Venus & Mars

Morning light streamed into in my prairie hotel room and found me covered in a light dusting of potash and wheat chaff, wearing a hideous green-and-yellow hoodie and missing a kidney. Then I awoke. Thank God it was but a dream – about the Saskatoon Association of Realtors, and how they deal with dudes from away who mess with the locals’ heads.

In fact, I returned to the Big Smoke from my recent jaunt with all my vital organs intact, and the sense that growing numbers of people are waking to reality. Not just about real estate, but the inherently changed nature of this economy. Finally.

I mean, just days ago the US Fed came close to declaring deflation, admitting that a few trillion have not repaired the economy. Canadian provinces – like staggering Ontario – are mired in historic piles of debt. Taxes are going up (the HST will be nation-wide before long), and unemployment is stuck above 8% nationally and 9.1% in the country’s largest city.

This means we’re not going into a double dip recession, because we never got out of the first one. It also means most Canadian families will soon be caught in a financial vice – deflating asset values on one hand as houses erode, and inflating prices on the other as taxes, energy, food and interest escalate. Oh yeah, and their wages have flatlined.

This sucks. So, what to do about it? Let’s go back to BC for a little inspiration.

Ten months ago I received this email, and posted it here:

I live in Delta, BC. with my girlfriend. Our house (purchased in 2000 for $283,000) is currently worth $620,000 (after $100,000 in renovations during the past three years and the real estate run-up). The mortgage currently sits at $180,000. I also have $50,000 sitting in my bank account ready to be invested.

I can either plunk that $50K into my mortgage, thus dropping the amount owed to $130,000. Or, I can take that $50K and put it into low-risk investments. Or, I can sell the house and move somewhere less pricey (further into the Fraser Valley, for example), pay the house fully out, and still have money to spare. I have no other debts, nor does my girlfriend, but we have just $40,000 in RRSPs and no other savings.

I know what’s going to happen in the next couple of years re: real estate, the economy, etc., and it’s the same scenario you envision. But the mortgage isn’t that big in the grand scheme of things, and we really do like this house. Seeing the mortgage we carry isn’t incapacitating, do you think we’d be foolish to just stay here?

Of course, I said he’d be dumb not to harvest the fat capital gain before the market turned. In fact, this was exactly my advice to a guy in Saskatoon this week who came up after my talk and said his $210,000 house (four years ago) was now worth $500,000. He’s hot to sell but his wife refuses to consider it for another five years, at which time she’ll retire and wants to move to Kelowna.

Dude, I said with uncharacteristic tenderness, are you wicked crazy? When else in your life are you gonna score a $300,000 tax-free-capital gain just for living someplace? That’s more money than your wife will earn in five years, and you risk missing selling at the top. Worse, I’m betting Saskatoon will take more of a hit than the Okanagan will, so if the goal is financial freedom, just be a decisive macho guy and sell it. She’ll eventually come round.

“It’s the house or my marriage,” he said, voice quivering. And I was reminded why I manage finances, not relationships.

Anyway, the Delta guy and his GF just wrote back. Here’s the update:

Well, we did it. After two years of looking at the numbers, watching a bubble form and now begin to deflate, my girlfriend and I have sold. We got a good price for it, though I know we just managed to catch the end of the “good” prices. So…once we pay off our existing mortgage, we will be $450,000 to the good. Not rich my any means, but not terrible, either. We are both, BTW, in our very early fifties. Now, I have another question for you and I hope you have the time to answer it. I feel it’s an important question, not just for me but for a whole bunch of people out there.

We need another place to live. The problem: To get into anything that isn’t either rundown or too small, we’re looking at $1600-$1900/month. That’s $20,000-plus over a year on rent, plus all utilities. Of course we’ll invest our money and cover some of it that way, but rents in this region are absurd.

Our other option: Buy a smaller, less opulent house out of town, where prices have already taken a small tumble and where they weren’t as insanely high to begin with. We would have less exposure to the real estate market than we had in the house we just sold, and we wouldn’t be crippled with mortgage payments. Of course, the value of whatever house we might buy would drop too, but at least we’d have much less money tied up in it and no mortgage.

Do you have a suggestion for us, and for other readers in similar situations? Thanks again for your blog.

This is simple. You have two viable options.

First, invest the $450K in a balanced portfolio with a great chance of earning 6-7% a year, yielding close to $30,000, or enough to cover $2,000 a month in rent, after tax. So, now you live for free and your portfolio stays intact.

(By the way, for that portfolio I’d suggest 40% fixed income, half in corporate and high-yield bonds, half in five or six bank and insurer preferreds, and 60% in growth assets, including sector ETFs, some REITs and trusts, and a smattering of hedged commodities and gold. If you don’t know how to do this, get a fee-based advisor.)

Second, if you do end up spending part of the nest egg on a home in a cheaper area, rent for at least a year until prices decline. Then pay cash, borrow back 50% of the equity through a HELOC, invest it as I have suggested above, make interest-only payments, and write 100% of them off your taxable income.

She will be so smitten she’ll propose.

See, I’m learning this sex stuff…

Hear Garth here:

Wolfville NS
Tuesday October 5, 7 pm, Ken-Wo Golf Club. Register here.

Lunenburg
Wednesday October 6, 7 pm, Fisheries Museum. Register here.

Halifax
Thursday October 7, 7 pm, Ashburn Golf Club. Register here.

Victoria BC
Wednesday October 13, 7 pm, Victoria Convention Centre. Register here.

Kelowna
Thursday October 14, 7 pm. Register here.

Surrey
Friday October 15, 7 pm. Register here.

140 comments ↓

#1 Canuck on 09.22.10 at 9:24 pm

Keep em rolling Garth!

http://financialinsights.wordpress.com/2010/09/22/behold-the-harbingers-the-pale-horsemen-of-the-coming-deflation/

#2 Left Vancouver and HAPPY! on 09.22.10 at 9:27 pm

Hey Garth, I was browsing the BMO website and came across this:

”While the interest rate changes with BMO’s prime rate your monthly payments remain the same throughout the term. The amount applied to the principal versus interest may change with fluctuations in BMO’s prime rate. Your amortization period (number of years to repay the mortgage) may vary and be longer if rates have risen or be shorter if rates have fallen since the start of the term.

You have the option to switch at no cost to a fixed rate mortgage provided the new term is the same or longer than the remaining length of your current closed variable rate term.”

Have variable rate payment plans like this always existed??? I had thought any VRM adjusted payments monthly, based on fluctuations in the floating rate. How does a scheme like the one above work, when the home buyer takes out a 35 year mortgage and interest rates go up? The gov’t won’t allow anything longer than a 35 year mortgage and the home owner could very well end up owing more on the mortgage at the end of the term than the beginning, if rates take a moderate hike upwards. Forget interest only payments, this is even worse… your principle on your loan can go up while the value of your house goes down.

Is this a new scheme to help keep the bubble floating, or have VRM repayment plans like this always been available? Certainly doesn’t seem to be a case of ‘strict lending standards’. More like a death-spiral of lifetime interest.

#3 Michael W on 09.22.10 at 9:35 pm

Hot Property on CP24 this Thursday at 7pm. Bloggers on this board need to start calling in and telling the viewers what’s really going on with the market.

416-872-2724.

Would be nice to hear from some of these knowledgeable posters on the show.

#4 grantmi on 09.22.10 at 9:40 pm

This appeared in today’s PEACE ARCH NEWS, South Surrey, B.C.!!

Very refreshing! A developer telling it like it is. I sure he’s going to get BLACKBALLED from his peers.

‘Hot-market’ pitch disputed
By Tracy Holmes – Peace Arch News
Published: September 22, 2010 12:00 PM
Updated: September 22, 2010 12:35 PM

A South Surrey developer “cornered” into offloading unsold inventory at below-market prices says consumers are being misled to believe the housing market is stronger than it really is.

“In contrast to this situation, which is clearly indicative of a sagging market, realtors… are blogging about how ‘hot’ the market is,” reads a statement issued Monday by Watermark Developments.

“Some realtors are putting the wrong perception out there,” explained Salome Sallehy, hired to help facilitate a sale this weekend at Watermark’s 2970 King George Blvd. project.

“Inventory is just not moving because the market isn’t willing to bear those prices. Developers aren’t really acknowledging that.”

At least one industry expert disputes the claim the market is sagging. While Greater Vancouver Home Builders’ Association’s Peter Simpson acknowledges the market isn’t as strong as it had been in recent years, housing starts are double what they were a year ago, he said.

“I’ve got a laundry list of developers that are launching new projects this fall. They’ve got a lot of confidence in the market,” Simpson said.

Watermark will offer 37 units for sale at noon Saturday, with prices ranging from $199,000 to about $320,000. The one- and two-bedroom units have sat empty since construction finished a year ago, and comprise almost half of the development, Sallehy said. The prices represent a discount of about 35 per cent off of what the units were sold for during pre-sales in 2006, Sallehy said.

While Simpson criticized the way the offer is being marketed – saying the language of the news release “smacks of bitterness” – he said if the homes are sound, it may be a good opportunity for first-time home-buyers.

“If these are good prices in a good location, that’s one thing,” he said. “The buyer needs to do their homework to investigate the track record of the builder.”

#5 Coho on 09.22.10 at 10:01 pm

North Delta: Recent townhouse listings 7-10% lower than listings of other units in the same complex that were listed several weeks ago.

Very evident recent listing price reduction coupled with a 200-300% increase of typical number of townhouse listings at any given time in this area (excluding new builds for sale). Twenty three pre-owned townhomes currently for sale where there are usually only 8-12 for sale at any given time.

#6 grantmi on 09.22.10 at 10:02 pm

Thank goodness the WORLD WIDE RECESSION is over!!

We dodged another one!!

Praise the Central Banks all over the world!! God bless them all!!

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

Central Banks Still Stuck in Crisis Mode as Recovery Weakens

By Scott Lanman and Jana Randow

Sept. 23 (Bloomberg) — The world’s major central banks are having a tough time exiting crisis mode, prolonging aid or raising the prospect of reviving unconventional stimulus tools as the global recovery loses momentum.

The U.S. Federal Reserve said Sept. 21 it’s prepared to ease monetary policy further if needed and has highlighted asset purchases as an option. The Bank of England yesterday signaled policy makers are moving closer to adding stimulus. The European Central Bank extended liquidity support for banks into 2011 on Sept. 2.

http://bit.ly/a79GNW

#7 dave in calgary on 09.22.10 at 10:14 pm

Hey Garth, if the HST will be “nation” wide soon, will Alberta harmonize the 5% gst with the 0% pst? so we’ll have to pay 5% on EVERYTHING…couldn’t help myself. Enjoyed your post, as usual.

Stop giggling cowboy. — Garth

#8 Bill ( Peterborough) on 09.22.10 at 10:16 pm

Re # 187 Gold_Is_Old ( yesterday)

Thanks, And thank you Garth. For letting us try to enlighten the masses.

still can’t E-mail You, ( Old_Is_Gold)

#9 andrewS on 09.22.10 at 10:18 pm

My parents live in a small city in the nosebleeds of Metro Vancouver. Actually, it’s in the Fraser Valley, which is technically down the hall, and probably in the men’s room judging by the smell.

Still, the house prices in this remote, cow-intensive town, which ceased to have an economy when a local military base closed 15 years ago, are relatively affordable, at least on BC terms.

My mom was telling me the other day that their neighbours had decided that THE HOUSE – spoken in capslock, as real estate usually is in the Lower Mainland – was their legacy to the kids. Daughter, who is late 20s, is unemployed and dropped out of a part time program at the local college and boyfriend works at a thrift shop part time.

Local economy is virtually non-existant but they don’t have any desire to leave, make anything of themselves. It’s ok, they have THE HOUSE. They are set for life.

It’s kind of sad, really. Or scary. I’m not sure which.

Scarier still is how the neighbour reacted when she learned that my parents didn’t consider their house a legacy. That me and my siblings had all left The Best Place on Earth (for Toronto of all places! Toronto! You can just about hear them spitting in disgust) and had things like good jobs and educations and stuff and would willingly give up THE HOUSE to pursue actual opportunity.

Funny, the place never seemed that delusional when I was growing up. But of course, that was back in those dark days less than a decade ago when a SFH in Vancouver could be had for 400k, and that seemed expensive.

#10 dmc on 09.22.10 at 10:29 pm

http://tasmanianrealestatetrouble.blogspot.com/2010/09/breaking-seal.html

The Mcmansion set are reluctantly starting to discount in Tasmania, while the property council assures a retiree led boom… that is before making the state a graveyard.

#11 JenC_T on 09.22.10 at 10:36 pm

“Worse, I’m betting Saskatoon will take more of a hit than the Okanagan will”

Why is that, my dear Garth?

#12 Pat on 09.22.10 at 10:37 pm

Garth wrote:
“So, now you live for free and your portfolio stays intact.”

The portfolio will effectively decrease 2-3%/y due to inflation, as you’ve pointed many times before.

#13 Old_is_Gold on 09.22.10 at 10:42 pm

#8 Bill ( Peterborough) on 09.22.10 at 10:16 pm

E-mail

Click above link to go to the home page, there is a link on the top right hand corner, Please E-mail…

It should work, works fine when I try it.

And you’re welcome!

#14 tran, Calgary on 09.22.10 at 10:44 pm

I am renting($500) now in Calgary NE. Chestermere is a nice neighbourhood with a large lake with sizeable fishes. Most listings asking 400K to 500K.

Similarly, Monterey Park(NE Calgary) listings asking
350K to 500K.

Wonder when is a good time to buy?

#15 604genX on 09.22.10 at 10:49 pm

Riddle me this Garth. With so many Boomers already relying on lines of credit and margin accounts to buy investments, once the housing market collapses, what will stop equity markets and your beloved prefs from also taking a radical dive? I checked the performance of a few prefs during Q4 2008 and they dropped like a stone.

Isn’t it better to sit on the sidelines for now until consumer sentiment reflects the housing meltdown and those margin accounts and HELOC’s supporting current equity valuations are pulled?

Sure, timing the market is a mug’s game, but this one seems like a sure bet – just like real estate’s collapse.

#16 Tony on 09.22.10 at 10:51 pm

Like i said not long ago they should’ve invested all the money long the Australian dollar. It’s closing in fast on the Canadian dollar and we’ll see if it blows past it this month (for good). The stock market is an accident waiting to happen. When you invest you look at the up and down side. Shorting oil looks like a very sure bet at the present time even with a falling US dollar.

#17 Old fart on 09.22.10 at 10:54 pm

You know…this will all seem so trivial when the real crisis hits us.

Kinda makes the whole rent vs own debate seem pointless…

http://www.planbeconomics.com/2010/09/22/will-our-skyscrapers-be-remembered-as-eccentricities-of-an-ostentatious-era/

#18 kevin on 09.22.10 at 10:56 pm

Forgive me if you’ve answered this one before Garth but in your book you talk about a house in the Peg as an example of someone using the equity in their house (I think the example was for something like 67,000) and investing it, before they lose that equity in the coming decline. We agree that it sounds good. But if the house declines in value and we go to renew, won’t the bank only renew us for the current value of the house and then we have to give back the investment to cover it? Thanks

#19 Sherri on 09.22.10 at 10:56 pm

“By the way, for that portfolio I’d suggest 40% fixed income, half in corporate and high-yield bonds, half in five or six bank and insurer preferreds, and 60% in growth assets, including sector ETFs, some REITs and trusts, and a smattering of hedged commodities and gold.”

Gold last on list? Get Real. Put it first. That should be the 40%.

#20 Debtisforever on 09.22.10 at 11:13 pm

“Worse, I’m betting Saskatoon will take more of a hit than the Okanagan will.”

Are you serious Garth??? Have you not looked at the market in the Okanagan lately? People have been speculating on Okanagan real estate for the past 5 years, saying “everyone wants to live here”. (sound familiar?? It’s nuts! There are so many recreational properties and condos for sale (and many more people are just holding on, hoping the market recovers). Many people I know are seriously underwater, and have been since at least last year.
Saskatoon will have nothing on the Okanagan downturn.
Kelowna=Florida North.

#21 VancouverGoinUP on 09.22.10 at 11:14 pm

Vancouver Real Estate, Gold and Rare Earth Stocks are the only safe haven. The news coming out of the States is downright scary. Putting money in financial assets is financial suicide. You thought the run to hard assets was huge after 911? You ain’t seen nothing yet. Whn the financial world crumbles once again the fallout of stocks will be incredible. Gold will do fantastic along with Vancouver REAL estate. VanGoldenCouver

#22 Skeptic on 09.22.10 at 11:16 pm

What do you make of this? And you’re not allowed to say it’s a “last gasp,” because that argument ran out of credibility about four years ago.

When the hell are things going to start turning around? I’ve been waiting for ages, and patiently buying into the arguments on blogs like this one. I lost my wife by refusing to buy at these ludicrous prices. But prices aren’t budging; in fact, they appear to be rising again.

#23 Cameroni on 09.22.10 at 11:16 pm

#33 VancouverGoinUp said:

“Come join us in the best place on earth Beautiful British Columbia”

————————————————

Welcome back Devils Advocate. You must have a new IP.

#24 JM in London on 09.22.10 at 11:20 pm

#205 Bill ( Peterborough) on 09.22.10 at 10:14 pm from yesterday

again no debate – you actually are arrogant enough to think you have the answers?

And you’ll be some sort of later day disciple/messiah thanked by the thousands here by “enlightening the masses” just because Garth has stayed true to his word and left the forum open to everyone?

Well the Rothchilds and their minions MUST be allowing it…the people you quote are dubious at best and they must survive (book sales) other wise they’d end up like Michael Rupert…

Anyone sane reading for an interesting and truly sad portrait of the bad side of this watch the documentary: Collapse…

OH NO! I might just have an education?? *GASP* How can I be shown the same “information” you’ve seen and not see the same ugly picture you do?

hmmm…Very likely the same B/S filter that prevented me from giving money to Jim and Tammy Faye, buying timeshares, swampland in Florida, the dotcom bubble, putting all my money in gold & rocking it to sleep at night to deal with my anxiety

What I’ve always loved about the whole Prison Planet/bilderburger/Council of ROME crud is if their mandate really is to reduce world population by SEVERAL BILLION – Destroying the middle class would be in diametric opposition as declining populations in the western world have far and away been the most effective population control the world has ever seen…but hey what would I know. If you want it cited and referenced and that your best weak rebuttal…TS – just thought I’d take a little more time and let you know the sane aren’t unwashed idiots looking for doomer guidance, I promise. ;)

#25 Love this Blog on 09.22.10 at 11:42 pm

Good link on the psychology of a bubble

http://canadabubble.com/bubble-article-list/1339-psychological-stages-of-a-bubble.html

#26 Soylent Green is People on 09.22.10 at 11:46 pm

Smell that? It’s HarperCon’s butt on fire after the Gun vote. Get out the marshmellows, time to feast.

http://unseatHarper.ca or click my name for our very lively FaceBook group (CRUSH).

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

Paul Vieira and David Pett, Financial Post · Wednesday, Sept. 22, 2010

OTTAWA AND TORONTO — The Canadian economy had a great run immediately following the recession, but analysts warn that the stark reality of a slow, painful recovery — like the one gripping the United States — is beginning to sink in.

Growth forecasts are being scaled back on the emergence of weaker economic indicators — highlighted yesterday by a report on the surprise drop in July retail sales. This is on top of soft consumer price statistics that suggest core inflation is slowing, and a bleak wholesale trade report.
.

Read more: http://www.financialpost.com/news/Canadian+economy+declining+dramatically+economist/3563588/story.html#ixzz10K8reftd

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

“Wave after wave of pointless and misleading provocation gushed from his podium before a Canadian Club audience which, except for the Conservative cheerleaders among them, appeared unimpressed by his fear-and-loathing diatribe. Eyes were openly rolling, whispers were exchanged under furrowed brows, groans could be heard when Flaherty’s script soared over-the-top, which was often.” (Don Martin, Calgary Herald, Sept. 22, 2010)

“The attack before a Canadian Club audience, which lasted the better part of 20 minutes, was received with stony silence by those in attendance.” (The Canadian Press, Sept. 22, 2010)

http://www.liberal.ca/newsroom/news-release/in-their-own-words-flaherty’s-canadian-club-rant/

♥♥♥

#27 Jax on 09.22.10 at 11:47 pm

Garth, I’m curious as to why you think the correction in Saskatoon will be more pronounced than in the Okanagan. Based on the latest income data (median family income was $77,740 in Saskatoon in 2008), the median price to median income ratio sits at about 3.75.

This may still be bubble territory in a city that has seen a traditional price to income ratio of 2.5, but in today’s low interest rate environment, it is not extreme.

Price-to-rent ratios are in the 12:1 range, and cap rates in the 4-5% range on the average property. Again, not unreasonable if these low interest rates continue.

#28 Ale on 09.22.10 at 11:51 pm

Sell realestate and buy reits. Surely this was a typo Garth.

#29 Dan in Victoria on 09.22.10 at 11:56 pm

From yesterday….sigh..

Post #171 Victor
For the record we paid 101K for the house 26 Years ago.
Quit scaring everyone.

Post#196 Victor
The number (wages) was $34,500 But what diffrence does that make?
Its paid for.

Quit scaring everyone.

I’m not going too embarrass you Victor. Let the wife handle “things.”
Pay attention.

#30 Patz on 09.23.10 at 12:06 am

Predictions are a mugs game to the extent that dates are involved. Because as sure as God made little green apples (he did didn’t he?) if you’re off by a nanosecond they’ll call you out on it. But scan the financial news on the blogosphere this week and find any bright spots. Times up. Can’t find much can you? But signs that we may just be on the verge of going tits up abound (sorry for the technical jargon). Just saying…

#31 Nostradamus Le Mad Vlad on 09.23.10 at 12:12 am


“. . . like staggering Ontario . . .” — Doesn’t Flaherty (and a few others) come from various holes in the ground in Ontario?

Seems Nostradamus Jr. was right — both Ont. and Quebec, the engines and driving forces of Canada — are having major fiscal problems.

“. . . (the HST will be nation-wide before long) . . .” — If nationwide, then the PM (whoever that is) can up or down the rate. We’re on the same track as Obama’s America.
*
Football (soccer) in the afterlife. No clip just yet, but the replays will be available shortly!

The UK In any case anyone forgot, there is a slight fiscal problem across the pond.

Another food crisis. Or is it engineered to appear to be that way?

Shadow Banking More complicated and less understood than regular GS hodgepodge! From Zero Hedge.

Obama is certainly not all he seems. It is quite amazing how easily people can be hoodwinked and cheated by talk. Talk is cheap. He wants the Healthcare bill brought in to tax Americans even more. Plus Arnie’s new tax.

Inflation coming shortly.

For Sheeple’s Eyes Only Not for us. We’re NOT sheeple! BBBAAAHHHHHH!

Weather Wars and HAARP.

Mish asks: Is the BB (Bond Bull) dead?

Spontaneity Life happens spontaneously, but we may not recognize it.

#32 dale in van on 09.23.10 at 12:17 am

real estate lady on the noon news mentioned a empty lot 50′, dunbar area (west side van), asked 1.3, multi offers and sold for 1.6.

i’ll bet you my truck that the buyers speak cantonese or mandarin – we do have overseas buyers, this is why local young families of very high earners have to live in crappy old east van where a mil still gets you a detached in good condition

vancouver – the land of no window screens and uninsulated houses – like seattle we make take a 10-15% hit, but the rest of canada and half of asia seems to be heading this way daily so the small land base will hold prices up.

#33 Jeff Smith on 09.23.10 at 12:44 am

I don’t know how credible Maclean magazine is, but according to them, the situation down south is not good at all. Third world nations tend to be unstable. The last thing we want is a Mexico right next to our border.

http://www2.macleans.ca/2010/09/14/third-world-america/?source=patrick.net

#34 mel on 09.23.10 at 12:57 am

Lot of people on this blog believe that oil/energy will be high in the coming years. I don’t agree. If I had to put my bet on the table, I would bet against oil. I am going to bet that oil by 2012 will be in the range of $45-50.

Gold is a commodity of it’s own. It could go higher for the feeling of safety. But, watch out! This could be last year for any money making for Gold. I don’t believe commodities are in a long term bull market. I think it is ending.

#35 glu on 09.23.10 at 1:47 am

#9 andrewS

Your right – the place stinks – loaded with dairy farmers – and it’s only 70 miles east down that hall from Vancouver – it’s surrounded by those ugly mountains – every second car has a Veteran’s plate on it – they’re even going to build a bigger Walmart and a new Home Depot – and we have to drink that untreated swill from the Chilliwack River while listening to the gunshots emanating from the old base from training RCMP / military – I could go on but – oh the misery is too much – man,do I ever envy you. Here I am stuck in Chilliwack and there you are in the Big Smoke. ;)

Everyone – take heed – don’t even consider moving to this hell hole where all I hear are gunshots from the police/military training on the old base.

#36 The Original Dave on 09.23.10 at 6:33 am

Hot Property on CP24 this Thursday at 7pm. Bloggers on this board need to start calling in and telling the viewers what’s really going on with the market.

416-872-2724.

Would be nice to hear from some of these knowledgeable posters on the show.
————————————————–

haha, great idea. I don’t have the courage to call.

We should gather points and questions for those that are willing to call. Things like:

– aren’t 35 year mortgages with 5% down kind of like subprime mortgages in the U.S? They’re both issued to people with very little money and financial commitment into the house.

– Spain, Portugal, Ireland, the U.S and quite a few other countries have all gone through or are going through their housing bust. In the mean while, Canada is one of the most indebted countries per capita. Isn’t it safe to say that our real estate melt hasn’t occurred yet because credit is everywhere….for now?

– Isn’t it a bad idea when people are lining up and buying things based on emotion rather than fundamentals? We’ve seen this story with tech. stocks, housing in the U.S, oil, and hockey cards in the early 90’s. Manias have happened thousands of times and none of them have ended well. Warren Buffett, the best investor in the world says “the only winner in a bidding war is the bidder that loses”.

these are just some points. I’d love for the people on that show to get grilled by some savvy individuals.

Garth, call on the dawgs!

#37 bigrider on 09.23.10 at 6:47 am

More from David Olive today Garth from Toronto Star

“Toronto is taking it’s place on the world stage, as the principle city of a nation that has led the world in economic recovery and is head office to the planet’s best in class banking system. Toronto this year cracked forbes annual ranking of the top ten most powerful economic centres, with a GDP forecast to leap from 209B in 2005 to 327B a decade hence”

He went on to say, “Toronto is fourth largest city on the continent, fastest growing, declining crime rates etc etc.” all this in discussion of Rob Ford’s impending victory of Mayoral race.

I believe his boasting on T.O to be a follow through, somewhat disguised, on his RE Article about not believing doom and gloomers of RE in T.O, from a day ago.

T.O is different, his mantra.

People will listen to this..of that I’m sure.

Bark louder please !

#38 Michael W on 09.23.10 at 6:56 am

#36 The Original Dave

Good points. I’ve called Hot Property a few times. There are many knowledgeable posters on this board that should really pipe up and call the show tonight at 7pm to speak their minds.

416-872-2724

#39 Jayman on 09.23.10 at 7:17 am

Hi Garth,
Love the blog, books and presentation. I do question the “fat capital gains” when referring to some of the house values. If one uses their purchase price only then yes. I believe that all interest, improvement and maintenance, and utility costs(gas, hydro, water) should be added to the purchase price. In addition the legal and real estate commissions upon selling. Not for everyone but that is how I calculate it. Opportunity cost could also be included. The result tells me what the gain is on selling and or what the cost has been for shelter.

#40 young & foolish on 09.23.10 at 7:29 am

jeff Smith …

a wise man once said: “It’s easier to bring the 3rd world to the 1st world than to take the 1st world to the 3rd” …

#41 Moneta on 09.23.10 at 7:36 am

“It’s the house or my marriage,” he said, voice quivering. And I was reminded why I manage finances, not relationships.
—–
Garth,

Managing finances is ALL about managing relationships.

I keep on thinking about my mom who’s been telling me for the last 5 years to just stop talking about money with my friends and everything will be ok. She fits in with all the people who keep on telling me that there is more to life than money.

They fail to understand that every single aspect of their lives is determined by their finances… Where they work, where they live, the car they drive, how they dress, what they do in their spare time, their parenting style…

Life is all about the distribution of resources and how people cope with it.

#42 Aussie Roy on 09.23.10 at 7:38 am

VancouverGoinUP
“Gold will do fantastic along with Vancouver REAL estate”. – Well atleast you are half right – LOL.
Whats is the fantastic rental yield based on current price <3% ?, how about median prices in annual household income terms x 8-9… Good luck with that spec-vestment.

Aussie Update

http://www.news.com.au/money/property/home-buyers-warned-90-rise-on-cards/story-e6frfmd0-1225928093071?area=money

http://www.couriermail.com.au/property/homebuyers-struggle-as-study-shows-queensland-properties-unaffordable/story-e6frequ6-1225928071925

#25 Love this Blog on 09.22.10 at 11:42 pm
Excellent link..

#43 T.O. Bubble Boy on 09.23.10 at 7:39 am

@ #22 Skeptic:

So, you’re on YatterMatters.com… and you don’t notice the daily stats on the right-hand side?

8 individual sales in Vancouver do not represent the entire market. For September, the stats show that sales are slow compared to other Septembers, and listings are rising.

As Garth has said many times, price decreases lag sales volume decreases, because sellers take several months to decrease their asking prices.

#44 Bill ( Peterbourough) on 09.23.10 at 7:44 am

# 24 JM London

Well the Rothchilds and their minions MUST be allowing it

OH NO! I might just have an education?? *GASP* How can I be shown the same “information” you’ve seen and not see the same ugly picture you do?

******************************************
No matter how much you show people the truth ,connecting the dots, some will still never get it.

As far as the Rothcilds and their minions allowing it…

With the general populous attitude( blinders on), towards what is really going on they usually do not have to do respond to people trying expose them.

They like this world of doubting Thomas’, in general.

Nice to see you have an education, I only have grade 11.
Mark Twain said; Education is a great thing, it’s the people who ruin it.

as far as your other comment:

again no debate – you actually are arrogant enough to think you have the answers?

No I do not have all the answers, but my ” Father’ does.

I just keep reading and crossreferencing these things. When enough people star forming the same educated opinion, sifting through all the deceptive lies then you can get a pretty good idea what is going on.

Problem is that alot of people seek their rewards here thinking that this is all there is. Myself being a Christian I seek my reward elsewhere. ( not intended to slander other peoples beliefs)

I guess in the end we will find out who was correct.

#45 Toronto Fun on 09.23.10 at 7:54 am

Is Canada really unique? Are we really “different” or are we just on the same path as other commodity Countries are on?

http://www.taipanpublishinggroup.com/tpg/taipan-daily/taipan-daily-092210.html

Australia and Canada: Waiting to Pop
Two countries that have done relatively well — perhaps even exceptionally well — over the course of the global financial crisis are Australia and Canada.

Unfortunately for the fine citizens of these resource-rich nations, both have housing bubbles that threaten to burst.

Investing legend Jeremy Grantham, whose firm manages roughly $100 billion in assets, has done an extensive quantitative study of bubbles throughout history. Without exception, all markets that met Grantham’s strict mathematical “bubble” criteria wound up reverting back to trend.

In June, Grantham called the Aussie housing market a “time bomb,” adding that “you can’t possibly miss it,” and observing that prices would have to fall 42% to return to trend.

In every bubble that accumulates true believers on the way up, there are those who will make a case as to why the current one is “different” and immune to the general rule. As Grantham’s studies have shown, so far these bubble-deniers have ultimately turned out wrong. Every time.

Looking to the north, Canadian investors have largely been exempt from the real estate carnage of America and Europe. But for how long?

As The Canadian Press reported last month,

…prices in six of Canada’s largest housing markets are in bubble territory for the first time in 30 years — and a U.S.-style correction is still not out of the question, according to a report from an Ottawa-based think tank.

The report… says home prices now sit at 4.7 to 11.3 times Canadians’ annual income — much higher than historical comfort levels of between three and four times income.

“To see all of the (major) markets outside of that comfort zone is very unique and concerning,” said David Macdonald, a research associate who authored the report entitled “Canada’s Housing Bubble: An Accident Waiting To Happen.”

#46 Old_is_Gold on 09.23.10 at 8:00 am

#31 Nostradamus Le Mad Vlad on 09.23.10 at 12:12 am
Another food crisis. Or is it engineered to appear to be that way?
______________________________________________

Remember the Ukraine famine in the 30’s. For those who haven’t seen it, this tragic episode of 20th century history is well worth watching, and learning from. Sadly, what we learn from history is that we learn nothing from history – so look for a repeat – on a bigger scale. Engineered or not, it’s coming!

Harvest of Despair (Soviet Engineered Famine in the Ukraine) 1933

BTW the NY Times repeatedly denied there was a famine in the Ukraine despite the overwhelming evidence, and have not printed a retraction to this day.

Although history such as this is not relevant to the subject of this blog, yet warfare, famines, even pandemics such as the Spanish flu in 1918, invariably follow Economic catastrophes. Those who have following the genesis of this so-called ‘Economic Crisis’ are well aware that this is a CATASTROPHE not a crisis. And this is not a recession; sadly the majority only wake up when it’s too late to do anything about it. I apologize in advance for the rant! I will try to think only happy thoughts!

#47 Toronto Fun on 09.23.10 at 8:14 am

I think this paragraph below is very important. We all know what the end result will be it is just a matter of when.

In every bubble that accumulates true believers on the way up, there are those who will make a case as to why the current one is “different” and immune to the general rule. As Grantham’s studies have shown, so far these bubble-deniers have ultimately turned out wrong. Every time.

http://www.taipanpublishinggroup.com/tpg/taipan-daily/taipan-daily-092210.html

#48 T.O. Bubble Boy on 09.23.10 at 8:17 am

@ #32 dale in van:

“vancouver – the land of no window screens and uninsulated houses – like seattle we make take a 10-15% hit, but the rest of canada and half of asia seems to be heading this way daily so the small land base will hold prices up.

ummm… “may take a 10%-15% hit”?

Are you talking about this year, or a total decline from spring 2010 to say 2015?

#49 Jon on 09.23.10 at 8:19 am

#19 Garth has it right, come back in a while when it’s back to $1000, when I hear people saying buy gold no matter what I know it’s a top.

I also can’t agree with corporate/high yield bonds, too many people are flooding into them and some high yields are trading at 90!!! unbelievable…

#50 Toronto Fun on 09.23.10 at 8:23 am

The Great Disappointment report from CIBC’s Avery Shenfeld.

The chart at the bottom right hand corner of page 8 of the pdf is interesting.

http://research.cibcwm.com/economic_public/download/fsep10.pdf

#51 Kevin on 09.23.10 at 8:24 am

“Worse, I’m betting Saskatoon will take more of a hit than the Okanagan will”

Garth, I’m very bearish on Saskatoon’s real estate and I hope to buy a home here one day without being house poor, but fail to see that logic. Sales have come down in Saskatoon but mostly on the lower end. The number of sales at the middle and upper end have not changed year over year. Which is a major sign of a weakening market. I have read that the Okanagan has taken an even bigger hit.

Just wondering how much you see the average price in Saskatoon dropping

It’s all about supply and demand. Okanagan RE will fall smartly, as will houses in Saskatoon, but a modest recovery in BC will be far quicker, simply because for every person who wants to move to Saskatchewan, there are a hundred headed for Kelowna. — Garth

#52 Old_is_Gold on 09.23.10 at 8:32 am

#31 Nostradamus Le Mad Vlad on 09.23.10 at 12:12 am

_______________________________________________

I believe you are out in BC somewhere (maybe the Okanagan). I will out that way from tomorrow (Friday 24th) to next Wed. If you have the time, and are so inclined, we can have a coffee and HAARP on about various subjects of mutual interest (not RE).

You can E-MAILme from my site. On the right side of the home page, there is a link for e-mailing.

#53 JM in London on 09.23.10 at 8:45 am

Well well…seems the forces of stimulus are showing some strain I think.

http://www.bnn.ca/News/2010/9/23/Ireland-falls-back-into-recession.aspx

Are you precious metal bugs starting to vibrate yet?

http://www.bnn.ca/News/2010/9/23/Gold-holds-near-record-high.aspx

After all, until Mike and Linda report it it just hasn’t happened yet…

#54 Nanaimo Sellers Slowly "Getting It" on 09.23.10 at 9:01 am

VI Funcanuck in Nanaimo here….

Great Mclean’s article re: US potentially becoming a 3rd world country. This will definitely impact Canada given our trade.

Latest MLS listings sent to me by a RE agent indicates PC’s (price changes), OM’s (off the market), and NEW.

What gets me are those sellers who ask RIDICULOUS prices, only to have to have their agents try to PALM them off as NEW listings.

Misguided Emotionalism in Youth: yesterday someone told me that their adult daughter (living at home of course) bought a brand-spanking new souped up muscle car. He tried to get her to drive an older, used car that he had already bought for her.

She told him that it was an “investment.” Yeah, right. I guess she’ll be living at home for many years to come.

#55 45north on 09.23.10 at 9:03 am

This time out it’s the Greater Toronto Area where new home sales in August were down 45% from a year ago. That’s the bad news. The good news is new home sales in the GTA are still 28% ahead of last year’s pace after eight months.

http://business.financialpost.com/2010/09/22/more-cracks-in-toronto-housing-market/?source=patrick.net#post-11053

holy cow! Toronto sales have fallen off a cliff! If there’s another drop in September, its going to leave a mark.

#56 Toronto on 09.23.10 at 9:29 am

6-7% is very optimistic indeed…I sold my house in june 08 before the initial crash. I looked like a genius but the money I invested ( in a portfolio which is similar to how Garth says to invest ) is still down 30%. Selling the house was a good idea but I wish I had put the money in GIC’s.

Still waiting for a correction renting for more than 2 years with very little returns on my cash.

Obviously your portfolio lacked balance. Did you do it yourself, plow into stocks and mutuals, what? — Garth

#57 BrianT on 09.23.10 at 9:34 am

#37Big-back in 1993 the gloom surrounding the future of TO was so thick you could cut it with a knife-the MSM is always two steps behind every trend-when RE values drop guys like that will be touting all the reasons TO is in big trouble.

#58 Basil Fawlty on 09.23.10 at 9:50 am

#34 “Gold is a commodity of it’s own. It could go higher for the feeling of safety. But, watch out! This could be last year for any money making for Gold. I don’t believe commodities are in a long term bull market. I think it is ending.”
My old man always said, “It doesn’t pay to think”. Gold is more than a commodity, as it is the only financial asset that is not at the same time someone’s liability. In these times of ongoing currency debasement, by those we elect for their professed financial insights, gold is the ultimate safe haven and much more than a commodity.

#59 Industrial Guy on 09.23.10 at 10:02 am

You have to wonder what these guys at the Toronto Star are smoking.
Tony Wong, Business Reporter at the Star wrote this article on September 22nd about the good deals to be had in the Windsor RE market. Did you know it’s the perfect place for “Executives looking to relocate”?

But wait …. Wong’s defense of this preposterous thesis gets better. Wong points to a recently released TD Bank report which states “Relocation for work isn’t the biggest factor in most people’s decision to move.”
In Windsor, families are leaving in large numbers and house prices are dropping because they can’t find work. The recent closures in the auto parts sector have hit the area very hard. It’s a simple mathematical equation even a RE agent could understand. Yes, housing prices are very low but, It’s not for reasons that are very positive.

You can always count on a Real estate agent for understatement. “Windsor has been working to diversify their industries, but the market value of the homes reflect the economic conditions,” said John Geha, president of Coldwell Banker Canada.” Somehow this fails to embrace the true realities of the economic disaster that hit the Windsor area. Clearly Tony Wong has not been to South Western Ontario in the last two years. The city has been ground zero for the worst of Canada’s recent recession. “For lease” and “for sale” signs are everywhere. The industrial sector, the largest employer in the region was gutted. The area has a huge unemployment problem and many of the recently “hired” in the area are actually working for temporary labour agencies. So, it’s really a stretch to say the are employed.

So the good news story here is …. If you’re a lottery winner or just received a large inheritance, Windsor is the place for you. If you’re retiring, Windsor could be a good choice also. Winters are milder. The greatly reduced price you sold that Monster house in Mississauga, Markham, Milton or Brampton for should be enough to buy a nice comfortable place in Windsor and if you’re lucky ………. there will be enough left over to supplement your CPP payouts for a few years.
http://www.thestar.com/article/864968–best-bang-for-real-estate-buck-is-in-windsor “Best bang for real estate buck is in Windsor”

#60 Medvedev on 09.23.10 at 10:08 am

Dear Old is Gold,

Thank you for sharing your thoughts at your blog.

Are you familiar with the Phoenix journals at http://www.fourwinds10.com?

#61 Teena on 09.23.10 at 10:13 am

“It’s all about supply and demand. Okanagan RE will fall smartly, as will houses in Saskatoon, but a modest recovery in BC will be far quicker, simply because for every person who wants to move to Saskatchewan, there are a hundred headed for Kelowna”. — Garth

Really, so how would you explain the following link?

http://thesheaf.com/2010/09/14/cbc-radio%E2%80%99s-the-current-investigates-saskatoon%E2%80%99s-boom/

I lived in Saskatoon for many years and would move back in a heart beat before even considering over priced, over rated, boring and tourist invested Kelowna. Although, that said I am not of boomer age , but my boomer parents still live in Sask and to my knowledge have never considered Kelowna as a retirement option. I have heard them discuss other options such as becoming California snow birds though. As hard as it may be to believe for those of you who have never lived in Saskatchewan, people do live there by choice, and don’t spend there days wishing and waiting for the first opportunity to leave.

I did not reference anyone leaving Saskatchewan, but rather the comparable numbers of migrants to the province as opposed to BC. I stand by my comments. Stop being sentimental. — Garth

#62 Flase Facade on 09.23.10 at 10:16 am

The City of Vancouver is a greater fool. Fire sale coming soon:

http://www.citycaucus.com/2010/09/vision-council-caught-in-apparent-in-camera-policy-about-face

Also, a dutch auction has been taking place for almost a month in the burbs and still no action:

http://vancouver.en.craigslist.ca/search/rea?query=dutch+auction&srchType=A&minAsk=&maxAsk=&bedrooms=

#63 BrianT on 09.23.10 at 10:16 am

#5545North-big surprise-the HST is an absolute killer for TO new home sales. The ave person in TO buying a 1 million dollar new house (prior to the HST) wasn’t rich by any means-the deal was financed. Approx $200000 in taxes (HST+LTT) is absurd, just absurd-how many months would the purchaser need to work to run up an income tax bill like that?

#64 T.O. Bubble Boy on 09.23.10 at 10:21 am

Run, run, run away from buying individual stocks on the TSX unless you are an insider. Anonymous “dark order” trading is coming to the TSX:

http://www.reuters.com/article/idCAN2226809720100922?rpc=44

#65 pete on 09.23.10 at 10:30 am

Hot Property on CP24 this Thursday at 7pm. Bloggers on this board need to start calling in and telling the viewers what’s really going on with the market.

416-872-2724.

Would be nice to hear from some of these knowledgeable posters on the show.
———————————————————-

To get on the show you go through a call screener who will ask you what you are going to ask. You must tell them a positive question like ” should I buy a second house” or “I’m thinking about buying a condo but not sure what area” . It has to be a positive RE question. Then once you are on the air live then you can ask or say what you want.

#66 BrianT on 09.23.10 at 10:40 am

Buffett’s shady deals are finally reaching the sheeple http://globaleconomicanalysis.blogspot.com/

#67 blase on 09.23.10 at 10:40 am

I agree with the poster who said Kelowna is overrated.

I visited for the first time last summer. Beautiful lake/lakes, but come on… I saw big houses built on the hill/mountain on the road out of town going to Penticton. These houses looked directly into a quarry!?

The wineries? give me a break. Penticton? give me a break. Vernon? please. It’s great if you have millions but have to live in Calgary. For the rest of Canada? Move to Southern Ontario or the maritimes, and winter in Phoenix or Florida. The Okanagon is soooo overrated.

And Garth, Saskatoon has something you forgot to consider. JOBS. A little bit more important than poopy lakes me thinks…

#68 Robert on 09.23.10 at 10:45 am

Garth,
Being a Saskatoon homeowner, I don’t see much of a correction here. Unemployment rate is just under 5%, median income is 77k with an average house price of about 300k. Listings are not too high and sales are doing fine. We have resources (potash,oil,uranium,etc) and if commodities take off 300k for a house might be a steal in 5 years. Prices may have doubled in just a few years but we were undervalued then. We may see correction of 10% over the next couple of years but that is about it.
One thing you should know about saskatoon is that only registered homebuilders can build a home and sell it. If a teacher builds a home he has to wait 4 years to sell or pay the city 50k. This has taken many specs out of the homebuilding market since 08.

#69 grantmi on 09.23.10 at 10:47 am

oh oh!!!

Damage control… Oygimpic Village is burning, while Greggie Rober-u-sum-more fiddles!!

http://bit.ly/992dMq

#70 reg on 09.23.10 at 10:59 am

Can’t see the HST going Canada wide just yet. Not after the political suicide the BC gov’t just committed. Wait till next September when the province of BC votes on it. The outcome of that will determine the fate of SK and MB.

#71 rory on 09.23.10 at 11:25 am

#26 Soylent Green is People

I am really getting tired of being the one that must reply to your continuous, childish political crap on an economic and housing blog.

1. You forget that your loved Liberals wasted billions of $$$ bringing in this program in the first place that basically tracks the good guys.

2. The only guns the .gov doesn’t know about are in the hands of the bad guys – heck of a plan.

3. It is always nice that ‘big brother’ knows all about me even though it is none of their business.

So, again, to be fair and keep this blog even handed politically – screw the evil Liberals and their duplicitous NDP brethren.

Another good grief….more kisses to ya…not.

#72 Malcolm on 09.23.10 at 11:34 am

Hi Garth,

I’ve been following you blog since the summer but have long had the feeling that the country is in for decline in housing prices. You article today intrigued me.

We live in Saskatoon (but I missed your seminar Tuesday) and noticed today that you thought Saskatoon might get hit harder than other places. We owe about $100K on a home that is worth about $300. I know you’ll tell me to sell the home invest the $200 in dividend stocks, bonds, reits, trusts,etc. It’s something I’m considering but it is quite scary with a young family.

You’re article today suggests that Saskatoon may take a bigger hit than other areas. I feel like we might take a smaller hit with the 6% growth predicted lately. Would you mind expanding on that a little?

#73 Chaos on 09.23.10 at 11:39 am

Grantmi

Re: The condo development on the K.G.

I don’t think that the developer will be able to sell off the remaining units with even a 35% haircut.

FYI dawgs, the development has fantastics views of a giant Canadian Tire garage and a Staples store on one side, a Ford dealership(auto mall) on the other side and a major roadway on another side.

The development also features a drive-thru shopping mall at street level with the condos built above the stores.

This is a good location for a business because of all the other business activity happening around the development, but…

Not a great place to drop 400K on an apartment.

IMHO

#74 Kenny on 09.23.10 at 11:45 am

RE: #63 Brian
>>The ave person in TO buying a 1 million dollar new house (prior to the HST) wasn’t rich by any means

Um, they ought to be pretty well off.

#75 Jake on 09.23.10 at 12:00 pm

#68 Robert said,
“Being a Saskatoon homeowner, I don’t see much of a correction here.”

That is because you are a Saskatoon homeowner. LOL!

#76 Jake on 09.23.10 at 12:06 pm

#72 Malcom,
I am in almost the same position you are in and I am keeping my house. We made easy equity on the way up and we will lose some of it on the way down. If you owed $270 K on that $300K property, like many new buyers, then I would be worried. It sounds like you have made some smart moves and are in a comfortable situation. I wouldn’t speculate on your primary residence unless you would really like to leave the place anyway. Relax and enjoy your home. Just my 2 cents.

#77 BrianT on 09.23.10 at 12:13 pm

#74Kenny-how much money would you need before you would willingly set fire to about $180000 of your money just on a whim?

#78 Soylent Green is People on 09.23.10 at 12:19 pm

I agree, it’s terrible young people think Canadian politics are childish. We need to get them engaged more, not less.

Click my name to join the fight to get Herr HarperCon out of office.

~~~~~~~~~~

Reading between the lines of Jim Flaherty’s speech

The speaker: Jim Flaherty, Finance Minister
The venue: Canadian Club of Ottawa
The date: Sept. 21, 2010

•••

It’s a pleasure to address this well informed and distinguished group of opinion leaders.

xxxThe Prime Minister sends his regards.
[Extends middle finger.]

•••

The fall session of Parliament has just started.
It’s a good time for some serious, frank talk.
We have some important choices to make.

xxxChoices like: should I adapt my speaking style to the audience I’m appearing before, and include more than nine words in some of my sentences? Or should I speak to this “well-informed and distinguished group of opinion leaders” in the same clipped manner most people reserve for domesticated animals?

•••

Accomplishments that Opposition politicians choose to ignore. Opposition politicians who talk down our economy for political gain at every opportunity.

xxxUnlike when we were in opposition, when we were all about providing the government with moral support and backrubs.

To them I say: rise above petty politics.

xxxI implore you: do that thing that I am about to not do.

•••

Canadians are anxious… The recession isn’t their fault. They look to us for leadership, so we can get through it together.

xxxAnd looking to us is fine, so long as they don’t actually make eye contact with Mr. Harper. AVERT YOUR GAZE, SASKATCHEWAN!

•••

We must implement our stimulus plan fully, and keep helping those who need it.

xxxI’d explain more fully, but I’m pressed for time. I have to be back for Question Period – and all those Economic Action Plan signs on Sussex Drive aren’t going to count themselves.

But there are risks ahead, serious risks. The global economy remains fragile… And beyond the economic risks, there is, I regret to say, a political risk. That is the risk of an unnecessary election, an election that would jeopardize our economic recovery, just as we enter the home stretch.

xxxIs anyone actually threatening an election? No. Has anyone threatened one for the past year? No. But Mr. Harper told me to say this and he gets mad when I don’t listen. DEEP DOWN, THIS MAKES ME FEEL LIKE LESS OF A MAN!

•••

But most important, we met the challenge of the global economic crisis head-on, with our world-leading Economic Action Plan…Once the crisis hit we didn’t panic.

xxxHow could we panic when we neither saw the crisis coming nor realized it had arrived?

Instead we went to work.

xxxOne stimulus sign, two stimulus signs, three stimu­– dammit, Strahl, you made me lose count!

We listened to Canadians in one of the largest pre-budget consultations in history. We fast-tracked our budget – the earliest in Canadian history.

xxxI am going to speak a little more quickly here so you don’t have time to realize that the reason we had to fast-track our budget is that, only a few months earlier, I had personally released the single-most inaccurate and widely mocked economic update in the history of both Canada and math.

http://www2.macleans.ca/2010/09/22/reading-between-the-lines-of-jim-flaherty%e2%80%99s-speech/

#79 junius on 09.23.10 at 12:20 pm

#62 False Fascade,

The next news release on the Olympic Village is going to be a doozy. The City is currently weighing their options but none of them are very good. They find themselves as the guarantors for a significantly depreciating asset. The units are not moving and the village feels dead.

I said earlier in the year that the City would lose at least $500 million dollars on the site. The rumours swirling now are that the number will be north of $600 million and perhaps as high as $800 million when all is done and paid for. It is going to be a disaster.

I feel for Gregor Robertson like I feel for Obama having come to power only to find out the cupboard was bare and the stove and fridge had stopped working. What a terrible mess.

The Olympic Village situation will be the tipping point in Vancouver from the denial stage of the bubble burst to panic and fear. Combined with the poor September stats (and the fall rains) it will get darker in October.

#80 Soylent Green is People on 09.23.10 at 12:24 pm

If HarperCon and his merry band of unelected backroom goons don’t impact the economy beyond measure, then I don’t know what does.

Flartery is one of the key reasons Canada is about to experience a giant housing bubble pop pop popcorn.

So unless GT hired you as his bitch assistant, bugger off.

~~~~

How a government, which has emptied the public purse far into the future, ratcheted up the deficit to historic highs and bloated the bureaucracy to unprecedented size can stand for re-election as a conservative-friendly government is beyond… me.

http://www.nationalpost.com/m/blog.html?b=fullcomment.nationalpost.com%2F2010%2F09%2F21%2Fdon-martin-flaherty%E2%80%99s-rant-signals-tories-keen-on-an-election

#81 super dave on 09.23.10 at 12:25 pm

Saskatoon…

I looked at the picture…. it’s really really flat…

And I’,m not a farmer… Kelowna, is my idea of a playground, lakes, mountains, trails, snow, good restaurants, pubs, nightlife, riots…

Lived in Kamloops and kelowna, both were great places, never lived in Saskatoon, but… its really flat …

#82 VancouverGoinUp on 09.23.10 at 12:26 pm

You got it Dale – I agree on Garth on many of his points, but like Shiller he just doesn’t get it when it comes to Vancouver. 300K over ask – LOVE IT and going UP
****
dale in van on 09.23.10 at 12:17 am real estate lady on the noon news mentioned a empty lot 50′, dunbar area (west side van), asked 1.3, multi offers and sold for 1.6.

i’ll bet you my truck that the buyers speak cantonese or mandarin – we do have overseas buyers, this is why local young families of very high earners have to live in crappy old east van where a mil still gets you a detached in good condition

vancouver – the land of no window screens and uninsulated houses – like seattle we make take a 10-15% hit, but the rest of canada and half of asia seems to be heading this way daily so the small land base will hold prices up.

#83 Bill ( Peterborough) on 09.23.10 at 12:44 pm

Re # 31 Nostradamus Le Mad Vlad

Intersting especially shadow banking ,
******************************************
Food for thought:

http://www.allvoices.com/contributed-news/3355826-who-is-adolfo-nicolas

#84 Mister Obvious on 09.23.10 at 12:45 pm

Somebody help me out here on the HST. Honestly. No one has been able to tell me why the Federal Government is so very anxious to administer a provincial tax and pay hundreds of millions of dollars up front for the privilege. What’s in it for them? So, the old 7% sales tax in BC is part of the HST at 12% which is applied to almost everything now. Does that mean the Provincial governments just gets more than before in addition to the millions the Fed’s used as bait to get BC to sign on? Why is this good for Ottawa?

#85 CrowdedElevatorfartz on 09.23.10 at 12:54 pm

#82 VancouverGoinUp
Where have all the construction cranes gone as compared to last year? (BC Place roof GOINUP)
Why are there way more “for rent” signs on almost every block as compared to last year? (Available rentals GOINUP).
What is the unemployment rate in Vancouver as compared to last year?(unemployment rate GOINUP).
Why are real estate prices dropping in the Lower Mainland( relistings GOINUP).
How soon before this fiscal meltdown hits Chindia( world economy NOT GOINUP).
Later NorthVan Realtor.

#86 CrowdedElevatorfartz on 09.23.10 at 1:20 pm

@ VancouverGoinUp
Olympic Athletes Village Not Selling:
$1,000,000,000.00 Bill to City Of Van.

BC Place Retractable Roof :
$600,000,000.00 (estimated).

New Olympic Media Center/ Convention Center:
$1,000,000,000.00

Canada Transit Line to Airport
$800,000,000.00

ETc.ETC.ETC.

The only foreseeable thing in Vancouver that will be GOINUP is our TAXES.

#87 Vancouver_Bear on 09.23.10 at 1:23 pm

I am not sure what realturds are blogging about “hot” RE market. Yesterday in the mail I got a fat envelope, it was addressed personally to me and return address had no name or company name on it, just street address. When I opened it the contents hit the paper recycle bin in the next 5 seconds. It was from a realturd promoting his business, togethre with featured listings urging me to buy as this prices will not be that low. And buyers market is about to turn into sellers with even higher prices. Yeah…..right. By looking at that POS from realturd I can conclude only one thing, their business in the deep do-do, it’s the exact place where it belongs.

#88 Real Estate Realist on 09.23.10 at 1:28 pm

VancouverGoinUP – The temps are below freezing temps all winter long. Insinuating otherwise is just another Vancouver lie that is relentlessly perpetuated. The only difference in your winter is that it is COLD and damp, instead of just damp, like say, in the Caribbean in monsoon season.

Oh, and the higher the climb, the harder the fall. You may want to keep that in mind so you don’t get more excited than you already are about the bidding wars that are still occurring.

#89 junius on 09.23.10 at 1:32 pm

Garth,

It appears that old Nostry Jr. has found his way back onto the site as Vancouvergoinup. Same old, same old.

#90 junius on 09.23.10 at 1:36 pm

#85 and #86 Crowdedelevatorfartz,

My wife and I have actually started preparing for an increase in taxes going forward. It is so obvious as to what is coming.

I actually am very pleased with much of the infrastructure that we added due to the Olympics. However I am acutely aware that it came with a price.

That message has not yet been received by much of our local population. Denial remains the prevailing sentiment.

#91 prairie gal on 09.23.10 at 1:47 pm

JenC_T wrote:

“Worse, I’m betting Saskatoon will take more of a hit than the Okanagan will”

Why is that, my dear Garth?
_______

because its Saskatoon! -30 plus windchill, bald-ass prairie, with historic RE values at just over 2x income. The boomer bulk will leave this province so fast in search of more hospitable climate it will leave Brad Wall breathless.

We have a resource based economy which is at the whims of the global commodities market. can you say boom/bust? resource-extraction economies are notoriously unstable. we’ve reached the pinnacle (or soon will) of the boom. construction drives growth right now. once everything is all built and the jobs dry up (many more short term construction jobs than long-term industry jobs) the population and GDP will realign.

or do you think that all the folks who came here for the construction work will realize they love no summers, wind and rain (regardless of whether this is ‘normal’ – it is what they are experiencing) and decide to move here permanently?

here in Regina, the upgrader expansion requires 500 subcontractors. almost ALL of them are from out of the country, let alone out of province. hence our low vacancy rate. but once the project ends in 2013, i predict a lot more vacancies and a lot of underwater home owners.

#92 TheBigLebowski on 09.23.10 at 1:56 pm

we are in the midst of the biggest transfer of wealth in history, and the biggest bull market in the last 100 years. And all you can muster in regards to this market in the form of exposure advice is a “smattering”? Its time to take the fiat blinders off garth and face reality.

#93 VancouverGoinUp on 09.23.10 at 2:02 pm

Rare Earth big news for Canadians with some of the best Rare Earth properties in Canada. This will be as big as gold. Rare Earth, could be talking about Vancouver

HONG KONG — Sharply raising the stakes in a dispute over Japan’s detention ofa Chinese fishing trawler captain, the Chinese government has blocked exports toJapan of a crucial category of minerals used in products like hybrid cars, windturbines and guided missiles.

EnlargeThis Image

Isaac Brekken for The New York Times
Didymium oxide is a rare earth mineral used in delicateelectronics.

Related
China’s Disputes in Asia Buttress Influence of U.S. (September 23, 2010)
Chinese Leader Fields Executives’ Questions (September 23, 2010)
EnlargeThis Image

Junko Kimura/Getty Images
An engine of a Toyota Prius. Each Prius uses at least twopounds of rare earth elements in its various parts.

Chinese customs officials are halting shipments to Japan of so-called rareearth elements, preventing them from being loading aboard ships at Chineseports, industry officials said on Thursday.

On Tuesday, Prime Minister WenJiabao personally called for Japan’s release of the captain, who wasdetained after his vessel collided with two Japanese coast guard vessels about40 minutes apart as he tried to fish in waters controlled by Japan but longclaimed by China. Mr. Wen threatened unspecified further actions if Japan didnot comply.

A Chinese Commerce Ministry spokesman declined on Thursday morning to discussthe country’s trade policy on rare earths, saying only that Mr. Wen’s commentsremained the Chinese government’s position. News agencies later reported thatChen Rongkai, another ministry spokesman, had denied that any embargo had beenimposed.

Any publication of government regulations or other official pronouncementsbarring exports would allow Japan to file an immediate complaint with the WorldTrade Organization, alleging a violation of free trade rules. But anadministrative halt to exports, by preventing the loading of rare earths onships bound for Japan, is much harder to challenge at the W.T.O.

The United States, the EuropeanUnion and Mexico brought W.T.O. complaints against China last November afterit issued regulations limiting the export of yellow phosphorus and eight otherindustrial materials. American trade officials have been considering for monthswhether to challenge China’s longstanding and increasingly tight quotas on rareearth exports as well.

China mines 93 percent of the world’s rare earth minerals, and more than 99percent of the world’s supply of some of the most prized rare earths, which sellfor several hundred dollars a pound.

Dudley Kingsnorth, the executive director of the IndustrialMinerals Company of Australia, a rare earth consulting company, said thatseveral executives in the rare earths industry had already expressed worries tohim about the export ban. The executives have been told that the initial banlasts through the end of the month, and that the Chinese government willreassess then whether to extend the ban if the fishing captain still has notbeen released, Mr. Kingsnorth said.

“By stopping the shipments, they’re disrupting commercial contracts, which isregrettable and will only emphasize the need for geographic diversity ofsupply,” he said. He added that in addition to telling companies to haltexports, the Chinese government had also instructed customs officials to stopany exports of rare earth minerals to Japan.

Industry officials said that mainland China’s customs agency had notifiedcompanies that they were not allowed to ship to Japan any rare earth oxides,rare earth salts or pure rare earth metals, although these shipments are stillallowed to go to Hong Kong, Singapore and other destinations. But no ban hasbeen imposed on the export to Japan of semi-processed alloys that combine rareearths with other materials, the officials said. China has been trying to expandits alloy industry so as to create higher-paying jobs in mining areas, insteadof exporting raw materials for initial processing.

Japan has been the main buyer of Chinese rare earths for many years, usingthem for a wide range of industrial purposes, like making glass for solarpanels. They are also used in small steering control motors in conventionalgasoline-powered cars as well as in motors that help propel hybrid cars like theToyota Prius.

American companies now rely mostly on Japan for magnets and other componentsusing rare earth elements, as the United States’ manufacturing capacity in theindustry became uncompetitive and mostly closed over the last two decades.

The Chinese halt to exports is likely to have immediate repercussions inWashington. The House Committee on Science and Technology is scheduled onThursday morning to review a detailed bill to subsidize the revival of theAmerican rare earths industry. The main American rare earths mine, in MountainPass, Calif., closed in 2002, but efforts are under way to reopen it.

The House Armed Services Committee has scheduled a hearing on Oct. 5 toreview the American military dependence on Chinese rare earth elements.

The Defense Department has a separate review under way on whether the UnitedStates should develop its own sources of supply for rare earths, which are alsoused in equipment including rangefinders on the Army’s tanks, sonar systemsaboard Navy vessels and the control vanes on the AirForce’s smart bombs.

#94 C on 09.23.10 at 2:03 pm

#86 Crowded ElevatorFartz.

Love the name, makes me laugh every time.

Good points. Hey if you want to avoid an increase in property taxes to pay the bill, rent.

That’s another thing I don’t understand about people? People are starting to get stingy on MER’s on their mutual funds compared to ETFs. How about property taxes on residential real estate? That’s an asset that has a “fee”.

I shake my head when I see these million $ properties in Burlington paying $15,000-$25,000 annually in property taxes. Nice use of money there.

#95 Jeff Smith on 09.23.10 at 2:04 pm

>#59 Industrial Guy on 09.23.10 at 10:02 am
>You have to wonder what these guys at the Toronto
>Star are smoking.Tony Wong, Business Reporter at the
>Star

Yep, always love to read his articles too. Good way to complement my daily intake of comics section.

#96 TheBigLebowski on 09.23.10 at 2:11 pm

#34 mel
I will take the other side of your bet against the only true currency in the world. The U.S dollar and gold are competing as the go to currency of choice in the world and gold is winning. Simply adjusted for scewed government inflation numbers since 1980 , gold will go to $2500. Just to cover the world’s money supply increase for the past 35 years, gold would have to be repriced at $5000/ounce. Simple math, no conspiracy. The smartest most wealthy people in the world are going into gold in a big way. Soros, Sprott, Jim Rogers, Mark Fabre, Paulson, Celente, etc. all are bullish on gold going forward. People’s faith in fiat currency is fading, and that is what is driving gold, not massive inflation.

#97 JenC_T on 09.23.10 at 2:13 pm

Thanks prairie gal- as I’m living here in SK, I’m acutely aware of the limitations of the environment here. I have also lived in BC for a couple of decades, and have directly experienced how difficult it is to get ahead when all of your income is directed toward housing costs. Taking all into consideration, my quality of life is much higher here. I may be the only person in the province to feel this way, but I doubt it.

I merely wanted to clarify what Garth’s reasoning was for his statement, “I’m betting Saskatoon will take more of a hit than the Okanagan will”. Does that mean he thinks housing prices will fall by a greater percentage from peak-to-trough? That our subsequent recovery from the trough will be slower? Is he taking both immigration and business into consideration when he makes that statement? Does he not think the effects of boomers downsizing will be greater there? Why or why not?

#98 grantmi on 09.23.10 at 3:01 pm

#73 Chaos on 09.23.10 at 11:39 am

Grantmi

Re: The condo development on the K.G.

I don’t think that the developer will be able to sell off the remaining units with even a 35% haircut.

Can you imagine the poor developer across the King George Hwy., trying to sell HIS new development (which just started) after this!!!

Ouch! Ouch, and more Ouch!!

“Move Along!! Nothing to see here but a Surrey Drive bye!!

#99 bullion.bunny on 09.23.10 at 3:05 pm

#93 VancouverGoinUp on 09.23.10 at 2:02 pm

Yes rare earths are going to be big in the future. But as the economy goes back into the tank, rare earths will be forgotten. Most of the renewable/ high efficiency energy devices that depend on rare earths also depend on heavy government subsidies and lots of fossil fuels to produce. The Toyota Prius is a prime example; it takes almost ten times the energy to produce it than can be saved using rare earths. Also the added complexity makes these products difficult if not impossible to produce and repair. Toyota in fact has great difficulty producing the electric motor and inverter section currently used in this vehicle.

One other thing…….complex electronics and salt water don’t mix, corrosion loves eating most metals including rare earths! Except GOLD, naturally.

#100 Teena on 09.23.10 at 3:15 pm

#91 Priarie Gal – “or do you think that all the folks who came here for the construction work will realize they love no summers, wind and rain (regardless of whether this is ‘normal’ – it is what they are experiencing) and decide to move here permanently?”

My understanding is that over 85 per cent of the net population gain in Sask. came from two provinces – Ontario and Alberta.

So, you are probably right they will have to pack it in and move back to Alberta where housing is more costly, there is never a summer, but guaranteed wind and rain and if you are really lucky snow in August!! I can’t speak for Ontario – never lived there.

#101 junius on 09.23.10 at 3:19 pm

Saw this good quote in an article on the failures of Obama’s economist Larry Summers;

“Richard Bove, one of Wall Street’s top banking analysts, told clients in a Wednesday note that the failure of Summers and the rest of the Obama team was a fundamental misunderstanding of the causes of the financial crisis. Bove, of Rochdale Securities, said the crisis was a result of years of over-consumption and underproduction in the West which caused money to flow to Asia and other big exporters, which caused debt accumulation in the U.S. and a desire for higher-yielding securities — like subprime mortgage-backed securities — elsewhere.

“Larry Summers and his group failed to grasp the simple point that the U.S. must sell things to get the flow of funds to reverse back to the United States,” Bove wrote. “Instead they continued to believe that consumers should buy things.

“This was a mistake that neither Germany nor Switzerland made. Thus, those economies, which emphasize production rather than consumption, expand while ours flirts with a new recession.”

Bove titled his note, “Mr Summers’ Failure.”

#102 Grandpa Grinch on 09.23.10 at 3:22 pm

The property market in China has become so overheated that the ratio between housing property values and disposable annual income in Beijing now exceeds 14 times. In other words, if the average homebuyer spent essentially all the money they made, it would take them 14 years to buy a house.

Why Garth’s previous recommendation to sell CA, buy USA is still an early call:

http://www.zerohedge.com/article/forget-recession-empire-crumbling

#103 Old_is_Gold on 09.23.10 at 3:33 pm

#84 Mister Obvious on 09.23.10 at 12:45 pm

Somebody help me out here on the HST. Honestly. No one has been able to tell me why the Federal Government is so very anxious to administer a provincial tax and pay hundreds of millions of dollars up front for the privilege. What’s in it for them? So, the old 7% sales tax in BC is part of the HST at 12% which is applied to almost everything now. Does that mean the Provincial governments just gets more than before in addition to the millions the Fed’s used as bait to get BC to sign on? Why is this good for Ottawa?
_____________________________________________
Probably something to do with TRANSFER PAYMENTS that Ottawa gets from the provinces, especially the have provinces like Ontario and BC. Its a good deal for both, the provinces get a lot more revenue and in turn they will kick more back to the feds – sweet!

#104 Old_is_Gold on 09.23.10 at 3:41 pm

#60 Medvedev on 09.23.10 at 10:08 am

Thanks. I am not familiar with that particular site but will check it out.

#105 CrowdedElevatorfartz on 09.23.10 at 3:49 pm

#93 VancouverGoinUp
….ya coulda saved yourself a LOT of typing by just saying RareEarthMetalsGoinUp…..

Yuan country’s success doesnt necessarily transpose to anothers.

I wonder when the US is going to force China to revaluate the Yuan. It’s still undervalued according to The Economists “Big Mac” index……

#106 Bill Gable on 09.23.10 at 4:03 pm

Comment of the day from Mr. Case, of the Case/Shiller index of American RE.

“Karl Case, the co-founder of the S&P/Case-Shiller home-price index, believes “a common mistake of the housing bubble years was the desire to own something that goes up in value rather than to own something you can afford”. He feels “more Americans need to view homes as durable goods, such as cars, and not primarily as investments”.

#107 Old_is_Gold on 09.23.10 at 4:05 pm

Who would have thought this would be 21st century America?

For Sale: Welcome to United States of Tent Cities

Anyone remember the 1988 movie ‘They Live’ – looks like it’s not fiction anymore…

They Live

#108 bullion.bunny on 09.23.10 at 4:07 pm

#34 mel on 09.23.10 at 12:57 am

Agree….Oil $33->$55 over the next two years. But look out when the economy starts to fire on all cylinders

Agree…commodities are toast and are heading down back into the basement.

Disagree….Gold heading higher maybe $2,500 or more. As the credit mess continues gold will once again become money. These types of gold bull markets last 20 years, just as they did in 1720,1770,1825,1873,1929,2000? Looks like we have another 10 years to go.

#109 jess on 09.23.10 at 4:13 pm

Subprime Education Bubble

Neoliberalism and the For-Profit, Predatory Educational Industry: You Can’t Regulate a Criminal Enterprise
Thursday 23 September 2010

by: Danny Weil, t r u t h o u t | Report

…”Walmart recently announced a deal with the for-profit American Public University System (hardly public, the stock is traded daily on the New York Stock Exchange and is the brainchild of Jim Etter (“The Chronicle of Higher Education, Why do you think they’re called for-profit,” July 30, 2010). The “university” is better known as the American Military University, which has developed into a publicly traded, for-profit behemoth that now sucks in veterans, either those in active duty or retuning from war. The university is also the home of Larry Forness, the “professor,” who lectured students on the best means of using torture, such as injecting Muslims with pig blood (“Does the American Military University (AMU) teach torture to its students or has it taught torture in the past?” WikiLeaks, March 29, 2010). Now, with the veteran market cornered, the American Public University seeks to train nine-dollar-an-hour employees for Walmart under the auspices of higher education, using government funds and especially Title IV monies….”
==============
Rich Yamarone,
Bloomberg
statement made by the Wal-Mart CEO last week.

I don’t need to tell you that our customer remains challenged…You need not go farther than one of our stores on midnight at the end of the month. And it’s real interesting to watch, about 11 p.m. customers start to come in and shop, fill their grocery basket with basic items – baby formula, milk, bread, eggs – and continue to shop and mill about the store until midnight when government electronic benefits cards get activated, and then the checkout starts and occurs. And our sales for those first few hours on the first of the month are substantially and significantly higher.

#110 Debtfree on 09.23.10 at 4:16 pm

@101 bb re. ree’s stick to what you know something about like gold . I have made huge gains at azure dynamics and canada lithium corp. If the economy goes back in the tank both will be even more in demand . ree’s are not only about cars . Too make what I have in the last year and a half your metal would have to be at about 9 to 10 k . I like gold I have some but I could kick myself for it’s meager gains. If your going to speculate show some balls . On the political front the HST (and now we fight) the so called liberals (actually retreaded socreds no creds ) are crapping themselves.
http://www.bclocalnews.com/okanagan_similkameen/pentictonwesternnews/news/103487264.html

#111 Bill ( Peterborough) on 09.23.10 at 4:24 pm

I have a suspicious feeling Garth is a double agent. Some of his views are liberal ,some are conservative.

He is in fact playing both parties ; when both parties think they are playing/using him to try and figure out how pissed of the masses are getting. ( after all Garth can almost be considered a national celebrity being in the main stream.) Sort of like ” Stompin Tom connors.

In my opinion it’s not a question of when he will get back . But which party he will represent.

For security you can use:
http://www.youtube.com/watch?v=F01yzbihp34

#112 Nostradamus Le Mad Vlad on 09.23.10 at 4:26 pm

#46 Old_is_Gold — Great link and thanks. History rhymes and repeats, always has, always will.

Fortunately, we are now in the Fourth of Four Ages, the Kali Yuga (Iron Age), which is the most spiritually empty and violent of the ages.

In a few hundred thousand years, the lower psychic regions (heavens – planes – levels) will be destroyed and recreated again, so the cycles begins anew.

The lower psychic regions are the Physical (this one) – Astral Plane – Causal Plane (the third heaven of which St. Paul spoke of) – Mental Plane (where we will meet shortly) – Etheric Plane.

After that are the higher, pure spiritual regions, none of which can be physically described, only spiritually experienced.

Thanks for the note!

#83 Bill (Peterborough) — Good day Bill, and thanks for the link.

It’s about time to draw the curtains over this ongoing pigsty of a mess, have a bloody great war (WW3) and let things sort themselves out.

Humanity continues doing a thoroughly magnificent job of screwing up 1 + 1!

#84 Mister Obvious — “. . . why the Federal Government is so very anxious to administer a provincial tax . . .”

Check out Obama’s new VAT in the US, the new global tax on poverty (both of which are to come in) and see how C-H-F are working with the rest of the west’s leaders in order to put us in the poorhouse. The west is dead broke, and the only way these yahoos can stay in power is to keep sheeples in perpetual poverty.

The HST is a Cdn. tax which the feds. want to implement over the whole country via the provinces, then raise the percentage to tax us beyond belief.

#86 CrowdedElevatorfartz — “. . . that will be GOINUP is our TAXES.”

See my response to Mr. Obvious!

#92 TheBigLebowski — “we are in the midst of the biggest transfer of wealth in history . . .” (through higher taxes).

Very true, and all we can do is protect ourselves to the best extent possible.

#94 C — “. . . if you want to avoid an increase in property taxes to pay the bill, rent.”

If life had turned out the way I would have liked (it didn’t), we would have sold our home a couple of years ago, invested the money then rented a townhouse.

No property taxes or any other fees. Best way to go.

Sheeple explained simply, clearly and in sketches.

12:28 clip The Corbett Report — Sheeple are waking up in the EU!

US falling under UN. May go with the first link.

#113 wetcoaster on 09.23.10 at 4:30 pm

Great to see that Flaherty don’t give two craps about overpriced BC/Canadian real estate. No way he’s ever reversing the previous changes, so the Victoria realotor beging his MP to save his ass best hang up his doorlocks and head down to the EI office.

Infact he may bring in even more rules as the mortgage brokers keep sucking the remaining sheep on to the highway to hell.

#114 Old_is_Gold on 09.23.10 at 4:42 pm

#96 TheBigLebowski on 09.23.10 at 2:11 pm

or any other West coaster that enjoys the X-Files and is smart enough to know that ‘Conspiracy’ is not a dirty word please e-mail me if you want to get together for a powwow, I’ll be in Vancouver on Friday (tomorrow) and Tuesday of next week. I’ll be in Kelowna on Sat. Sun. and Monday. You can E-MAIL me from my site home page (top right hand corner).

Nostradamus Le Mad Vlad, look forward to meeting you.

#115 jess on 09.23.10 at 5:03 pm

Affordability and Accountability are two words lately than seem to have no meaning

September 23. 2010 1:00AM .Detroit tops list of most affordable housing
Depressed values, recession put 3 Mich. cities on U.S. survey
Jaclyn Trop / The Detroit News

“Detroit is the most affordable U.S. housing market, with Michigan claiming three of the top 10 spots in a report released Wednesday by Coldwell Banker Real Estate LLC.

…A four-bedroom, two-bathroom home here averages $68,007, while a similar home in second-place Grayling costs $84,625, according to the real estate brokerage.

From The Detroit News: http://www.detnews.com/article/20100923/BIZ/9230409/1001/biz#ixzz10OLAmWOL

#116 Dan on 09.23.10 at 5:14 pm

Grandpa Grinch

Why Garth’s previous recommendation to sell CA, buy USA is still an early call:
———————————————————-
Grandpa you are clueless to reality. The housing crash in Canada has started and will only get worse. Sales are down 25% for each and every month for the last four months and prices are down 8%.

POP……………………………….

Grandpa……………..What was that?

NO MONEY………….we are a payday away from going bankrupt.

Realtors……………..Please buy greaterfools or else I will have to work at a real job.

#117 Devore on 09.23.10 at 5:14 pm

#28 Ale

Sell realestate and buy reits. Surely this was a typo Garth.

Despite what you may believe, there is still plenty of profitable commercial real estate and REITs running them.

#118 dark sad person on 09.23.10 at 5:48 pm

#207 Dumfucanuck on 09.22.10 at 11:07 pm

My God, Canadians are perhaps the most delusional (and misinformed) people on planet Earth. Why is it Canadians NEVER can stand on their OWN arguments, statements, and misgivings without mentioning the U.S.? It is so very interesting.

If you look up “Canada” in the dictionary, you’ll note it says “The stalker of America, often caught in the bushes whacking off to pictures of the U.S. Also referred to as canaDUH” Also, you may consider taking or retaking English as most of you appear to have a difficult time deciphering the difference between “your” and “you’re” and “there,” “their,” and “they’re.” Seems to me you have an AMAZING educational system with top-tier talent! ROFLMFAO Oh wait! Any real talent that was in Canada has already left and moved to the U.S.

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

Your write-the grammar display on this board is horrible-

There always using the right word-but their always using it in spelt write but using it in the wrong context-
This pisses me off to no end–cuz–

It gives those-like you-who do not have the ability to add any sort of constructive information or debate-or some post that you can back up (save grammer)to this board of “economic/financial/real-estate” slant something to bitch and nit pic about–

I’ll bet you were won of the asskiss kids that got to clean the chalk brushes-

http://www.youtube.com/watch?v=Sa1BCErCaCY

#119 prairie gal on 09.23.10 at 6:12 pm

Re: Saskatchewan

My guess is Garth’s message here is that property values generally revert to historical levels. Given the unprecedented run-up here in Sask, the fall could be equally precipitous. Students and young people are having a terrible time finding suitable accommodations. What makes anyone think they’ll be persuaded to remain here given the rents in other locations are comparable and offer higher paying jobs (Calgary, for example). Opportunities are limited here.

Any benefit to being in Saskatchewan due to lower living costs has been erased over the past couple of years. Its like living in Fort Mac – you don’t move here because its such a desirable place to live. You move here to make a living. Those of us with family here have other motivations, but that does not apply to the immigrants, who will leave as soon as another opportunity presents itself.

Saskatchewan is maintaining merely because its the least bad place to be for those seeking work. Once the economy picks up elsewhere, we’ll once again experience a mass exodus to greener pastures. I’d be long gone if it weren’t for family.

As for the Okanagan, a person can live there for 8 months of the year in an RV and then head south for the remaining 4. Mobile home parks abound. There are plenty of cheap living options there if you are retired.

Keep in mind, its not the structure but the land itself that holds the value. bald-ass prairie commands bald-ass prairie prices. Wine country commands wine country prices.

#120 john m on 09.23.10 at 6:16 pm

Anyone who thinks Canada is recovering should visit their local car dealership….i took my truck in this morning for a factory recall repair..it was a ghost town!…the lot was full of 2010’s the only 2011’s were in the showroom (this is the end of September?) ….i walked around for over an hour and a half and was never approached by a salesman,The huge waiting room was empty and so was the huge garage area except for 2 other vehicles..i called yesterday at 4 pm and got in at 9:30 this morning and pretty much could have picked my time……….the bullshit that “H” and company have been promoting makes me angry and i feel so sad for the people affected.

#121 Charismatic on 09.23.10 at 6:26 pm

If the HELOC is invested in U.S, is the interest still tax deductible?

Only if you receive income taxable in Canada. — Garth

#122 Bill Gable on 09.23.10 at 6:35 pm

VANCOUVER (NEWS1130) – They may be the greatest example of green living in a prime, new waterfront community, but the 480 condos in the former Olympic Village still haven’t sold.

The city has over a billion dollars in the project. These units, which started at $389,000 for less than 500 square feet need to move. Vancouver City Councillor Geoff Meggs says so far, there’s been no decision to change the strategy and sell it all as a parcel.

“We’re working hard to support Millenium. We’re responsible for the sales. We’re always considering every option.”

Mayor Gregor Robertson believes it will take full two years to sell all the units. Back in May when the condos first hit the market, he also figured competition among buyers could be fierce.

>>Above post dedicated to VGU….who wins the NOSTY for being named this months Economics dunderhead; as awarded by the Committee for Basic Common Sense.

Runner Up – by a nose hair – Jimbo Flaherty.

#123 Bill ( Peterborough) on 09.23.10 at 6:52 pm

Re #114 Nostradamus Le mad Vlad

#92 TheBigLebowski — “we are in the midst of the biggest transfer of wealth in history . . .” (through higher taxes).

Very true, and all we can do is protect ourselves to the best extent possible.

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

Self sufficiecy will be the key to survival. Farm land, gardens, livestock, forested area ( wood burning stove ) . You would be suprised how little money is required when you start becoming self sufficient and bartering with locals. ( making what you have / earn last alot longer.)

#124 Nostradamus Le Mad Vlad on 09.23.10 at 7:02 pm


#116 Old_is_Gold — Ditto! Call anytime, and leave a message if I’m out walking in Fairyland!

Received this e-mail an hour or so ago. 1:03 clip.

“Good One! Have a quick read before you watch the video. HP PRINTER

“WHAT A GREAT WAY TO LET A COMPANY KNOW ABOUT HOW THEIR CUSTOMER SERVICE IS DOING! LOVE IT!

“This soldier in Iraq had an HP printer which quit working. He contacted HP tech support for help to fix it. HP told the soldier that he would have to pay them for the advice. Watch this 60 second video for his response to them.

“I don’t know how many folks will end up seeing this…but HP customer relations probably wish they had helped him out or even sent him a new printer.”
HP (not BP)

5:24 clip “Listen to this incredible audio recording of a speech made by JFK before the American Newspaper Publishers Association where he warns the press about the secret societies that are the real power in global affairs.” wrh.com. There are NO conspiracy theories, secret societies or any of that nonsense!

False Flag? Only the Yanks (with co-operation) pull these off regularly. Besides, Dubai has a lot of oil, plus a lot of empty buildings.

Bleed sheeple dry in the name of Almighty QE.

Hmmm. Isn’t California always living in nice, sunny weather?

A new approach to foreclosures, which lead to this. “Back in the 1960s, this sort of behavior resulted in bank branches being set on fire, which led to a famous poster spoofing Bank of America’s then-new picture checks!” wrh.com.

‘Net Neutrality “Using the term “mass psychologic brainwashing,” the agreement said that the dissemination of information “harmful to the spiritual, moral and cultural spheres of other states” should be considered a “security threat.”

After paying the purchase price, taxes, a license to own your own home and other costs . . . “A year from now you won’t be able to sell your house. Yes, you read that right.”

Taking a break before the next round.

House Shots Part Deux has begun (apparently).

The people behind Obama. Part 1 – 9:05 clip. Part 2 – 10:05 clip.

#125 john m on 09.23.10 at 7:04 pm

Harper pushes for UN Security Council seat…..he sure as hell is ..in fact did he not pledge 540 million of our tax dollars for aid to help him gain the prestige? To put things in perspective –thats almost $17 for every man woman and child in Canada…Canada will never rebound with this guys spending for self promotion and it goes on almost daily.Do we ever need a change..as real estate crashes and jobs diminish,wages frozen and we have a fool at the helm oblivious to the concerns of the people and bragging about his success…… makes me wanna upchuck!

#126 Herb on 09.23.10 at 7:08 pm

Rory (#71),

If the Libs are “evil” and the NDP “duplicitous”, where does that put the esteemed CPC?

Where you been for the last four years, Rory? Certainly not in Harper’s Canada!

Of course, all “to be fair and keep this blog even handed [sic] politically.” And perhaps introduce you to fact and logic.

#127 dark sad person on 09.23.10 at 7:14 pm

Here’s a classic example of a liquidity trap–
This has only one possible outcome–default-cuz-
The PIIGS-can’t print-they are roasted-
When the Vigilantes are through with them-they will cast their eyes towards the next weakest link and roast them–
They will be here one day-no question-
The only way to ward off Vigilante’s-is-for Governments to start engaging in sound fiscal policies–haha
Guess what?
Our ass is cooked-like a barbecued PIIG–

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

DUBLIN – Investors sold off Irish and Portuguese bonds Thursday, driving the borrowing costs of both countries to euro-era records and reinforcing worries about the heavy debts some European governments are carrying.

Analysts say Ireland, in particular, faces a high-pressure few weeks ahead as its government must convince international investors that it won’t have to tap an emergency EU-IMF fund — and won’t keep sinking billions more into its most debt-crippled bank.

Worries over Ireland’s ability to fund its own debts and those of five state-insured banks have driven the interest rates on Irish bonds to a series of record highs dating back to the 1999 launch of the euro. Rates on existing bonds rise when they’re being dumped by investors, because yields increase as prices fall.

If risk perception remains high, paying those higher rates is the only way to attract new buyers when governments need to borrow again.

Two years ago, before Ireland’s long-booming economy went into freefall amid a burst property bubble, its bond interest rates were nearly identical to those of Germany, the benchmark of safety in the 16-nation euro zone.

http://news.yahoo.com/s/ap/20100923/ap_on_bi_ge/eu_financial_crisis

http://www.youtube.com/watch?v=EBLI9jq6tUY

#128 Behavioral Finance on 09.23.10 at 7:54 pm

Obviously your portfolio lacked balance. Did you do it yourself, plow into stocks and mutuals, what? — Garth

MSMLX up 24% YTD
From 11/14/2008 up 148%

Who said Mutual Funds are not sexy?

#129 Confused in Victoria on 09.23.10 at 7:57 pm

#122 John M

In Victoria a couple of wonderful shops (a new furniture and a very well known established antique dealer) are closing due to poor economic conditions. The antique dealer said he has been in the business 30 years and has never seen it to bad. He is a high end dealer on Fort Street.

One woman I spoke today said she is sick of reading in the Times Çolonist that everything is great. She has to sell her house and it has been sitting on the market for over 6 months. Funny though she blames it on the HST.

#130 Timing is Everything on 09.23.10 at 8:01 pm

I did not reference anyone leaving Saskatchewan, but rather the comparable numbers of migrants to the province as opposed to BC. I stand by my comments. Stop being sentimental. — Garth

Well, We are thinking about a ‘reverse’ retirement to Saskabush. We moved to Victoria from Regina in ’89 and bought in ’91. Most of our families still live in SK. Worst case scenerio is sell the 2 acres (forested/well/irrigated/septic system/power gen back-up/wood heated) in Victoria and buy 360 acres in Sask.
And still have some coin left over….and do the 3-4 month warm climate thingy in the winter in various places around the planet.

Decisions, Decisions. No worries, we have 15 to 20 years to think about it.

Go Riders!

#131 Steve from Calgary on 09.23.10 at 8:10 pm

Garth, those “hoodies” in Saskatchewan are called “bunny hugs”.

#132 cyrus arian on 09.23.10 at 8:19 pm

Why cant i read all of comments,out of 136, show only 10.

#133 Devil's Advocate on 09.23.10 at 8:33 pm

#33 VancouverGoinUp said:

“Come join us in the best place on earth Beautiful British Columbia”

————————————————

Welcome back Devils Advocate. You must have a new IP.

#23 Cameroni on 09.22.10 at 11:16 pm

doN’T teMpT mE nor coFusE mE wiTH ANother… nor say mine name three times thrice.

http://www.youtube.com/watch?v=ChWs1d5kots

#134 Timing is Everything on 09.23.10 at 8:34 pm

#133 Steve from Calgary on 09.23.10 at 8:10 pm

Garth, those “hoodies” in Saskatchewan are called “bunny hugs”

Ya Garth, get your act together.Jeeez. ;)

Oh ya, Go Riders!

#135 Bill ( Peterborough) on 09.23.10 at 9:36 pm

Food for thought; ( and most people are worried about the price of real estate)

http://www.youtube.com/watch?v=ICc4pxx_mDg&feature=related

#136 Devore on 09.23.10 at 9:38 pm

#90 junius

I actually am very pleased with much of the infrastructure that we added due to the Olympics. However I am acutely aware that it came with a price.

Vancouver, like every other olympics site, will be saddled with the costs of the facilities for years and decades to come. After all, once built they must be maintained. How much demand is there for a skating rink in Richmond? Will the place ever come close to paying for itself? 10, 15, 20 years from now, when the place is crumbling due to lack of maintenance and rushed construction, like the Montreal stadium, how much will it cost then?

#137 HomeinVictoria on 09.24.10 at 6:07 pm

“If you don’t know how to do this, get a fee-based advisor.”
——————–

So why then are you forcing your prospective seminar attendees in Victoria to exchange their personal contact information with Investor Group advisors shilling their commission-driven services? I’d love to hear you speak Garth — heck, I’ll even pay for it within reason — but I draw the line at trading away my privacy to these IG guys. This really seems like a tradeoff with the devil. Can you do a free book signing appearance instead?

The company paying for the event is providing you with a free evening of information. In return you give your name and address. I’m sure you will not be held down and force fed a mutual fund. — Garth

#138 C'est moi on 09.24.10 at 6:37 pm

Nostradamus Le Mad Vlad – your posts are too long – if you can’t say your blurb in a few sentences, then I don’t bother reading…

#139 i.see.debt.people on 09.24.10 at 9:00 pm

Nostradamus Le Mad Vlad – your posts are too long – if you can’t say your blurb in a few sentences, then I don’t bother reading…

i just skip over them

#140 jwkimba on 09.24.10 at 9:02 pm

#68:” if commodities take off 300k for a house might be a steal in 5 years. Prices may have doubled in just a few years but we were undervalued then. We may see correction of 10% over the next couple of years but that is about it”

So what you are saying is, it’s different in Saskatoon? Got it.