Age of L

Any sane person who takes a wrong turn to the ladies’ room and ends up on this blog will notice a few things. Well, in addition to the moderator’s fetish for ample people in underwear. Even more striking is the doomer tone set by many visitors who think this site is eHarmony for cryogenics.

Not a day goes by, it seems, that somebody doesn’t hint these are the End of Days, in which we need to slay deer, plant gardens, hide in the orange guy’s shorts or hoard shiny yellow metal. Maybe it’s my eau-de-écureuil deodorant, but I sure seem to attract people who believe we’re about to plunge into a deflationary spiral or a hyper-inflationary crisis with the USA defaulting on its debt, the eradication of the Canadian middle class, currency collapse and riots in the streets.

Holy crap, is F now now of them?

The country’s gritty little finance minister, fresh off applying more stimulus than Johnny Depp, emerged from a big meeting with economists in Ottawa Monday to declare Canada’s boom times are over. “We’re in a different world today We’re not going to see the boom times that we saw before…” he told reporters. And to make his point he added: “ This is not a time of booming economic growth… We’re in a time of high uncertainty, particularly with respect to the United States’ economy.”

Now why would a finance minister, who just spent billions trying to goad people into borrowing and buying stuff, say that? In fact, why did the head of the Bank of Canada utter the same thing last week, warning people debt may soon be their worst enemy? Are these guys – who have access to data you will never see – trying to tell is something? Like we should gut a few deer and marry a woman with lots of body heat and recipes?

Not exactly. But I’d expect to hear some grim economic numbers over the next few months, including the latest ugly housing sales stats in coming days. Economic growth in the country’s cooled dramatically from early 2010. Stimulus cash may have helped keep us out of depression, but it didn’t bring recovery. Like many new home buyers a year ago, the feds find themselves mired in debt and wondering what happened. Wasn’t this supposed to buy happiness?

Well, here’s my point (finally). F is right. The doomers are a bit, too. This is a new day and we’re not going back to 2007 no matter how hard we click our heels.

So I hope you’ve been paying attention to things like the stock market, which is probably the strongest leading economic indicator (gold prices indicate only fear). September, if you listen to the guys with doe blood on their fingers, was supposed to be wicked bad. Instead, the TSX gained 3% on the month, which ended up being the best September in 71 years.

In fact, a balanced portfolio containing bonds, preferreds, REITs, commodities and equity ETFs is now up smartly on the year as a whole, at a time when real estate is growing more illiquid, more taxed, more unloved.

This is the new day I’m talking about. The Age of the House is over. The Age of Liquidity is upon us.

Why are financial markets rising even amid gloomy economic news, indebted consumers, staggering governments and structural unemployment? In part this results from a river of money flowing out of real assets (mostly real estate) and into financial assets. It’s powered by those people who understand that for at least a generation, maybe two, owning a house will be shelter, not an investment plan. It’s also pushed along by the obvious – that those who bought within the last few years, especially with large mortgages, will almost surely endure large losses.

Behind this move is demographics – an inexorable force which cannot be abated or altered. Boomers are awaking to the fact they need income, not a house. They’re chasing return and yield, with the smart ones already bulking up on dividend-spewing preferred shares, quality corporate bonds paying 200% what GICs do (with no more risk) and low-cost, highly-liquid targeted ETFs to give them equity growth with reduced volatility.

This is the new real estate – financial property. Stuff that pays you to own it, every day. Vast amounts of money, in corporations, pension funds, money markets and dead-end GICs and savings accounts are joining this housing cash. Much of the liquidity is flowing into sectors which will plump as the Boomers age, including pharma and financials, and others that will soar as the developing world trades bikes for cars – like energy and fertilizer.

Of course, it’ll take some time for this to be apparent. People being people, they chase assets all the way to the top. Dot-coms. Houses. Bullion. They pile on because everyone else is. Investors become fools. The greatest is he who follows.

There’s no doubt where the next ten years are headed.

BTW, F also said this on new mortgage debt:  “We continue to watch. If it’s necessary to tighten the rules further, we will tighten them further.”

It’s now the last thing he has to worry about.

Hear Garth here:

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

Dartmouth
Thursday October 7, 12 noon, Burnside Best Western. Register here.

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

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

Kelowna
Thursday October 14, 7 pm. Register here.

Surrey
EVENT FULL Friday October 15, 7 pm. SECOND EVENT: Friday October 15, 2 pm. Register here.

Calgary
Thursday October 21, 7:45 pm, Chapters Dalhousie, 5005 Dalhouse Dr NW

Toronto
EVENT FULL Tuesday November 9, 7 pm, Double Tree Hilton, 655 Dixon Road (airport strip).

220 comments ↓

#1 Joe Q. on 10.04.10 at 9:12 pm

Can someone give me the history of minimum mortgage requirements in Canada?

Currently — 5% down, 35-yr am
From 2006 to 2008 — 0% down, 40-yr am
Before 2006 — ?

#2 Chaos on 10.04.10 at 9:18 pm

Is that a fat lady on the conservative benches that I hear singing?

#3 Dan in Victoria on 10.04.10 at 9:19 pm

Yep, remember something.
When mommy put that bandage on you felt all better.
It sure hurt like hell when it got pulled off.

#4 CrowdedElevatorfartz on 10.04.10 at 9:26 pm

I agree with what your saying Garth but trying to convince the Armageddon crowd that the sky is NOT falling…… Good Luck.

#5 604genX on 10.04.10 at 9:31 pm

If all these yield-orientated investments are supported by HELOCs, margin accounts and lines of credit, wont they also collapse with the underlying security (real estate)?

Isn’t it better to wait until markets adjust to reflect the unwind of home values and collapse of home equity? At that point, the markets should be ripe.

#6 Dan in Victoria on 10.04.10 at 9:31 pm

I had to go down to deepest darkest Victoria today.
My friend owns a commercial building 5 or 6 little mom and pop stores / businesses.
Apartments on top.
Needed to do a couple of repairs.
I know the tenants, did a lot of improvements for them, they all had dreams of their own business, being the boss so to speak.
Talked to most of them, times are not good, hanging on so to speak.
The bubbly optimism of just last year has faded. More of a quiet resignation of how long can they hang on.
One fellow is from near greece he just shook his head its coming here he said, its just the same.
I’m not sure what he meant totally but it was about finances for sure.
We’re so screwed he said when I left.
I’m thinking of the effort that all these people put in and their quiet desperation.

#7 TaxHaven on 10.04.10 at 9:35 pm

There’s NO way to avoid risk. Risk is everywhere, whether hidden or obvious.

There isn’t – CAN’T be – free money in the form of high dividends, payments from preferred shares or any kind of bond that doesn’t carry risk. Does Japanese yen speculation entail risk? How about buying Treasuries? What about gold, even?

Risk is ALWAYS there, only we can’t predict its size or when it will become evident.

And there’s more risk around now than usuual, too. The future belongs not to passive investors but to those who are prepared to take individual action to manage their money daily without such excuses as “I’m not a professional” or “I’m too busy with my job” or “I don’t have enough money to do that…”

No more armchair real estate or mutual fund grandees. No more TFSAs, CSBs, RRSPs or RESPs, CPPs or bank accounts.

Returns in major asset classes – bonds, money markets, cash – are universally LOW, everywhere. Why? Simple – LACK OF GROWTH. And why should anyone asking for your money, without an inside edge or an ironclad magic business plan, pay you more than @2% without risk?

Is there a sudden ATM around that corner? A panacea of liquidity, of diversification?

YOU HAVE TO GAMBLE. TO SPECULATE. HAVE TO.

And only equities offer any chance to eke out a return above the New Normal. You have no choice but to be in the markets, watching daily, buying and selling, daytrading even.

And don’t think too much about EPS, cash flow, waves, charts, Fibonachi bands or debt loads. Nearly meaningless now. All stocks are in play as casino counters now. Momentum, timing is everything.

I know it sounds trite but we are all forced to accept the risks of speculation in a world of no-growth near-zero returns elsewhere.

#8 Jsan on 10.04.10 at 9:47 pm

So once again, we have pulled what would have been future work and projects into the last year or two thanks to unprecedented stimulus (100 Billion dollars plus), home renovation tax credits, Billions and Billions of new CMHC mortgages and extremely cheap rates leaving virtually no fuel to propel an economy that is already slowing down. We are left with a population that is wallowing in debt, a government wallowing in debt and a new generation that took on mortgages at levels that will have them shaking their heads once their stupor wears off and they realize what foolish financial decisions they have made.

Again, no wonder Carney and Flaherty are worried. But than they should be worried, they were the debt enablers that helped create this decade of debt junkies.

#9 Ben on 10.04.10 at 9:51 pm

“corporate bonds paying 200%”

must be a typo… lol

#10 Love this Blog on 10.04.10 at 9:52 pm

I’m flattered Garth!!

#11 Mister Obvious on 10.04.10 at 9:55 pm

A Short Field Report from the USA’s Pacific Northwest:

I’ve just returned to la-la land from a week’s vacation in Washington and Oregon. I was consciously on the lookout for outward signs of the American economic blight that is often spoken of on this blog.

There was a festival at Seattle’s ‘Pike Place market’ on Saturday, Sept 25. Among the thousands in attendance I noticed a small vocal group of college-age kids (but not actual students) handing out leaflets and wearing picture placards of Barack Obama adorned with a Hitler moustache.

I talked to one glassy-eyed young pup who almost, but not quite, had a moustache to speak of. He claimed to represent “The LaRouche Political Action Committee” inspired by the writings of ‘Lyndon H. Larouche Jr.’, a self-styled maverick economist, prophet and convicted fraudster.

http://en.wikipedia.org/wiki/Lyndon_LaRouche

This kid explained to me that America had carved out its own heart through de-industrialization. “Well, you got that right, son”, I said, but the conversation went rapidly downhill from that point.

According to him, the only fix was the immediate implementation of the “Larouche Plan”. The Larouche plan posits that President Obama takes his marching orders from the power brokers in London (huh?) who seek to lower the population of the world by several billion people through the mass murder of the world’s poor, elderly and sick. Only by a coalition and common currency between Russia, China, India and the USA can the world hope to stop the British Empire in its tracks. Apparently he hadn’t heard the British lost their grip on world dominance about a century ago.

He also stressed the importance of the ‘North American Water and Power Alliance’ (NAWAPA) to the recovery of the USA. This plan proposes the diversion of water through Canada from Alaska to the parched southern States so that they may again flourish agriculturally. I got the distinct impression he felt that Canada’s approval and cooperation in this matter would be quite irrelevant and unnecessary. He saw Canada as a large ‘empty space’ standing between America and her rightful resources.

Larouche also upholds the right of the USA to colonize the moon as well as Mars and other planets. In addition, he states:

The biosphere must be brought under the control of the nooshpere (i.e. man’s creative control) by a process of anti-entropic development through which it incorporates an increasing amount of non-living material resulting in higher states of organization etc., etc., etc.

There’s lots more mumbo-jumbo where that came from. L. Ron Hubbard lives again. It’s reassuring to see the upcoming generation of young Americans have their heads screwed on right.

On Wednesday, Sep 29 in Portland, Oregon I saw about 200 angry Teamsters hold a rally in a park then proceed to march on to City Hall screaming for a contract which they are now without as the city enlists private companies to do more cheaply many of the tasks they once performed. Not a happy group for sure , but many of them were floating helium-filled red balloons and wearing matching green T-shirts making it all seem somewhat festive, in an Oregon, ‘soft-on-pot’ sort of way.

Out on the coast there were some extremely low priced waterfront properties. That is to say places that would be perhaps 1.5M in the Gulf Islands for equivalent properties going for say $400K, and seemingly, getting no offers. There were even some respectable smaller waterfront and water view places in the $200K range.
The newspapers of Washington and Oregon abound with ‘human interest’ stories about ‘the recession’ (occasionally, even the ‘D’ word is used). Oregon especially claims to be essentially broke but is emphatic that raising taxes is not an option. The state makes it clear that it won’t try squeezing blood from a stone. Cutting services is the only viable course of action for the foreseeable future.

In general, I got the feeling the Americans in the Northwest have only just recently realized how bad their situation is and are desperately seeking someone or something to blame. They haven’t quite gotten around to checking in the mirror yet.

#12 Nanaimo Slowing Down-More Rentals Available Soon on 10.04.10 at 9:56 pm

VI Funcanuck here in Nanaimo….

A RE agent friend of mine said he only had ONE call in September. Furthermore, that he was glad to get a contract w/ his other business (not related to RE at all).

Despite this, prices are stubbornly high on MLS. Not much is moving.

Am renting out my other house-ironically as my tenant has just bought a home. Hope that works out ok for them.

Did research on rentals in Nanaimo and am surprised that there is A LOT AVAILABLE! I can see many owners not being able to sell and then renting out to at least get some income coming in.

Good for renters.

#13 nonplused on 10.04.10 at 10:07 pm

The stock market is trading with a high inverse correlation to the US dollar. US dollar down, stocks up. Or like today, US dollar up, stocks down. Gold is doing more or less the same thing but has taken on a relationship with more currencies that just the US dollar.

Makes sense for stocks, as a lot of companies sell commodities and consumer goods that will go up with a weaker dollar. Then throw in all the black box computer trades (70% of all trades now) and everything gets correlated to everything else.

There is reason to be gloomy, although I don’t see a quick destruction of society or anything like that. But there is only so much debt a person or a nation can carry, and the train whistled right by that stop a long time ago. The debt will not be repaid because it cannot be repaid, so the only question is how it gets written off; either deflation and default or inflation and the buying power of principle eroding. The net result is the same either way, lenders get screwed and nobody knows what the money is worth anymore.

But it is not the end of the world. Financial systems fail all the time. The countries almost always survive and go on to prosper once the bane of odious debt is removed from their backs.

The most interesting news state side last week was the suspension of mortgage foreclosures unless the foreclosing agent can provide the mortgage paperwork. Yum! This one has the smell of fresh chum in the water! First, the Mortgage Backed Securities market is now officially dead. Second, it sort of inadvertently solves the foreclosure problem in the States. Most people can now just stay in their homes, make no mortgage payment, and who knows they may get years out of it before the deed can be found, if at all. And then if there is anything wrong with the paper work…. Third, the housing market is now officially screwed, because nobody is going to lend in a market where you can’t foreclose and you don’t even really know if you can transfer title. Things just went from SNAFU to totally FUBAR. Oh and forth, the banks are now totally insolvent, because there is no way they can carry their MBS’s on the books at anywhere near full value now. The bailout required is going to make the original look like an ice cube beside and iceberg. Big Ben is going to have to buy up all the paper. Which might be why they are talking about a new ongoing Quantitative Easing (money printing) program.

But none of this is serious, just hopeless. What I mean by that is that there is no way to fix it, the situation is irredeemable, but the actual outcome isn’t going to be as bad as people fear. The houses will all still be there after the banks go away and get replaced by another one. And you get to live in it for free! Kind of sucks for all the people who actually paid for their houses, but oh well. There’s a sore looser at the end of every poker game!

What is serious but maybe not hopeless is the peak oil thing. We should be spending a lot more time on that bulge in the carpet. Maybe with this new shale gas drilling and also the success they seem to be having trying that technology out on shale oil we can buy ourselves an extra 20 years and do something about it this time.

#14 timbo on 10.04.10 at 10:11 pm

west is stuck in near depression. Will Europe be the first domino to fall..

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8039789/IMF-admits-that-the-West-is-stuck-in-near-depression.html

Good read from Harvard on how a “liquidate labor,stocks and farmers ” worked in the Hoover administation during the great depression.

http://docs.google.com/viewer?a=v&q=cache:ZkoR6f9iESQJ:www.j-bradford-delong.net/pdf_files/Liquidation_Cycles.pdf+andrew+mellon+liquidate&hl=en&gl=ca&pid=bl&srcid=ADGEESiQo9W2Yus5_L7J43MrGuFiB2N1ePC2CkoRCh19Q5y4cRZ_3pzd4UJb_kuMDSgbr8NxrCUeZ3owFzwk_NJ0Nv7_opq3WEZN3SB0JU1GUEfSOWtxYODOny-yJFgYPc85RgFLZpjG&sig=AHIEtbQEyqvxX3C2y0av2p2KKorHa2IRig

#15 JM in London on 10.04.10 at 10:19 pm

#11 Mister Obvious on 10.04.10 at 9:55 pm

Well – I can report similar things here on the Michigan (hour & change away) side all the way down to Chicago – with pockets of exceptions like Troy for instance – but on the whole it’s not a pretty picture. Gotham seems to be fairing much better than The Motor City but there are pockets of wear and tear everywhere. Infrastructure despite all recent cash infusions seems to still be fraying around the edges…

#16 Sue on 10.04.10 at 10:47 pm

eau d’écureuil…..that completely cracked me up! Thanks, Garth, for never losing your sense of humour.

#17 T.O. Bubble Boy on 10.04.10 at 10:52 pm

Anyone else think that F is a REALLY slow reader? (or, really far behind on his to-do list?)

He’s just catching up to the news from 3 years ago!

I love how in every conservative speech about the economy now, it is mentioned that they “raised” lending standards… quite ridiculous to count this as an accomplishment when they were “raised” from the 0%/40-yr level that the cons also introduced.

That’s like saying “I bought a bunch of crap on my credit card that I can’t afford, but I did a good thing by returning 10% of it”.

#18 eddy on 10.04.10 at 10:53 pm

good banking video here-

http://larouchepac.com/node/13837

#19 InvestorsFriend (Shawn Allen) on 10.04.10 at 10:59 pm

Garth said:

“In part this results from a river of money flowing out of real assets (mostly real estate) and into financial assets.”

Yeah… well an individual can sell a house and invest in stocks. But the population as a whole cannot.

When granpa sells that 50 year old bungalow to clueless 30 year olds for $450,000, Grandpa gets money but junior has to borrow it and put it in the real estate. No net money has flown out of real estate.

As house prices decline no money whatsoever flows out, it just disappears into the same thin air from whence it came.

As houses are sold no net money flows out as the buyer must put the money in.

I guess you could say new borrowers who buy houses from gandpas ultimately cause money to flow from banks to house to grandpa to the financial markets.

Also keep in mind that when stock prices fall not a single dollar flows out because of the stock price decline. Every stock sold is also bought.

That is to say, an individual investor can pull his money out of stocks, but only by another investing putting that money in. Investors as a whole cannot pull a single dollar out of stocjks by selling. (They do as a whole get money out through dividends but not by selling shares to other investors)

Same for houses. ‘cepting no dividend on owner occupied houses.

New money flows into owner-occupied houses as they are built or renovated. No money ever really flows out of owner occupied real estate since the money on the sale of the house must be put in by the buyer.

Sorry but that is the nasty nature of the math here.

#20 realpaul on 10.04.10 at 11:02 pm

Hey…..wait jus a minute senor…..didn’t the ’emergency intrest rate’ scenario begin in 2001? Isn’t that what got the real estate whores all fired up about a market cycle that just wouldn’t quit? Didn’t the governments need to recue the dot com bust? Isn’t that when RE start taking off? This has been no short term manipulation…this debt has been building for a decade. People have spent themselves stupid say Carney and F….no duh ! But at the same time the BOE governor states that low intrest rates were ‘fixed’ to jack up spending…. so how can these bozo’s have it both ways. Does the realization that national GDP has risen over 120% have something to do with this sudden ‘ epiphany’?

Oh there is plenty of bad news to come…it is being managed by F and the dipwads on the hill….the recent announcements are the front running before the shotgun falls on the floor.

With Ottawa in record debt and new taxes being announced every friday night we can be damn sure that F isn’t whistling past the graveyard when saying that ‘growth will moderate’. Its as if he’s suddenly found out that he has gonorrhea and would like us to blame the whore.

#21 PhinnyLovesETFs on 10.04.10 at 11:03 pm

Funny how Garth seemed to be leading a fringe group of real-estate armageddonists in January, and NOW the real-estate armageddon is all over the front pages.

When everyone else is panicking, Garth, you seem to be telling us to stay cool, stay liquid, and make investments in reasonable industries(read about ETFs in your book, btw, and buying some tomorrow).

Will you be now painted as some fringe leader of a cult of docile, cow-eyed investors suicidally putting money into an imploding market while (now-)panicked majority stick their cash (what’s left of it) in gold, canned goods, rifles and tinfoil hats?

I wonder…

#22 Mark on 10.04.10 at 11:18 pm

#5, margin accounts are supported by the securities, and not by housing. The TSX probably would be 25k-30k today, if it weren’t for a distinct preference amongst the population for housing investment instead of stock investment.

TSX earning estimates are way too pessimistic, especially in the resource and financial sector. The gold sector is just waiting to explode. Banks are now in the drivers seat to raise spreads now that the peak of the housing market has been reached. And there is very little manufacturing or retail in the TSX so the downturn there won’t really affect the index.

#23 Veej on 10.04.10 at 11:23 pm

Man the gall that F has. It’s like he handed out free drugs on the downtown east side for 5 years and then one day showed up and said “hey you bums, drugs are bad for you! I’m going to help you get off these drugs!”. Holy crap he so deserves a good hard kick in the nuts.

#24 Cameroni on 10.04.10 at 11:26 pm

“Are these guys – who have access to data you will never see – trying to tell is something”?- Garth Turner.

——————————————————–You bet they are trying to tell us something. These guys would NEVER make the remarks that they are now making by accident or by a slip of the tongue.

So here is what they may be telling us (in code of course).

1) That there is about to be a sharp reckoning in the distribution of transfer payments as Ontario, Canada’s usual breadwinner swims in billions of debt that will not be cleansed from the books for the next decade.

2) That the numbers are coming in on real structural employment losses and futures estimates based on current closures of manufacturing, mills and large changes imposed on the economy by housing now entering it’s funk years.

3) That unemployment is rising and we cannot possibly continue to entertain the idea of settling more than 300,000 newcomers and immigrants annually especially at a time when unemployment is going up. It is just not politically a winner of an idea anymore as Canadians cannot find work themselves.

4) That changes are coming to the immigration act that will substantially affect current applications and therefore estimates for future tax revenues. We can no longer grow the economy with immigrants which is a tough pill to swallow as they were the ones who were to carry the burden and offset all the Boomer retirements.

5) That there will therefore be reduced revenues and programs will have to be whittled and cut. Austerity is now on the horizon and nobody will like how it affects them.

6) That consumption, the driver of 65% of our economy is about to take a hit due to the high levels of indebtedness at exactly the worst possible time and bringing with it widespread jobs losses in the service sector.

7) That the sinking US economy is about to take a bite out of our wallets as the Loonie rises above parity and drives many of our weakened manufacturers out of business or out of the country. This primarily due to major purchasing power losses in the US as it devalues it’s currency and fights to right it’s own economy.

8) That cuts are coming to the Federal public service and they will be broadly based and potentially deep as the next few years unfold.

9) That the combination of all of the above means social programs, pensions, health benefits, transfers, subsidies and government supports will all face a close encounter with the scrutinizers pencil and cuts are on the horizon. None will be spared (we are an fair country).

10) That the Provinces should get out the crying towels now because the days of largesse are over. We might expect some very tough medicine to be doled out at the provincial level as the message gets through and the trickle down effects could result in some harsh budget cuts in the coming years. Watch for big changes to Health and education.

That covers the rough points. Now I think I will be sick.

Actually you can wake up now. — Garth

#25 dark sad person on 10.04.10 at 11:26 pm

Why are financial markets rising even amid gloomy economic news, indebted consumers, staggering governments and structural unemployment? In part this results from a river of money flowing out of real assets (mostly real estate) and into financial assets. It’s powered by those people who understand that for at least a generation, maybe two, owning a house will be shelter, not an investment plan.

*******************
We are still in blowoff from stimulus goosing-
Now what?
Take away the stimulus and we’ll see how long markets hold up-
Maybe they’ll jazz it some more and we stumble along until the next election is over-then-who knows for sure-but-
this doesn’t sound all that rosy-
What will put people back to work?
I see nothing near term-

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

S&P 500 Profits Cut for First Time in Year by Analysts

For the first time in more than a year analysts are cutting their forecasts for Standard & Poor’s 500 Index earnings, jeopardizing gains from the biggest September rally since World War II.

Estimates for S&P 500 companies’ combined 2011 profit fell as low as $95.17 last month from an August high of $96.16 and posted the first quarterly reduction since the three months ended June 2009, according to more than 8,500 analyst forecasts tracked by Bloomberg. The revision came as the benchmark gauge for U.S. equities rose 8.8 percent last month, the largest September advance since 1939.

U.K., Hong Kong

Analysts cut 2011 profit estimates for benchmark stock indexes in 20 of the world’s 24 developed markets last month as U.S. unemployment remains near the highest in 27 years and European lawmakers enact austerity measures to shrink budget deficits. Income forecasts for the FTSE 100 Index of U.K. companies have fallen 4.9 percent since the end of May, while those in Hong Kong’s Hang Seng Index are down 1.5 percent since February, data compiled by Bloomberg show

http://www.bloomberg.com/news/2010-10-03/s-p-500-profits-cut-for-first-time-in-year-in-analyst-forecasts.html

#26 tim on 10.04.10 at 11:27 pm

Why do people have this silly debate about Gold?
It is in a trend. Trade and make money period. Who cares what it is- make money. Buy dips and place your stops.
Repeat and enjoy………..

#27 InvestorsFriend (Shawn Allen) on 10.04.10 at 11:29 pm

Garth, I keep monitoring the delinquent mortgages in Canda and they remain extremely low. Too low to be believable. (under 1/2% in Canda versus some 10% in the United states)

Then I wondered has CMHC paid out more in claims to the banks?

Well check it out

http://www.cmhc.ca/en/corp/about/anrecopl/upload/CMHC_AR2009.pdf

Page 66 of 160 shows they paid out $1112 million in 2009 against a budget plan of $279 million. How is that for a miss? And I seached the discussion in the annual report and they totally brushed over this.

But don’t worry page 100 of 160 shows they expect that claim payment to fall by half in 2010. Well we shall see.

If house prices drop as you expect, then I expect a good lot of people to declare bankruptcy and CMHC will have a fat lot of claims on their hands from the banks. If I was 30 and owed four times my income and the house price drops, I’d want a do-over, a mulligan. A bankruptcy…

CMHC is likely to feature prominently in the 2011 budget speech as F announces it needs an equity injection.

#28 Fireangel on 10.04.10 at 11:31 pm

Garth,
Are you following the “RoboScandal” in the US?
It looks like US housing could take another plunger. Wanted to get your take,
Thanks,

#29 Cameroni on 10.04.10 at 11:31 pm

There is an emoticon added to my text in the previous comment that I DID NOT enter. I don’t do emoticons and I do not know how to include them. Kindly remove the offensive icon Garth or delete my entire messge as it does not reflect my opinion in any way.

#30 lexington on 10.04.10 at 11:31 pm

Garth,

I have had the misfortune of investing in natural gas using HNU.TO, which doubles the move in natural gas futures. I got in at $25 just over a year ago and now it trades at $3, down from a high of $1000 just over two years ago. No, that’s not a typo, that’s one thousand! You are bullish on energy, does this include natural gas? I realize that part of the problem is the contango and this ETF readjusts every time the futures roll over. But it also seems like there is so much natural gas out there today there’s almost nowhere left to store it. Do you see this situation changing any time soon, or are you only bullish on oil, coal and uranium?

That was an extreme move, and you paid the price. — Garth

#31 pez on 10.04.10 at 11:37 pm

oh give me a damn break..

the only greater fool is me for getting out of vancouvers housing market during the irrational panic of dec 2008..

now, as loser tenant, we have been told our landlord is selling our home and we have to pack up and move again..oh and guess what, he didnt even list the property, instead he had 6 of his builder friends fighting over it and sold at 33 foot lot with a tear down in kitsilano for 1.5 million…this market is alive and well and i sadly will never be part of it again..after owning my own home for 25 years, i will exist as a loser tenant at the whim of my “landlord” GROSS!

btw, millenium waterfront is not selling because the stupid vancouver city council, in an effort to please every frickin bleeding heart, are proposing to put welfare losers in with 2 million dollar condos owners…do you wonder why they aren’t selling? no one ever talks about this pivotal fact as to why this development is stalled….the sky is not falling, it is just the dumbest planning ever…
Seen many poor Chinese people showing up here lately?
nah, neither have I …believe me, its different here.

#32 obert on 10.04.10 at 11:41 pm

Blaming the Canadian government, its agency CMHC, finance minister etc. for the housing bubble…

However, the ultimate responsibility is of the Canadian citizens. Our country is a democratic one. If people suffer, they better get engaged, involved, educated both financialy and politicaly. Sometimes nations go through hell before organize their affairs better.

I think the US citizens are getting smarter, and I’m sure Canadians will follow.

Don’t live beyond your means, don’t steal from your children, choose leaders of your country carefuly, etc.

People got complacent, but they will come around. Let’s hope for better days..

#33 Tom on 10.04.10 at 11:45 pm

I don’t know whether to shoot Flaherty or his barber lol!
It’s nice to hear the Finance Minister tell us we’re headed for slower days a year after it was common knowledge. I guess that’s why he works for Steve – or maybe because he does what he’s told and doesn’t question his marching orders.

#34 John on 10.04.10 at 11:45 pm

Ben,

Read the article again, it says ‘corporate bonds paying 200% what GICs pay’, meaning bonds are paying twice as much as GICs.

#35 aal Finance on 10.04.10 at 11:49 pm

Garth,

So what do you think is the reason that investors are plowing their cash into bonds? Do you think it’s the savings account money?

#36 Patz on 10.04.10 at 11:50 pm

The US housing market is sailing into waters marked “thar be dragons.” It is nowhere near a recovery and now another wrinkle is starting to look like a mountain ridge. In their greed and rush to securitize their mortgages the banks failed to dot all their ‘i’s never mind cross those ‘t’s. The result is a big mess brewing.

Here’s why. 23 states require a judge to sign off on foreclosure. The claiming party must show proof of title and interest. If they can’t, they don’t get their security, i.e. they can’t have the house until they can prove they have the legal claim to it. So now thousands and soon maybe millions of the foreclosed on are demanding, through their lawyers, that the banks show the original mortgage. Meanwhile they get to stay in their homes.

Who knows who wins, who loses but right now it doesn’t look to rosy for the banks.

Garth,

Too right 2007 won’t ever be back. The Canadian middle–class is already gutted, they just haven’t bled out yet.

You probably know Jeff Rubin personally. He was Chief Economist for CIBC World Markets 1992–2009. His book Why Your World is About to Get A Whole Lot Smaller, just came out in paperback. He understands peak oil and that it is going to throw a giant wrench into the “Age of Liquidity.”

Info on Rubin and his book: http://tiny.cc/wrznn

#37 Behavioral Finance on 10.04.10 at 11:51 pm

Ben,

“corporate bonds paying 200%”

must be a typo… lol

I think he is comparing this to the orange guy rate of return.

I said bonds paying 200% more than GICs in the same bank. Sheesh. — Garth

#38 Basil Fawlty on 10.04.10 at 11:56 pm

“(gold prices indicate only fear)” Sure, but fear of what and is it justified? Why is gold rising, just because people believe in the end of days? Of course not, it’s rising due to competing currency devaluations and the falling US dollar, which is the worlds reserve currency. People around the world see the massive unsustainable debt and are moving to a more secure store of value. Most of these investors are not doomers or survivalists, they are quite rational and this rationality has paid off quite nicely and will continue until governments become responsible with currencies. Why is buying gold “hoarding”, but purchasing bank stocks “investing”. Some of the richest people on the planet are invested heavily in gold, do you think they are stupid?

#39 Patz on 10.04.10 at 11:59 pm

Check out this little Vancouver gem for just pocket change under 1 mil. It’s in the “highly desirable Cambie area.” Reminds me of BHA in Los Angeles, Beverly Hills Adjacent. (Hell, Watts is BHA with a little stretch.) This one is a couple of blocks from 22nd and Main. When I went to school in Vancouver that was considered East Van. Now you practically have to go to Burnaby before a realtor will allow somethings in East Van.

Anyway here she is, another candidate for “Crack Shack or Mansion.”
http://www.stuartbonner.net/7W22nd.asp

Yup, the market’s stable all right.

#40 garthfan on 10.04.10 at 11:59 pm

Mr Oblivious wrote:

“In general, I got the feeling the Americans in the Northwest have only just recently realized how bad their situation is and are desperately seeking someone or something to blame. They haven’t quite gotten around to checking in the mirror yet.”

You really should visit different locations besides the mirror, Mister O.

My friend Garth wrote recently about a lack of tent cities, yet failed to mention why… when the Street Sweepers come through they take your tent, slash your sleeping bag, blast last noises in your ears and threaten to put you in jail. You fuggin’ yuppie baby-boomers really piss me off sometimes with your lack of humanity!

Here comes the sun!.

#41 Grandpa Grinch on 10.05.10 at 12:06 am

I fail to understand why someone who is so well spoken can be so underinformed Garth. Gold is not a reflection of fear, its a reflection of the loss of purchasing power of the USD. Commodities have signalled inflation with prices in everything from wheat to coffee to iron ore. I give it 6-9 mos before the full force of these price increases yoy are felt in every corner of our country.

The run up in the price of gold in ’79-80 was a response to fear & uncertainty brought on by runaway inflation & double digit interest rates. We aren’t there yet – but we will be.

When some of the brightest economic minds (Rosenberg, Faber, Sprott, et. al) are all saying the same thing and have a 30+ year track record in calling it as they see it – its time to shut off Dancing with the Stars or Hockey Night in Canada and listen. 99% of the population havent. They will, however, expect to have thier ignorant assess bailed out by others once the SHTF.

#42 Republic_of_Western_Canada on 10.05.10 at 12:07 am

“shooting deer and warming up to young women with good recipes..”

You should be doing that anyway. It has nothing to do with some abstract financial calamity or other.

“People being people, they chase assets all the way to the top.”

Yep. It’s called momentum investing. Can be pretty damn profitable too. The risk of course is changed from trying to guess what is going to move at all (fundamentals), to where exactly the top is going to be (charts and trading emotion analysis).

In the first case you hope that an investment value follows good fundamentals (but it will do whatever it damn well pleases), in the second you hope you can tell when the ballistic part of the chart is topping (here it is surely moving predictably – if you pay attention and don’t get greedy you could probably profit from it).

The problem now is that with HFT (high-frequency trading) you have computers trading against other computers on any trace of investor-supplied momentum. It’s a cancer that both smothers price progressions based on good fundamentals as well as chops up momentum swings.

Watching the stock market in this day and age to infer anything is just so wrong.

#43 harry on 10.05.10 at 12:08 am

Garth,
just wondering since I have a property where I live on the main floor and rent out the basement. I declare the income. I paid 286k for it and lets say I sell it for 250k in a few years, would I be able to claim some of the loss 9 the part of which I rent out)?

#44 Nostradamus Le Mad Vlad on 10.05.10 at 12:11 am


It would be very interesting if someone gets hold of all the quotes that C-F-H have said over the past few years (all lies), and printed them onto a large board just when the feds. call an election.

Then it is very simple to remind Cdns. they got what they voted for — a cheating, lying bunch of skumbags not worth shitting on.

“. . . these are the End of Days . . .” — Not quite. Several hundred thousand years left to go before this cycle ends.

“This is not a time of booming economic growth…” — F said that? That is the first non-lie I’ve ever heard him speak! He must have soaked his underpants!

“F is right. The doomers are a bit, too.” — Not doomers, just realists. The cycles are changing and we have to change with them, like it or not.
*
Isn’t this interesting? “Creating debt on paper and then charging interest on it turns out to be unconstitutional.”

The west is all but finished. “Most countries peg the value of their currency on the American dollar, with Washington’s runaway printing/money creation devaluing the dollar, other countries follow suit to keep their goods attractive. Thus, the master plan of the IMF and World Bank to create a one world currency unfolds. — kdtroxel”

So much for GM potatoes. But — Surging food prices.

This may be the reason for all the terror warnings coming out. Apparently, “Going To The Toilet” (nudge nudge wink wink) was involved in this, so gas / diesel prices will be on the up soon, as well as food and other things.

OctoberFest Time for a bull or bear market? Maybe bear.

Pretty Chart Recessions vs. Depressions.

Nevada One out of every 84 homes received a foreclosure filing notice, but are they legal?

Gold “But something just doesn’t seem right about precious metals and the US dollar in general.”

#45 Onemorething on 10.05.10 at 12:12 am

Garth, best one yet!

GREAT GLOBAL RESET! Three Decades in the making, at least one to find the trough (let’s say by 2015), half of one more to muddle through to 2020 and something quite different as the western world is stagnant and ROW catches up by 2025.

War and Food Stamps?

#46 Defrauded2 on 10.05.10 at 12:23 am

The RE failure in Canada will be part of the world of economic hurt as now being experienced throughout the Western World. It seems the problem is larger than that of just found within our own backyard. We may have some fundamentals better than that of the rest of the world, but in the end the state of the world economy will amplify the morass the Canadian RE industry will find itself in… True, demographics play a role, but, so does the state of the economy of our favourite trading partners….. We will go as they go? Listening to the economic pundits on the local Calgary radio, I should be heading for Phoenix so I can pick up a great deal down there ( nobody can afford them down there now south of the 49th ) but as a Canadian could I live there year round? I don’t think so… Rent it out maybe? Absentee land lord, that would be good. Could I even find a tenant, let alone collect the rent? Maybe Europe is the place to go…….
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8039789/IMF-admits-that-the-West-is-stuck-in-near-depression.html

#47 Cameroni on 10.05.10 at 12:32 am

#98 junius on 10.04.10

“Thanks for that (Cameroni). The doomers are so sanctimonius on this Blog. Apart from being outright rude”.
——————————————————-

Your comments are appreciated Junius as are yours BigLeboski and others. I agree they are rude however I will admit I dished out a few flames of my own, but seriously the guy seems deranged to me. His words to so many others on this site are utterly nasty and poisonous.

Garth can keep him. Maybe it’s good for the ratings but I am done here as of today. This site has finally descended into anarchy and mayhem with some even welcoming financial collapse as a solution to our woes.

I want no part of this anymore.

#48 Cameroni on 10.05.10 at 12:35 am

Oops, small correction. Should have read:

I agree they (the Doomers) are sometimes rude….

#49 Nebbio on 10.05.10 at 12:43 am

@Ben…go back and read what he said?

#50 CrowdedElevatorfartz on 10.05.10 at 12:58 am

#11 Mr Obvious
Yup, Mr LaRouche is definitely an L Ron Hubbard sci fi fan. When ever Im feeling depressed and “blue” I google one of his sites or one of his progeny.
Quite amusing and frightening all at the same time.
NAWAPA …. a 1950’s Cold war idea to supply America with endless power and irrigation(who needs salmon spawning rivers eh?). God help us all if a Larouche follower actually gets into power. ( Sarah Palin could have been a heartbeat away from the Presidency).

#51 Devore on 10.05.10 at 1:04 am

#11 Mister Obvious

In general, I got the feeling the Americans in the Northwest have only just recently realized how bad their situation is and are desperately seeking someone or something to blame. They haven’t quite gotten around to checking in the mirror yet.

As Churchill is said to have remarked once, Americans will always do the right thing, after exhausting all other options. I think this can easily be extended to everyone else.

#52 Kilt on 10.05.10 at 1:06 am

October is a bad month to get into the market. Especially after a good September. Market is going to correct, and gold with it.
Buy puts if you want to buy anything.

Kilt.

A volatile October could be the best possible time, unless you like paying too much (like most Canadians). — Garth

#53 Ghost of Tom Joad on 10.05.10 at 1:35 am

This is off the charts:
http://www.prisonplanet.com/climate-cult-indoctrinating-our-kids-with-depraved-death-wish.html

#54 Sherri on 10.05.10 at 2:11 am

Garth, You have the markets all sussed out.
When a man thinks he has the markets figured he’s
about to get his head handed to him.

The bullion boys are coming to eat your lunch pal.

#55 Numbers. on 10.05.10 at 2:14 am

So Garth, are you saying “Buy into the stock market now” or “Buy into stocks slowly” or “Wait till the market corrects then buy”?

Yes, like 90% of people I DO CARE about my capital being lost. I won’t risk more than 5% to get up to a 10% return.

I said what I said – balance, various asset classes. Can’t you read? — Garth

#56 jed on 10.05.10 at 2:56 am

http://en.wikipedia.org/wiki/David_Lereah

always good for a laugh

#57 TheBigLebowski on 10.05.10 at 3:01 am

Within a single week 25 nations have deliberately slashed the values of their currencies. Nothing quite comparable with this has ever happened before in the history of the world.

And you think preferreds are going to shield investors from what is brewing on the horizon? Good luck with that

The best defence is asset allocation. Anybody who tells you differently (like you) is a doomer or a pumper. — Garth

#58 TGS on 10.05.10 at 4:05 am

Here is a great link from the New York Times that calculates whether it is better to buy or rent. There are a number of variables that can be changed including rent, home price, downpayment, mortgage interest rate etc.

This is great for anyone who wants an objective tool to determine whether they should rent or buy.

http://www.nytimes.com/interactive/business/buy-rent-calculator.html?_r=2&ref=patrick.net

#59 kitchener1 on 10.05.10 at 4:51 am

F is trying to prime the population for whats sure to be some very weak GDP and Quarter #’s out soon.

Here it is in a nutshell:

Housing is a one time hit to GDP, short term and looks good on balance sheets but not a good long term fix.

A person that signs up to a 35 year mortgage with 5% down is now tapped out so to speak financially. Forgot about entertainment, dinners, new expenditures etc.. all income goes to pay down debt.

With household debt at insane levels, home ownership at record levels, boomers hitting 60-65 enmasse, the economic engine is going from running on 8 cyclinders to 4 that will soon be 2.

Garth is right, we will have a boom but not in the next 2-3 years.

People not in debt already are probely not going to go into debt. And without debt driven economy, boom times are indeed over.

Common sense, talk to the cab drivers, local hot dog cart guy or small resturant, talk to waiters and bartenders, people with small time business and shops, these folks get it.

#60 dd on 10.05.10 at 6:38 am

“TSX gained 3% on the month, which ended up being the best September in 71 years … gold prices indicate only fear”

Alot of commodities increase over 10% this month alone! If this keeps up one might have to revisit the low fixed income return strategy.

Gold prices indicate the devalutation of the dollar and most paper currencies. Inflation indicators flashed a 1.5% yearly rate this month. The Fed wants more! Is 3 or 4% the target or higher? It has to be because it will be the only way to meet their spending needs.

#61 jim hobart on 10.05.10 at 6:53 am

“I was a lousy mayor, but not anymore”

“I probably made every single political mistake that was possible”

Does anybody have any sense of responsibility anymore?? This disturbs me.

http://www.ottawacitizen.com/news/Larry+Brien+culpa+lousy+mayor+anymore/3623183/story.html

#62 brunt on 10.05.10 at 7:11 am

#9 Ben

“corporate bonds paying 200%”

must be a typo… lol
———————————

No, it’s not a typo. You left out the important part “what GICs do”, as in if GICs pay 1%, bonds pay 200% of that, or 2%.

#63 Industrial Guy on 10.05.10 at 7:19 am

This is what passes for good news these days … Future Shop is hiring 4000 minimum wage or 100% commission staff.
I’m sure the hundreds of steel workers in Hamilton who are not getting fired, but actually will be once US Steel gets over its little legal issues with the Government of Ontario are overjoyed to hear this. I thought “Globalization” was supposed to bring the developing world up to our standards and not the opposite. Of course, this information came to us from the same folks who claimed “the economic fundamentals are sound” in the Fall of 2008. You remember …. “the era of deficit spending is over …..”?
Finance Minister Jim Flaherty now tells us, “Canada’s boom times are over”. Well Holy Crap Batman!! Where has he been the last 24 months?
He fashioned a “recover” on massive personal debt and mindless government spending. Now the Minister of the Absurd has the nerve to tell us …. yeppers, all you unemployed 50 year olds. You are really screwed. Your factory jobs are gone. Your savings are gone. The terms “under performing investments” and “underfunded liability” are keeping you awake at night. Your house will soon be worth less than you paid for it in 1985 and your EI is running out. Hows that “self employment” thing working out? Tough market, eh?
Don’t Panic! You’re about to become a minimum wage retail clerk in a high pressure electronics retail store …… and you daughter’s 22 year old boyfriend is your boss. Bet you saw that one coming in 2007, eh?

#64 Numbers. on 10.05.10 at 7:23 am

#55 Numbers. “So Garth, are you saying….”

“I said what I said – balance, various asset classes. Can’t you read? — Garth”

Ok, ok, be nice, it’s wasn’t an attack on your reasoning or judgement, just an open question. :)

#65 pbrasseur on 10.05.10 at 7:36 am

At 18 times announced profits the TXS is expensive, one of the most expensive markets in the world.

Pay attention indeed…

BTW I love that picture!

#66 613 Happy where I am on 10.05.10 at 7:52 am

What the industry we all love to hate on this blog is saying about the housing market:

http://www.ottawacitizen.com/business/Fall+housing+market+improve+after+summer+slowdown/3625026/story.html

#67 bruce corell on 10.05.10 at 7:58 am

Last week an associate of mine put on offer on a home that was listed for 3 months in a nice area of the GTA.
The house originally listed for 610K. When reduced to 55Ok he tried an offer for 510K. It was written back at 530K. He then walked away and said he should wait as that was a 80K drop in 3 months and 530 still seems high.
We are in for a HUGE CORRECTION………Garth It has BURST……..This will be Scary.

#68 jen on 10.05.10 at 8:00 am

One even gets the sense that some in the opposition parties are beginning to worry about the Frankenstein like private debt that has been created. They were asking all kinds of questions about the probabilities and consequences of deflation, severe housing price reductions and negative growth to bank economists in Parliaments finance committee the other day.

Naturally the banks brushed off these concerns as too negative. When a Bloc member asked if they had risk management assessments of worst case scenarios the bank economists had rather evasive responses. They claimed it wont happen but that anything can still happen. In other words, the housing market will not decline, but if it does ‘we’ were still the ones who told you so.

#69 VancouverGoinUP on 10.05.10 at 8:02 am

In tough times you need a hideout

A.M. Kitco Metals Roundup: Comex Gold Posts New All-Time High as U.S. Dollar Decline Continues

05 October 2010, 8:19 a.m.
By Jim Wyckoff
Of Kitco News
http://www.kitco.com

Comex gold prices are trading solidly higher and hit another new all-time record high of $1,330.00 an ounce in December futures as of this writing Tuesday morning. More weakness in the U.S. dollar and generally stronger commodity futures prices Tuesday morning are supporting buying interest in the yellow metal. December Comex gold last traded up $11.60 an ounce at $1,328.40. Spot gold was last quoted up $12.30 at $1,327.75.

#70 Joe Q. on 10.05.10 at 8:04 am

Garth — TREB numbers for September out this morning. Sales down 23% relative to this time last year.

#71 Joe Q. on 10.05.10 at 8:05 am

Garth — TREB numbers for September out this morning. Sales down 23% relative to this time last year. New listings up 6%. Active listings up 28% (wow!) Prices, of course, are still up relative to last year.

So much for the fall market.

#72 Ron Burgundy on 10.05.10 at 8:06 am

“bulking up on dividend-spewing preferred shares, quality corporate bonds paying 200% what GICs do (with no more risk)”

Can you please explain how a GIC has the same level of risk as preferred shares/corporate bonds?
Are our markets really that inefficient?

#73 Apsalar on 10.05.10 at 8:34 am

Talk about whistling past the graveyard :)

http://www.ottawacitizen.com/business/Fall+housing+market+improve/3625026/story.html

#74 mousey on 10.05.10 at 8:41 am

#31 Pez
Wow, lot’s of anger here. Definitely switch to decaf and sign up for a yoga class. I’m not dissing you for being upset about having your rental sold from under you, but you do have choices. Next time sign a longer term lease and write in a penalty if the lease is broken. If you owned your home for 25 years and sold in 2008, then you’ve got a nest egg tucked away somewhere unless you blew it all on a couple of Aston Martins. We owned for 20 years, sold in January 2009 – probably the worst month in recent history – and now rent and so I feel the “scarlet letter” of renting, but it’s fading and the freedom factor is totally kicking in. Basement flooded two weeks ago, call the landlord. Roof looking more than a little tired, oh well. Second installment of property taxes due, no worries. The return on the nest egg probably sucks, but get some advice, find out about your options. What about renting something more compact in Vancouver and buying a vacation property that you can enjoy in your retirement and maybe rent out for now? Probably some good deals coming down the pike in that department so do your homework and don’t be so hard on yourself. You have so many options! Was 2008 the best time to cash out? A year later was obviously better. At least you are driving your own bus. I don’t think it’s different here.

#75 dark sad person on 10.05.10 at 8:44 am

#47 Cameroni on 10.05.10 at 12:32 am

I agree they are rude however I will admit I dished out a few flames of my own, but seriously the guy seems deranged to me. His words to so many others on this site are utterly nasty and poisonous.

Garth can keep him. Maybe it’s good for the ratings but I am done here as of today. This site has finally descended into anarchy and mayhem with some even welcoming financial collapse as a solution to our woes.

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

Getting your own words stuffed back down your throat doesn’t sit well i suppose–
I notice there are lots of people here-who like to dish out personal attacks-like you-but as soon as someone stands up to it-they’re considered “rude”
Whatever–

G would ban me-if i was a racist or a sexist or a pumper or probably even if i was like you and fabricated peoples posts to try and make myself seem “a notch above” like you did-
Sorry i popped your bubble-but bubble popping seems to be trendy-these days huh

Get personal–expect it back–simple

#76 Apsalar on 10.05.10 at 8:49 am

And another…..

http://www.theglobeandmail.com/report-on-business/economy/housing-market-makes-strides/article1742799/

#77 45north on 10.05.10 at 9:00 am

Dan in Victoria: One fellow just shook his head its coming here he said

Plainfield, Illinois: RealtyTrac had just released numbers showing the month’s 95,364 home repossessions in August hit an all-time high since the online foreclosure listing site started tracking figures in 2005.

http://plainfield.patch.com/articles/plainfields-real-estate-market-is-worse-than-you-can-imagine?source=patrick.net

as Pestov’s says Canada doesn’t need a US-style problem to have a problem. A Canadian-style issue will do just fine.

http://www.scribd.com/doc/38541631/38509625-the-Elusive-Canadian-Housing-Bubble-Fall-2010-Musings

High debt levels in Canada are going to hurt the Canadian housing market.

#78 TGS on 10.05.10 at 9:00 am

Ron Burgundy on 10.05.10 at 8:06 am
“bulking up on dividend-spewing preferred shares, quality corporate bonds paying 200% what GICs do (with no more risk)”

Can you please explain how a GIC has the same level of risk as preferred shares/corporate bonds?
Are our markets really that inefficient?

Ron….check out the preferreds by Canada’s major banks. Depending on the series they are paying between 5% and 6.25%. TD bank (now TD Canada Trust) has never missed a preferred share dividend payment since 1845…..I’d say that’s a pretty safe investment….one that pays double what a 5-year GIC is yielding.

#79 Devil's Advocate on 10.05.10 at 9:13 am

For a while there I would get up in the morning brew my first java and read what the Blog DAWGs had to say thinking it an accurate reflection of public sentiment. I got drawn into their negativity. Holy Crap what an abysmal shit hole of despair and pathetic self pitty.

I have since returned to getting up in the morning and instead going for a run while listening to motivational podcasts/informative positive audio books (Zig Zigler – a timeless favourite…). and good tunes (Sympathy for the Devil ;-) ) Gotta tell ya my income is back up but far more important is my frame of mind… I once again see opportunity instead of negativity.

That was an expensive little stint comin’ round this place. And really… nothin new here since this blogs inception anyway. Sorry Garth – your message is good but the repetition is tiresome for the informed and never will penetrate the thick skulls of the ignorant. Unfortunately this site and the Blog DAWGs participation is now only doing a lot more damage than good.

Point is folks… the Blog DAWGS are toxic. Those friends I have met here… and others… heed my advice. There are far, far better things you can do with your time than spend it on here. Things really aren’t as bad as they seem… not by a long shot.

But then… I live in the BEST PLACE ON EARTH!!! Beautiful British Columbia so how could I possibly see anything but optimism? The whole FRIGGIN’ Pacific Northwest!

Mahwah ha, ha, ha, ha…

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

#80 C on 10.05.10 at 9:17 am

#67 Bruce Corell

Wow! That’s what I like to hear as a renter. Can you tell us where in the GTA that price drop occurred?

#81 TGS on 10.05.10 at 9:24 am

The sovereign debt crisis in Europe is not getting any kind of visibility by the MSM in Canada….but conditions continue to deteriorate in many European countries.

The most notable recently is Ireland. The government in Ireland last week announced that it would sink another 34 BILLION EUROS to keep the Anglo Irish Bank solvent. This is equivalent of 12.5% of Ireland entire GDP to keep one bank solvent!

Gold hit $1331 an ounce this morning and will continue to rise for the next 12 to 18 months, albeit with some bumps along the way. The sovereign debt crisis will keep pushing gold higher for probably another year or two as governments keep their presses rolling and printing new money. Gold will certainly fall once governments begin to get their debt in order.

So, gold is certainly not a magic bullet and will not become a ‘currency’ as some on the blog predict. But…it is a hedge against currency value erosion and will stay strongly in play for the next little while. Having a small portion of your overall investments in gold is not a bad play right now….or for the next 12 to 18 months.

We put some money in gold in the spring….made a decent return and got out to solidify our gains (no need to be greedy). Recently got back in with a smaller amount (since the risk of a correction is higher than in March) but still expect to be able to make some gains until late 2011 after which time we will probably bail out again. We could bail out sooner….depends on monitoring European sovereign debt.

This week Moody’s warned that it may downgrade Irish debt…if that does happen gold will spike up again. Downgrades on Portugal, Italy, Spain and more trouble in Greece would also push gold higher.

#82 JM in London on 10.05.10 at 9:30 am

Just spent some time watching F’s speech Garth is referring to…his body language & tone have sure changed. I can’t say more on that as his speeches back in his Harris days made me want to vomit so I had to stop watching him yammer. Just something different is all – still had to take a Gravol to get through it. There is a man who’s been given some news that’s hard to handle.

Garth’s post made me look at our refinance activity and enquiries of late – there is something up with boomers wanting some equity for investing…not enough data as yet to paint anything clear from what I’ve looked at, but will keep an eye on it and see if we have a correlation…

Agent body count at the RE brokerage down the road went up by three for Oct if anyone’s interested.

#83 junius on 10.05.10 at 9:32 am

#31 Pez,

You said,”btw, millenium waterfront is not selling because the stupid vancouver city council, in an effort to please every frickin bleeding heart, are proposing to put welfare losers in with 2 million dollar condos owners…do you wonder why they aren’t selling? no one ever talks about this pivotal fact as to why this development is stalled.”

Really. So this is the new Bull argument. The OV is not selling because of Social Housing. This is despite the fact that Yaletown, Coal Harbour and Cross town all sold with social housing integrated into the community.

Show us evidence of this? Where is the potential buyer who said this? Nonsense.

#84 Charts and Graphs on 10.05.10 at 9:33 am

“The Truth Behind Canadian Real Estate”

Some great charts: http://www.planbeconomics.com/2010/10/01/the-truth-behind-canadian-real-estate/

#85 Bill ( Peterborough) on 10.05.10 at 9:35 am

Well, here’s my point (finally). F is right. The doomers are a bit, too. This is a new day and we’re not going back to 2007 no matter how hard we click our heels.

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

F is just a bum boy. Just does what he is told.

As far as the dommers being right. Interesting.

I think most of the so called doomers are actually informed ” Realists”. Who take the time to sift through bullshit medias, propoganda… to find out why this is happening.

Sure this blog deals with real estate and economics, and I thank you Garth for allowing such a broad range of bloggers comments here.

The fact is that every year it is getting harder to maintain the same comfort levels of each individual in general.

Sure alot of people are maxed out financialy falling into the easy credit trap thrown at them. The question is why was this allowed by our financial institutes in the first place ? Why did the medias feed us the bullshit that everything will be alright ?

Personally before I would loan anybody a large sum of money, I would make sure they would be able to pay me back. Only common sense.

Every year countries are getting further into debt th the banking cabals, selling off their gold reserves, infrastructure, resources and land to huge monopolized/deversified business. We are being robbed by these people right under our noses. AND WE DO NOTHING ABOUT IT.

Then there are comments like ” The national debt is not designed to be payed off, only service through interest payment’s”. What are you F#@$$G NUTS.

So based on the above formula how is it going to get better for the working middle class in the future ? It’s not.

Now advice is given to people where to invest money for the future, because alot will not have enough to retire on. Dam shame this is happening. Does any body ever question WHY ? Very few do , choosing to just plug away harder in a game that is rigged against them.

Personally I find it hard to give my hard earned money to the majority of these financial wizards in these times of currency/ stock manipulation. Even if you do do win, it’s only short term. Because we all heading down the same road of destructive financial collapse, where the middle class will have less and the elite will have more.

It’s not rocket science. Our currencies throught the world are “FIAT CURRENCIES”, because they are based on nothing but bullshit formula’s.

This fractional banking system is “INSANE”. For every actual dollar the banks have they can loan out 10+ more, in credit. Wild.

Whats next fractional grocery shopping, where for every actual dollar I have I can go to the store and buy 10+ times the groceries, and tell them I will just the service the interest debt. ( and use my house as collateral, until I have nothing left)

If any one out there thinks that this is all done by coinsidence, that all governments are truly stupid and not bought and payed for, trully you will be in for a rude awakening. I don’t care how wealthy you think you are now, we will see in the future how you will make out. After they finishing sucking the blood out of the middle class.

All you so called doomers out there : TheBigLebowski, Nostra, darksadperson, Old_Is_Gold, and a few more out there keep em coming. I enjoy reading your blogs, and I am sure aloy of other bloggers do as well.

Oh by the way darksadperson, handle youself well this wknd. Your welcome at my campfire any time, as well as the other ones out there( you know who you are)
( dsp if you want to get get a hold of me go through Old_ Is_Gold, would like to chat with you sometime, thanks)

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

#86 Bottoms_Up on 10.05.10 at 9:36 am

#191 Victor from Vancouver on 10.05.10 at 1:35 am
——————————————
Interesting anecdote, thanks for sharing.

#87 junius on 10.05.10 at 9:37 am

#74 mousey,

You think Pez (#31) really sold in 2008? Think again.

This is Bull poop planted in order to make the “it is different here” argument in Vancouver. More of the same.

#88 JM in London on 10.05.10 at 9:40 am

#75 dark sad person on 10.05.10 at 8:44 am

My Post from Yesterday:

Intellectually dishonest debate tactics are typically employed by dishonest politicians, lawyers, dishonest salespeople, cads, cults, believers of outlandish theories and others who are attempting to perpetrate a fraud.

Name calling: debater tries to diminish the argument of his opponent by calling the opponent a name that is subjective and unattractive; name calling is only intellectually dishonest when the name in question is ill defined or is so subjective that it tells the listener more about the speaker than the person being spoken about;

Apparently, your use of name calling and professionally assaulting me are proof of what?

It of course begs the question as to your own profession. Is it such that it gives you a moral high ground to insult others?
__________________________________________

You did get personal and you have no real ability to debate rather just display an ability to be a caustic.

Have I about covered it?

#89 Bottoms_Up on 10.05.10 at 9:42 am

#30 lexington on 10.04.10 at 11:31 pm
—————————————-
NEVER(!!) buy the 2x and 3x stocks/funds.

They dabble in the options market to enhance returns (and losses!).

It is the equivalent of gambling in the casino.

Even if the price of the commodity doesn’t move, you lose over time (due to depreciation in the underlying price of the options).

STAY AWAY FROM THESE THINGS AT ALL COSTS!!!!!!!!

#90 T.O. Bubble Boy on 10.05.10 at 9:45 am

On those TREB numbers for the GTA:

Funny how no one in the MSM mentioned that 6,310 sales for September is THE LOWEST FOR THE MONTH IN OVER 6 YEARS!

September 2008 was 6424, and that was when the financial crisis was hitting.

Overall, the RE association has to be pretty happy with the month though… GTA fared far better than Vancouver or Victoria or other “bubble” markets.

#91 $fromas$ia on 10.05.10 at 9:46 am

Hey dont like gold?

How about Silver, nickel, platinum, paladium, steel, sugar, wheet.

C’mon Garth the big F and all the other countries in the world want to prop housing prices with inflation.

When the dust settles your money will be debased and the commodities will give a better gain than dividends paid out in debased currency.

Well be whiping our asses with American one dollar bills.

The Canadian penny and maybe the nickle will be used for washers or shims.

Canadian Tire money will be printed in dollars.

Japan now is buying their own debt! LOL

So Garth what is it. Gold at $500 or Gold at $2000?

#92 Blitzkrieg on 10.05.10 at 9:50 am

#30 Lexington,

HNU is a no no, double ETFs are only valid on a short trend, you are better off shorting HND if your brokerage allows you

#93 C on 10.05.10 at 9:51 am

Today’s headline from Remax:

“Real estate market improving”. Come on now for real???

#94 lexington on 10.05.10 at 9:56 am

Is it just possible that in Canada, a rise in listings and drop in sales will lead to higher housing prices? That seems to be the pattern so far. I guess it really is different here. The laws of supply and demand do not seem applicable to Canada.

#95 shankland_the_dog on 10.05.10 at 9:56 am

In defense of doomers.

Yes, yes, you get all kinds on this site. But in defense of my fellow doomers Mr. Turner, you have to forgive us. Your blog is not the only one on the internet. I’m certain that most of us strayed here from other sites based on the recommendation of others. Real estate is just ONE aspect of our overall viewpoint.

Now, I’ll agree and commend you on your real estate downfall predictions, however, some of us have been following peak oil, oil production, flow rates, gold and silver, the stock market, world food production, the Baltic Dry Index, etc, etc, etc…for many, many, many years.

You don’t like gold…we get it. Nuf said. Others do. Others do have an opinion on other matters as well. It is a blog, with a comments section. I guess you don’t want comments about things not pertaining to real estate, then you should make a note on your blog not to discuss them,or disengage the comments section altogether.

Most of the other forums that us “doomers” visit may have started off with a direct theme, but have morphed into their own monster. I think I discuss more finance related issues on oil industry forums, then I do oil.

Just saying. Love the site, part of my daily reads. But be a little easier on your fan base.

#96 JM in London on 10.05.10 at 9:59 am

and speaking of vomit…

http://www.bnn.ca/News/2010/10/5/Housing-market-makes-strides.aspx

#97 DiGiacomo on 10.05.10 at 10:00 am

re: Bank Preferreds

My understanding of preferreds is that if we see a theoretical jump in the market rate for them from 5% to 8%, (as we would expect with higher interest rates, and therefore higher Bond and GIC rates) we’d also see a drop in the trading value of the stock.

Using basic stock valuation, a preferred trading at a theoretical $100 at 5% interest drops to trading around the low $60 range when the market rates shift to 8% (as would likely happen when we interest rates go up, and GIC / AAA Bonds back to the 4-5% range).

Is my math somehow wrong here, or is there something else I’m missing?

Personally, this is primarily why I’m currently focusing on shorter term cash / GIC / AAA Bond assets than preferreds – open to the idea of preferreds, your insight is appreciated.

#98 junius on 10.05.10 at 10:06 am

#47 Cameroni,

You said regarding “DSP”, “His words to so many others on this site are utterly nasty and poisonous.”

Indeed. Clearly his entire life he has spent being part of the problem instead of being part of a solution. The personification of aging, selfish boomer who had it all and now just wants to destroy.

#99 brett on 10.05.10 at 10:06 am

“Gold prices only indicate fear”

Garth you still dont understand gold, it has nothing to do with fear, nothing whatsoever, it is the numeraire par excellence.
—In economics, the numeraire is an item or commodity acting as a measure of value or as a standard for currency exchange—

Gold is being revalued as debt is being revalued, no fear involved, just awakening…the awakening that marked to model “assets” are really worthless garbage, and promises to pay (such as the US dollar) are improperly valued. This revaluation takes time, thats why today 1 oz. of gold is “worth” 1336 US federal reserve notes, but next year may be worth 1600 of them, and in between, “fear” may drive the price down to 900, yes garth, fear works both ways, foolish people can be scared into buying fiat currencies in a panic, (2008 anyone)

there is over 1 quadrillion in OTC derivatives- that insane level of marked to model garbage is the driver of gold, not the tin foiled hat set.

#100 TGS on 10.05.10 at 10:09 am

Looks like the spin doctors at Remax are working overtime…. here is their latest self serving hype: a “rosy fall home market”….LMAO

http://news.sympatico.ctv.ca/home/remax_paints_rosy_fall_housing_market_picture/385d0d5a

#101 dan on 10.05.10 at 10:12 am

Realtors are running scared and trying to put out as much propagnada sunshine as sales have crash 20-30% in Torontno for the last 5-6 months. Realtors are very worried as they see the writing on the wall . Many realtors wil have to find a new job since this one is all but done. Look on MLS or dive through the GTA and you will see empty houses and empty condos all over.

POP……………..What was that?

#102 nikon_d40 on 10.05.10 at 10:19 am

Falling property values are effecting mortgages

This is happening in Alberta and I am expecting to see more of this in the next couple of years.

http://calgary.ctv.ca/servlet/an/local/CTVNews/20101004/cgy_mortgage_foreclosure_101004/20101004/?hub=CalgaryHome

#103 TheBigLebowski on 10.05.10 at 10:22 am

#26 tim
I hope you own some physical because when it starts to move $200 in a day in either direction you will get reamed if you are trading. Go long and stay long.

The best defence is asset allocation. Anybody who tells you differently (like you) is a doomer or a pumper. — Garth

I am a realist you has figured out the course we have been deliberatly placed on. Why is being right for 11 years make a person a doomer. Do you think I take pleasure in knowing most of my family members never listened and most likely will be impacted negatively with their finances ? I take no pleasure in knowing what I know and I stand by my conviction that gold is going to $3000+ based on a loss in confidence in fiat money. I do not wish this to happen but at the same time knowing reality is knowing reality. Because I have puleled my head out of the sand that society has most of us stuck in I am considered a doomer. George Orwells 1984 is upon us and the thought police are out in full force.

#104 jimsum on 10.05.10 at 10:24 am

I don’t think the risk of GICs and preferred Bank shares are the same at all. Imagine it is a few years from now and foreclosures have hit U.S. levels in Canada. At this point, CMHC will supposedly pay for all the bad mortgages and preserve the Bank’s profit margins. If CMHC pays up, Bank dividends will continue.

I can’t help suspect that taxpayers will not be happy with this situation. People will be losing their houses, government debt will be piling up at an accelerating rate, and the only people benefiting will be bankers and preferred share holders. Somehow, I think bank profits are not going to be left unmolested when the housing collapse happens, and GICs will prove to be better investments than dividends.

#105 brett on 10.05.10 at 10:24 am

#30 lexington

buy HNU-tsx today and you will make big $ in the next few years, (I prefer GAS-tsx) Nat gas will likely range between 3.50 and 8.50 for the next 5 years, but has the possibility of going parabolic and exploding upwards. It is not going off the board (unless a technological disruption like cheap cold fusion comes along) I will buy gas to zero, as well as wheat, corn, uranium, and gold.

Gold, food and energy are the winners, in that order, with food arguably better then gold.

#106 Bill ( Peterborough) on 10.05.10 at 10:25 am

# 47 Cameroni

I find your blogs informative, (alot of head butting going this wknd).

Alot of times it gets frustrating here, hidden agenda’s, lack of grasping what’s out there, whether intentional or not.

Tempers flare though passion of their beliefs( most of which are well researched, both sides)
Problem is there are so many pieces in the puzzle to put together before the big picture makes sense.

It has been designed like this by the ” So -Called Elite”.(Like the story of the three blind men who wanted to touch an elephant for the first time, all touching the elephant in different areas, then argueing about what the elephant looked like)

We in general are no different( the ones seeking out information as to why?)

No one person has the answer, but through reading, sifting out the bullshit in mainstream medias, and collectivley blogging we can get try to reveal what paths are being taken by the “Elite’ to accomplish their goals. Hopefully allowing others to see this as well.

Again I see alot of frustration here sometimes on the so called doomers which sometimes becomes sarcastic, tempers flaring. More of being passionate, I believe.

There are some here who do speak with little facts, spinning others peoples words. You and a few others out here I do not put in that category.

Hope you stick around.

#107 rosie on 10.05.10 at 10:52 am

Garth your investment advice assumes a world where manipulation is absent. The only market the P.T.B. cannot manipulate is the housing market. Everything else is a scam.

#108 tran, Calgary on 10.05.10 at 10:56 am

http://chronicle.augusta.com/news/business/2010-10-04/foreign-buyers-are-snatching-property-us

“This year in Phoenix, for the first time, there have been more buyers from Canada than from California, according to real estate data outfit Information Market. With the Canadian dollar approaching parity with its U.S. counterpart, the opportunity was simply irresistible to Jim Chuong, a 38-year-old Novartis sales manager from Toronto.

Chuong’s investing in Phoenix condos, paying $50 a square foot for units that would cost $500 a square foot in Toronto.

The deals can make money from day one. Chuong buys two-bedroom condos for less than $40,000 in low-crime areas. He only picks up units that already have renters. After paying association fees and taxes, he walks away with $300 a month, pre-tax, on each.”

Sell Canada, buy U.S.?

#109 The Original Dave on 10.05.10 at 10:59 am

Just for observation purposes…..

those of you who are watching the bull market in gold and those that have watched the bull market in real estate, bull markets can be tediously long. Just because something has gone up significantly for a long period, it doesn’t mean it will fall tomorrow. You have to look for the faults that are showing in the asset to determine that the party is in fact over.

It seems a lot of people simply see that something has gone up for a long time and deem it as a danger asset. Good luck with that. A lot of people make a lot of money off of buying a party asset. Obviously, you have to know when to get off and sell.

Obviously the bull run in real estate is over. The cracks were shown a few years ago and still it took some time. The bull run in gold isn’t showing signs of weakness. It doesn’t matter if you think it’s gone up too much, it can go further. Bull markets can get so irrational that it becomes stupid.

I’m not pumping anything. Just talking about bubbles and the length of them.

#110 emanon on 10.05.10 at 11:03 am

TORONTO, October 5, 2010 — Greater Toronto REALTORS® reported 6,310 sales
through the Multiple Listing Service® (MLS®) in September 2010.
This represented a 23 per cent decrease compared to the 8,196 sales recorded
during the same period in 2009. Through the first nine months of the year, sales
amounted to 69,069 – up four per cent compared to the first three quarters of
2009.
The average price for September transactions was $427,329– up five per cent
compared to the average of $406,877 reported in September 2009. The average
selling price through the first nine months of the year was $429,657.
“Resale homes in the GTA remain affordable,” said Jason Mercer, TREB’s Senior
Manager of Market Analysis.
Average GTA Price:
August 2010 – $411,012
September 2010 – $427,329
4% price increase since last month, more than usual for aug to sept.
This is really starting to piss me off. seriously.

#111 Brian1 on 10.05.10 at 11:06 am

Cameroni; Why take things so serious? You see his moniker, slide right by. He is nothing but someone who needs lots of attention and medication. Try to read just Garth’s comments. As an asskisser I should know. By the way I still don’t believe anyone should buy preferreds or anything until prices fall substantially. Hardly the opinion of an asskisser. By the way Dark, that’s ‘Mr. Asskisser’ to you.

#112 WINNIPEGER on 10.05.10 at 11:07 am

http://www.ctvbc.ctv.ca/servlet/an/local/CTVNews/20101005/remax-housing-101005/20101005?hub=BritishColumbiaHome

Remax says Winnipeg’s housing market is just awesome…. 32% of houses sold????? hahah

#113 Crash Callaway on 10.05.10 at 11:08 am

#31 Pez

“the only greater fool is me for getting out of vancouvers housing market during the irrational panic of dec 2008”

Perhaps your mistake was not getting out of Vancouver period.
The millions people pay to live as paupers in the shoe boxes in Van is mindboggling.
There are still many places where with the same $$$ people could “Own” better digs and have enough to retire.

Hanging around Vancouver is like cashing out of the gambling section on the Titanic and then hanging out in the buffet area complaining about never spinning the rigged wheel again.
The issue is not how we amuse ourselves on the voyage but whether or not the vessel gets to it’s intended destination.
Vancouver is dead in the water , destination bottom and yet through some dysfunctional allegiance many people who had the good sense to climb into the lifeboat in 2008 keep circling the putrid vessel they freed themselves from.

If a loaf of bread cost $25 in Vancouver and the same or even bigger loaf cost $10 elsewhere, guess where I’m going.

#114 Real Estate Realist on 10.05.10 at 11:12 am

#1 Joe Q: Sure, here’s the stat that really matters…

In the 80’s, building up to the massive crash of the early 90’s and including that time period, a person could NOT get a mortgage from a Chartered Bank, or a Trust Company (before they were all sucked up into the restructuring chaos of the Chartered) for less than 25% down and most terms were 25 yrs. Renewals still hit at 5 yrs for the most part as well. However, there was a lot more play in rates for the sake of keeping the customer.

IF a person couldn’t afford the 25% down (ie. 75% LTV, ie “Loan To Value”), a Private Broker was the only other choice. Brokers are backed by private lenders who want to make some money in Real Estate as part of their diversified portfolios so they lend money to people for mortgage profits. (just covering it, don’t know how much you know). SO, back then, a Broker would NOT go beyond an 80-82% LTV (ie. 18%-20% down).

After that it’s a loan shark someone would have needed.

I was up to my neck in this stuff all day for 4 years through the last crash, in a capacity that covered just about every angle you can imagine out there. There is nothing I didn’t see, learn, or was involved in for the most part.

Bottom line: Other than all of the horrible indicators leading up to this coming crash (not correction, CRASH), the fact that CMHC took the reins off and allowed lending to people that NEVER would have qualified for a mortgage in Canadian history until this stupid move, and the fact that they amortized their lives away as well…honey, you ain’t seen nuthin’ yet. And then there’s the “Collateral Mortgage” portfolio at all of the Banks. OMG, I won’t even bothered. Zillions of dollars, a huge amount in 1st position, just as many in 2nd, and UNINSURED with all of the same laws as a “Conventional” mortgage, the ones most people on the street are familiar with, ie. CMHC insured. The same criteria stood for qualifying for a Collateral mortgage, by the way…. and the EXACT same recovery laws apply….

On top of the very strict LTV policies, noone EVER got away with not justifying their income if they were self-employed. If you were incorporated you had to produce books and tax submissions. If you weren’t (ie. propietorship) you had to produce books and tax submissions.

NO losers got mortgages. DUH ! And still the real estate market collapsed. Today we have the factors of the past crash in place, but we also have all of these broken rules. Enjoy the ride people. ; )

#115 Kip on 10.05.10 at 11:37 am

GTA September sales, 6300.

Slight correction, maybe. Outright collapse, hardly.

People are reluctant to take your stock market advice Garth because they generally don’t understand it and don’t believe it.

The stock market has ripped off far more money from people than has real estate. I’ll take my chances in the GTA real estate market for now as at least I can see it, touch it and live in it.

Worldcom, Enron and our very own Nortel are the reasons people are skittish about stock markets and it’s a reputation well deserved.

Kip

#116 DANIEL on 10.05.10 at 11:40 am

Mark my words.

You are seeing the high’s of the TSX right now.

The TSX will be lower in a month and much lower in a year.

#117 PR on 10.05.10 at 12:05 pm

#114 Real Estate Realist : keep writing its good stuff!

26 tim on 10.04.10 at 11:27 pm
… Repeat and enjoy. Yeah so simple! Nothing to be afraid, when you know what your doing.

Garth ,you know, may be those events, are well plan in advance.

ORDO AB CHAO (ORDER OUT OF CHAOS)

#118 The VULTURE on 10.05.10 at 12:08 pm

Don’t Step on That Cats Tail!

I was looking at today’s blog and I noticed the picture of the mean looking cat. I said to myself, that cat has a striking resemblance to Jim Flaherty in a kind of creepy, too close for comfort way.

I thought, there has to be references to Jim Flaherty somewhere in this blog positing. Then I began to read Garth’s blog and sure enough Jim Flaherty’s name came up. The resemblance is kind of eerie. The implied humour is studpendous.

Gives me the creeps looking at that cat. Maybe the cat should be running the country’s finances. That cat sure know how to avoid being “underwater”!!

I have never laughed as hard as I laughed today!

Thanks Garth for your posting.

Brilliant post as usual.

#119 patiently waiting on 10.05.10 at 12:10 pm

The markets are rocketing higher this morning because Bermonkey and his clowns are at the Federal Reserve are likely to announce a new round of Quantitative Easing (Money Printing). This will keep US interest rates low for awhile yet. My guess is that if US rates are kept artificially low, Canadian rates will also stay low – at least for another year or possibly longer. Does this mean that the housing downturn that has begun in Canada will be less than anticipated? Any comments?

#120 Dan in Victoria on 10.05.10 at 12:11 pm

Hey Cameroni, stick around, I ignore 2.5 posters on here its pretty simple.

#121 OttawaMike on 10.05.10 at 12:14 pm

Re:Cameroni

Too bad you’re no longer posting. You are one of a handful of sound commentors here that I always read.

I wish I could write as eloquantly as you do.

#122 dark sad person on 10.05.10 at 12:14 pm

#79 JM in London on 10.05.10 at 9:40 am

You did get personal and you have no real ability to debate rather just display an ability to be a caustic.

Have I about covered it?

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

JM–you have a short selective memory-
I tried to debate you once-
Your first comeback was-

WTF are you smoking?
I then proceeded to show you what i was smoking-
You simply got your ass kicked-in an economic debate-by me-
You’ve been bitter ever since-
This goes for a few more of the complainers here-
They/you-resort to personal attacks-when you get backed into a corner with facts-instead of admitting you’re wrong and learning something-

I’m open to debate about anything-
Simply prove me wrong and I’ll admit I’m wrong-because none of us are always right-but instead-people bitch about linking music or refer to the old tried and true -crazy goldbug/end of the world wishing doomer-

How stupid do the goldbugs look today JM?
Not that tomorrow the price wont fall-but really-
it does seem like many of you are simply barking up a dead horses ass and have some desperate need to be right-always-

#123 Foggy on 10.05.10 at 12:14 pm

Is it possible to add a feature to the comments section that highlights, in red, the word “gold”? That way I can immediately skip that comment and go to the next one, saving me precious minutes of reading time.
8) 8) 8) 8)

#124 junius on 10.05.10 at 12:16 pm

#106 Bill (Peterboourgh),

You said, “No one person has the answer, but through reading, sifting out the bullshit in mainstream medias, and collectivley blogging we can get try to reveal what paths are being taken by the “Elite’ to accomplish their goals. Hopefully allowing others to see this as well.”

I very much agree with this view. I may not agree with everything you say but I would read your blogs and even the “best of DSP” when he is not running down people. Even the drivel on this site can provide little gems of insight. In any event better to pan for gold here (pardon the reference) than accept the MSM spin machine as gospel.

#125 Foggy on 10.05.10 at 12:17 pm

By the way, Cameroni, that’s where your smiley came from. An eight followed by a bracket. No need for paranoia. 8)

#126 DiGiacomo on 10.05.10 at 12:25 pm

#94 Lexington

“Is it just possible that in Canada, a rise in listings and drop in sales will lead to higher housing prices? That seems to be the pattern so far. I guess it really is different here. The laws of supply and demand do not seem applicable to Canada.”

From what I’ve heard, luxury $1 million + homes have still been selling well, it’s the sub $500k market that’s been taking the recent beating (likely why you see the drop in units sold without the drop in average price – the luxury homes are burying the average price changes from the lower end of the market)

averages rarely tell the whole story – a market that has 5 sales of $1 million and 5 sales of 100k has the same market “average” as one that has 2 sales @ 550,000k – yet they’re completely different pictures of what’s going on.

#127 Andy S on 10.05.10 at 12:26 pm

I agree with most of what Garth says, however I have a problem with his relentless poo-pooing of gold. Me thinks gold is as liquid or more so than any equity or bond. I bought in the fall of 08 at $850. I can visit the bank any time of day and sell for $1330.00. Why would gold not be a viable alternative to the gap toothed dutch guy or a volatile stock market. I could go on, but I have to go count my profit.

#128 lexington on 10.05.10 at 12:43 pm

Enough! This blog has been saying housing prices will come down for what, 5 years now? He’s bullish on energy and commodities too, meanwhile there is so much natural gas they are flaring it off. Anyone who has listened to this blog while housing prices have continued to rocket upwards and natural gas prices have continued to scrape along the bottom has paid a huge price. I’ve got news for you folks. Housing prices are never going to fall in any meaningful way. Maybe one or two percent for a few months, but then they will resume their ascent.

#129 Brian1 on 10.05.10 at 12:45 pm

I slide right by DSK and Bill(Peterborugh).

#130 CREA Cirlce Jerk on 10.05.10 at 12:48 pm

#99 brett on 10.05.10 at 10:06 am

That’s EXACTLY right. Very well said.

I couldn’t give a flying F about gold – it’s just an asset class to me with a great record as a store of value. I’ve tried to convince the wife to invest 25% of our assets in gold, but she won’t do it. She won’t budge. That’s why, I don’t have any financial interest either way unfortunately.

But a blind man could see the nature of its bull market. Anybody who steps in front of that train in the next 2-3 years at minimum is going to get destroyed. It’s still got a long way to go, and it hasn’t come close to mania stage yet.

When I start hearing professional Money Managers and Advisors recommend their clients allocate 25% of their portfolio to gold, then its time to get out. Right now, not even half of Money Manager’s want to own it! And those that do generally recommend 5-10% allocation.

#131 CREA Cirlce Jerk on 10.05.10 at 12:51 pm

Stocks In Gold Down As Latest Stock Ramp Again Fails To Offset Purchasing Power Loss

Submitted by Tyler Durden on 10/05/2010 09:36 -0500

The now traditional ramp in all risk assets continues to underperform the increasing fund flow into gold: a phenomenon we last disclosed after the most recent FOMC meeting. In other words, the S&P expressed in gold is down for the day. Which basically means that even with today’s joke of a market move, the purchasing power lost as a result of now global currency debasement is not offset by some high beta name surging to all time highs. Even basicalier, it means that gold continues to do better than stocks every time there is a central bank intervention. And there will be much more central bank intervention before the location of the next world war release party is officially disclosed. Basicaliest: stocks ramp, gold ramps more. Nuf said.
http://www.zerohedge.com/article/stocks-gold-down-latest-stock-ramp-again-fails-offset-purchasing-power-loss

Another one who gets it!

#132 junius on 10.05.10 at 12:56 pm

#90 T.O. Bubble Boy, #94 Lexington and #110 emanon,

A good article on Financial Insights about the “supply and demand” scenerio. Toronto and Vancouver both experienced the same effect of much lower sales but overall higher average prices in September.

The key is almost no first time buyers.

Here is his thesis, “I’ll give you my theory of what is going on. Demand from first-time buyers is down. Way down. Remember that it is not uncommon for a housing sale to actually close 90 days later. In other words, the deal is done and recorded as a sale, but the money and the house don’t change hands for several months. Now many people who sell their home will immediately go out and put in an offer on their next home, aligning the closing dates. But not everyone does so immediately, meaning there is a residual effect from earlier home sales some months into the future.”

Full article here.

http://financialinsights.wordpress.com

#133 S on 10.05.10 at 1:15 pm

#30 lexington on 10.04.10 at 11:31 pm

Not unusual at all. A good while ago I bought a similar oil ETF when oil bottomed at around $30 a barrel. Sure bet, no? Within days oil was up to $50, while the ETF in question collapsed to the point that the shares were consolidated 1:5. Someone there made money, but it sure wasn’t small investor.Your experience is not unique. Business week had a good writeup on this in July 26 edition. Title: “Amber Waves of Pain : Do Not Buy Commodity ETFs, Do Not Buy Commodity ETFs, Do Not Buy Commodity ETFs”

#134 nsqt on 10.05.10 at 1:17 pm

Almost spit my coffee out of my mouth (due to laughter) reading this one……..

The real-estate industry is no longer only battling with the Competition Bureau. It is now fighting amongst itself, with one of the country’s largest firms starting a campaign against part-time agents.

Michael Polzler, head of Re/Max Ontario-Atlantic Canada, launched a new offensive this week with an advertising blitz in the greater Toronto area that says: “Warning! Don’t use a part-time agent.”

The campaign follows a letter Mr. Polzler paid to have printed in The Real Estate Magazine, an industry publication. In the letter, he declares it’s time to “take back the industry” and calls for the creation of new requirements for agents such as increased education, a one-year apprenticeship program and a referral program that would allow inactive realtors to transfer clientele to full-time professionals for a fee.

“I don’t believe part-time agents can do the job,” he said in an interview. “Many consumers use part-time agents without ever knowing it. If an agent doesn’t do at least one deal per quarter, they are not active in the business, excluding the obvious people like managers.

“Someone who has a non-real-estate, full-time job should not be allowed to handle the largest financial transaction most people make in their lifetime. You have taxi drivers with real-estate licences and that’s not cool,” Mr. Polzler said.

Re/Max Ontario-Atlantic Canada’s campaign for more professionalism in the industry comes as the Canadian Real Estate Association (CREA) continues a legal battle with the Competition Bureau.

The government watchdog has launched a complaint with the Competition Tribunal over what it says are anti-competitive practices. The case revolves around the Multiple Listing Service system owned by CREA and responsible for about 90% of the transactions in Canada.

Last week, CREA passed new rules that will allow consumers to decide how much they use an agent on a deal and allow them to conduct parts of a transaction without using an agent at all. But the case is still proceeding because the bureau maintains the new MLS rules can be changed by the local boards or CREA itself.

Phil Soper, chief executive of Brookfield Real Estate Services, which operates Royal LePage and La Capitale, wondered whether Re/Max’s proposals would further antagonize the bureau.

“It flies in the face in the face of concerns about competition. We are an industry that is full of diversity. There are many models in which our profession is practiced. To state that lower fee-charging realtors who adopt a different model have no place is similar to saying only high-priced lawyers should exist. You can’t say people shouldn’t have the opportunity to hire somebody who is less experienced.”

Some in the industry suggest Mr. Polzler’s proposed business model is an attempt to squeeze out smaller agents as well as being a marketing campaign for full-service brokers. The industry faces consolidation in anticipation of CREA’s new rules.

But Mr. Polzler says he’s been talking about non-producing agents for a year. He gives the example of Toronto, where 20% of realtors with the Toronto Real Estate Board didn’t complete a deal in 2009. Some brokerages have 70% of agents doing less than a deal a quarter, he added.

“Nobody is suggesting these people not be licenced,” said Mr. Polzler. Part-timers could stay in the industry, but on the referral basis, he suggested.

Don Lawby, chief executive of Century 21 Canada, conceded the numbers of agents in Canada does look odd on the surface. There are 98,000 agents or about one agent for every 336 people, including children and people who aren’t home buyers.

“There are some people who get a licence and just elect to keep it active without practicing,” Mr. Lawby said, adding the qualification for being a realtor should be having a licence and knowledge about the market.

“That could include part-time people,” said Mr. Lawby. “I’m sure there are part-time people who perform in a better fashion than some full-time people.”

Financial Post

[email protected]

Read more: http://www.financialpost.com/story.html?id=2744919#ixzz11VbZqGZE

#135 VancouverGoinUp on 10.05.10 at 1:36 pm

Pez
This is a common story of people who made the mistake of selling their home in Vancouver. You know the truth it ain’t ever going down. Sure there will be dips but once your out and if your a Canadian it is very very difficult to get back in. Maybe a dip in the future will give you one more chance before that 1.5 million Kits Home costs 2,3 4 million and beyond
*********

the only greater fool is me for getting out of vancouvers housing market during the irrational panic of dec 2008..

now, as loser tenant, we have been told our landlord is selling our home and we have to pack up and move again..oh and guess what, he didnt even list the property, instead he had 6 of his builder friends fighting over it and sold at 33 foot lot with a tear down in kitsilano for 1.5 million…this market is alive and well and i sadly will never be part of it again..after owning my own home for 25 years, i will exist as a loser tenant at the whim of my “landlord” GROSS!

#136 Real Estate Realist on 10.05.10 at 1:44 pm

Re my post # 114: I retract the word “losers”. That was very inappropriate. Replace it with “people who couldn’t qualify” because there are many reasons, a lot of times that which are not the fault of the borrower, that a person can’t produce a large down payment or make large monthly payments towards a mortgage. A lot are still very hard working people that are responsible and have families to support.

The same hard working people who should NOT have been given a mortgage this time around because it put their entire futures at risk. Sure, they should have done the math into the future, known that one missed payment or lost job would cause major trouble, and recognized a bubble, but their intentions were good. The Banks know that people are vulnerable. It’s a BUSINESS. They sell money the same way Kraft sells cheese. Yummy! It’s terrible, but it’s the truth.

#137 junius on 10.05.10 at 1:44 pm

#132 VGUP,

You said, “the only greater fool is me for getting out of vancouvers housing market during the irrational panic of dec 2008..

now, as loser tenant, we have been told our landlord is selling our home and we have to pack up and move again.”

I see you travel through the blog world posting this crap. No one hear believes you sold in 2008. This is just bull spin to push the “it is different here” spin.

Well, it is different here. No one buys your bull.

#138 Mister Obvious on 10.05.10 at 1:47 pm

#29 Cameroni

“There is an emoticon added to my text in the previous comment that I DID NOT enter. I don’t do emoticons and I do not know how to include them. Kindly remove the offensive icon Garth or delete my entire messge as it does not reflect my opinion in any way.

Actually, Cam, you DID enter the smiley face emoticon simply by typing 8 followed by ). In text-based communication people sometimes use an 8 followed by a round closing bracket to represent two ‘sunglassed’ eyes over a smiling mouth (on its side of course). Its all rather juvenile, but then again, this is the internet.

Browsers now turn that character sequence into an actual graphical face. Personally, I wish they wouldn’t make such presumptions. You should come up with an alternate way of numbering your points.

And by the way… have a nice day! 8)

#139 Devore on 10.05.10 at 1:47 pm

#119 S

Commodity funds can’t hold the commodity (for obvious reasons), so they hold futures. It’s usually some weighted combination of 1-12 months out, GAS is all in 1 month contracts. Those don’t behave as you’d expect vs spot price, so if that is what you want to track, you can’t use them.

Know what you’re buying.

#140 junius on 10.05.10 at 1:49 pm

#128 lexington,

You said, “I’ve got news for you folks. Housing prices are never going to fall in any meaningful way.”

Really? Yet the changes in the market are on course as many of us started predicting last fall.

Watch the market over the next 6 months and prepare to be amazed.

#141 Fuzzy on 10.05.10 at 1:52 pm

@ S (post #133)

Look up something called “CONTANGO”. Many commodity ETF’s are based on futures contract, not actual physical inventory of the commodity it represents. This creates sub-ideal behavior in the ETF tracking.

If you want to reap the benefits of certain commodities, I suggest you buy ETFs which track stock of companies, or index of nations, that produce such commodities.

Good day.

#142 Real Estate Realist on 10.05.10 at 1:55 pm

#128 Lexington: You said – “I’ve got news for you folks. Housing prices are never going to fall in any meaningful way. Maybe one or two percent for a few months, but then they will resume their ascent.”

That’s what we call seeing things through “rose colored glasses”. It’s pleasant and much less stressful. Have another chamomile tea. : ) You’ll want it to be a habit later on.

#143 JM in London on 10.05.10 at 2:00 pm

122 Dark Sad Person

Muck like Junius replied to Peterburogh Bill (and Bill you can chime in here if you must) it the pompous attitude you have mixed with certainty that you are right that undermines your credibility. Throw in the caustic name calling and absolutist/absurd positions (the smoking comment is in reference to an absolute position – not a personal attack) to which you respond with personal attacks – any facts you may display are undermined at that point. You claim incredible debating ablitity while ignoring basic debate skill while choosing what you respond to out if context and be snooty about it all…

#144 Joe Q. on 10.05.10 at 2:03 pm

#115 Kip on 10.05.10 at 11:37 am writes:

“GTA September sales, 6300. Slight correction, maybe. Outright collapse, hardly.”

It’s the lowest September sales number for the GTA since at least 2004. Not a collapse, but more than a slight correction.

#145 Bill ( Peterborough) on 10.05.10 at 2:07 pm

# 124 Junius

I very much agree with this view. I may not agree with everything you say but I would read your blogs and even the “best of DSP” when he is not running down people. Even the drivel on this site can provide little gems of insight. In any event better to pan for gold here (pardon the reference) than accept the MSM spin machine as gospel.

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

Thanks, enjoy your posts as well.

#146 Dave on 10.05.10 at 2:11 pm

#101 Dan

If all these Realtors that you want to see out of work do so, where will that leave Mortgage brokers like you?

You’re not part of the solution dude, you’re part of the problem.

#147 S on 10.05.10 at 2:12 pm

#139 Devore, #141 Fuzzy

Yup, the event I described thought me that lesson well and I did not make that mistake since. But how many individual investors out there can tell you what “contango” is? The article I mentioned in my previous post addresses the bloodbath that some “stay at home” traders still experience. Not surprisingly there are professional traders out there that prey on just this lack of understanding of the financial instruments. So,”… the more things change the more they stay the same…” addage applies. Peace.

#148 JM in London on 10.05.10 at 2:13 pm

Excuse that last: What I meant to say DSP is that much like Junius was saying to Bill – You (like everyone else here) have some interesting and correct things to say at times but you undermine your credibility with this whole attempt (it fails) at some sort of intellectual ego…it’s tiresome – give it a rest

#149 C on 10.05.10 at 2:18 pm

#115 Kip.

Go for it Kip!!!

Maybe you should check out what real estate realist #114 wrote?

#150 Another Albertan on 10.05.10 at 2:24 pm

#108/Tran:

Jim Chuong frequents this blog. Many comments have shown up as “A Watched Bubble Never Pops” (or words thereof). He has promo’ed his website here as the URL under his name.

Everyone else’s mileage may vary.

#151 Debt's Dark Embrace on 10.05.10 at 2:32 pm

#119 patiently waiting on 10.05.10 at 12:10 pm

The markets are rocketing higher this morning because Bermonkey and his clowns are at the Federal Reserve are likely to announce a new round of Quantitative Easing (Money Printing). This will keep US interest rates low for awhile yet. My guess is that if US rates are kept artificially low, Canadian rates will also stay low – at least for another year or possibly longer. Does this mean that the housing downturn that has begun in Canada will be less than anticipated? Any comments?
………………………………………………………………………

Interest rates will stay low for much longer than one year. Closer to 3 years, maybe 5.

#152 dark sad person on 10.05.10 at 2:34 pm

Bill ( Peterborough)

See you tonight-you know where

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

(danger–music)
http://www.youtube.com/watch?v=rHK3rtMyJ5Y

#153 JM in London on 10.05.10 at 2:39 pm

#146 Dave on 10.05.10 at 2:11 pm

Disagree wholeheartedly there Dan.

Here’s one where I’ll use the rates posted here vs TD’s posted…those of you who will bring up that someone may have a better rate, I’m typing quick here and just pulling real numbers here….

Problem: A person owns a house, person needs to renew every 5 years (on average) , person wants a five year fixed, person has the choice of:

a) TD’s posted special of 4.39

or

b) a broker who will go and get them 3.45

We haven’t even touched on the people who’ve mismanaged their credit even slightly who will not have access to those specials – if you say “but they should be out of the market because this blog says so…get real – most people want their houses” and we’re just scratching the surface here…

Still gonna get a blast or two I’m sure…

#154 JM in London on 10.05.10 at 2:40 pm

sorry meant DAVE not DAN

#155 Bottoms_Up on 10.05.10 at 2:44 pm

#79 Devil’s Advocate on 10.05.10 at 9:13 am
————————————————
As a regular I must admit I still learn a lot from the people posting here, and get pointed to good news pieces and stats.

However, some of the clients are no doubt doomers.

To prevent that type of thinking, I like to think “what makes our generation so special that we’re going to see a collapse of the world economy?”.

This type of event happens what? Every 40-50 generations (or more — if ever)? Remember, those of us alive today arose out of the dark ages (and, do the dark ages really apply to places like India and China?).

So I believe we’re not special, we’re not living in a special time (although it’s great to be alive), and life is going to go forward as usual.

#156 Hovering on 10.05.10 at 2:47 pm

cool

#157 Bill ( Peterborough) on 10.05.10 at 2:54 pm

# 148 JM in London:

Excuse that last: What I meant to say DSP is that much like Junius was saying to Bill – You (like everyone else here) have some interesting and correct things to say at times but you undermine your credibility with this whole attempt (it fails) at some sort of intellectual ego…it’s tiresome – give it a rest
*******************************************

The difference between you and any person with knowledge is that we can back what we say with facts and research.

You choose to be close minded in alot of issues, yet you say that you have been through these debates before and choose not to go further, it being futile.

So who’s the pompous ass here.

Usually the so called tinfoilers /doomers as you call them are very informed as to what they say. Having done alot of research on these topics.

We don’t pretend to know everything, but when someone slams our blogs trying to discredit them with smoke blowing in the form of intellectual jargon, we get our hairs up.

Like darksadperson says, we will debate anyone with logical, fact based hypoyhesis on where the future will take us.

There is a difference between being intellectual idiot and one who strive to get to the truth in any subject matter. Something which you still fail to grasp.

#158 VancouverGoinUp on 10.05.10 at 3:04 pm

Junius,

All renters in Vancouver are bitter bitter people. I feel sorry for the renters, a life spent thinking of only “what if” scenarios. What if I would of bought that condo in Yaletown, What if I had bought in 2000 that house on Main for 200k, What if I have to be at the mercy of a landlord and rising rents for the rest of my life!!!!What if I end up homeless in the future as I didn’t buy Vancouver and now have watched my rent rise 1000% over the next 30 years!!! You can count on it
***(By the way I never sold)

I see you travel through the blog world posting this crap. No one hear believes you sold in 2008. This is just bull spin to push the “it is different here” spin.

Well, it is different here. No one buys your bull.

#159 Sam on 10.05.10 at 3:13 pm

#111 Brian1 on 10.05.10 at 11:06 am

Cameroni; Why take things so serious? You see his moniker, slide right by.
_________________
Good advice;

BUT

I’ve noted an extreme unwillingness to just stop reading a poster.

JUST IGNORE THEM. When you read that name, skip to the next post.

An “ignore” feature would make it easier, but even on boards with that feature it amazes me how few people don’t use it to reduce the noise of the anti-social, the attention-seekers and other assorted time wasters …

#160 jess on 10.05.10 at 3:13 pm

Less Government …hey tea party what about these “real” Americans?

Firefighters Let Family’s House Burn Down Because Owner Didn’t Pay $75 Fee
Monday 04 October 2010

by: Joshua Holland | AlterNet | News Analysis

http://www.truth-out.org/firefighters-let-familys-house-burn-down-because-owner-didnt-pay-75-fee63901
Clayton County loses vital bus service, link to Atlanta
Many workers fear they’ll lose their jobs without the transportation, cut off because of a county budget shortfall.
April 01, 2010|By Richard Fausset
Reporting from Jonesboro, Ga. — The Great Recession has yet to claim J.C. Butler’s warehouse job on the north side of metro Atlanta.

But now it has eradicated his means of getting there.
=
cuts to deputies etc judge tells citizen to arm themselves…criminals are on a waiting list to serve time in the jail.
http://www.wkyc.com/news/local/news_article.aspx?storyid=133951&catid=3

#161 junius on 10.05.10 at 3:44 pm

#157 VCGUP,

You said, “All renters in Vancouver are bitter bitter people. I feel sorry for the renters, a life spent thinking of only “what if” scenarios.”

The true colour show. The taunting bull. Jump in now or be priced out forever.

Like many on the Bears on this Blog I will also be hurt by the coming decline in Real Estate. However it is know that people like you will be shut up forever almost makes it worthwhile to watch. The end of the underbelly of the Real Estate market can’t happen soon enough.

#162 Vancouver_Bear on 10.05.10 at 3:57 pm

Just drove around during my lunch in the block between streets Boundary, Kingsway, Vaness and Joyce. Take a look at the pics first one taken in June 2010, second one today at the same building. Third one was taken at the building across the street from the first building today.

Find 10 differencies:
http://yfrog.com/n80621001159j – June 2010
http://yfrog.com/491005001236j – October 2010

Realtor’s post is higher, will fit more plaques.
http://yfrog.com/nc1005001238j – building across the street.

I am really sorry for those “investors” suffereing from Greater Vancouver Dellusion Syndrome (GVDS). LOL I came up with medical definition of this!
Next pics will be taken in a month from now.

#163 dark sad person on 10.05.10 at 4:00 pm

Sorry–more doomer stuff again–

The Recent Collapse In Consumer Growth Has Been WORSE Than The Great Recession

For the past several months, the Consumer Metrics Institute’s Daily Growth Index has been one of the most interesting data series I follow, and I recommend bookmarking the Institute’s website. Their page of frequently asked questions is an excellent introduction to the service.

The charts below focus on the ‘Trailing Quarter’ Growth Index, which is computed as a 91-day moving average for the year-over-year growth/contraction of the Weighted Composite Index, an index that tracks near real-time consumer behavior in a wide range of consumption categories. The Growth Index is a calculated metric that smooths the volatility and gives a better sense of expansions and contractions in consumption.

Read more: http://www.businessinsider.com/consumer-growth-index-shows-the-2010-contraction-was-worse-than-the-great-recession-2010-10#ixzz11WFcgewF

*******************************
JUST IGNORE THEM. When you read that name, skip to the next post.

I’ve noted an extreme unwillingness to just stop reading a poster.

http://www.youtube.com/watch?v=wr1EkQ-hPOM

#164 junius on 10.05.10 at 4:05 pm

#157 VGUP,

You said, “***(By the way I never sold)”.

Good for you. Now hold on as long as you can. Remember Real Estate prices in Vancouver can only go up.

When will we call the ones holding on the longest the greaterfools?

#165 Vancouver_Bear on 10.05.10 at 4:06 pm

#157 VancouverGoinUp on 10.05.10 at 3:04 pm

Welcome to the blog, we have another comedian on duty. You just made my day I am still laughing!!! You have the worst case of GVDS. See your doctor, thank me later!

#166 VICTORIA TEA PARTY on 10.05.10 at 4:15 pm

NONSENSE, MOONSHINE, SUNSHINE. WATCH OUT!

Remax’s contention, according to the Globe and Mail this date, indicates that the future is just fantastic for Canadian real estate. Nonsense.

So, Garth must be right about liquidity superceding illiquidity because the RE propaganda machine is sputtering back to life in advance of a cold, dark, commission-free winter for many of that industry’s participants.

With that in mind Mssrs. Carney and Flahertys’ darkling recent comments about Canada’s future economic prospects probably DO hide something that they know and we don’t. But what?

How about the BRAND NEW US foreclosure documention disaster that is causing even more problems in that real estate market?

It’s gone international, according to the Market Ticker Website. A state-owned German bank is suing Goldman Sachs for $37 million over a credit default swap (CDS)transaction that is alleged to have gone bad.

The CDS is an insurance “vehicle” associated with the issuance of MBS (mortgage-backed securities) zillions of dollars of which went bad during the US sub-prime mortgage meltdown. Much more to come.

Perhaps that’s what C and F are grinding their ball bearings about. After all there are Canadian mortgage-backed securities “out there” in the hands of investors. Will we be sideswiped?

Speaking of liquidity, boy did the stock markets in Canada, the US and Europe ever do well today!

In the US the market was up nearly 200 points because the US central banker said last night that further money printing (Quantitative Easing) was possibly just around the corner (wunnderful–more US-based debt!) and that Christmas hiring has begun. For that you get 200 points UP on the day?! Really?

This does not compute in my mind unless the liquidity is like that which heats up as it goes to its ultimate gaseous destination and, therefore, a bubble! Bubbles and sunshine!

Meanwhile, in other countries, this yesterday in Bloomberg: “World Economy Decoupling From US…” Wall Street economists believe that the global economy can withstand a US slowdown. “…international reliance on US trade has diminished and is too small to spread the lingering effects of America’s housing bust (US share of global GDP has shrunk from 31 per cent to 24 per cent since 2000!).”

Goldman Sachs predicts a weakening USD, high bond yields (lower bond prices) outside the US, and stronger emerging market equities.

And another related story from BB: “The euro seems to benefit from the perception that it’s one of the only hard currencies around, rather than reflecting…” any actual improvement in euro-based economies (including basket cases: Ireland, Greece, Spain…)

So investors are buying one very sick currency (euro) over the sickest of all (USD). And this is supposed to instill investor confidence? Moonshine!

Does all that worry C and F given that Canadians need the US in order to continue our spoiled brat economic attitudes?

IN SUM:

Here’s what’s REALLY happening: The rest of the world is running for cover, stashing their loot in emerging markets, gold and silver, anywhere except the USA. They know a sinking ship when they see one. Do we?

If so, then that chick with the recipes and the gutted deer looks a little more viable don’t you think? Pass the pepper.

#167 Debtfree on 10.05.10 at 4:43 pm

@ van bear 162 thanks that cracks me up. maybe GVRDS . On a funnier note we just met another one of your old neighbors Looking for their missing dog . They’re renting in town and building on acreage in the country . They are also laughing their asses off and like me they are debtfree.

#168 Nibs on 10.05.10 at 5:02 pm

The great connection between real estate, consumer spending, and employment. Things are gonna get ugly!

http://financialinsights.wordpress.com/2010/10/05/primer-6-the-great-connection/

#169 kw on 10.05.10 at 5:16 pm

Would any of you financially savvy types kindly give their opinion on HMD & HXD. These are Horizon Beta Pro’s leveraged inverse ETF’s. Do these represent the same danger as suggested in #30 for HNU natural gas and discussed in post 119, 133, 139?
Could these potentially go to zero? Could they possibly go back to the extreme highs of 08 & 09 if the markets sell off? Could I feel comfortable holding these longer term or are they bad news?
Thanks to anyone who helps!

#170 john m on 10.05.10 at 5:34 pm

This afternoon i drove through a huge industrial area..factories that employed thousands of people a few years ago–the are vacant-up for sale or lease,grown up in weeds! On my way home i drove by our new 2.8 million dollar community center..nicely manicured lawn (has held 3 functions since it opened in july) …….time to get rid of “H” and company people…our country can not afford his vote buyng incompetence!

#171 Brew on 10.05.10 at 5:38 pm

#62 Brunt

#9 Ben

“corporate bonds paying 200%”

must be a typo… lol
———————————

” No, it’s not a typo. You left out the important part “what GICs do”, as in if GICs pay 1%, bonds pay 200% of that, or 2%. ”

By the way it’s 3%.

#172 Devore on 10.05.10 at 5:39 pm

#155 Bottoms_Up

So I believe we’re not special, we’re not living in a special time (although it’s great to be alive), and life is going to go forward as usual.

Pretty much. Every generation thinks they’re special, and living in a special time. Whether it’s the starry-eyed idealist socialists (ready to fix all problems of society their parents could not) or the doomers (preparing for the collapse their parents unwisely avoided and postponed).

The great breaks in general social order (ie collapse of economy and society as we know it) happen extremely rarely. They are marked by either a decline and disintegration of an empire (US today), which need not be overly disruptive (for example the British empire declined mostly peacefully), and this is something that happens gradually over generations, centuries even.

Another event would be when the pitchforks come out, and lets face it, while there are some people here and there that feel very dissatisfied with the current system, there is no wide-spread populist discontent. For the most part, people think things are pretty good, and while they could be better, it is hard to imagine how, and they could certainly be much much worse, and we have many ready examples of this. There is no reason to rock the boat.

We’ll muddle through it, there will be some pain, perhaps lots, but everyone will persevere, and we’ll come out the other end. No need for any collapse. People will continue going to work, stores will be open, things will be on sale, new movies will be made, some team will win the Stanley Cup, and you’re still gonna be here too, shaking your head at the young whippersnappers and how they’re doing it all wrong.

#173 junius on 10.05.10 at 5:41 pm

#162 Vancouver_Bear,

You coined the term, “Greater Vancouver Dellusion Syndrome (GVDS).”

Love it. It is different here.

It reminds me of the book Catch-22. Only the crazy people don’t know they are crazy.

#174 wetcoaster on 10.05.10 at 5:42 pm

ReMax only proved beyond a shadow of a doubt they are the most despicable company in Canada. To go against all the major banks, F,C and anyoneone else with half a brain will solidify them in history for what they really are: Overpaid salesmen with a three month course behind them.

#175 Devore on 10.05.10 at 5:48 pm

#160 jess

Less Government …hey tea party what about these “real” Americans?

Firefighters Let Family’s House Burn Down Because Owner Didn’t Pay $75 Fee

I always see these examples trotted out whenever someone proposes a smaller government to reduce tax load or deficits.

Ok, firefighters and police, great places to cut. So what about the other 99%? Pencil pushers too indispensable?

#176 betamax on 10.05.10 at 5:57 pm

DSP, LMinL, et al — stop whining about each other and who’s insulting whom. No one else cares about your sophomoric snit. Grow up and move on already.

#31 Pez – thanks for the pumper fiction.

And that cat is going to f*** someone up.

#177 A Lesser Fool on 10.05.10 at 6:06 pm

http://calgary.ctv.ca/servlet/an/local/CTVNews/20101004/cgy_mortgage_foreclosure_101004/20101004/?hub=CalgaryHome

Falling property values are forcing a Carseland family out on the street.

When the Folviks took out a $288,000 mortgage in 2007 their home was worth $300,000.

Now the three year term is up and they have to pay off the balance which is still $288,000. The problem is because of the intervening economic downturn their home now worth only $240,000, and the banks won’t lend a penny more on a new mortgage.

That leaves the Folviks $48,000 short and that means even though they’ve never missed a payment, the Folviks are losing their home.

Heather Folvik says we’re “not deadbeats, we did everything right, and we stand to lose it all”.

“We did everything right”??? — 4% down and interest only payments for 3 years is considered doing “everything right”?? I suspect we are going to be seeing a lot more of these stories in the near future.

#178 JM in London on 10.05.10 at 6:16 pm

#157 Bill ( Peterborough) on 10.05.10 at 2:54 pm

This from the guy who uses partial out of context quotes, dubious “facts” (at least DSP attempts to use regular data – however distorted the “interpretation” then becomes) and uses the ultimate intellectually dishonest debate tactic in cloaking himself in his beliefs and religion when it gets a little tough –

I’ll say this again

PSEUDO. Can you say PSEUDO? I’ll bet you can…Think me saying this as if talking to 4 year old…you guys expose yourselves for the frauds you are everytime you trot out the “Our arguments are steeped in FACTS”

Frauds boys – always will be always have been I’ll wager.

#179 45north on 10.05.10 at 6:17 pm

Real Estate Realist: Today we have the factors of the past crash in place, but we also have all of these broken rules. Enjoy the ride people. ; )

I read your post with great interest.

#180 CrowdedElevatorfartz on 10.05.10 at 6:20 pm

News on the Radio today at noon in Vancouver on CKNW
“…..6 Elementary schools will be closing due to budget cuts…”
Then the next story….
“……city councillor Susan Anton recommends hiring BUSKERS and musicians to make the area around the Millenium Olympic Village more attractive to buyers…”

Well now I’ve heard it all, Politicians “Staging” entire neighbourhoods to make a property more attractive.
Unbelievable.

#181 CrowdedElevatorfartz on 10.05.10 at 6:22 pm

Perhaps the $600 million they are spending on the new retractable roof for BC Place (a CFL stadium ! 25,000 max attendance in a 60,000 capacity venue) could be put to better use????????

#182 morpheus on 10.05.10 at 6:25 pm

So the TREB numbers came out. Can someone explain something to me. They had mid-month numbers and the market was down 20% and it stayed that by the end of the month at 23%. But mid-september the price was $412,000. Yet by the end of the month it bumped all the way upp to $427,000 when it was projected to be around $410,000. Does anyone else find that odd. Did some Rosedale properties sell the end of September or what?

#183 Jeff Smith on 10.05.10 at 6:28 pm

>#32 obert on 10.04.10 at 11:41 pm
>Blaming the Canadian government, its agency CMHC,
>finance minister etc. for the housing bubble…
>However, the ultimate responsibility is of the Canadian
>citizens. Our country is a democratic one. If people
>suffer, they better get engaged, involved, educated

Actually they (the irresponsible ones) will not suffer at all as the situation in the USA demonstrated. They basically stop paying the mortgage and continues to live in the house they bought with nothing down , for free, years after years.

In fact it’s the responsible who suffer because they get to pick up the bag. It’s worst in Canada because CMHC is basically a public system similar to welfare fund. So it’s all paid for by tax payers.

#184 CrowdedElevatorfartz on 10.05.10 at 6:30 pm

Betcha that new roof leaks CONSTANTLY in the torrential BC rains. But it wont matter. Place is empty half the time. and half capacity the rest of the time.

#185 Jeff Smith on 10.05.10 at 6:33 pm

>#32 obert on 10.04.10 at 11:41 pm
>Don’t live beyond your means, don’t steal from your
>children, choose leaders of your country carefuly, etc.

Actually, history has not demonstrated that leaders chosen by the mass (i.e. elected) are in fact more competent than the one who has to fight a bloody fight to get there. See, the leaders who are elected are there because people put them there. Those who aren’t elected have to work for themselves to get there. Now in the system where the people elect the leader, it probably necessary to get smart people to elect good leaders. But what if the people who do the electing aren’t all that smart? Ever been at the election booth? Did those people around you look all that smart? Woops! Darn!

#186 S.B. on 10.05.10 at 6:34 pm

Was this posted yet?

Trying to fob overpriced R/E onto retail investors now…how original. Only in BC.

Fortress Investment Group LLC plans to take the popular Whistler Blackcomb ski resort public after several unsuccessful attempts to find a buyer for the Olympic venue, according to a newspaper report.

The Globe and Mail says the New York investment firm is preparing to file an initial public offering for the flagship resort in Whistler, B.C.

The snowcapped Blackcomb mountain is shown. The B.C. resort’s owners are reportedly about to make a public offering on stock markets. (Randy Lincks/Associated Press)
The company is hoping to attract retail investors by capitalizing on the international spotlight that was placed on the venue during the 2010 Vancouver Olympics.

Read more: http://www.cbc.ca/canada/british-columbia/story/2010/10/05/whistler-blackcomb-fortress-intraswest-ipo.html#ixzz11Wtdl3YM

#187 Nostradamus Le Mad Vlad on 10.05.10 at 6:34 pm

Bill (Peterborough) — Afternoon Bill. It was nice chatting with you this a.m.

Sunny and about 21C, still able to hang laundry out to dry. Great being retired. Learning how to cook properly from the better half. Damn, life is good!

Now, I’m off to watch a cartoon show to enlighten me on the ways of the world, so I’m out to lunch for the rest of my life. L8r!

#188 Jeff Smith on 10.05.10 at 6:42 pm

>#14 timbo on 10.04.10 at 10:11 pm
>west is stuck in near depression. Will Europe be the first
>domino to fall..

Maybe most of the west will fall, but not the USA. The reason is because the US is blessed with its “Exorbitant privilege”. It can just print money to spend its way out of trouble.

http://en.wikipedia.org/wiki/Exorbitant_privilege

#189 Vichy/Petain kids colouring book on 10.05.10 at 6:50 pm

#63 Industrial Guy

You forgot to add: your fired after the Xmas rush…

#190 The Great Gazoo on 10.05.10 at 7:32 pm

BAHAHAHAHA

F. giving advice to his boys (and the public) how to save money.

http://www.thestar.com/moneyville/article/870692–daw-4-tips-jim-flaherty-is-giving-his-three-sons

Point 2. Spend less than you earn.
Point 3. Buy property.

Has he seen recent debt levels of Canadians??
This guy is so out of touch with every day Canadians.

#191 Bill ( Peterborough) on 10.05.10 at 7:37 pm

Re # 178 JM In London;

Try to digest some of this, might have to ask someone what it means, then get back to me.

http://www.iamthewitness.com/DarylBradfordSmith_Rothschild.htm

http://www.mindfully.org/Reform/2005/Rothschild-History-Hitchcock2005.htm

http://www.bigeye.com/griffin.htm

http://www.apfn.org/APFN/fed_reserve.htm

http://video.google.com/videoplay?docid=3891535120990840079#

http://www.flyingsnail.com/Dahbud/femaconcentrationcamps.html

http://foodfreedom.wordpress.com/2010/08/24/gm-foods-and-senate-bill-s510/

Everything I post I can back. What about your rebutals? Didn’t think so.

#192 Devil's Advocate resurrection on 10.05.10 at 7:41 pm

”So the TREB numbers came out. Can someone explain something to me. They had mid-month numbers and the market was down 20% and it stayed that by the end of the month at 23%. But mid-september the price was $412,000. Yet by the end of the month it bumped all the way upp to $427,000 when it was projected to be around $410,000. Does anyone else find that odd. Did some Rosedale properties sell the end of September or what?” #182 morpheus on 10.05.10 at 6:25 pm

I know I will get blasted for saying this but toward the end of the month things really started to pick up. The fundamentals are there – prices are down in as much as you get a lot more house for the money, interest rates are low so monthly payments are low and thee is, believe it or not demand out there – pent up but there just nervous pent up demand.

Things are not as bad as the Blog DAWGs want them to be.

Watch this….

Hey Blog DAWGS… price is going up… I just raised the list price on a home 2.0% and got two offers within days of doing so. It sold for over list price.

Now watch the barking being.

Woof woof, bark bark yipe yipe yipe

#193 Mister Obvious on 10.05.10 at 7:42 pm

If you’re going to buy RE in Vancouver make sure you shop at the very top end. Vancouver Sun 4:05 PM PST:

http://www.vancouversun.com/business/Luxury+home+market+booming+Metro+Vancouver/3628230/story.html

#194 Bill ( Peterborough) on 10.05.10 at 7:58 pm

Re # 185 jeff Smith

But what if the people who do the electing aren’t all that smart? Ever been at the election booth? Did those people around you look all that smart? Woops! Darn!

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

Not to worry Jeff, the elite have already though about that. Pretty soon we won’t have to vote at all.

http://www.youtube.com/watch?v=t4WYpQ2bPiI

#195 Nostradamus Le Mad Vlad on 10.05.10 at 8:00 pm


Very interesting. Something is happening when the big guns start loading up on gold.

What’s up at the WH? Sumtin’s goin’ on!

Oh Dear One and Oh Dear Two

Hmmm. Don’t think I would have my kids subjected to this.

7:08 clip TBL et moi have mentioned this over the past couple of days.

Comment by wrh.com is better than story. “The mosque was run by Imam Darkazanli, who like Osama bin Laden, is suspected of being a CIA asset. Which would explain why the Mosque is left alone by German intelligence.”

5:16 clip Two differing mindsets on two different continents with one thing in common — a fast-declining economy.

CC “Notice how they dropped the phrase “global warming?” Now it’s “climate change”, but climate is always changing. So what these politicians are doing is taking something that happens naturally, declare it a crisis and force you to buy their “solution”; a carbon tax.” wrh.com.

3:27 clip Coldest winter in 1,000 years? Noooo! GW rules!

Green Agenda Speaking of CC, GW and GC, more nonsense from these weird whacknutjobs. It’s good there are free comedy shows out there!

Eekonnomee “In a global economy, where U.S. workers are forced to compete with Chinese workers who make less than $1 an hour, the jobs outsourced to countries like China and India are not returning.”

Money Is Power The IMF’s global influence.

Agenda 21 What is it?

2012 It is simply the end of the Mayan Age, not the end of the world.

#196 JM in London on 10.05.10 at 8:02 pm

uh Garth?

Someone would like to speak you about his royalty cheque…

http://s1093.photobucket.com/albums/i424/doomersarenutz/?action=view&current=Truthcat.jpg

#197 Causalien on 10.05.10 at 8:06 pm

To #169

Those are inverse leveraged ETF, used by day traders to hedge a position. Not recommended for long term holding. You will experience a lot of pain holding it for a long term since it has daily decay from the balancing act they have to perform.

If you read their prospectus, you’ll see that somewhere it says to NOT hold it for long term.

#198 dd on 10.05.10 at 8:06 pm

“gold prices indicate only fear”

Too funny. Government are printing money without restraint and there shouldn’t be any repercussions?

#199 nsqt on 10.05.10 at 8:07 pm

I just got back from hearing Garth in Wolfville this evening……..lots of wonderful info……Did I hear you correct that your next book will be out in Feb 2011????

#200 Devore on 10.05.10 at 8:09 pm

Now Mexico is getting in on the century bond train. When do we see one from US or Canada?

http://online.wsj.com/article/SB10001424052748703298504575534621044294114.html

Another train wreck underwritten by Deutsche Bank and GS.

#201 Devore on 10.05.10 at 8:12 pm

And Japan ACTUALLY drops their rates to zero. Then they wonder why people don’t save.

http://www.nytimes.com/2010/10/06/business/global/06yen.html

#202 S.B. on 10.05.10 at 8:16 pm

#162 I only found one difference between your two photos:

http://yfrog.com/n80621001159j – June 2010
http://yfrog.com/491005001236j – October 2010

In the 2nd photo there is an anglo saxon realtor name: Ryan Donald
I’m serious. Not certain of your point here?

#203 Basil Fawlty on 10.05.10 at 8:19 pm

Some September commodity statistics: Soybeans +9.5%, Rice +10, Oil +11, Corn +12.2, OJ +13, Cotton +17.5, Sugar +19.3, Gold at all time high, Silver 30 yr high, Copper 3 yr high.
Is this inflation or am I a monkey’s uncle?

#204 jess on 10.05.10 at 8:20 pm

#175 Devore
http://www.cornellpress.cornell.edu/cup_detail.taf?ti_id=5576http://www.taxjustice.net/cms/upload/pdf/TJF_6-2.pdf
TAX HAVENS
How Globalization Really Works
Ronen Palan; Richard Murphy; Christian Chavagneux

=====================
policy drivers – bush tax cuts
According to the Financial Times
…”encouraged capital flight to other countries because of the weak American dollar and the tendency of capital to flow to stronger currencies. ”

http://www.allgov.com/Top_Stories/ViewNews/Bush_Tax_Cuts_Actually_Helped_Foreign_Business_more_than_US_101004
============================
MERS/MBS/Foreclosure Goes RICO
http://market-ticker.org/akcs-www?post=168144
==========================

Who Wins?
October 3, 2010
By Michael Hudson
While Labor Unions celebrate Anti-Austerity Day in Europe, European Neoliberals raise the ante: Governments must Lower Wages or Suffer Financial Blackmail Most of the press has described Europe’s labor demonstrations and strikes on Wednesday in terms of the familiar exercise by transport employees irritating travelers with work slowdowns, and large throngs letting off steam…
==============

#205 jess on 10.05.10 at 8:31 pm

Transfer Pricing
http://www.taxjustice.net/cms/front_content.php?idcat=139

Transfer pricing is one of the most important issues in international tax.

…”Mispricing and the Arm’s length principle.
If two unrelated companies trade with each other, a market price for the transaction will generally result. This is known as “arms-length” trading, because it is the product of genuine negotiation in a market. This arm’s length price is usually considered to be acceptable for tax purposes.

But when two related companies trade with each other, they may wish to artificially distort the price at which the trade is recorded, to minimise the overall tax bill. This might, for example, help it record as much of its profit as possible in a tax haven with low or zero taxes.

For example, take a company called World Inc., which produces a type of food in Africa, then processes it and sells the finished product in the United States. World Inc. does this via three subsidiaries: Africa Inc. (in Africa), Haven Inc. (in a tax haven, with zero taxes) and America Inc. (in the United States).

Now Africa Inc. sells the produce to Haven Inc. at an artificially low price, resulting in Africa Inc. having artificially low profits – and consequently an artificially low tax bill in Africa. Then Haven Inc. sells the product to America Inc. at a very high price – almost as high as the final retail price at which America Inc. sells the processed product. As a result, America Inc. also has artificially low profitability, and an artificially low tax bill in America. By contrast, however, Haven Inc. has bought at a very low price, and sold at a very high price, artificially creating very high profits. However, it is located in a tax haven – so it pays no taxes on those profits.

What has happened here? This has not resulted in more efficient or cost-effective production, transport, distribution or retail processes in the real world. The end result is, instead, that World Inc. has shifted its profits artificially out of both Africa and the United States, and into a tax haven. As a result, tax dollars have been shifted artificially away from both African and U.S. tax authorities, and have been converted into higher profits for the multinational. ..”

#206 Jeff Smith on 10.05.10 at 8:36 pm

>#194 Bill ( Peterborough) on 10.05.10 at 7:58 pm
>Re # 185 jeff Smith
>But what if the people who do the electing aren’t all that
>smart? Ever been at the election booth? Did those
>people around you look all that smart? Woops! Darn!
>******************************************
>Not to worry Jeff, the elite have already though about
>that. Pretty soon we won’t have to vote at all.
>http://www.youtube.com/watch?v=t4WYpQ2bPiI

Hehehe, probably happens, like to this guy here:

http://www.youtube.com/watch?v=1aBaX9GPSaQ

#207 Blitzkrieg on 10.05.10 at 8:41 pm

169 KW

Due to the way these ETFs are structured, decay and daily rebalancing will destroy value over longer holding periods. Riding a short trend (max several weeks) or shorting the inverse is a far superior strategy

#208 Timing is Everything on 10.05.10 at 8:42 pm

Garth said – “There’s no doubt where the next ten years are headed.”

2020….Do I win a prize?

BTW, We like our home. Ya, it’s a bit of effort to keep; most things worth owning/having usually are. We are beholden to one less asshat in this world. Of course we bought a home to live in (for a long time), not a speculation.

#209 US Dairyland View on 10.05.10 at 8:46 pm

#177 A greater Fool?? Here’s a beginning…..the lamest Leming…the slowest runner IS the Bear’s lunch. A lesson for the next in line. In the US it was the ínterest only loan borrowers who went belly-up first. Then the variable pay loans, all the rest were Variable Rate / Variable Term loans. Here in the US we have always had available Fixed interest rate 5-30 yr terms or anything inbetween. 20% down or more and no PMI (Private mortgage insurance) which pays the lender should you go tits-up, and default your mortgage, and they have to foreclose.
This couple who couldn’t get a loan for more than the home was now worth as their loan term was up is understandable, it is called ‘mark to market’ accounting.
Sorry there, pay the difference, or you are out, and we the lender may sue you for the deficit. At least, that’s how it can work here in the United Snakes. Canadians being more civilized, perhaps not, but I wouldn’t know what the contract reads.
My point is this: CAN this be the grim leading edge of what might be a fairly common event??? Do not know, but certainly would NOT want to see it become so.
FL, NV, CA real estate prices down from 50% to lesser amounts, but unemployment in those same areas is over 10% -ugly friends- those are!!
Still, it’s not the end of the world. It might be the end of YOUR world, if you are on the receiving end of a reluctant banker, or a pink slip.
Garth has it correct, balanced savings, reduced -or preferably no DEBT- especially if you can see your retirement ahead. No, there is still no cure for stupid and, when your older it is even harder to handle stupid, yet it can be minimized even neutralized if you have time on your side. The wild ride is coming.

#210 UrbanCowboy on 10.05.10 at 8:56 pm

I wonder if those FEMA Concentration Camps in the US will be “housing” people when total anarchy brakes out in the streets.

http://www.youtube.com/watch?v=MqZ-g2dMYxw&feature=related

Tin foil alert! — Garth

#211 An Cat Dubh on 10.05.10 at 9:06 pm

Devil’s Advocate must not get out much or work for the B.C. Liberal Party. Best place on earth!?!. That’s a govt. propaganda term which would fit in well with the old USSR or the Germany under the National Socialist Worker’s Party. Go visit Heidelberg,Germany and you will see what a city is supposed to look like. Not a city built of strip malls. I do like and appreciate your comments however DA and I believe in freedom of speech. When I bring up real estate prices dropping, people get almost insane and believe it could never happen here. Keep up the good work Garth. A bearer the truth is never popular.

#212 Calgary Rip Off on 10.05.10 at 9:44 pm

#177:

Why didnt the Folviks do the smart thing and rent?

Buying:
1)Maintenance and taxes.
2)Long term committment for mortgage renewal and upkeep.
3)If numbers 1 and 2 are dealt with(good paying job) you get to keep the place and retire in it. Then hopefully you arent a fool and decide to sell and buy another place.

Garth:

Bob Truman, Calgary realtor listened to your advice and shut down his blog. It no longer is on his website. :)

#213 Bill ( Peterborough) on 10.05.10 at 9:48 pm

#210 Urban Cowboy

wonder if those FEMA Concentration Camps in the US will be “housing” people when total anarchy brakes out in the streets.

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

Absolutely. But first they will declare martial law, then start to round up all the ptotesters and the people in the know.

Once this is example is done the sheeple will fall back into place, working for meager food rations, and thanking their masters for allowing them to carry out the rest of their existance in bondage. And informing on other sheeple who step out of line. Sort of like they did in Red China.

http://www.youtube.com/watch?v=33g5-OtIqc4

#214 bill on 10.05.10 at 10:43 pm

curses ….foiled again

#215 Another Albertan on 10.06.10 at 12:05 am

#169:

I’ll re-iterate #197 and #207.

ETFs are trading instruments, not investment instruments.

http://www.my10000dollars.com/etf-time-decay/

Everyone else’s mileage may vary.

#216 Lorne on 10.06.10 at 12:12 am

#202 SB The point is, nothing has sold in 3 months!

#217 betamax on 10.06.10 at 2:19 am

#192 Devil’s Advocate resurrection: “prices are down in as much as you get a lot more house for the money”

Exactly how the downturn began in the US. Fools will spend all the money they’ve been pre-approved to borrow, so initial price drops are partially hidden as knife-catchers scale up, not down.

#218 inlalaland on 10.06.10 at 1:08 pm

Can someone explained to me why those who save a decent downpayment have to pay the same interest rate as someone who doesn’t…

Why punish those who save? It be nice to see the interest rates climb to 6-8% but those who save 25% or more of a downpayment recieve a low 3-4% fixed rate….

#219 realpaul on 10.06.10 at 4:23 pm

We know that savers are currently being robbed, deliberately so, by low rates and other forms of loose monetary policy, as central bankers pursue their, in my view, needless obsession with staving off deflation and ‘kick-starting the economy’. With savers effectively losing money through inflation by sitting in cash, they are being driven out of bank deposits as they search for yield or capital appreciation. In short, people are being forced to speculate. What right does a central bank have to rob the prudent in such a fashion?

#220 realpaul on 10.06.10 at 4:29 pm

#215 . Nonsense…an ETF beta is whatever the underlying sector profile happens to be. The XDV for example has paid a dividend in the 6% range for the past five years. If stability is what you want an ETF has a much lower MER ( XDV .50%)…or speculate in sectors like gold XGD and trade. Some rules apply to holding periods …. do your own DD.