in a future weblog?

One good thing about a slow melt….’Regular’ citizens, including ‘regular’ boomers have time to adapt, by any means necessary for survival.

#36 Grandpa Grinch on 09.19.10 at 8:32 pm

Recent article on the historical interest/bond rates:

http://www.mcoscillator.com/learning_center/weekly_chart/60-year_cycle_in_interest_rates/

Looks like all the suckers who pulled their money out of equities and into bonds are about to start losing money. So what happens to bank preferreds Garth when interest rates start ratcheting up and yields down??? I imagine the banks start issuing new series with higher rates.

(a) There is no interest rate cycle. This is crap. (b) Rate will not rise substantially now for some time, due to economic weakness. (c) If you had a remote idea how bonds and preferreds are priced you would not embarrass yourself with this question. — Garth

#37 Old_is_Gold on 09.19.10 at 8:48 pm

32 Wise Guy

Do you think if this tax is scrapped, it would prolong a downturn in Toronto housing, perhaps even temporarily propping it up?

Believing politicians’ promises is like believing in the tooth fairy or Santa. Remember Chretien / Martin’s promise to get rid of the GST, when was that again? Oh yeah – 1993! How about Obama promising to take care of the Middle Class, boy is he taking care of them! Or reining Wall Street in, ha haha hahahaha, well that good for a laugh.

The LTT is too much of a cash cow and it is highly doubtful that it will ever be scrapped.

#38 El Rojo on 09.19.10 at 8:53 pm

Garth,
My wife and I just got back from your talk at the Capri this afternoon. You gave us all very good advice with good historical backing. Any thoughts we had of jumping back into the Real Estate market are gone for another year at least. Really enjoyed the show and come back soon.

#39 Nostradamus Le Mad Vlad on 09.19.10 at 9:01 pm


#127 Old_is_Gold on 09.19.10 at 10:02 am — “. . . he (Chapman) is not the most reliable source of information out there.”

Thanks for the info. I guess many who have their own sites are free to make whatever claims they want, and whether others believe them is another matter.

Interesting at the HoweStreet.com Money Expo today in Kelowna. There was a gold / silver company selling their wares. I would prefer to put 5 or 10K into a TFSA to buy shares instead, but that’s my preference. I don’t think Son Of Bre-X is returning!

#147 bigrider on 09.19.10 at 1:59 pm — “Accountant? Why an accountant?”

Depends on who you like. Both provide good investment info., but an accountant may charge more while giving the same level of service.

Our CFP works fine for us.
*
Excellent presentation, good reception from the crowd and plenty of other useful info. Great ideas, the same stuff you constantly harp on about here and it appears that the message is beginning to take effect.

“It’s called a melt.” — One aspect to keep tucked away is the amount of increasing job losses, because if it happens faster than expected, then combined with the boomers turning 65 – 71 in the next few years, there will be a panic to cash out (not necessary if one has $300K or so in RRSPs with DRIPs) and an increasing drain on social payments (CPP – OAP – GIS).

The term melt may be correct for now, but can anyone say with 100% accuracy what the weather will be on Boxing Day? Life is fast becoming a crapshoot, e.g., who stays / who goes; those choices are made by others, not us.

Sublime There are ordinary goals in soccer and sometimes, special ones just to enjoy watching a player at his best.

In today’s early game from the EPL, Dimitar Berbatov of Man. United scored the first hat trick in 64 years, the second of which was a neat scissors (overhead) kick. Totally unexpected, and Man. U won 3-2.

Rigged Stock Market? “In other words, the stock market rally is due almost entirely to hedgies, pension funds, banks and other institutional investors, and not every day investors.” Hmmm. Pension funds haven’t been doing that well recently.

11:17 clip How many bloody canaries can be stuffed into a gold mine?

One Last Binge There is the timeline — Spend It All, Spend It Now! Die young and live much much longer!

Big Pharma has won a big one in Europe.

Control food to have slaves, but when WW3 happens, how many slaves will be around to do the dirty, clean-up work?

US meddling The US would never interfere in other countries, would they?

Where is St. Pope of the AlGores? Plus this. In any event, as Garth said earlier, CC is gonna hit everyone in the pocketbook.

#40 sail1 on 09.19.10 at 9:07 pm

#32 Wise Guy

I personally think that Rob Ford is the worst possible candidate for mayor, but it looks like he is going to win.

Maybe you should run, you are still in time. Just be sure you know how to use a calculator and learn to say NO to unions. Should be easy enough for someone like you.

#41 Aussie Roy on 09.19.10 at 9:09 pm

Denial is alive and well.

Aussie Update

An excellent read “Psychology of a housing market”.
http://www.thirdwavegroup.com.au/tidal-report/tidal-report-19-sep-2010-psychology-of-a-housing-market/

Our NZ (Kiwi) cousins are slowly sinking, no, not another earthquake, its housing. Who holds the bulk of Kiwi mortgages, Aussie banks.

http://www.abc.net.au/unleashed/stories/s3012400.htm

#42 Debtisforever on 09.19.10 at 9:20 pm

Glad to see you made it alive out of Kelowna, real estate debt capital of Canada. It’s been pretty impossible to express any sort of negative opinion about real estate there over the past few years. I have friends who are in their 30s and have $700k in mortgage debt. Or more. Oh, and they make $55k per year. The mortgage payments are paid with their own money and tenants (basement suites etc), and they barely break even on a variable rate mortgage. This makes me feel sick inside. But they insist this is how to get rich and I must be some sort of idiot to still be renting at age 32. It’s like watching someone tied to a railroad track, where you know a train goes by every 15 minutes and they keep insisting they can stay there all night, because trains never use the track. You just want to close your eyes against the horror that is to come….

#43 brainsail on 09.19.10 at 9:42 pm

#21 jess

“While oil shale is found in many places worldwide, by far the largest deposits in the world are found in the United States in the Green River Formation, which covers portions of Colorado, Utah, and Wyoming. Estimates of the oil resource in place within the Green River Formation range from 1.2 to 1.8 trillion barrels. ”

http://ostseis.anl.gov/guide/oilshale/

http://ostseis.anl.gov/guide/tarsands/index.cfm

#44 canuckfilly on 09.19.10 at 9:50 pm

Garth Thanks for the great talk in Kelowna today. Unfortunately I did not get to ask a question and maybe you would have shot me down anyhow. Can anyone make an argument to keep a mortgage free house?

#45 Grandpa Grinch on 09.19.10 at 9:52 pm

If you had a remote idea how bonds and preferreds are priced you would not embarrass yourself with this question. — Garth

Well, truth is I haven’t looked into bonds & preferreds beyond what you’ve written as I have my cash tied up in commodities, but my question was genuine and your petulant response was uncalled for Mr. “Balanced Portfolio”.

If you don’t know what you’re talking about then why would you denigrate an investment? — Garth

#46 grantmi on 09.19.10 at 9:55 pm

#20 Timing is Everything on 09.19.10 at 6:05 pm
The Age of the North American Multi-generational House dawns. Those three level monsters may come in handy.
Good night, John-Boy.

1. T.I.E. – try http://bit.ly for link compression.

2. Three levels of a family in one home! Shoot me know please!!!!

#47 rickster-bc on 09.19.10 at 9:59 pm

Attended the Real Estate Outlook 2010 conference yesterday in downtown Vancouver. The basic message: real estate always goes up, has always gone up, and will continue to go up. Best places to buy right now are “Surrey, Richmond, New Westminster, Abbotsford, Chilliwack, Sunshine Coast, Whalley, White Rock, Westwood Plateau, etc.” In other words, basically EVERYWHERE in BC. I think there was SOME realization from the presenters that prices COULD decline in the short term but it will likely be minor and then prices will continue their ascent. The market was also described as a “buyer’s” market for the time being but it won’t last long. In other words, buy now because these deals won’t last. A lot of convincing statistics were presented.

I came out of this conference pumped and ready to dive back into the market. This lasted as long as it took me to read your latest blog.

#48 bridgepigeon on 09.19.10 at 10:06 pm

Objects in the mirror appear closer than they are…
All I need is two more weeks to finish up all the little renos on my place than it’s off to market… nice little resurgence out there now, just enough…

#49 Crash Callaway on 09.19.10 at 10:20 pm

#34 Raps

You say you will be able to absorb higher payments on renewal. Is this based on the inclusion on the $600 from your basement rental?

What if the rental market is flooded with whole houses similar to yours (including the basement!) for $600 in a year or two from now.

#50 Jody on 09.19.10 at 10:23 pm

A melt? Yea right, try crash, big crash, the herd will panic, then all will be lost. I think silver will skyrocket, same with seeds, or a place to grow your own food. I don’t buy the mantra that China and India will grow, without Americans buying their crap who will pay their wages, how will they buy their own crap? With gold? The US and their stupid fiat dollar which has dug it’s way into everything around the world will bring as much as the world economy to it’s knees as it can, just to be the proverbial prick. We’re going down so everyone else has to. Bloody yanks.

#51 winnipeger1 on 09.19.10 at 10:27 pm

A downgrade is unlikely. But if it happens the only consequence is higher yields for investors. — Garth
————-

So you mean prices for new purchases would drop and thus yields would increase…..the underlying price of preferreds you already own would drop…..if you already own preffereds your cash flow would remain the same even though your yield would increase….but if you had to sell you would take a capital loss….

People who contemplate the need for liquidity buy dividend ETFs, not preferreds. People who want steady and predictable yield buy preferreds. People who have never owned either post comments about them. — Garth
————–
Politician definitely…….teacher not so much….I’ve owned both……I prefer the liquidity of ETFS…..you could have stopped after the second sentence and not come off so snide…..but that’s just me…..I wish you well on your across Canada Tour

#52 T.O. Bubble Boy on 09.19.10 at 10:29 pm

@ #44 canuckfilly:

Yes… there are many reasons to stay in your house if you are mortgage-free:

1) The one-time capital gain isn’t going to make much of a difference in your financial situation… e.g. if you had bought a $350,000 house that is now $400,000, you’d net maybe $28,000 after the realtor fees and other closing costs.

2) You can use a HELOC to diversify: if you have a $400,000 home and no other assets, putting some of that money into investments that will help to balance out any housing downturn would help you. e.g. if you put $200,000 of the $400,000 equity into 5% preferred shares, you’d get $10,000 dividend income per year, and the interest on the HELOC is tax-deductible.

3) If you’re HAPPY with your home, and don’t care about losing say 25%-30% of it’s value.

#53 Kelvinator on 09.19.10 at 10:32 pm

I have small kids and we sold our house in 2008 (North Van), and we’ve been renting since… in a better neighbourhood, 3 block walk to a great school, quiet street, view of the water, etc. And in a bigger and newer house, the rent wouldn’t even cover the interest on a reasonable mortgage for the same house. AND… The tax assessment has dropped 70k in the last year. Which is more than double what we pay in rent.
It’s a no-brainer….

#54 Mike on 09.19.10 at 10:38 pm

There’s been alot of talk of a “double dip recession” – on BNN and stuff. Warren Buffet says not going to happen, but you get various opinions.
Any thoughts on this here? I would expect if this did happen that would only accelerate the housing bubble pop and value decline. Garth?

There will be no double dip because we’re still in the first one. — Garth

#55 VancouverGoinUP on 09.19.10 at 10:38 pm

Ya gotta live somewhere and nothing goes straight up or straight down. Let’s say your Vancouver Duplex drops from 900k to 850k over the next two years. 10 years from now its 1.5 Mil. People talk of a house like they’re a stock. Looking over the past decade those who put everything into real estate are rich and the renters with the exception of a small minority who have the discipline to invest are the Have Nots. Fact of the matter is a townhouse rent can run you around $2800 a month in Vancouver. You have to make some good coin to have money left over to invest and Discipline and know what sector to invest in and God help you if there is another market meltdown. I’d be interested to see the percentage of Canadian renters who have the discipline to make meaningful investments. Worse case scenario is a house is a forced savings plan (In Vancouver this is a great return long term in other parts of Canada not) You can’t live in stocks or other investments. Most Canadians can’t save; at least with the house you have equity over time, you have pride and your self dignity knowing your family’s future is secure – the renter has nothing – that 4 year old is going to care when he/she gets older and sees her parents were bag holders because they didn’t buy. They will look over old weblinks from 2010 prediciting doom and gloom and in 2025 see how wrong their parents were – cause VancouverIsWasandAlwaysWillBEGOINUP!!! over the years not days or months. Will the 4 year old care? You bet they will.

Drivel. — Garth

#56 45north on 09.19.10 at 10:42 pm

Nervous Home Owner: (Stroud Ontario) I am worried we are going to end up in negative equity along with everyone else, but am unsure if our area is as affected by the bubble.

I have a nephew that lives in Innisvil, works at the Honda plant so he has a reason to live there. I’m hoping that he has substantial equity in his house and can hold on if Honda cuts back on his hours. At some point he may owe more on his mortgage than his house is worth. For him it’s not about getting rich, it’s about holding on and providing for his family as well as he can.

To quote Cassandra Brace for the worst.

Your mileage (litres per 100 Kms) may vary.

Old_is_Gold and Taxpayer like everybody else:
#9 / 45 North What about a quarter of the GTA behind on their mortgages?

Is this speculation or based on some report?

pure speculation – it’s a free country.

In the US, rate of default on mortgages is 10% but in Canada it’s only 0.5%. This means that the banking system in Canada is still functioning. The tornado in the rear view mirror is the decline in real estate values and its devastating impact on the middle class: the American said “I have seen my middle class friends decimated over the past four years. The decline feeds on itself much like a tornado. Lower house prices leads to underwater mortgages which leads to lower house prices. Circular like a tornado.

Quarter of the GTA behind on their mortgages. That is my fear.

#57 freedom_2008 on 09.19.10 at 10:46 pm

Hold on second here, Garth never said everyone should sell their homes and rent, just the examples he used (eg. unemployed 62 old with most money tied to a house) are the ones who should sell. How can anyone answer a question like “should I sell if my house has increased value or has been paid off” without knowing the whole story of the owner is beyond me. After all Garth is still living in his own house (about 30% of his total wealth), so we can too.

#58 An Cat Dubh on 09.19.10 at 10:48 pm

I tried to warn my brother in law and sister about buying. They just bought a home in Kamloops and are trying to sell their home in Prince George. I did give them links to the blog.
As for “climate change” it is natural. Remember Climategate. Do your research. Sea level markers that are over 100 years old in San Fran and Houston haven’t moved more than a foot +-. This is faulty Al Gore-Ken Lay scams to get your $$$.

#59 InvestX on 09.19.10 at 11:03 pm

#9 – 45north: “What about a quarter of the GTA behind on their mortgages?”
—————————————–

Source?

#60 TheFirstRick on 09.19.10 at 11:08 pm

Whatever happened to Nostradamus?

Was he the latest heart attack victim on the Grouse Grind?

#61 wise guy on 09.19.10 at 11:14 pm

#40 sail1

Toronto already has a poor reputation to the rest of Canada and if Rob Ford is elected mayor, it will only justify this belief!

This is not the forum, but Ford is extremely low class and it would be embarassing for him to be our mayor!

#62 Debtfree on 09.19.10 at 11:15 pm

2. Three levels of a family in one home! Shoot me know please!!!!

We’ve had some of our wonderful grandkids stay with us most of the summer … when they had to go back for school grandma had tears in her eyes and so did I.

#63 Debt's Dark Embrace on 09.19.10 at 11:16 pm

I retired at age 59. My kids were grown and gone and I was rattling around in my “McMansion” alone spending weekends mowing my quarter acre lawn and skimming the pool. I sold the house myself, no realtor, and I bought a nice little townhouse, FSBO, and I invested the leftover cash. I bought some very good blue chips in the dip of 08/09 with 6 to 10% yields. ( I also have an rrsp, a company pension, and some savings). I believe that by 2015 the boomer retirement wave will be doing exactly what I did. All those McMansions on the market will drive prices down. Does the generation following the boomers have the cash to buy them out? The boomers will be searching for an income stream (yield) to finance their retirements. That will drive prices up and yields down. Not to mention the slow melt and higher interest rates Garth speaks of.It’s gonna be fugly……

#64 Timing is Everything on 09.19.10 at 11:18 pm

#37 Old_is_Gold said – “Believing politicians’ promises is like believing in the tooth fairy or Santa. Remember Chretien / Martin’s promise to get rid of the GST, when was that again?”

True enough, BC’s citizens have had enough of Gordon Campbell too…
i.e. HST lies.
Recall is coming Gordon….the people must prevail, if we do not we will be…just another failed state. But what alternative? The ‘political’ reset button has to be pressed.

election time: Petty Politics and False Promises

http://telegraphjournal.canadaeast.com/city/article/1208264

Apparently there is no obvious corruption in Ottawa. Ask Me No Questions and I’ll Tell You No Lies…It’s all about perception…and I perceive a certian amount of corruption. Although Garth does not. Interesting.

#65 Dan in Victoria on 09.19.10 at 11:34 pm

Post #34 Raps.
Keep in context what we are talking about here.
Do a spread sheet, figure it out and see what you end up with. If it works for you good.
Remember though crap in is crap out be honest with yourself.
We’re just giving you some tools, and ways to use them.
Not a good idea to put a screw in with a hammer, or painting with a stick.
Learn how to use the ideas etc. here.
Good Luck.

#66 junius on 09.19.10 at 11:38 pm

Garth,

I’m considering a bet with my Mom (she’s a realtor in Alberta). On the line is a case of great scotch.

She say’s Vancouver will NOT be down 10% from its peak by year end, contrary to what your views are (as I’ve interpreted them).

Should I go for it?

junius

It’s already down 2.9%. Don’t let Mom think you’re a weenie. — Garth

#67 dark sad person on 09.19.10 at 11:45 pm

27 fu_ming_xia on 09.19.10 at 7:03 pm

Garth, I’m not giving up. I emailed this to the author of that story in the Toronto Star:http://www.thestar.com/article/862116–olive-don-t-listen-to-the-doomsayers-on-housing

“Question.

Why is your article closed for comments? What are you, or should I say the news paper you work for scared of?

Let me answer for you. Cause you know you’ll get bantered down buy people who don’t write for a paper that gets a large portion of their revenue from an industry that thrives on telling people it’s always a good time to buy.

You should be ashamed of yourself.

I know people that purchased 3 months ago (with 5% down) and are already in negative equity.

Listening to “professionals” like you is what gets people into trouble financially.

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

Good for you- 1 person out of 30 million that doesn’t like rolling over and-taking it–

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

I stumbled on this today-but can’t find any more on it-guess it’s not headline news-although it should be–
**************

Finance History 2010-09-17 (17 September 2010 )

17 Sep 2010 01:57:43 GMT Finance Minister Flaherty Urges Provinces to Agree to Single Regulator
Canadian Finance Minister Jim Flaherty is pressing his counterparts in the nation’s provinces to cede control of securities regulation to a single, federal regulator.

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

Translation–

Because of the nefarious operations that will soon be necessary-to hide losses in Pension and Teacher Funds and and the illegal transfer of Swaps to on and off Bank balance sheets and of course-certain Securities–
Our decision is being directed by the BOC–
We have come to the conclusion at the (arm twisting) of our BOC Governor Mr C that all this crookedness-is best done in secret and beneath any type of outside scrutiny
(not that i think Stelmac etc. would even have a clue what was happening-but-the fewer that see-the harder to get caught) and the more centralized the power is-the easier it is to carry out the crime–

Centralization of power =
The fulfillment of all dictators-

I fully support the move to have one centralized securities regulator in Canada to replace the inefficient, costly, duplicating and repetitious 13 provincial bodies which now exist. This is a reform which has been years in the making and will lead to far higher and better form of consumer and investor protection, while streamlining the regulatory process allowing better flow of capital and fewer barriers to economic growth. It has nothing to do with the central bank, by the way. — Garth

#68 Peter Pan on 09.19.10 at 11:46 pm

#66 Junius… You won’t even bet Larry on Agentwill’s website (despite many calls on his part)… Why would you bet your mamma then?

#69 dark sad person on 09.20.10 at 12:15 am

In case anyone had the crazy notion that electing another/different Political party would help-

Zap!

You’re wrong–

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

OTTAWA — When the parliamentary session resumes on Monday, Finance Minister Jim Flaherty will feel very much like the master in Oliver Twist, with political opponents, provinces and interest groups coming with their bowls and pleading, “Please sir, I want some more.”

The more, of course, being stimulus, which is set to run out on March 31 of next year. Calls for more government spending grow louder by the day on the fear of a slowing global economy and relatively high unemployment rate. If the Obama White House is contemplating more stimuli, NDP leader Jack Layton said Thursday, so should Ottawa.

Meanwhile, Liberals say the Conservatives should keep the funds flowing past the March 31 deadline to ensure projects already underway get the needed cash even if they aren’t completed by deadline. Otherwise, they add, municipal taxpayers will get stuck with a surprise bill in the millions once the stimulus taps are closed.

Read more: http://www.financialpost.com/news/Flaherty+pressured+more+stimulus/3536421/story.html#ixzz102iVfpxe

http://www.youtube.com/watch?v=kUmmSIMGm-E&feature=related

#70 Timing is Everything on 09.20.10 at 12:17 am

#50 Jody

If wishes were horses, beggars would ride.

#71 KLO_PROF on 09.20.10 at 12:54 am

We have a compulsion to own, even if it is adverse to our financial well-being.

It’s common sense to rent now because the cost of owning a home and the opportunity cost of parking a significant amount of equity in a house is too great. Now is a perfect time to invest in a globally diversified equity portfolio. The cost of owning businesses (through shares) is at a generational low. Housing is a wealth trap, especially for young people. It not only victimizes the home owner, but on a grand scale, it ties up large amounts of money in an asset class that really does not produce any true societal value.

Let’s recognize housing for what it really is: a ponzi scheme generally designed to fund the retirement of the boomers by slaving greater fools.

#72 kc on 09.20.10 at 12:58 am

55 VancouverGoinUP

“Looking over the past decade those who put everything into real estate are rich and the renters with the exception of a small minority who have the discipline to invest are the Have Nots.”

“the renter has nothing”

I smell very desperate RE agent here… Let me tell you something smart ass… 3 years back girl friend and I did a stupid thing and put an offer on a house, luckily for us it was rejected. We hunkered down and just rented last while. this summer we just finished moving onto a 40 acre farm in GVRD that is in her family, and are charged 700 a month… so guess what, your theory is actualy a debt-to-death situation for many who are buying today will be paying for 10 years and will be stuck in a place that only they will grow to love. they are paper rich dude… only gains are made when you sell… and then these dumb asses usauly turn around and “trade up” and get a larger mortgage than they just paid off/or had.

stop being so “head up ass” and look hard to the south.

cheers

#73 dark sad person on 09.20.10 at 1:01 am

I fully support the move to have one centralized securities regulator in Canada to replace the inefficient, costly, duplicating and repetitious 13 provincial bodies which now exist.

**********************
So-how much are we going to save G?
A few hundred million “saved” to put more power in the hands of the competent F-H–
Meanwhile Ottawa will Spend “Billions”-building prisons for criminals-yet to be identified-
And–new parks and fancy foot bridges-
Ohhh and of course–last I heard–Canada’s only source of Media truth-
Our very own CBC (yawn) is screaming for a “bit” of the Stimulus to dribble their way–cuz–well–ya know–arts and culture are so friggen important-and of course what would Canadians do if they didn’t have this little pet Frankenstein to pay for?
Heard their top rated soap is–

As The World Burns

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

It has nothing to do with the central bank, by the way. — Garth
************************

G–everything and anything–has to do-with GS North-

#74 The Original Dave on 09.20.10 at 1:02 am

I just thought of something, does anyone know if there’s a uranium etf that pays a nice dividend? I’ve never bought etf’s, but I like the idea of buying uranium right now and if it pays me to hold it, I’m even happier. Thanks.

#75 Alan on 09.20.10 at 1:23 am

Junius,

No point in trying convert those that can’t see the forest through the trees with this exception:

First you can start Oracle, Cisco, Google, Apple in any country, so intellectual capital moves and in fact has moved already and easily. What cannot move easily are resources and food to feed people. Canada has both and the nature and the prices of the commodity are such that we are not flying plane loads of grain and coall to India or China….yet.

Lastly, please point out in my post where I suggest people should be buying at the top of any market. This you fabricated on your own. Of course the “top” is subjective as in do you suggest buying today or 2, 5 10 years from now?

The point you fail to understand is that economic activity within a city or region along with supply and demand fundamental will determine the future value of real estate in any city. The cost of housing may not go up but may not go down either. There will be cycles and the ebb and flow of sentiment based purchases or just plain value investing. When you can grasp this you will understand that the next 5 years will not make any difference 10 years from now unless you are over extended or lose your job and can not afford to make low-interest payments on your home. If you are over extended and can’t pay then you lose your home to someone who can afford to buy your house and in a city with economic activity, this will not be a problem.

A city without economic activity, real estate will fall in value. People will migrate to where there are jobs and this is an important component. This is nothing new and the most elemental economic theory.

The only fear I have for real estate owners is the potential for extremely high interest rates above 8 or 9 percent. This would make borrowing and repayment difficult. But then if interest rates were this high, it would mean that the economy was firing on all cylinders and they needed to slow things down. So not such a bad scenario.

#76 Seen this in the US and it's come to Canada on 09.20.10 at 2:05 am

Everyone go to the library and read the book “The world is Flat” by Thomas L. Friedman. It’ll explain where we are going in the global economy, be prepared it isn’t pretty.

Garth any other books you can recommend reading other than yours, which is an excellent read by the way. Everyone should read Garth’s book, if I wasn’t clear enough previously!

#77 Seen this in the US and its come to Canada on 09.20.10 at 2:22 am

@ #67 dark sad person on 09.19.10 at 11:45 pm

I fully support the move to have one centralized securities regulator in Canada to replace the inefficient, costly, duplicating and repetitious 13 provincial bodies which now exist. This is a reform which has been years in the making and will lead to far higher and better form of consumer and investor protection, while streamlining the regulatory process allowing better flow of capital and fewer barriers to economic growth. It has nothing to do with the central bank, by the way. — Garth
++++++++++++++++
Canada must have centralized securities regulator; it will help stop those pump and dump schemes that are prevalent on the Vancouver stock exchange and protect the investor!

#78 Nick on 09.20.10 at 2:57 am

I would not want to live in an area where renting is considered a dirty thing. Are we still in the 50’s? Do renters also need their own water fountain, their own busses?

#79 Marcus Aurelius on 09.20.10 at 3:16 am

#17 Devore

“Everything you want in life is just outside your comfort zone.”

So true.

#80 Aussie Roy on 09.20.10 at 3:23 am

VancouverGoinUP on 09.19.10 at 10:38 pm

Dear me, sounds like you have the delusion bad.

Better go buy some more houses, you already know they only go up. You must be keen for the BIG rental yields on offer there, 3% ?. LOL

#81 Tony on 09.20.10 at 4:03 am

#28 T.O. Bubble Boy

They’re paid to the city of the province/provinces that you own houses and or property in.

#82 Brian1 on 09.20.10 at 6:14 am

Don,t be surprised that in the near future friends who turned their backs on you show up looking for help or have a great way for you to make money. The unfortunate result of all this will be a significant increase of suicides. Some should ask themselves if this scenario is preferable for their children than enduring the hardship and stigma of renting.

#83 Brian1 on 09.20.10 at 6:18 am

I met an old buddy realtor this weekend and I raised the issues of this blog. He acted surprised but gave me his new card anyway, which looked like his old card. I think they are watching us.

#84 Brian1 on 09.20.10 at 6:20 am

Multigenerational households will at least instill family values.

#85 David B on 09.20.10 at 6:22 am

Has this not been mentioned here? FR WSJ

Bond Markets Grow Riskier
Bond markets are growing riskier as investors seeking steady returns bid up prices and ignore some early warning signs similar to those that flashed during the credit bubble

#86 Brian1 on 09.20.10 at 6:23 am

The good thing about an economic downturn is a rescue of the environement will occur. Less demand for hydrocarbons. We need that.

#87 bullion.bunny on 09.20.10 at 6:41 am

My goal, he’d said, is to buy an acreage outside of town, but that will cost more than a million, and to do it I obviously need to sell my home here.

What are people nuts or what?……..Kamloops has high paying jobs? Why would anyone want to carry another $500,000 plus of debt…..it’s complete madness!

#88 David B on 09.20.10 at 6:53 am

Service Fee’s here in Halifax/Dartmouth ( HRM) they want a 40%! increase on water bills and the power company is asking for 15% again! and cable and who’s knows what is next?

Poor poor west coasters having problems buying and selling million dollar homes looking to double their money.

#89 breezer1 on 09.20.10 at 6:53 am

thinking about buying down south? read this.
http://www.nakedcapitalism.com/2010/09/latest-real-estate-time-bomb-title-of-foreclosed-properties-clouded-wells-fargo-dumping-risk-on-hapless-buyers.html?source=patrick.net

#90 bigrider on 09.20.10 at 7:05 am

#39 Nostradamous-accountant depends who you prefer for investment advice.

Accountants are not qualified to give investment advice. There is a fallacy out there that the bean counters are qualified to dispense investment advice.
Unless they are a CFP, have some kind of an economics degree, RFP designation etc. then they are no more qualified to give investment advice then a dentist is qualified to fix your car.

#91 Bruce on 09.20.10 at 7:10 am

Canada is going broke:

http://www.lfpress.com/news/canada/2010/09/20/15407191.html

#92 Suburban John on 09.20.10 at 7:12 am

#13 Suzukimum

Landlords cannot force a tenant to move because they “sold the house”. Even if the landlord dies, the tenants still have the right to continue renting and the executor must continue to rent the property to the tenants, until they decide to move. Heck, even the executor could die and the duty would fall to the executor’s executor. Being a landlord is not what it is cracked up to be.

#93 Bruce on 09.20.10 at 7:12 am

Welcome to the United States of Austerity / Towards a very serious breakdown of the world economic and financial system:

http://www.leap2020.eu/GEAB-N-47-is-available-The-Global-systemic-crisis-Spring-2011-Welcome-to-the-United-States-of-Austerity-Towards-a-very_a5168.html

#94 Sail1 on 09.20.10 at 7:18 am

61 wise guy

Wow your full of yourself, what is classified as low class? Or is your name George?

#95 Bill ( Peterborough) on 09.20.10 at 7:51 am

Re # Old_Is_Gold

Believing politicians’ promises is like believing in the tooth fairy or Santa. Remember Chretien / Martin’s promise to get rid of the GST, when was that again? Oh yeah – 1993! How about Obama promising to take care of the Middle Class, boy is he taking care of them! Or reining Wall Street in, ha haha hahahaha, well that good for a laugh.

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

Absolutley right , sad thing is that the general populous is still being led around like a donkey with a carrot tied on a stick in front of it.

I remember when Shiela Copps said if Chretien was elected on the promise of aboloshing the GST and did not do as promised she would resign.

A year later she stll had here position in Hamilton. Bill Carol , radio talk show host, kept phoning her office inquiring why she had not resigned. Eventually he embarrased her into resigning.

After Shiela resigns she runs in a by election. What did the Genereal populous in Hamilton do?

THEY VOTED HER BACK IN. WILD!!!!!!!!!!!

Most people are either too exhausted at the end of the day, don’t give a shit, are not informed… Until the shit hits the fan, then they are the fisrt to cry.

Prior to the mid 70’s in Canada only one parent had to work. Mom was at home keeping the kids in line. Dad did not have to work over time to support the family. Had time to read and understand what was going around in the world.

Then Truduea came around and instilled alot of ” BEAUTIFUL SOCIAL PROGRAMS”, (raising taxes along the way) This led to alot of families having both parents working to manage….

Slowly we have been taxed to death, Hollywood has raised alot of the kids, via the garbage content in movie theatres, television…

Family values have eroded, along with alot of morals and principles to the point of living in a grey world. No longer right or wrong.

Now if you have a good enough excuse for what you did wrong we will accept it. ( It’s everybody elses fault not yours, poor creature.)

Very few people take responsibilaty for their actions these days.

Most people pass the buck these days, and we wonder why we are such a mess.

#96 Bill ( Peterborough) on 09.20.10 at 8:04 am

Re # 54 Mike ( Garths Comment)

There will be no double dip because we’re still in the first one. — Garth
*******************************************
This first dip will be a recession, the second dip, following right after, will be a depression.

#97 T.O. Bubble Boy on 09.20.10 at 8:11 am

@ #55 VancouverGoinUP:

You make Vancouver sound like it is full of used car salesmen.

“Most Canadians can’t save; at least with the house you have equity over time, you have pride and your self dignity knowing your family’s future is secure – the renter has nothing – that 4 year old is going to care when he/she gets older and sees her parents were bag holders because they didn’t buy.”

So, being hundreds of thousands of dollars underwater on a $1M mortgage with even a mild market correction is “secure”?

Have fun telling the 4-year-old “we can’t go to Disneyworld because all the money went to this awesome house”!

#98 BrianT on 09.20.10 at 8:30 am

#61Wise-many that dislike Ford personally and consider him low class will still vote for the guy-he is the only candidate tapping into the voter disgust for business as usual in Toronto.

#99 junius on 09.20.10 at 8:31 am

#66 Junius,

I see my impersonator has returned.

Sorry about that Garth.

#100 junius on 09.20.10 at 8:36 am

#55 Vancouvergoinup,

You said, “Let’s say your Vancouver Duplex drops from 900k to 850k over the next two years. 10 years from now its 1.5 Mil.”

This your fundamental flaw. If it only drops to $850K in 2 years it is a miracle. Try 700K as a better example. Then it drops more when interest rates rise.

Prices may not return to the 900K mark for more than a decade. Meanwhile you are wasting time sitting on a depreciating asset or throwing away money on interest payments while in negative equity.

Your assumptions are flawed. Deal with reality.

#101 Got A Watch on 09.20.10 at 8:39 am

Stupid Guy says “I personally think that Rob Ford is the worst possible candidate for mayor, but it looks like he is going to win.

Toronto already has a poor reputation to the rest of Canada and if Rob Ford is elected mayor, it will only justify this belief!

This is not the forum, but Ford is extremely low class and it would be embarassing for him to be our mayor!”

Wrongo, Stupid Guy – Rob Ford would represent a return to sanity in Canada’s largest city, and also signal certain doom for the McMoron Provincial Government.

It just speaks to how stupidly leftist you are. What’s a matter, your boy Scammer Smitherman not doing well in the polls? I guess he needs to defraud taxpayers of another Billion $ to fund his desperate campaign.

Rob Ford represents fiscal sanity, a concept I am sure you are totally unfamiliar with. The guy is a small businessman who actually runs a business in the community and employees actual people. Unheard of in politics, I know. That’s one of the many reasons the “Toronto elite” (aka The Stupid Guys) hate him. If Toronto is ever to recover from 8 years of Miller Moronisms, the “elites” need to be flushed down the toilet where they belong.

#102 Paul on 09.20.10 at 8:43 am

Don’t count on Ottawa to fund your retirement
Pay down debt and sell off possessions: Freedom, not stuff
BY JONATHAN CHEVREAU, FINANCIAL POST SEPTEMBER 18, 2010 COMMENTS (19)
STORYPHOTOS ( 1 )

Nortel pensioners and supporters rally at the Ontario Legislature at QueenÕs Park in Toronto Wednesday to protest the handling of their pension funds by the Government of Ontario. Those without defined benefit pensions will have to save more for their retirement.
Photograph by: Aaron Lynett, National Post
There seems to be an entire cottage industry built around telling Baby Boomers how they can’t afford to retire any time soon. Early in October, pension luminaries will descend on Toronto for a conference that will look at all aspects of Boomer retirement, from longevity to soaring health costs to their collective failure to save.

One of them, actuary Dr. Robert Brown, warns the spike in costs that will accompany the aging of the Boomers has barely begun. He says a proper demographic analysis shows Canadian Boomers, currently aged 44 to 59, won’t enter their high-cost years until 2016, peaking in 2031.

Other highlights of the conference hosted by the Retirement Planning Association of Canada will include sessions on senior fraud, how to avoid unseemly family fights over inheritances, even one on using comedy and magic to present retirement planning sessions.

If various books flooding the market are any indication, governments will need a major dose of magic to prepare for the coming tidal wave. And Boomers still toiling in the workplace will need a sense of humour as they try to suppress a new phenomenon I call pension envy.

That will be aimed, of course, at contemporaries who retired in their 50s with the gold-plated, annuity-like defined-benefit pension plans enjoyed by most government workers in retirement. Private-sector envy of public-sector pensions is also the focus of one session scheduled for the RPAC conference, entitled Pension Tension. According to pension expert and panelist Patrick Longhurst, there is “an alarming disparity between the pension coverage of employees working in the public and private sectors.”

The gulf between pension haves and have-nots may even spill over into social unrest in the future. A new book capitalizing on this theme is James Bacon’s Boomergeddon, an alarming prophecy of what America’s 78 million Boomers will experience as they reach the traditional retirement age of 65.

Bacon, editor of the Generational Advisor newsletter, argues U.S. social security will be broke by the year 2027. Add to that soaring health-care costs and other liabilities, he expects Uncle Sam to be so much in hock he will be forced to curtail benefits to 65% or 75% of what was promised. Even what’s salvaged will be ravaged by inflation as governments continue to resort to the printing press to postpone their fiscal problems.

Boomers should expect the retirement age to drift further into the future. The combination of curtailed benefits and rampant inflation means middle-class Boomers should not count on government for help in old age.

Financial planners already take the stance that government promises like Social Security or the Canada Pension Plan and Old Age Security should be regarded only a bonus — if they actually materialize. Individuals should focus on what they can control, and save and invest as much as possible to achieve financial independence.

However, those that succeed will likely experience a still greater tax hit in order to bail out impoverished Boomers who failed to save. A feature story in the October issue of Atlantic Magazine advocates just that. Entitled, “The Least We Can Do: Boomers’ Last Chance,” the article suggests that before they head for that giant Woodstock in the sky, Boomers should take a tax hit in order to help their children deal with all these problems.

My own take is that Boomers should just keep working as long as possible. Indeed, Bacon says Boomers have already concluded they will have to work about four years longer than their parents did. Even that may not mean they will be prepared for retirement, which he defines as having the financial wherewithal to replace at least 70% of the income enjoyed while working.

Bacon sensibly suggests Boomers should embrace what I call “guerrilla frugality” — downsize their homes, get rid of stuff, cut transportation and entertainment costs and try to save and invest as much as possible. I encapsulate this philosophy with a simple slogan: Freedom, Not Stuff!

Financial Post

#103 Another Guy from Winnipeg on 09.20.10 at 8:48 am

I found out he’d bought his current house for $176,000 four years ago, which was now mortgage-free and (he thought) worth at least $500,000….I could see he understood my points, but there was huge doubt – that Kamloops real estate prices (population 87,000) could ever actually decline…

I doubt his home is worth that much, I work for a company in Winnipeg that recently closed down their manufacturing facility there, approx. 500 out of a job. They did offer these people an equivalent job here in Winnipeg, a few took them, but, from what I have heard, they are having a lot of trouble selling their homes since their economy is in the dumps and they could not believe how expensive the homes in Winnipeg are. They clearly did not do their home work. Most of these people now have split families, the bread earner works in Winnipeg, the family lives in Kamloops. I really do not see that working out for them.

#104 The solution on 09.20.10 at 9:16 am

I have the solution: Get the standard boring haircut, dress like everyone else does, go to work, act like everyone else does.

After work….Ignore the masses. Whether boomers sell their shacks is irrelevant. Play guitar. Lift weights. Listen to heavy metal music. Do all the things that are fun. You have a job that pays big bucks. Now ignore the idiot masses who are clueless.

#105 grantmi on 09.20.10 at 9:46 am

#52 T.O. Bubble Boy on 09.19.10 at 10:29 pm

1) The one-time capital gain isn’t going to make much of a difference in your financial situation… e.g. if you had bought a $350,000 house that is now $400,000, you’d net maybe $28,000 after the realtor fees and other closing costs.

Wrong TO B. Boy!!!!!

You forgot all the upfront interest you paid off the top of your monthly mortgage payment to the bank before you calculate the sale price \ profit of your $400K trap shack!!

Come on! Use common sense!!

#106 dark sad person on 09.20.10 at 10:21 am

Our bag lady in the UK-has addressed the commoners again and look what she’s pulled out of the gut pile–
*****************
UK Proposes All Paychecks Go to the State First

The UK’s tax collection agency is putting forth a proposal that all employers send employee paychecks to the government, after which the government would deduct what it deems as the appropriate tax and the pay the employee’s by bank transfer.

The proposal by Her Majesty’s Revenue and Customs (HMRC) stresses the need for employers to provide real-time information to the government so that it can monitor all payments and make a better assessment of whether the correct tax is being paid.

http://www.cnbc.com/id/39265847

#107 DaBull on 09.20.10 at 10:30 am

I guess someone out there thinks the Canadian mortgage market is safe and doing OK.

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2010/09/thanks-europe-asia.html

As Dan the wanker would say:

No bubbles here, move on. LOL

#108 jwkimba on 09.20.10 at 10:35 am

Ya gotta live somewhere and nothing goes straight up or straight down. Let’s say your Vancouver Duplex drops from 900k to 850k over the next two years. 10 years from now its 1.5 Mil.

Actually in ten years it will be worth 600k. So much for your plan. Drivel indeed….

#109 VancouverGoinUp on 09.20.10 at 11:00 am

KC

Nice to see you living off the wisdom of your wife’s family members. You see her folks bought and that’s why you can rent for 700 bucks. In fact the financial future of all GVRD children and their children is tied into owning real estate. You get a house for 700 bucks because someone bought a home
******

I smell very desperate RE agent here… Let me tell you something smart ass… 3 years back girl friend and I did a stupid thing and put an offer on a house, luckily for us it was rejected. We hunkered down and just rented last while. this summer we just finished moving onto a 40 acre farm in GVRD that is in her family, and are charged 700 a month

#110 BrianT on 09.20.10 at 11:05 am

Interesting article from the NY Times explaining the magic of “financial engineering” AKA legalized fraud http://www.nytimes.com/2010/09/18/business/18pension.html?_r=3&pagewanted=1&ref=business&src=me

#111 CD in Ontario on 09.20.10 at 11:05 am

Is there a way to calculate the value of a defined pension plan so that you can determine if the value of your house is in the right % of total assets with the pension value included?

Defined benefit pension contributions can end. This is why I recommend anyone who can, takes the commuted value. — Garth

#112 BrianT on 09.20.10 at 11:08 am

The Obamaman did it! The experts have declared that the US recession ended in June 2009-happy days are here again http://finance.yahoo.com/news/Economic-panel-says-recession-apf-2658642411.html?x=0&sec=topStories&pos=main&asset=&ccode=

#113 Kenny on 09.20.10 at 11:09 am

RE: #50
>>I don’t buy the mantra that China and India will grow, without Americans buying their crap who will pay their wages, how will they buy their own crap?

Obviously, other Chinese and Indians will buy their crap (you realize that most of the high tech ‘crap’ out there is from south east asia, right?). They won’t be depending on Americans forever. Not with two billion people.

#114 dark sad person on 09.20.10 at 11:10 am

#77 Seen this in the US and its come to Canada on 09.20.10 at 2:22 am

Canada must have centralized securities regulator; it will help stop those pump and dump schemes that are prevalent on the Vancouver stock exchange and protect the investor!

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

Sure-let’s put more power in the hands of the very people that caused this mess–
Have you “ever” witnessed anything positive of all these “new mandates” that are cooked up by Fed “regulators”?
Where in hell were these-soon to be “tough on crime” regulators-when the crime of the century was hatched out by the same people-you “think” will clean up this-in comparison-tiny problem–

The solution is simple-
Make the penalties for fraud-more then the current slap on the wrist-

The best thing we can hope for now is–
A power stymied Government-that cannot do anything-

Give it up. You do not know what a securities regulator does. — Garth

#115 T.O. Bubble Boy on 09.20.10 at 11:11 am

@ #105 grantmi:

agreed… my calculation was too simplistic.

My basic point was more along the lines of: if your house hasn’t appreciated the 100%+ that many markets have seen in the last 5-10 years, the “bubble” is probably a bit smaller in your neighbourhood.

Really, my point #1 and point #3 need to be taken together:

If you aren’t living in a severely over-priced home, you’re happy where you are, and you’re diversified enough that can handle a 30% drop in your home’s value, STAY PUT.

As someone else noted: it’s not like Garth is renting!
(he owns his house, but doesn’t have a large % of his net worth in it)

#116 Another Albertan on 09.20.10 at 11:17 am

#74/Dave:

Googling those two words got about 100000 results in 0.21 seconds.

The rub with U3O8 is that it is a controlled substance with only qualified parties involved in transactions, typically buying multiple years of supply at a time. The market for the actual commodity does not move quickly when it comes to transactions meant for physical delivery.

If you go back in time from 2005 to 2008, you will see hockey stick style increases in many of the miners. You will also see the crash in these equities too, as hedge funds and other levered parties unloaded anything that wasn’t nailed down.

Your mileage may vary on this one…

#117 Ghost of Tom Joad on 09.20.10 at 11:32 am

CNN says great recession over:
http://money.cnn.com/2010/09/20/news/economy/recession_over/index.htm?hpt=T1

Now it’s time to panic.

#118 Pixma on 09.20.10 at 11:37 am

#60 “Whatever happened to Nostradamus?”

He was banned by Garth. All in the quest to have uniform opinions which support a crash.

I couldn’t care less about dissenting opinions on any economic and or financial issue. He was banned for his bigotry. — Garth

#119 This is Wonderland on 09.20.10 at 11:39 am

Hi Garth

My husband and I are planning to see you in Toronto on Sept 29th, do you have any more info on where you will be speaking and when the registry begins. Also I plan to bring my Parents who are in their late 70’s, is there usually a wait before the doors are open.

Best Regards.

The event is now scheduled for Tuesday, Nov. 9, and details will come shortly. Your parents will be seated as soon as they arrive. — Garth

#120 Prof ANON on 09.20.10 at 11:41 am

@ #97 T.O. Bubble Boy

I hear you on this. I recently witnessed a “disagreement” between a friend of mine and his wife. He wanted to buy his son a quality bike from an independently owned shop. She told him that they couldn’t afford it and that they should go to Walmart and pick out a cheap one. He responded with “If we can afford this $750,000 house, we shure as hell can afford a good bicycle for our son.” The conversation went all down hill from there.

BTW: They have a $700,000 variable rate mortgage and this conversation happened BEFORE the last three rate hikes.

#121 jaksun on 09.20.10 at 12:01 pm

opinion?

http://stubellblog.blogspot.com/2010/09/rent-or-buy-in-vancouver.html

#122 dark sad person on 09.20.10 at 12:03 pm

Give it up. You do not know what a securities regulator does. — Garth

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

Well-you might be onto something there-cuz-who knows what a security “is” in Canada?
First-one has to define what a security is-
Point in question-
Are OTC derivatives
(that are sitting off Bank balance sheets) going to be listed as a security-that will be regulated in view of the public?

NO—

They will be exempt–
As Nancy Pelosi said–
We must first pass the bill-in order to see what’s in it–

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

If this legislation is eventually enacted, the regulators will have a great deal of flexibility in terms of regulating derivatives or particular aspects of derivatives markets. The Act gives no indication of how derivatives will actually be regulated under this Act. We would anticipate that bi-lateral contracting of OTC derivatives between sophisticated parties will remain free of disclosure and registration requirements. We suspect many of the policy decisions remain to be made on many significant issues (such as clearing and trade reporting) and that they will not be made until more of an international consensus emerge

http://www.cba.org/CBA/PracticeLink/06-10-BC/securities.aspx

****************
OTC derivatives likely to remain–
Free of disclosure-

Define a security and regulate it-
Just be sure to omit-was is to be defined–

Cool huh

#123 Soylent Green is People on 09.20.10 at 12:05 pm

My b/f works at City Hall, I used to work there myself. I don’t know how many times I can say this but everyone, and I mean EVERYONE who works there views Rob Ford as a mentally challenged person.

Seriously, he is that “R” word I’m not allowed to use. SERIOUSLY. Rides the short bus, beats his wife, snorts coke and lies about it.

Everybody knows this and how on earth will he get any city counsellors on board to do anything.

When my parents told me they were voting for Rob Ford I must have laughed in their living room for ten minutes before I started crying. I left with tears in my eyes, I can’t believe how stupid people / voters are.

And now they are still going to vote for Rob Ford because now it’s a matter of saving face and not being able to change their decision and being stubborn and NOT DOING A LICK OF RESEARCH.

And I guess that’s how we got Stephen HarperCon in office. Most people are not doing their due dilligence.

If Toronto is suffering money wise, blame the GOD DAMN province for amalgamation when they rammed a ton of expenses down Toronto’s throat and pretended in the MSM it was revenue neutral. IT WAS NOT REVENUE NEUTRAL. MY GOD< I GET SO FRUSTRATEDLSFADJLJLADFJLD

Fast forward to the part where Rob Ford screams "Fat F**k" a hundred times. You want this garbage representing Toronto? dear God.

http://www.youtube.com/watch?v=z8EpSdyB0zY

#124 Sandra on 09.20.10 at 12:07 pm

Garth,

What happened to the Sept 29 TO date?

It has been rescheduled to Tuesday November 9th in Toronto. Location and registration will be posted here shortly. — Garth

#125 Silen on 09.20.10 at 12:10 pm

I encourage everyone to watch this excellent talk by Niall Ferguson that makes among other things the case for deflation: http://fora.tv/2010/07/28/Niall_Ferguson_Empires_on_the_Edge_of_Chaos

#126 Bill ( Peterborough) on 09.20.10 at 12:12 pm

Re #106 dark sad person

The proposal by Her Majesty’s Revenue and Customs (HMRC) stresses the need for employers to provide real-time information to the government so that it can monitor all payments and make a better assessment of whether the correct tax is being paid.
**************************************

Where do I sign up . ( Vaseline will be distributing to all no charge)

Alot of informative posts today.

Food for thought;( for those non conformist free thinkers)

http://www.youtube.com/watch?v=7eLvjUL1Urs

http://www.youtube.com/watch?v=TLbYL10c1zo

#127 EB on 09.20.10 at 12:15 pm

“Defined benefit pension contributions can end. ”

Hi Garth – could you possibly expand on this slightly (as it is relevant to my interests)? Do you mean taking the commuted value now as a hedge against something catastrophic happening to the pension plan itself?

In part, yes – many plans are underfunded and could well blow up. Better a bird in the hand. Additionally, it is often possible to have an outside manager grow funds more predictably and successfully than many pension administrators do. — Garth

#128 Devore on 09.20.10 at 12:21 pm

#71 KLO_PROF

The cost of owning businesses (through shares) is at a generational low.

People keep saying this EXACT same thing, almost as if they’re parroting it from somewhere else, and understand not what they are saying.

How are businesses at generational lows? The worth of a business is in its ability to generate income. A simplistic measure of its value is the PE ratio, which, even when stated in terms of fantasy make-believe future earnings estimates, is relatively high.

The S&P500 PE ratio is north of 20 today, that’s much higher than the historical average of 15, which is already blown up by the utterly insane PE valuations of the late 1990s and 2000s. Traditionally (oh, how quaint, we’re in the new economy stupid!) anything over 10 was overvalued, and 3-5 was buy territory. You can find solid blue chips trading in the 12 range, some even below 10, and some over 40! I guess someone is pricing in some mighty impressive earnings growth!

But that has always been the case. There were always good businesses that were cheap, and others that were irrationally overpriced.

Here, I’ll let you in on a secret, though it’s not much of a secret here, now that you hear it every day: we’re not different. There’s nothing different about the market today, nothing different about the times today. It’s all been done. It’s only different for people who know no history. In other words, every generation thinks itself different and special.

There is money to be made by investors in every market. And although I don’t see how companies today are at “generational lows” (wtf that means) there are certainly some good buys. If you believe we’re at generational lows (like, say, in the 30s), then you should put your money where your mouth is: buy the index, and retire.

#129 Devore on 09.20.10 at 12:30 pm

#82 Brian1

Don,t be surprised that in the near future friends who turned their backs on you show up looking for help or have a great way for you to make money. The unfortunate result of all this will be a significant increase of suicides.

Well, that’s a little drastic, but just yesterday (or today?) someone posted a story out of NZ of family disfunction and violence on a steep rise, due to “stress”, where they have places with price-income ratios rivaling Vancouver.

Yeah, stress no doubt.

Some theorize that economic hardship will bring families closer together and keep marriages from falling apart, as people cannot afford to separate. But I think this idyllic scenario will not play out, and instead we’ll see a rise in what you describe: suicides, family violence and abuse. Maybe one day things will change, but we have too much baggage and momentum right now.

#130 Robert 1 on 09.20.10 at 12:33 pm

A question for the Dawwwgs regarding “salary continuance” as an option in the event of severance. I would assume that during the period that the salary continuance is being paid the recipient would continue to pay C.P.P. … E.I. .. and of course Income Tax. The question that I have is what happens after the salary continuance ends …. Is collecting E.I. an option ?

#131 Bill ( Peterborough) on 09.20.10 at 12:34 pm

I fully support the move to have one centralized securities regulator in Canada to replace the inefficient, costly, duplicating and repetitious 13 provincial bodies which now exist. This is a reform which has been years in the making and will lead to far higher and better form of consumer and investor protection, while streamlining the regulatory process allowing better flow of capital and fewer barriers to economic growth. It has nothing to do with the central bank, by the way. — Garth
*******************************************

Garth the reality of it is than nothing will change but it will definitley creat more government jobs not less.

No different than with the amalgomation of Toronto.

Our governments have spun the webs of deciept for ages under the false pretexed that it is for our own benefit.

Who the F–k are they to tell me what will benefit me, especially with their past records.

Too much government has always been non productive. The way they are going pretty soon we will all work for the government with the catchy slogan
” BY THE PEOPLE FOR THE PEOPLE”.

Can believe people actually eat this bullshit up which medias , governments.. spin on us.

Baaaaaaaad people.

This is less government. There are now 13 regulators, 13 staffs, 13 offices, 13 bureaucracies, 13 sets of regs, 13 enforcement divisions. Take off the tinfoil. — Garth

#132 Old_is_Gold on 09.20.10 at 12:39 pm

# 113 Kenny
RE: #50
>>I don’t buy the mantra that China and India will grow, without Americans buying their crap who will pay their wages, how will they buy their own crap?

Obviously, other Chinese and Indians will buy their crap (you realize that most of the high tech ‘crap’ out there is from south east asia, right?). They won’t be depending on Americans forever. Not with two billion people.
_____________________________________________

I am from India and this CHINDIA myth is just one another promoted by MSM to keep people singing ‘Don’t worry – be happy!’, Chindia will save the world. Ain’t gonna happen and here’s why…

Can’t say about China but in India the majority and I mean some 1 billion people have actually become poorer, much poorer since Sonia Gandhi (who is actually Italian, closely associated with European bankers) had Indian markets forcibly pried open by the namesake PM, Manmohan Singh. Forget Africa, India is the most malnourished country in the world, and it is getting worse there, not better. Food inflation was 20% last year and running well over 10% this year with wages dropping as multinationals threaten to move to even cheaper labor countries like Vietnam and Cambodia.

The majority of goods manufactured there are for export only because there is no possible way for Indians, except for a small minority to buy them. This small wealthy minority shops in London and New York not in Delhi or Mumbai, and this is true even for federal ministers. Even the better quality commodities like Basmati rice, tea, coffee, lentils etc. are exported to wealthier markets because most Indians cannot afford them. The rice most Indians eat sells for around $0.25 / kg., the export quality costs something like $2.00 a kilo if it is available for purchase locally. There are riots and protests on a weekly basis because of food prices.
Because of globalization policies, India will experience a revolution or civil war, probably within this decade. And with the US helping neighboring Afghanistan and Pakistan achieve peace and stability, it is only a matter of time before India goes to war with Pakistan which will be round 4 since 1947. This time, however this could be of the thermonuclear variety. Forget about Iran or N. Korea, the probability of nuclear war is much higher in the Indian subcontinent than anywhere else in the world.

Leaving aside the glittering towers of Shanghai, in China too the vast majority live in abject poverty, there is not a chance that they can ever replace the US as a consumer, let alone the Eurozone and the rest of the Americas.

Just like the media promotes the drivel that ‘it is different in Canada’, so too do they promote the drivel that China and India will save the world economy. India will certainly not be able to save itself, let alone the world, and I am sure the same is true of China. China may be a true superpower in another decade, India never. There is still only one major superpower, the US, and one considerably smaller one, Russia.

#133 mikey on 09.20.10 at 12:45 pm

Garth, read this very funny!! you know the market needs to come down whne there thinking of this idea

This article gave me a good chuckle, intergenerational mortgages, what a splendid idea.

http://www.financialpost.com/Jewels+Overrated+Leave+mortgage/3544055/story.html

#134 Makaya on 09.20.10 at 12:47 pm

#119 @jaksun

A few days ago, there were some comments attached to this article that were pretty amusing (for me, not for him…). This post is really amusing and I extracted the best parts of it below.

“As a Realtor, I have expertise in the Vancouver Real Estate Market. ”

“lending practices in the US are far less stringent than Canada, and the fact that it is very difficult to obtain a mortgage in Vancouver, is a testament to our responsible lending systems and re-assurance a Foreclosure deceased market like in the US will never destroy Canadian Real Estate”

“high rent rates (which are forecasted to grow)” Seriously?

This one is the best:
“in my professional opinion Vancouver Real Estate is the most Rock Solid investment around. Simple Market Fundamentals are all strong: low interest Rates, Growing Population, rising incomes/ increasing minimum wage, limited Supply, increasing Global demand, and a growing job market with low unemployment rates.”

“As a lifelong resident of Vancouver, I believe the reason we are at historic highs, and the reason we have always been the most unaffordable city in Canada, is because Vancouver has the “It” factor. A city center envied by city planners across the world, a natural scenery attracting Tourists and Immigrants by the masses, a global position with amazing transportation, a temperate climate, excellent school system, and a safe, intellectual, community driven way of life. It appears the demand for Vancouver is infinite”

Note the ” demand for Vancouver is infinite” hahaha!!!

To finish convincing you, here’s how this guy justify RE investment:

-“Great Investment (Pay down your mortgage, not your landlords or have tenants paying yours)”
-“Build Equity (Get financed, grow your business)”
-“Pride of Ownership (add value, grow roots in the community)”
-“a Mortgage is the best Savings Account” (this one will make Garth smiling…)
-“retire Land Rich because with todays costs of living your bank account may not be” (if you can’t buy tomatoes, you can still grow them on your land!!!)
– “sleep well knowing that your hard earned money is invested in an asset you can touch, an asset you can rent, and an asset you can enjoy!”

Sleep well folks!

#135 Bill ( Peterborough) on 09.20.10 at 12:58 pm

This is less government. There are now 13 regulators, 13 staffs, 13 offices, 13 bureaucracies, 13 sets of regs, 13 enforcement divisions. Take off the tinfoil. — Garth
****************************************** Same theory behind the amalgomation of Toronto Garth. ( and other things which the government has done.)

I can say this on their previous track records.

What do you base your observations on?

#136 Devore on 09.20.10 at 12:59 pm

#85 David B

Bond markets are growing riskier as investors seeking steady returns bid up prices and ignore some early warning signs similar to those that flashed during the credit bubble

Lots of debate happening over the so called treasuries bubble. Prices have certainly been trending like a bubble (hockey stick) but is this just a bump, or are we already on the vertical part?

This whole thing is gonna keep rates low for years to come. First, the demand, domestic and foreign, second, does anyone believe the US is able to service its $14T+ federal debt at 8%? And when it’s growing by over $1T+ every year? (Divide numbers by 10 to see Canada is also well on pace.) They would have to, otherwise the loss of confidence in treasuries (and consequently the dollar, which is wholly backed by treasuries) would probably bring down the government, in a bad doomer way.

ZIRP forever!

#137 Will on 09.20.10 at 1:08 pm

#8 Confused – Sales are looking up indeed. You can visit http://www.findcalgary.com or http://www.dailystats.ca for your daily dose of local stats.

It looks like the number of sales might increase slightly over August (though far below historical averages). The average price looks to go up about 10k this month, though the median will go down 5k. Average price per square foot is also going down. The only thing that’s keeping Calgary averages alive at this time is the large amount of million and multi-million dollar home sales. That’s also the reason why the average is up, while the median is down.

#138 Devore on 09.20.10 at 1:11 pm

#106 dark sad person

The UK’s tax collection agency is putting forth a proposal that all employers send employee paychecks to the government, after which the government would deduct what it deems as the appropriate tax and the pay the employee’s by bank transfer.

Now that is something else. I have absolutely no doubt there are many people reading that and nodding their heads, oh yeah, sure, that makes sense. UK has been at forefront of all that is big government and big brother. It almost feels like reading the V for Vendetta script.

#139 The Original Dave on 09.20.10 at 1:11 pm

i’m reading this blog and the wife is watching recordings of “Property Virgins”. We’re renting. Please God this downturn has to move a little quicker.

#140 grantmi on 09.20.10 at 1:12 pm

Can you F’ing believe these bastards!!

They Lied, Lied, and Lied again about the ratings of companies all through this implosion.. .. .. and now that they are getting squeezed with regulation.. they’re just going to pass it on to the companies they rate!!

UNBELIEVABLE!!!!

Moody’s to Raise Fees to Offset New Regulation Costs

By Matthew Leising

Sept. 20 (Bloomberg) — Moody’s Corp. plans to raise prices to grade debt by about 5 percent to offset increased regulatory and compliance costs, according to Piper Jaffray & Co.

http://bit.ly/8XscTW

#141 bullion.bunny on 09.20.10 at 1:16 pm

Give it up. You do not know what a securities regulator does. — Garth

They watch porn all day while the Madoffs og the world steal……..much like politicians.

If I had any doubt of your irrelevancy, it is now but a memory. — Garth

#142 Dorf on 09.20.10 at 1:17 pm

The news on CBC announced today that the recession is officially over. It ended in the summer of 2009.

“Any future downturn in the economy would now mark the start of a new recession, not the continuation of the December 2007 recession, NBER said.

That’s important because if the economy starts shrinking again, it could mark the onset of a “double-dip” recession.”

The first thing I thought is….it doesn’t feel any different than it did last year.

Then I read further…they are just splitting it up into smaller chunks, so they can keep declaring it over to see if it stimulates the economy any.

So Garth, the first recession is over and we may be experiencing a second right now, probably a third next year, maybe a fourth the year after…etc. It’s just not one BIG one.

It sounds more like a prayer than a declaration.

#143 Timing is Everything on 09.20.10 at 1:22 pm

Garth said – “I fully support the move to have one centralized securities regulator in Canada to replace the inefficient, costly, duplicating and repetitious 13 provincial bodies which now exist.”

If 13 is too many, and one too few. Hmmm… Maybe, 3 ‘specialized’ securities regulators are needed.
Too much in one place is as bad as too many spread out all over the place. All or none (many or one) does not seem like the only two choices here, as is usually the reality.

#144 Prof ANON on 09.20.10 at 1:27 pm

@ #121 Jaksun
There are LOTS of problems with his analysis. Here is an incomplete list:
1.He uses derogatory language to describe people who choose to rent/not buy. In other words, he is attacking the people not the issue.
2.He doesn’t actually do a financial cost/benefit analysis of renting. Also, the list of variables he mentions is horribly incomplete.
3.He also assumes that people who don’t want to buy fall into several categories. His categories are incomplete as are the assumptions on which they are based.
4.He states that “lending practices in the US are far less stringent than Canada.” (Italics added). To some extent lending standards are more stringent than what they were in the us, BUT I’d like to see his definition of “far”. Lending practices are/were a lot more similar than he would like to admit. For example, I can currently get a zero down mortgage at a variety of lenders. There are also special “stated income” mortgages for entrepreneurs. Also, many/most Americans knew their interest rate for their entire amortization period; this should have added some stability to the market. In contrast, almost every Canadian has to renew their mortgage every five years. This is the equivalent of the resetting ARMs that caused so much chaos.
5.He makes the claim that price drops are inherently attached to interest rate changes. To some extent these factors have been highly correlated in the past. However, there are a number of reasons why the spending power of the average individual can drop. Interest rates are only one of them. Also, interest rates are low around the globe, yet real estate continues to depreciate.
6.He talks about the desirability for foreign investment, and he bases his opinion on some kind of ambiguous “it factor” that Vancouver supposedly has. However, he fails to account for the fact that there are MANY places throughout the world that are desirable (for both business investment and quality of life). Just think, why would someone who has a lot of money pick Vancouver when they have the ENTIRE world to choose from? What about New York, Tokyo, London, Honolulu, LA, Prague, Toulouse? I get that he grew up in Vancouver and he likes it, but this is the thing that is clouding his judgment. Perception is inherently ego-centric.

#145 Devore on 09.20.10 at 1:45 pm

#121 jaksun

opinion?

http://stubellblog.blogspot.com/2010/09/rent-or-buy-in-vancouver.html

Fair and balanced.

#146 TheBigLebowski on 09.20.10 at 2:00 pm

#45 Grandpa Grinch
I agree with the “balance’ approach. So I am diversified. I own both gold and silver.

#147 Willie on 09.20.10 at 2:02 pm

With enough fear mongering, maybe you’ll get your prophecy to self-fulfill. Then you can enjoy the adoration and amazement of your followers and some intense schadenfreude. Congratulations in advance.

#148 Old_is_Gold on 09.20.10 at 2:03 pm

$129 Devore & # 81 Brian

I agree – financial stress is a great divider of families and marriages, not uniter. Financial stress, also will lead many to take the ultimate tragic step. I personally know a young man of under 50 years of age that took that step leaving behind a wife and 4 kids. What’s happening is a tragedy of immeasurable proportions; this is way beyond just home prices and retirement savings, at least in the US and many other parts of the world, and coming soon to Canada.

#149 InvestX on 09.20.10 at 2:10 pm

Suburban John: “Landlords cannot force a tenant to move because they “sold the house”.”

Which province(s). Source?

#150 InvestX on 09.20.10 at 2:26 pm

Soylent Green is People:
“My b/f works at City Hall, I used to work there myself. I don’t know how many times I can say this but everyone, and I mean EVERYONE who works there views Rob Ford as a mentally challenged person.”

– Could it be because he holds them accountable, such as in the areas as spending?

#151 TheBigLebowski on 09.20.10 at 2:28 pm

I fully support the move to have one centralized securities regulator in Canada to replace the inefficient, costly, duplicating and repetitious 13 provincial bodies which now exist.-garth.

The only thing standing between the average person and a total government monopoly and control is borders and separate regulations. That is why in the U.S the 50 separate states was created. To create a competitive free market economy. If taxes were raised in one state, then business would move to a more friendly location, this created an open free market economy. Anytime a government tries to homogenize its control over a country, it is not for our benefit, its for theirs. Garth do you apply the same logic to sovereign countries? Would we not be more efficient if we just tore down all borders and created a one world corporate state. You sound more like a one worlder by the day. Any time business and government can streamline their control over a country you can bet we lose choices and voting power as a nation and they gain more control. By the way Garth I attended you speal in Kamloops the other day, other than showing a slide that compared the gold market to housing side by side, it was pretty good. But that grade 3 attempt to associate gold to a housing bubble was effective on a dumb down sheep but I almost laughed out loud.
Do you support a global tax scheme implemented by the U.N? With leaders like yourself we can kiss our soverignty goodbye.

There is no justification for having 13 securities regulators to do the work of one, even in your twisted world. I am flattered you came to hear me in Kamloops, but I did not have such a gold slide in my presentation. BTW, there was an open question-and-comment session at the end. You must be braver online than in person. — Garth

#152 OnlyTheBankersLaugh on 09.20.10 at 2:31 pm

Garth,

Realize that any defined benefit private sector pension plan is at risk but what about our royal true and blue Canadian government pension plans. The massive wild card in my overall financial evaluation is the pension piece. In the old days, it would be considered gold plated but, now, I see smoke based on what’s happening in Germany, in States along lines of forcing workers to work to 67, 68, 70 (heck, make it 80 for full pension to align with life expectancy)…. while I feel that the Canada I grew up in wouldn’t let this happen, I am not sure that government will simply be steamrolled into the situation eventually. Thoughts?

#153 dark sad person on 09.20.10 at 2:36 pm

#140 grantmi on 09.20.10 at 1:12 pm

Can you F’ing believe these bastards!!

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

lol–without digging up the link-it was only a few months ago-these crooks were threatening to lower grade ratings on each other-

#154 Prof ANON on 09.20.10 at 2:38 pm

@ #138 Devore

Forget the movie. Read the graphic novel.

#155 junius on 09.20.10 at 2:39 pm

#144 Prof Anon,

I agree with your points but I think the bigger problem is in the assumptions. Like so many Re pumpers he does not properly address the 2 biggest problems facing the industry being (1) affordability and (2) the economy.

No where does he deal with the high debt loads that Canadians are currently carrying.

He also doesn’t have any grasp of the current eoncomic situation and assumes a healthy and growing job market with salary increases coming. This is, unfortunately, a pipe dream.

What so many in the Re business fail to factor in is the long term impact of rising interest rates. So long as the economy is in its current weak position rates will remain low and the market is more likely to melt than crash. However once it finally picks up in a few years rates will crank up as well. Rate hikes will push prices down very quickly.

#156 Moneta on 09.20.10 at 2:46 pm

The ironic part was that my absolute favorite place I’ve ever lived turned out to be a rental.

Food for thought.
————–
When we first moved to Montreal, my parents did not know where to go­ as they did not know the city.

We rented for a year and that year was probably the most exciting year of my life.

Parents try to build their kids’s memories but kids never remember what parents expect them to.

#157 joseph on 09.20.10 at 2:47 pm

Landlords cannot force a tenant to move because they “sold the house”- Suburban John

I admit I am not familiar with Ontario rental laws, but in Alberta you can boot a tenant out at the end of a fixed term tenancy for any reason whatsoever. Periodic leases are different…

#158 Iceberg on 09.20.10 at 2:50 pm

Interesting UK article

The IMF itself has become the problem as Europe’s woes return.

Once a quorum of big names says the game is up in a debt crisis, events move fast and furiously

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8012175/The-IMF-itself-has-become-the-problem-as-Europes-woes-return.html

#159 DJ on 09.20.10 at 2:50 pm

#125 Silen on 09.20.10 at 12:10 pm

Nice Link! Worth the hour (although I’m sure my employer wouldn’t agree).
See, these are the kind of posts I like. Instead, I have to wade through all the crazies. I wonder if they know who they are?

#160 vicguy on 09.20.10 at 2:55 pm

Hello Garth, on the subject of receiving a pension’s commuted value, would it not inevitably trigger a large income tax payment? Is there a way to mitigate the hit? I do realise that a lump sum pension refund can be deposited into an RRSP plan without tax implications, but the sum would only be some half of a comuted payment in this particular case. Thank you.

Pensions have to be commuted into an RRSP or a LIRA, so there is no tax hit until it is taken as income. Plans differ, but I do not understand why you would lose half of the commuted value, when that is specifically the cash withdrawal sum. — Garth

#161 Bill on 09.20.10 at 3:04 pm

Was out last weeks witha few buddies who ran into other buddies some of whom are in the banking/mortgage biz. The housing market was being talked about and these mortgage guys where saying there is now a big problem with people behide on their mortgages. I know the housing market for sales is bad but now it seems there is a problem with people paying their mortgages?

#162 TheBigLebowski on 09.20.10 at 3:09 pm

BTW, there was an open question-and-comment session at the end. You must be braver online than in person. — Garth

I wasn’t there to confront you, i do have some basic respect for someones presentation.

I would have welcomed your questions. — Garth

#163 Bill Gable on 09.20.10 at 3:23 pm

#55 VancouverGoinUP

> Perfect setup as to why so many people NEED TO HEED Mr. Turner. This poster has been at the Vancouver Kool Aid stand, far too long.

I think the line from one of the blog dawgs on what’s happening is bang on….”all we are doing is amortization extensions, no one has any money”.

Think the worst is over? It is JUST picking up steam.

A melt, will become a flood.

#164 dark sad person on 09.20.10 at 3:23 pm

#159 DJ on 09.20.10 at 2:50 pm

#125 Silen on 09.20.10 at 12:10 pm

Nice Link! Worth the hour (although I’m sure my employer wouldn’t agree).
See, these are the kind of posts I like. Instead, I have to wade through all the crazies. I wonder if they know who they are?

******************
Typically Canadian-let’s have a board that suites my taste and to hell with everyone else–
No wonder we’re so friggen easy to control–

#165 CrowdedElevatorfartz on 09.20.10 at 3:25 pm

#55 VancouverisGoinup
You sound suspiciously like “NorthVan Realtor” who hasnt been around for several months.
The ‘buy buy buy” mantra wears a tad thin when I drive by 2 year old town house complexes that are wrapped in plastic and under multi million dollar repairs.
I wouldnt touch a condo or a townhouse in this city with a 10 ft. pole.
Builders “Warranties” last as long as it takes the “sub contractor” to finish the job and leave town.

Just call me “MortgageRatesGoinUp”

#166 jess on 09.20.10 at 3:35 pm

Thanks 43 brainsail for that approx. denominator however, this has me concerned:

What Those Who Killed the Tar Sands Report Don’t Want You to Know
Why did a parliamentary committee suddenly destroy drafts of a final report on tar sands pollution? Here’s what they knew.

By Andrew Nikiforuk, 15 Jul 2010, TheTyee.ca

#167 bigrider on 09.20.10 at 3:38 pm

Garth-when you said that defined contribution plans can end and that is why you recommend anyone who can to take commuted value.

Do you mean plans such as hoopp(hospital employees) and omers as well? I would think that these are safe and that they are going to make good on there obligations to their members.

Would you not agree? Please elaborate.

Nortel was big. GM, too. I would never fail to commute a pension, if I could. — Garth

#168 Bill( Peterborough) on 09.20.10 at 3:39 pm

Re # 148 Gold_Is_Old

A shame that people are put in such situations so as to see no other solution . Truly a tragedy.

Materialistic wealth has been programmed subconciously/ conciously into the vast majority of society, leading to a judgemental society based on the degree of an individuals wealth, in general.

Along with this wealth, in general, usually comes the know it all illusional attitude of ” So Called Intellect”.

Figuring that with wealth comes wisdom. No matter how much you try to show these people the light, most will never see it, being insulated in their little worlds of materialistic comfort.

They will never rock the boat for fear of loosing what they have, instead they choose to live in the world of grey trying to understand/justify wrong doings .

You can always spot these people, because they usually have the same outlook in life saying ;

What can we do about it, so just go with the flow.

Found your gmail address early , but can’t seem to find it. Whats the best way to reach you.

#169 DJ on 09.20.10 at 3:43 pm

#164 dark sad person on 09.20.10 at 3:23 pm
#159 DJ on 09.20.10 at 2:50 pm

#125 Silen on 09.20.10 at 12:10 pm

Nice Link! Worth the hour (although I’m sure my employer wouldn’t agree).
See, these are the kind of posts I like. Instead, I have to wade through all the crazies. I wonder if they know who they are?

******************
Typically Canadian-let’s have a board that suites my taste and to hell with everyone else–
No wonder we’re so friggen easy to control–

Question answered! Thank you.

#170 dark sad person on 09.20.10 at 3:43 pm

#138 Devore on 09.20.10 at 1:11 pm

UK has been at forefront of all that is big government and big brother. It almost feels like reading the V for Vendetta script.

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

Yep–apparently their per capita placement of security cameras is numero uno–

They also started this Government trendy game–

Police have seized a potential £1 billion “treasure trove” of cash, drugs and guns in an unprecedented raid on concrete vaults holding 7,000 safety deposit boxes.

The investigation – codenamed Operation Rize – has been running for two years and included intensive work with lawyers to ensure they were able to seize all of the boxes.

http://www.telegraph.co.uk/news/uknews/2066470/Safety-deposit-box-raids-yield-1bn-of-drugs-cash-and-guns.html

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

intensive work with lawyers to ensure they were able to seize all of the boxes.”

This makes sense as well–wouldn’t want them mistakenly cutting open–Mrs Windsors SDB–

#171 bullion.bunny on 09.20.10 at 3:47 pm

Give it up. You do not know what a securities regulator does. — Garth

They watch porn all day while the Madoffs og the world steal……..much like politicians.

If I had any doubt of your irrelevancy, it is now but a memory. — Garth

Well smart ass…..here are the stories from the press.

http://abcnews.go.com/GMA/sec-pornography-employees-spent-hours-surfing-porn-sites/story?id=10452544

http://www.youtube.com/watch?v=xCzm2PshT7U

As fas as politicians go, would you like me to name some names?

In case you had not noticed, this is Canada. — Garth

#172 jess on 09.20.10 at 4:10 pm

…”As with all oil and gas resources, analysts distinguish between oil shale resources and oil shale reserves.

“Resources” refers to all oil shale deposits, while “reserves”, represents those deposits from which producers can extract oil shale economically using existing technology.

Since extraction technologies develop continuously, planners can only estimate the amount of recoverable kerogen.[6][1] Although resources of oil shale occur in many countries, only 33 countries possess known deposits of possible economic value.[19][20] Well-explored deposits, potentially classifiable as reserves, include the Green River deposits in the western United States, the Tertiary deposits in Queensland, Australia, deposits in Sweden and Estonia, the El-Lajjun deposit in Jordan, and deposits in France, Germany, Brazil, China, southern Mongolia and Russia. These deposits have given rise to expectations of yielding at least 40 liters of shale oil per tonne of oil shale, using the Fischer Assay.[6][12]

A 2005 estimate set the total world resources of oil shale at 411 gigatons — enough to yield 2.8 to 3.3 trillion barrels (520 km3) of shale oil.[2][3][4][5] This exceeds the world’s proven conventional oil reserves, estimated at 1.317 trillion barrels (209.4×10^9 m3), as of 1 January 2007.[21] The largest deposits in the world occur in the United States in the Green River Formation, which covers portions of Colorado, Utah, and Wyoming; about 70% of this resource lies on land owned or managed by the United States federal government.[22] Deposits in the United States constitute 62% of world resources; together, the United States, Russia and Brazil account for 86% of the world’s resources in terms of shale-oil content.[19] These figures remain tentative, with exploration or analysis of several deposits still outstanding.[2][6] Professor Alan R. Carroll of University of Wisconsin–Madison regards the Upper Permian lacustrine oil-shale deposits of northwest China, absent from previous global oil shale assessments, as comparable in size to the Green River Formation.[23]
(wiki)

#173 betamax on 09.20.10 at 4:24 pm

#132 Old_is_Gold

– Thanks for the inside scoop on India. My wife is from China and says similar — i.e. that the west has grossly inflated ideas of (a) the wealth of average Chinese, and (b) the economic stability of a kleptocracy built on graft and corruption at every level.

#174 cj on 09.20.10 at 4:32 pm

I am receiving my defined benefit pension plan – B.C. teacher and have never considered commuting its value. If this pension were in jepordy, then essentially the bare bones of the provincial economy would be tumbling.

You are very trusting to leave your future to an institutional manager over you have no influence or control, rather than have this managed in your own personal best interests. — Garth

#175 Scalgary on 09.20.10 at 4:53 pm

#132

Drivel.

I think you visited India in 1980s. I dont buy your thoughts…

India became self reliable in food grains since 1990. It has diversified economy.

China is the only cash-rich nation in the world… California is looking for China to fund it jet-train project. China is trying to buy natural resources around the world… may buy PotashCorp too…

Yours comments doesn’t carry any true statistics….

#176 dark sad person on 09.20.10 at 5:24 pm

Soooo–If it ain’t broke-why do they want to fix it I wonder?

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

The national securities regulator: A federal travesty

Proponents of the takeover of the securities regulation field by the Federal government are prone to assert that such a centralized regime would considerably improve the efficacy of securities regulation and enhance Canada’s image internationally. These are lofty objectives, easier said than done. In fact, the record points in the other direction.

Comparisons made by international institutions rank Canada amongst the best with respect to the quality of securities regulations and investor protection. For instance: Canada was ranked second in terms of the quality of overall securities regulation in the OECD 2006 report “Going for Growth”, ahead of the United States (fourth), the U.K. (fifth) and Australia (seventh). Compared with 178 economies, Canada was ranked fifth in terms of investor protection in the World Bank Doing Business 2008 Report, ahead of the United States (seventh), the United Kingdom (ninth) and Australia (51st).

The empirical studies indicate that on all dimensions of market efficiency that depend on securities regulation, the Canadian market ranks with the best.

Read more: http://opinion.financialpost.com/2010/05/20/a-federal-travesty/#ixzz106oe2ciG

**********************
Canada ranks among the top huh

Must be some “other” reason then-that the Fed needs to control this thing–even better–
What could be their reason–i wonder–

Well–let me adjust my tinfoil/crazies hat here-

Could the Financial instruments-such as– Swap/CDS’s/SIV’s/ etc. be too transparent with (gasp) 13 regulators overseeing the flows?
Remember Swaps-can masquerade as cash–
Naw couldn’t be–

http://www.youtube.com/watch?v=ae4KwdC_dDI

#177 jess on 09.20.10 at 5:33 pm

dark sad person:

Michel Barnier, Commissioner for Internal Market and Services said: “No financial market can afford to remain a Wild West territory. OTC derivatives have a big impact on the real economy: from mortgages to food prices. The absence of any regulatory framework for OTC derivatives contributed to the financial crisis and the tremendous consequences we are all suffering from. Today, we are proposing rules which will bring more transparency and responsibility to derivatives markets. So we know who is doing what, and who owes what to whom. As well as taking action so that single failures do not destabilise the whole financial system, as was the case with Lehman’s collapse.

Key elements of the proposal:

http://ec.europa.eu/commission_2010-2014/barnier/headlines/speeches/2010/09/20100920_en.htm

http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/1125&format=HTML&aged=0&language=EN&guiLanguage=en

http://www.ft.com/cms/s/0/c5f6b70a-c0a3-11df-94f9-00144feab49a.html

#178 VICTORIA TEA PARTY on 09.20.10 at 5:36 pm

Every once in a while your comment earns my title of “Spine Stiffener”. Your latest rates right up there, a clarion call for those whose cranial cases do not sound like a conche shell when pointed into a light onshore breeze.

Speaking of breezes, what’s the wind whispering today?

Why, more of the same.

The Dow Jones, whose resident entitlement bunnies and other financial froth on Wall Street, was awaiting Helicopter Ben’s words tomorrow: “let there be more instant money printing…”

As a result they chose to drive up the average by 145 points in thin anticipatory trading.

Meanwhile over at the BDI (Baltic Dry index), a real harbinger of economic things to come, this key index, that monitors transoceanic shipping volumes, continued to plunge off its summer highs. This means that someone’s not shipping things from Point A because Point B is flat flaming broke!

The bond market remains in the deflation (depression) suburbs.

And gold, that truth-teller of things to come, is starting to look a lot like $1,300.00 an ounce. Glad I stocked up at much lower prices over the last few years. Silver, that other precious metal is cruising northward into the low 20s. Two years ago you could have bought it for $10 bucks.

And then there are still all of those locals who continue to drink from the RE punch bowl, its elixer of poison short-circuiting their common senses always addled by granite wishes and Hawaii beach caviar dreams.

When will they ever learn, indeed.

On another related topic, the American Empire and its current state of being, given all of the debt and the ongoing and very tragic ramifications, I don’t know how its future can be anything but clouded under these current circumstances. Garth, you seem so sanguine about it.

With that in mind I watched the second episode of “MELTDOWN”, the CBC’s documentary about the crash of Lehman’s, TARP, and the rest of it in 2008. It’s a six- part series, I think, and well worth viewing.

The commentator, at one point, says this phoney money printing was done to prevent the next depression, but the depression keeps showing up in many different forms.

For instance, he showed people losing their homes in California, their belongings piled on a boulevard; another story of an old man who killed himself just as the sheriff moved into the foreclose on him.

And it was heart-breaking watching two young homeless mothers and their babies subsisting homeless and jobless on the streets of LA!

This will repeat itself millions of times this winter, all over the USA. And the American Empire can withstand that? For how long?

During the Dirty Thirties the US was not a real empire. Also, it was more agrarian and industrial than it is now.

By comparison, today, just about everything of substance, in the continental US economically speaking, has been offshored. What’s left? Wall Street?

Not so fast, Bunkie. Read the NYT today: “Wall Street’s Profit Engines Slow Down”. The denizens therewith are “rethinking” their 2010 bottom lines. I’ll bet.

Another story on the weekend, from Bloomberg, talks about massive possible Wall Street layoffs unless Mr. and Mrs. America step up to the plate and buy those crappy stocks.

Mr. and Mrs. America are living on their home town street right now, Mr. Wall Street. Have a nice day.

Which means to me that today’s 145 point bump on the Dow was pure fiction brought about by computer sleight of hand and total desperation by the pumpers and dumpers.

Long live the Empire. I’m not exactly sure which one.

#179 Brian1 on 09.20.10 at 5:43 pm

#129 Devore; I think that this is the real reason Stockwell Day is building prisons. They do see it coming.

#180 freedom_2008 on 09.20.10 at 5:45 pm

cj wrote:

I am receiving my defined benefit pension plan – B.C. teacher and have never considered commuting its value. If this pension were in jepordy, then essentially the bare bones of the provincial economy would be tumbling.

You are very trusting to leave your future to an institutional manager over you have no influence or control, rather than have this managed in your own personal best interests. — Garth

Hmm, isn’t cj one of the lucky few who have government or private pension plans that rest of us (70-80% Canadians) envy about? Are you telling them to take the money out the plan and find an advisor (who has the clients’ interest above his/her own ;-) to manage, so they would be just like the rest us?

#181 YEG on 09.20.10 at 5:48 pm

What happened to Devil’s Advocate? Did he get banned?

#182 CrowdedElevatorfartz on 09.20.10 at 5:48 pm

#167 BigRider
Your pension is with HOOPP ? Geez Louise, I looked after one of their “commercial assets” in Vancouver. I have NEVER seen such a paper pushing beaurocracy in my life( SNC-Lavalin runs a close second).
Reports about reports, inspections of the inspections, duplication of jobs.
HOOPP should stand for
“Happy Obscenely Obese Paper Pushers” not
“Hospital Of Ontario Pension Plans”

#183 S.B. on 09.20.10 at 5:49 pm

In downtown Toronto the typical new condo parking space costs $40,000.

Even if you ploughed $1500/mo into this debt, forgetting interest, it would take you 26 months – or just over two years – to pay it.

Add to this condo fees of at least $400/mo, and after over 2 years living in the condo you own…your parking space. To say nothing about the 300,000 mortgage on which you are paying additional monthly payments.

Ahh the joys of condo ownership and “building equity”.
I can think of better uses for $1500/mo.

#184 dark sad person on 09.20.10 at 5:59 pm

Oooooops–a blinding flash of paranoia-has just swept over me/like a bone chilling SE wind blowing through Alberta–

Wouldn’t it also be much easier-if one were so inclined-to {tweak} the Securities laws that are already in place–you know–the ones that seem to hold Canadian Securities in fairly high esteem-at least when measured against the likes of the UK/USA etc-
Much easier and less of a pain in the ass-to manipulate-when it’s not spread out so damn far-why–
They even have a say in the West-the way it is–
Gotta stop that–

http://www.youtube.com/watch?v=j_AgRzg0_jo

#185 Bill( Peterborough) on 09.20.10 at 6:00 pm

In case you had not noticed, this is Canada. — Garth
***************************************

So what your saying is ” THAT WE ARE DIFFERENT IN CANADA”

Yes, we have 13 securities regulators and the US has one. Are you guys on drugs today? — Garth

#186 Brian1 on 09.20.10 at 6:04 pm

If you have a family and a house with a large mortgage then you must sell now. You must admit defeat, cut your losses and save your family.

#187 rory on 09.20.10 at 6:04 pm

“123 Soylent Green is People

“My b/f works at City Hall, I used to work there myself. I don’t know how many times I can say this but everyone, and I mean EVERYONE who works there views Rob Ford as a mentally challenged person.”

SGiP … I live out west and have no idea who Rob Ford is … but if City Hall bureaucrats and you (ex-bureaucrat) dislike him then he sounds like the guy Toronto needs … Go Robbie.

#188 Bill( Peterborough) on 09.20.10 at 6:11 pm

previous comment of mine refered to Garths comment to bunny .bullion #171.

#189 brainsail on 09.20.10 at 6:31 pm

#172 jess

Green River Formation

Here is an article from 2007 explaining the status of the technology that Shell has been developing for several years.

http://money.cnn.com/2007/10/30/magazines/fortune/Oil_from_stone.fortune/index.htm

#190 Nostradamus Le Mad Vlad on 09.20.10 at 6:53 pm

#71 KLO_PROF, #121 jaksun and #156 Moneta — “We have a compulsion to own, even if it is adverse to our financial well-being.”

I take a different view. With the children now grown and gone, I strongly prefer to rent half a duplex, townhome, condo or apartment, put the net proceeds into a mix of what Garth recommends and have few responsibilities.

We’re getting on a little now, and have no interest at all in doing yard work or similar, so I have no compulsion to own, just enjoy life.

#85 David B — “Bond Markets Grow Riskier”

Pertains to a link from a week or two back, which said when everything is in place, the plug will be pulled and a lot of people will be left on Shit Street.

#93 Bruce — Would sure be interesting if #85 David B’s and your links happen in spring. Then it will be easy for anyone to know this downturn is a concerted effort by different players behind the scenes to bring in more wars, etc.

#117 Ghost of Tom Joad — “Now it’s time to panic.”

Well, not me. I’ve forgotten how to panic and neither can I remember what I was supposed to panic about!

#125 Silen — Excellent link on Niall Ferguson and Empires on the Edge of Collapse. Friedrich Wilhelm Nietzsche said “Out of chaos comes order.”

Clinton first transferred the SS surplus to pay the US deficit off, leaving Americans with no safety net. Then dubya the war monger falsely won two elections, was well aware that the dot.com bubble had burst and was the harbinger of the present downturn, so created 9-11 and started the chaos part.

Now Obama is nearly done and, one way or the other, will be finished after four or eight years, by which time the NWO will be running the show.

Probably helps that big oil, big pharma and others are funding everything. Now that big pharma has had a major success in Europe, chances are they will advance their agenda over here and do the dirty on us.

#158 Iceberg — “. . . of big names says the game is up in a debt crisis, events move fast and furiously”

That is keeping in line with #85 David B’s and #93 Bruce’s comments. Seems things are falling into place even as we communicate via Garth’s blog.

#191 junius on 09.20.10 at 7:10 pm

#181 YEG,

DA took a permanent leave of absence.

We miss him.

#192 Bill Gable on 09.20.10 at 7:19 pm

“Adding all of these together, we come up with a total of roughly 6.97 million residences which are almost certainly going to be thrown onto the resale market as distressed properties at some point in the not- too-distant future. This massive number of homes will put enormous downward pressure on sale prices. To believe that prices are firming now is to completely ignore this shadow inventory. Ignore it at your own risk.”

Apparently, the “stimulus” measures coming out of the Obama Administration and the Federal Reserve aren’t doing as much stimulating as hoped. Apparently, if we may volunteer a simplistic deduction, sustainable economic growth derive from the private sector’s investment and production, not from the public sector’s bailouts and “make work” programs.

>> From today’s http://www.dailyreckoning.com

#193 canuckfilly on 09.20.10 at 7:33 pm

A question Garth please. Is your talk in Kelowna on Oct 14th going to be approx the same as the Howe St one?

Unless the world changes in the next month. — Garth

#194 Behavioral Finance on 09.20.10 at 7:45 pm

Who said mutual funds and equities are so 80s?

FEMEX up 8.92% YTD
VMW up 106% YTD
NFLX up 159% YTD
THI up 21% YTD
PTTAX up 6.5% YTD
MAPIX up 13.49 YTD

American Real Estate in the woodshed.

#195 Behavioral Finance on 09.20.10 at 7:47 pm

Wow, 13 securities regulators. That is some serious inefficiency. Who pays their bills?

#196 dark sad person on 09.20.10 at 8:00 pm

Yes, we have 13 securities regulators and the US has one. Are you guys on drugs today? — Garth

************************
Exactly–which is why a few of us-have a few questions-about {ONE}

Here is an example of {ONE}
**********

(Reuters) – Goldman Sachs Group Inc agreed to pay $550 million (356.6 million pounds) to settle civil fraud charges over how it marketed a subprime mortgage product, ending months of negotiations that rattled the bank’s clients and investors.

The U.S. Securities and Exchange Commission said the penalty was the largest ever for a financial institution, and leaves the door open for future civil suits.

But many investors viewed the $550 million settlement as a slap on the wrist for a bank that earned more than $13 billion last year.

“They pay $550 million and they get an $800 million pop in their stock price … they got off easy,” said Kevin Caron, a market strategist at Stifel, Nicolaus & Co in Florham Park, New Jersey.

The company’s shares later rose further, bringing the total gain in Goldman’s market value on Thursday to about $6.6 billion. In the months after the SEC pressed charges on April 16, Goldman’s market value fell by more than $25 billion.

The SEC announced the settlement on the same day a sweeping Wall Street regulatory reform package — support for which was boosted in some quarters by the accusations against Goldman — cleared Congress and headed to President Barack Obama for his signature.

http://uk.reuters.com/article/idUKTRE66E6ER20100716

*********************
Did the SEC just exempt itself from the Freedom of Information Act?

In a speech a few days ago hailing passage of financial regulatory reform, Securities and Exchange Commission chairwoman Mary Schapiro said the bill “brings greater public transparency and market accountability to the financial system.” That’s largely true, except for one little provision that could potentially exempt a huge portion of the SEC’s paper trail from the Freedom of Information Act, the most important governmental tool for transparency we have.

As Fox Business’ Dunstan Prial first reported on Wednesday, the Dodd-Frank bill, which is now law, contains a section declaring that the SEC “shall not be compelled to disclose records or information obtained” in pursuit of its “surveillance, risk assessments, or other regulatory and oversight activities.” It goes on to specifically exempt those records from the Freedom of Information Act. There’s considerable debate online right now over what that exemption precisely means, but it could potentially have opened a bus-sized hole in the FOIA as far as the SEC is concerned. And would-be watchdogs of the financial sector’s leading watchdog have only noticed the provision now, when Congress has already passed the law.

http://news.yahoo.com/s/yblog_upshot/20100730/bs_yblog_upshot/did-the-sec-just-exempt-itself-from-the-freedom-of-information-act

********************
Lots more-but don’t want to clutter the board-with all the craziness involved-with being skeptical about {ONE}

Bit on Mary-though–
When she was to be appointed as SEC head-an inconvenient truth-crawled out of the gutter–
Seems Mary-had not filed taxes with the IRS for about 7 or so years-
Seems she simply “forgot”

http://www.youtube.com/watch?v=BVLqaGNJ2wE

#197 Confused on 09.20.10 at 8:00 pm

#137 Will

Thanks for the info. I was just wondering, if anyone had any explanation for what is causing the surge in Calgary sales.

Hormones. — Garth

#198 Nostradamus Le Mad Vlad on 09.20.10 at 8:11 pm


“Unless the world changes in the next month. — Garth”

Don’t bet against it!
*
4:39 clip Marc Faber on gold. He doesn’t seem to trust politicians. That is surprising!

Basel III “China is also part of this confidence game. But, contrary to IMF and other renowned economists who are betting on China’s and Asia’s so-called economic strengths, I take the view that when US treasuries collapse, faith in all fiat monies will likewise evaporate and there will be massive capital flight to commodities, especially gold, silver and oil.” Note the term “when US treasuries collapse”; maybe in collusion with bonds falling to pieces?

2:24 clip Milton Friedman on Greed. 1979, and still relevant today. Phil Donahue (sans skirts) is the host.

5:07 clip Silver at just under $1K? Great mathematics and connection between banks and gold, and it also poses another question about govt. confiscation of bullion.

Canada This may be related to big pharna and Monsanto.

Avoid vaccines, big pharma, big oil and Monsanto!

Can anyone say “martial law is here”? It’s not that hard!

Interesting POV re: CC. Whether true or not, it is fascinating to see how this planet works.

Now that GW is a no-no to use, here is a list of alternatives from someone in Sask. Note the term “Climageddon”; sounds vaguely familiar. GW belongs to dubya!

Plus taxes, taxes everywhere.

Billionaires in Poverty Let them eat Monsanto’s and BP’s rotting fish!

US Housing The decline may be slow. Well duh! Try inserting some new mfg., industrials, IT’s, science and the like, put people back to work and see what happens!

#199 Torquemada on 09.20.10 at 8:15 pm

Give it up. You do not know what a securities regulator does. — Garth

They watch porn all day while the Madoffs og the world steal……..much like politicians.
.
.
.
In case you had not noticed, this is Canada. — Garth

http://www.investorvoice.ca/PI/2439.htm

“Lewd behaviour. Inflatable sex dolls. Erotic emails” – Scroll down to the article entitled ‘It’s a dirty job-but it shoudn’t be’

It’s not just the SEC, Garth.

By the way, I’m for a national securities regulator.

Sex in the workplace. Imagine. I thought the government hired only eunuchs. — Garth

#200 Old_is_Gold on 09.20.10 at 8:36 pm

#132
#175 – Scalgary
Drivel.

I think you visited India in 1980s. I dont buy your thoughts…

India became self reliable in food grains since 1990. It has diversified economy.

____________________________________________

As a matter of fact I spent four months last fall and winter in India, and have family and friends there with an ear to the ground. My report was not speculation, it is fact.

An index measuring wholesale prices of farm produce rose 15.1 percent from a year earlier in the week ended Sept. 4, the highest level since July, according to data published by the Ministry of Commerce & Industry. The figures for the following week are due Sept. 23.

http://www.bloomberg.com/news/2010-09-20/food-price-inflation-2-4-billion-government-debt-sale-india-week-ahead.html

And here’s a video with Prof. Jayati Ghosh of JNU in New Delhi. Watch some of her You Tube videos to get a picture of the real India, not the saccharine version you read about in G&M and watch on BNN.

http://www.youtube.com/watch?v=344elODZbAY

Indian food riots and other such horror stories will certainly hit MSM, possibly by next fall or by 2012 at the latest.

#201 Onemorething on 09.20.10 at 8:41 pm

There is no justification for having 13 securities regulators to do the work of one, even in your twisted world. I am flattered you came to hear me in Kamloops, but I did not have such a gold slide in my presentation. BTW, there was an open question-and-comment session at the end. You must be braver online than in person. — Garth

Garth, you would have seen him, he was dressed as Goldmember!

#202 Old_is_Gold on 09.20.10 at 8:51 pm

Bill (Peterborough)

Just click on the link and go to the Contact Page, you can e-mail me directly from there.

$178 Victoria Tea Party – Good Post

BTW The OECD, The IMF, The WORLD BANK, BIS etc. are all tentacles of the same Octopus. Any reports / predictions they make should be taken with more than a grain of salt, may need a whole salt mine.

Your web site makes Dante look gay. — Garth

#203 i.see.debt.people on 09.20.10 at 8:52 pm

http://www.irvinehousingblog.com/blog/comments/contrarian-investing-and-the-psychology-of-deflation/

an interesting read on house deflation

#204 bullion.bunny on 09.20.10 at 8:55 pm

#139 The Original Dave on 09.20.10 at 1:11 pm

Don’t wish too hard…..you may get what you wish for! In Canada the average person is far too deep in debt, this can only end one way and that’s bad. Then what? When the population is starving on the street, then what? I’m not looking forward to that! Only a very small percentage of the population is self sufficient and when push comes to shove, people are going to get nasty.

#150 InvestX on 09.20.10 at 2:26 pm

– Could it be because he holds them accountable, such as in the areas as spending?

Well Spot ON………Rob Ford holds them accountable for all the spending and mistakes, that’s why they hate him so much. Toronto is quickly spending itself into a hole so deep it will never escape. Politicians are far too busy running up expense accounts while feathering their own nests. Rob Ford may not be the most eloquent speaker, but a shit disturber of his caliber is long overdue. Canada has far too much political correctness in this country, we need to push the left wing gas bags out of the way and GET THE JOB DONE.

#205 dark sad person on 09.20.10 at 8:57 pm

#177 jess on 09.20.10 at 5:33 pm

dark sad person:

Michel Barnier, Commissioner for Internal Market and Services said: “No financial market can afford to remain a Wild West territory. OTC derivatives have a big impact on the real economy: from mortgages to food prices. The absence of any regulatory framework for OTC derivatives contributed to the financial crisis and the tremendous consequences we are all suffering from. Today, we are proposing rules which will bring more transparency and responsibility to derivatives markets

***********************
I couldn’t open any of your links-
I agree about the need for transparency-
The best way to do it is put these (hidden derivatives) on the market and let them be priced-in the open–

Of course the Derivative market is needed-
I believe it’s valued at 400 trillion in the US alone-
The synthetic derivatives-especially-are imaginary
The problem is and always has been–
What are they really worth?
Some savvy Derivative experts–
John Hussman-Carl Denninger-Janet Tavakoli
say-likely 70% does have value–
So-the shortfall in the US-would be about 120 trillion-if marked to market at what they say-
Can we say Deflation?

The idea of open transparency is a good one-
Actually doing it-is another

What if these guys are right?
Would declaring a 120 trillion loss have an effect?
Here’s where the rubber meets the road–
There is no way in hell-it will happen-
Transparency-that is–
They simply cannot put these things on the market-and-
if they can’t-then–there’s no such thing as regulation-it’s hooped before it starts–
They should outright ban synthetic derivatives-not try and regulate something-that does not exist in real terms-
What would happen if traders demanded payment in Gold?

*********************
Speculators Want U.S. CDS Payoffs in Gold

Remember AIG? When prices moved against AIG on its credit default swap contracts, AIG owed cash (collateral) to its trading partners. AIG paid billions of dollars and owed billions more when U.S. taxpayers bailed it out in September 2008.

U.S. credit default swaps currently trade in euros. After all, if the U.S. defaults, who will want payment in devalued U.S. dollars? The euro recently weakened relative to the dollar, and market participants are calling for contracts that require payment in gold. If they get their way, speculators on the winning side of a price move will demand collateral paid in gold.

The market can create an unlimited number of these contracts very rapidly. The U.S. wouldn’t have to ever default to trigger a major disruption in the gold market. Spreads (or prices) on the credit default swaps could simply move based on “news,” and demand for gold would soar.

If this speculation drives up the price of gold, and the available gold supply becomes limited, are you willing to post your children as collateral? I am pushing the point so that we put a stop to this before it is too late.

http://www.tavakolistructuredfinance.com/TSF61.html

#206 bullion.bunny on 09.20.10 at 9:02 pm

If I had any doubt of your irrelevancy, it is now but a memory. — Garth

P.S. Garth, you have an over inflated opinion of yourself. This blog is irrelevant in the scheme of things. In another 100,000 years the earth will be a frozen rock floating in space and none of this will matter.

#207 Old_is_Gold on 09.20.10 at 9:02 pm

#161 Bill on 09.20.10 at 3:04 pm

Was out last weeks witha few buddies who ran into other buddies some of whom are in the banking/mortgage biz. The housing market was being talked about and these mortgage guys where saying there is now a big problem with people behide on their mortgages. I know the housing market for sales is bad but now it seems there is a problem with people paying their mortgages?

+++++++++++++++++++++++++++++++++++++

People falling behind on mortgages is a natural consequence of the fake RE boom created since 2000. People with 60K family incomes just can’t afford 400K mortgages; something has to give, and it probably has already in a bigger way than the banks or the RE industry will admit. The proof will come next spring when every third house on the street is for sale.

#208 S.B. on 09.20.10 at 9:08 pm

A new condo high (low?) in Toronto – ~380sq foot bachelors priced “from the 300,000s”. Not a joke. I’ve seen the floor plans posted elsehwere.

$300,000+ to sleep on a pull-out sofa bed in a 380sq foot bachelor apt? Now that’s luxury living!?!?

http://www.bisha.com

This development backs on to the new M5V condo tower, and the corner lot between them has a rezoning sign for another condo tower. Views?

#209 Patz on 09.20.10 at 9:20 pm

#38 El Rojo sez:
“Garth,
My wife and I just got back from your talk at the Capri this afternoon. You gave us all very good advice with good historical backing. Any thoughts we had of jumping back into the Real Estate market are gone for another year at least. Really enjoyed the show and come back soon.”

So El what is it? Are Garth’s talks kind of like an inoculation; the sense they make lasts for about a year and then you need a booster?

#210 SpaceMonkey on 09.20.10 at 9:46 pm

re #188
Are you convinced of switching to threaded responses yet Garth?

#211 mrmike on 09.20.10 at 9:46 pm

whats the deal with “blend and extend”?
my credit union is pushing it and my wife likes it.
we have a 5 year fixed at 4%.
wife thinks we can get 3.75% if we blend and extend.
what are the cons of this deal?
sounds to good to be true.

#212 bullion.bunny on 09.21.10 at 1:01 am

#199 Torquemada on 09.20.10 at 8:15 pm

Sex in the workplace. Imagine. I thought the government hired only eunuchs. — Garth

No that is very true……….but it shows you the people it attracts to Government.

#213 Brian1 on 09.21.10 at 2:39 am

I don’t see the relevance of any mayoral candidates for Toronto. None seem to be in agreement with this blog. All are pumping a better future coming. Even Ford wants to build a subway. If he does try to expose incompetence then I’m all for him, But I don’t see where the money is coming from now, let alone the future. If any of them agree with this blog then they must be hypocrites.

#214 Golf gifts for men on 09.21.10 at 4:32 am

Are you convinced of switching to threaded responses yet Garth?