Deflate this

One thing I can count on after finishing a talk is a pissy guy who wants to wrestle with me. I hate to stereotype, but why not? Thirties, sunglasses on his head, Berry on his belt and a Durango outside. Votes Conservative, convinced climate change is a crock and Sarah Pallin’s hot. Barely married, anti-tax, anti-government and hugely leveraged. Dependent on the tenants he utterly disdains (“losers…”). He’s sure I’m full of crap. Came to argue.

Such guys think they’re astute but get talked into anything. After all, when a core belief’s that growth is natural and relentless, why not borrow a mess of money and buy a pack of houses or condos? How can you lose in the long run when God wants a higher gross domestic product?

Actually, losing will be easy. When inflation and growth finally get here, they’ll be too late to save real estate values. The cowboys will have higher payments and lower rents. Worse, we have to get through this first: deflation.

In case you missed the latest news, here’s a flash recap.

In America: Teetering on the edge of deflation, the US is about to spend $1 trillion it doesn’t have. So said Fed boss Ben Bernanke on the weekend. The money will be created digitally then used to buy government bonds held by banks. The hope is the trillion will encourage banks to lend money to businesses which will then create jobs. Another goal is to screw up the bond market by dropping yields with the onslaught of cash, which will make those loans cheaper.

But it probably won’t work. Interest rates are already dirt-cheap, with no lineups to borrow. Business won’t hire new help until sales pick up, and over-indebted consumers are in no buying mood. Meanwhile US mortgage rates are at the lowest level ever, and yet the housing market crashes.

In Japan: In its tenth year of deflation, property values remain 60% lower than they were in the late 1990s. In fact, the Bank of Japan dropped its interest rates to zero back in 1999 in a bid to revive real estate. It bombed. Days ago the bank said money would remain at 0% for as long as necessary. Fail.

In Britain: With the housing market going into a double dip, the currency spongy and the economy a swamp, the coalition UK government’s about to go extreme.

The Bank of England will spend 100 billion incestuous pounds to also buy its own bonds. At the same time, interest rates will be kept at a record low of just one half of one per cent until at least late 2012. That’s the stimulus part. The other action seems just about certain to cancel it out – massive spending cuts. The deepest, in fact, since WW2 bankrupted the country.

The latest forecast for economic growth in early 2011 is 0.1%, which implies a 50% chance of recession and a 100% chance of deflation. Britons hear how the government will be slashing spending, come Wednesday.

In Canada: “Fresh and quite positive real estate information, from Canada, is here!,” says the blog of Toronto super-agent Elli Davis – who devotes a lot of time convincing rich Iranians to buy $5 million townhouses for their kids. “September housing starts, in Canada, did not fall as significantly as they were predicted too. They only fell by 1.5 per cent…” Poor Elli. If she only knew that 1.5% in a month is the same as 18% a year she might not be so effervescent.

In fact, as I try to tell people in my messianic cross-country proselytizing, groupie-infested romp, Canadians are getting a heroic amount of sunshine pumped up their rears while others taste reality. Facing a significant market decline, the housing industry does things like point to declining five-year mortgage rates as blessed news, when cheaper rates are a death rattle for the economy. The federal government, in announcing a record deficit, announces new health care funding. Look! A shiny thing! In Ontario, facing the worst red ink in history, the premier spends $1.2 billion on all-day kindergarten, which is actually just vote-sucking day care.

The truth is we’re losing altitude fast. All that stands between us and a US-style housing event is a lack of listings. Come the Spring, well, stand back.

No doubt a dose of asset deflation is on the way. This comes after we lost a ton of jobs, many of which will never be replaced, after households have run up the biggest, steamiest pile of debt in history and amid total stagnation for salaries and wages. The inevitable result will be deflationary – when everybody expects prices to keep falling, so they put off buying until prices fall, which means they fall.

Deflation’s what keeps politicians tossing at night. And it should terrify the Durango guy.

But he’s lucky. He knows everything.

218 comments ↓

#1 BrianT on 10.17.10 at 8:17 pm

The major banks in the USA are flat broke-insolvent. Bernanke’s job is to transfer as much taxpayer funds as he can until someone opposes him-you don’t have to Albert Einstein to realize that giving taxpayer funds to banks which then turn around and buy treasuries with those same funds is Madoffian economic policy at its finest. Ben isn’t brain dead-he knows the US economy is toast but that isn’t his problem or the problem of his owners.

#2 T.O. Bubble Boy on 10.17.10 at 8:18 pm

I hear all highly-respected economists drive Dodge Durangos.

(even if someone gets a company car, which has to be chosen from one of the Big 3 automakers, it still wouldn’t be a Durango)

#3 Nostradamus Le Mad Vlad on 10.17.10 at 8:22 pm


“. . . when God wants a higher gross domestic product?” — Hmmm. Not overly sure whether God really gives a damn about ths planet, one way or the other.

“Teetering on the edge of deflation . . .” — See first link.

“It bombed. Fail. Look! A shiny thing!” — So history does rhyme and repeat. Is this a great theory or what!?! The rest comes from taxpayers’ money.

“The truth is we’re losing altitude fast.” — Is the landing gear down and ready? Methinks not.
*
The Four Horsemen of the Apocalypse appear right on cue to play their roles. “One thing this article fails to address is the historical reality that the US’s response to any depression has been to start a war. The last great war ended with nuclear weapons: I am greatly concerned that the next US-sponsored great war (as an attempt to forestall the potential scenarios detailed in this article) will be started with them.” wrh.com.

As Iceland has gone, so the EU and North America following merrily along. The blind leading the blind.

IMF in Shanghai “IF one has any kinds of financial holdings, it might be wise to watch the outcome of these meetings, as they may be crucial to the decisions you make about your portfolio, and how that portfolio is allocated.” wrh.com.

China is not the villain. The US Fed is.

The Real GS (not Dilbert’s). From April 16, 2010. “This is why the talking heads are trying to shout down the foreclosuregate mess, because the citizen’s anger will not stop with the foreclosure fraud but will (already is) ripping the scabs of a worse scandal; that the entire bundled mortgage bubble was a fraud, one in which the US Government assisted Wall Street by dangling an $8000 tax credit before new homeowners who otherwise might have prudently declined to sign a mortgage.” wrh.com.

5:28 clip Sparks visits the WH. Who wins?

Falling US$ — Increasing cotton prices (clothes, etc.) go up in price.

Put these two stories together, seemingly unconnected. Think again! One min. clip.

Plus this. False flag soon?

Poverty in the USA “WASHINGTON — The American suburb is no longer a refuge from poverty in cities.”

Keep in mind the the leftover swine flu vaccines from last year’s A-H1N1 hoax have been added to this year’s regular flu shot. Evidently, I’m still alive, and NOT taking any bloody shot!

Mortgage + Legal Stuff “The unfolding foreclosure-processing debacle is causing bank stocks to slide and putting millions of delinquent borrowers in limbo.”

7:46 clip Donald Duck for President? Why not? Ronnie Reagan was elected twice! Also incl. Glenn Beck.

US Fed Owners and History “Charles A. Lindbergh, Sr. 1913 “When the President signs this bill, the invisible government of the monetary power will be legalized….the worst legislative crime of the ages is perpetrated by this banking and currency bill.”

#4 Peter North on 10.17.10 at 8:22 pm

So I see you have been talking to my father in law

#5 $fromas$ia on 10.17.10 at 8:22 pm

Garth,

8% unemplyment is B.S.

I know allot of companies that have cut their employees work week to 3-4 days.

If they let some go to keep guys in a 40 hour work week then we’d see 12% unemployment.

Care to add to this?

#6 Patz on 10.17.10 at 8:29 pm

You’re just trying to trick me with that “0 comments yet…Kick things off by filling out the form below.” As soon as I post 17 other comments will appear. But like Charlie Brown and the football—here goes!

Garth, I agree with everything you said. How’s that for pulling no punches; telling it like it is and in the process leaving no cliche unturned?

#7 Willy H on 10.17.10 at 8:39 pm

Brilliant post, one of your best! The opening paragraph says it all.

It appears that the G8 economies are carrying around a much larger ball and chain than most imagined, although several economists realistically predicted no meaningful growth until 2013*. The end of Obama and the rise of the GOP (who created much of this mess**) will be the nail in the coffin. The closing months of 2010 should see the good ship SS RE Appreciation sail off into the sunset, after a very very long good-bye. The planets are now fully aligned for one of the most damaging RE collapses in Canadian history.

* the predicted growth is still tepid in comparison to the past 10-15 years
** as per Reagan’s Budget Director Paul Stockman (see link)
http://www.nytimes.com/2010/08/01/opinion/01stockman.html

#8 jimbo on 10.17.10 at 8:41 pm

Hope you have some crowd control for the Dalhousie Chapters event given how fast the MRU event sold out.

Next time book the Jubilee!

Any comments on how much exposure the Canadian Banks have to the US mortgage assignment fraud problem?

#9 AxeHead on 10.17.10 at 8:42 pm

Health Care spending- ‘look a shiny thing’.

This made me laugh…but so true…as any fisherman knows, it’s shiny things (called lures) that entice a sucker fish to it’s doom. This also speaks of the mentality of realtors. Thanks Garth.

Red Deer, Alberta RE stats for mid October:

2009 – 66 sales
2010 – 38 sales

#10 Evangeline on 10.17.10 at 8:42 pm

((After all, when a core belief’s that growth is natural and relentless, why not borrow a mess of money and buy a pack of houses or condos? How can you lose in the long run when God wants a higher gross domestic product?.))

I’ve always felt that one should find a financial advisor who, above all, shares one’s core values and your post confirms that if core values aren’t shared there will be animosity in the relationship.

However the conservative stereotype you are writing about doesn’t sound like any small “c” conservative that I know. All the small “c” conservatives that I know have an anathema toward debt and have been calling deflation all the while that the ptb and msm have been claiming the recession was over. They are all in cash and they all see Bernanke as a Keynesian leftie who is doing nothing that will help the economy grow but a lot that will stifle growth. Most of them do think Palin is hot though.

#11 In Van on 10.17.10 at 8:47 pm

I agree with everything said on this blog and elsewhere re why housing should plunge; and I personally am not about to put down a mil for a dumpy old house here in Van; but I am beginning to think things won’t plunge for these reasons: a) I talk to a-lot of people in my job, and the degree that their self-worth and satisfaction is so often linked (by them) to home ownership (both those that own and don’t) is really quite astonishing. It’s very emotionally driven and irrational. As long as nothing prevents many people from purchasing the max they can afford, even if they never vacation and sit in their bare living room eating soup out of a can, I think they will continue to do so, maintaining the high price of this asset. Buying real estate at all costs is like an addiction that is culturally (and governmentally) encouraged. b) It’s looking like interest rates will stay low for a long time; unless they take a significant jump (at which point many will lock in for 5 years, so add 5 years onto that point), the many that have bought beyond their means will continue to service their insane debts. c) people in this city will let their leisure, health, education, savings, peace of mind, everything go before they will consider losing (or downsizing) their house. I’ve seen it with very bright people, and it is really hard to believe. Not owning, or downsizing in the face of hard financial times, is not an option unless absolutely forced upon them. And I do not see that situation as imminent as I thought it might be when interest rates appeared to be going higher. Plus, the uncomfortable living quarters people will tolerate (with tenants jammed into tight, loud quarters to help out with mortgage payments) also is very surprising. Just some idle thoughts, I’m no expert, but I do talk to a lot of people and this real estate=life satisfaction link is really firmly fixed, at least here in Van.

#12 WINNIPEGER on 10.17.10 at 8:53 pm

Enormous amount of realty fed media saying all is well!
That should be indication enough something is very wrong. One trillion $$$ virtual dollars $$$. Bailouts , deflation , debt , housing crash in the USA , international austerity measures . How soon before Canada raises the retirement age and axes Old Age Security?

We simply cannot afford what is coming.

#13 Keith in Calgary on 10.17.10 at 8:55 pm

Well……..I know for a fact that climate change is a crock and that Sarah Palin is hot……..but I’d never be caught dead driving a Dodge Durango.

Why do you and others keep saying that we are “teetering” on the edge of deflation, sorry, I should have used the term that the MSM likes better…….”negative inflation”……..it has been here for some time now…..after all, aren’t we discussing the very subject as it relates to US and Canadian real estate ?

Every where you look car prices are falling, clothing prices are falling (bought two Ralph Lauren business suits for $189 each yesterday….original sticker was $499, then $399, then $299, and I got them for 40% off that number). The department stores have extraordinary sales and all the while, retail sales are falling or flat lining……..

Nope…..there is no “negative inflation” here…..heh…..and we’re aren’t teetering anymore Toto. We’re falling down hard……come on Garth you can say it…..just follow along with the bouncing Loonie……….”we’re already in deflation”……..

#14 Rick in Japan on 10.17.10 at 8:55 pm

Great post Garth,

At an open to the public forum, at a university here, last weekend I did a presentation on the limits of growth (perhaps Japan is the ‘new model’).
There are clowns like described all over the planet now. Get a few beers into him and he will most likely want to fight to prove his point. I think it was Kunstler who stated that technology breeds the most egregious arrogance in humans (though he was probably paraphrasing someone else).

#15 Tryingtobepatient on 10.17.10 at 8:59 pm

All day kindergarten is nothing more than vote-sucking day care??? Are you serious when you say this??? Research world wide points to the importance of foundational learning in the early years! In the midst of such economic uncertainty perhaps the timing of this implementation was hasty. Whether or not it was intended to lure votes, you just slapped a lot of dedicated educators smack in the face. That just doesn’t become you.

Pile on all the lipstick you want. — Garth

#16 TS on 10.17.10 at 9:00 pm

Great post as always Garth! With devaluation of hard assets like real estate on the very near horizon are you still feeling positive about bank preferred shares?

Nothing has changed there, as part of a balanced portfolio. — Garth

#17 Debt's Dark Embrace on 10.17.10 at 9:16 pm

#234 Checkmate on 10.17.10 at 7:13 pm

#201 Kim

“Still not understanding. Even if someone can afford to hold what they “want” why would they hold something they are so sure is losing value??”

Checkmate!
………………………………………………………………………
My home is paid for so I do not care what it is worth or not worth. It is a place to park my ass when I am not traveling and it is a place to leave all my stuff when I am traveling. I don’t care if the value drops by 30% . Once it is paid for, who cares?

#18 TheBigLebowski on 10.17.10 at 9:26 pm

With what Garth has putlined above, the entire western world spiraling down the drain together. How can people still think this has all been just dumb luck ? Its the co -ordinated takedown of the old economic model to prepare us for a new system . Part of that takedown involves the most complete transfer of wealth from the middle class to the governmnet and banks . None of what is happening is random , it was all planned 30 years ago when the Council on Foreign Relations talked about a post- democratic society run by “experts” and government funded think tanks and scientists. The 6 o’clock news will come on and the talking head will say “government experts say vitamin D is unhealthy, or government experts have found 6 month old babies should take the flu shot,” etc. And the public is unquestioning and will take it as fact, as long as an expert or think tank says it is true. This is where we are today, We have a society that is no longer able to think for itself and must wait to be told what reality is by government and scientists. We have become completely domesticated. That is why the majority believe that a rising unemployment rate only means housing is going higher, because a study done by remax says so.

Your mothership just signaled. — Garth

#19 T.O. Bubble Boy on 10.17.10 at 9:29 pm

“The truth is we’re losing altitude fast. All that stands between us and a US-style housing event is a lack of listings. Come the Spring, well, stand back.”

In Toronto, there were a couple of BIG listings days recently (at least, from what guava.ca was showing).

Sales do seem to be pretty brisk, but so are price drops as the number of hurried sellers gets higher and higher.

I expect to see the average price in October hold up, simply because it seems that a lot of extermely expensive houses are out on the market.

For example, you sell one of these Forest Hill homes that recently listed, and the average price for October goes way up:

Old Forest Hill Rd. #1
Old Forest Hill Rd. #2
Forest Hill Rd. #1
Forest Hill Rd. #2

#20 TheBigLebowski on 10.17.10 at 9:29 pm

#16 TS
housing is not really a hard asset, well it is in a way. But rising interest rates will suppress the price of housing as well as economic activty and employment. So housing is not the best asset to protect a person against inflation, or deflation.

#21 Willy H on 10.17.10 at 9:34 pm

Tryingtobepatient on wrote:

All day kindergarten is nothing more than vote-sucking day care??? Are you serious when you say this??? Research world wide points to the importance of foundational learning in the early years! …..

Pile on all the lipstick you want. — Garth
______
I think your both off the mark. Ontario`s problem is two separate systems (Catholic and Public) costing untold billions over the years – that`s the bloated elephant in the room. Just ask John Tory!

I`ll agree that full day kindergarten is just subsidized day-care in another form, yet it is long overdue. The full-day kindergarten policy will certainly help out cash strapped mid & low-income folks who are most likely overexposed to RE.

Hell if the province of Ontario can afford to giveaway the ETR 407 whats a few quid for day care!

To be accurate, the province received $3.1 billion for Highway 407. The kiddy plan will cost $1.2 billion per year. And why are taxpayers responsible for providing universal day care? — Garth

#22 steve p on 10.17.10 at 9:35 pm

the fed does do not set interest rates the market does
the fed follows the market.

http://www.elliottwave.com/freeupdates/archives/2010/03/30/You-Still-Believe-The-Fed-Can-Stop-Deflation.aspx

declining interest rate are almost never bullish because it means a decline in the demand for credit

#23 UrbanCowboy on 10.17.10 at 9:37 pm

Did anyone see Pin Poschman from CD Howe Institute on BNN today. Can’t remember what the show was called but the host asked him about RE and Canadian debt being at its all time highest levels. He tripped and stubbled over his words and through out stuff like “we’re different than the US”…”its high but managable still”…”we aren’t seeing the same red flags”.

But then stupidly went onto say there maybe problems starting in 2014 as some health care contract comes up or something, and there could be a huge generational transfer of debt from the boomers to us, meaning higher taxes.

Anyone else see this to clarify a bit?

#24 TheBigLebowski on 10.17.10 at 9:39 pm

In Ontario, facing the worst red ink in history, the premier spends $1.2 billion on all-day kindergarten, which is actually just vote-sucking day care.-Garth

Actually that agenda was planned back in the 70’s and goes much deeper than votes. The earlier the government system can get a hold on kids the less influence the parents will be able to instill their family values. Children will begin to look at the system as their parents and the indoctrination process of the kids into whatever agenda the government wants to instill can begin sooner. By the second grade children will be ardent CO2/global warming believers, they will be already neck deep in the “Global Community ” brainwashing curriculum. The sooner a child can be torn away from their parents , the more malleable they are to government brainwashing. Soon kids will be shipped off to government boarding schools as soon as they can walk, and the parents will have to make an appointment to visit, that’s the plan

Do you home school your own kids? What a devastating thought. — Garth

#25 Cashman on 10.17.10 at 9:49 pm

#3 Nostradamus Le Mad Vlad on 10.17.10 at 8:22 pm

You are absolutely correct man, how did you get so smart? I bet it wasn’t listening to MSM that did it. Helicopter Ben is indeed running the printing presses ever more fervently of late. After all, he is one of the architects of the fall of the US empire and setting us up for a common north american currency called the Amero.

Since the residential re market is dead, how is the commercial side doing? Anyone have stats for that like vacancy up or down, market rents up or down and by how much. I would appreciate if someone could post some stats on this.

Hey Garth, since your events sell out so quickly, why rent larger premises like I dunno, say, the house of commons in Ottawa, the BC legislature, these would certainly accommodate the hundreds of your loyal blog dogs. wuff wuff. lol.

#26 Phil on 10.17.10 at 9:51 pm

This is getting unbearable. Earlier we were waiting for the fall/winter to commence looking and early 2011 to commence selective vulching… Now we are hoping for listings next spring to even begin the downward slide??

I think every rational reader of this blog has to at least entertain the idea our thesis has been incorrect.

The thesis has been clear: sales demolish first, prices later. If you can’t be accurate, at least be patient. — Garth

#27 Sam on 10.17.10 at 10:08 pm

#11 In Van on 10.17.10 at 8:47 pm

think things won’t plunge for these reasons: a) … their self-worth and satisfaction is so often linked (by them) to home ownership (both those that own and don’t) is really quite astonishing. It’s very emotionally driven and irrationa
_______________________

It’s easy to convince oneself that one’s a genius in a bull market.

Wait til the bear comes a’ – callin and a-shreddin (asset values).

> this real estate=life satisfaction link is
> really firmly fixed, at least here

and … drum roll … there have been RE busts there, quite recently, in fact

When the choice comes – declare bankruptcy or spend 30 years (trying in valin to) pay off a ridiculous underwater mortgate, it won’t be so firmly fixed. Ask all the places in the US, UK, Ireland, Spain, Latvia, Japan … where they said the same thing you just did before their bubbles burst.

#28 The Dude on 10.17.10 at 10:08 pm

Hey Big Lebowski, hang in there brother!

Garth likes to pick on you, but I’m sure I’m not alone in saying that I enjoy your posts and perspective.

I don’t always agree with you, but I enjoy reflecting upon your opinions.

Garth can be a bit of a bully….but I bet he secretly likes your posts :)

#29 Basil Fawlty on 10.17.10 at 10:14 pm

A decrease in real estate prices and deflation in the things we do not need to stay alive is happening now. However, we are also experiencing currency induced cost push inflation in many of the commodities/resources that are needed to keep us alive.
James Dines made the point in his newsletter this week that in terms of gold everything is deflating.

#30 Randman on 10.17.10 at 10:17 pm

Tryingtobepatient on wrote:

All day kindergarten is nothing more than vote-sucking day care??? Are you serious when you say this??? Research world wide points to the importance of foundational learning in the early years! …..

Pile on all the lipstick you want. — Garth

Research may point to it being important..
That doesn’t mean governments and taxpayers should
pay for it!!

As far as a slap in the face to educators…
give me a break……their only interest
is in playing out their gig and collecting a pension

#31 Steve from Calgary on 10.17.10 at 10:22 pm

Like we say out west, Ontario’s got a $200 Billion dollar deficit and it’s Alberta’s problem. ;)

See you Thursday, Garth.

#32 AxeHead on 10.17.10 at 10:23 pm

#15 Imtryingtobepatientwithyou…

I put 2 children through public education system. In my opinion, 50% of what ‘dedicated’ educators do is babysit from Kindergarten to grade 12. 6 hour days, 4 days a week, 9 months per year, all prime holidays off, coffee in the classroom, no ties, movies.

Teachers are 2nd on my list of public leaches besides realtors. 1.2 Billion was pure political.

#33 Willy H on 10.17.10 at 10:23 pm

To be accurate, the province received $3.1 billion for Highway 407. The kiddy plan will cost $1.2 billion per year. And why are taxpayers responsible for providing universal day care? — Garth
_____________
True enough. But we dumped it for 3.1B (one time injection ) and it is presently valued at $10B+ and it generates 400M annually less upkeep (& depreciation) approx $100M* Combining the cost savings with one school system (500M per year estimated) we would be well on our way to covering off over half of the kindergarten costs.

*Not a bad return for an essential piece of RE infrastructure, if we had hung onto it. Apparently the ETR 407 Toll Highway wasn`t good enough for the Province of Ontario to keep but ten years later CPP (the Federal Government`s puppy) is about to snap up 10% for a measly $900M+

Your right about tax payers being the hook for too much but let`s cut the Heritage Language Program for starters – another $120M pissed away each year pandering to the ethnic vote.

No, I am not red-neck and I don`t drive a Durango!

I am married to my cousin twice removed and I drive a PT Cruiser Woodie!

Back to RE – my current obsession!

#34 Burnt Norton on 10.17.10 at 10:25 pm

#11 In Van on 10.17.10 at 8:47 pm

I would say the same as far as the love affair that my friends and neighbours in Van have with their homes, but of course love will not prevent prices from coming down.

In addition to the nesting / “home sweet home” factor, a big part of this phenomenon relates to the cognitive bias that makes people think they are really smart investors because their homes are worth a lot more now than 10 years ago when in 99% of cases it was just dumb luck.

Those geniuses will have a lot of trouble maintaining portfolio diversification by bailing on their RE when TSHTF because they will be blinded to the fact that they are actually not Warren Buffet, they just got lucky sitting on the same couch every evening for the past 10 years.

Add in the luxury car lease payments and the ownership costs on the place in Whistler (encouraged by low rates and required to keep up with the neighbours), top off with some unexpected unemployment and I would think that the more emotionally attached they are to the house, the more screwed they will be over the next 10 years.

IMHO, only independently wealthy home owners will be ok in Van. Working, leveraged homeowners are for the most part buggered. Especially emotional ones.

#35 Joe Larue on 10.17.10 at 10:28 pm

What deflation really looks like..this article

http://www.nytimes.com/2010/10/17/world/asia/17japan.html?ref=homepage&src=me&pagewanted=all

is a real eye opener on the effects of deflation on a once ‘world beating’ economy…some quotes….

Yukari Higaki, 24, said the only economic conditions she had ever known were ones in which prices and salaries seemed to be in permanent decline…As living standards in this still wealthy nation slowly erode, a new frugality is apparent among a generation of young Japanese, who have known nothing but economic stagnation and deflation. They refuse to buy big-ticket items like cars or televisions….matchbox-size homes stand on plots of land barely large enough to park a sport utility vehicle, yet have three stories of closet-size bedrooms, suitcase-size closets and a tiny kitchen that properly belongs on a submarine….

but, of course, it’s different in Japan..i lived there in the early 90s and am stunned that this could happen to Japan…
Gambate

#36 Dirk Diggler on 10.17.10 at 10:30 pm

Take a look at us now Toronto!

Japan has often been portrayed in US media as a futuristic society: you know, robots and the like.

But more and more, the story has been about the Japanese economy looking like what we’ll look like in 10 years — a land of endless cheap money, sub-1% rates on 10-year bonds, and a three-decade slump in stocks.

The New York Times has a very worthwhile piece on the state of Japan, focusing on its economy, and its effect on the national psyche.

It starts with a terrifying little anecdote:

Like many members of Japan’s middle class, Masato Y. enjoyed a level of affluence two decades ago that was the envy of the world. Masato, a small-business owner, bought a $500,000 condominium, vacationed in Hawaii and drove a late-model Mercedes.

But his living standards slowly crumbled along with Japan’s overall economy. First, he was forced to reduce trips abroad and then eliminate them. Then he traded the Mercedes for a cheaper domestic model. Last year, he sold his condo — for a third of what he paid for it, and for less than what he still owed on the mortgage he took out 17 years ago.

17 years later selling your home at a 66% discount? It’s not even that bad yet in Las Vegas! We sound childishly greedy talking about a housing recovery in 2010 just a couple years after the peak.

#37 HangItUpHolmes on 10.17.10 at 10:35 pm

Garth would you just kill yourself already? All you ever do is post a bunch of recent news items decoded for simpletons, and add a touch of armageddon and voila a giant poop cake!

ok, I’m going to just pretend it’s spring 2009 you’re talking about… that way I can pretend too I didn’t get two years older listening to you missed calls.

Frankly, I’d be depressed just knowing that I could string along so many people for so long and somehow still have an audience.

It’s enough to make you lose faith in humanity altogether!!!

So, how’s that Durango working out for you? — Garth

#38 dd on 10.17.10 at 10:36 pm

…The money will be created digitally then used to buy government bonds held by banks….

Ya. The banks are borrowing from the Fed at less than 1% and selling back to them at a spread. If this isn’t subsiding big business I don’t know what is. And small business still can’t get loans. Main street bails out Wall Street once again. One giant ponzi scheme with the Tax payer picking up the bill once again.

And what are the banks going to do with the money? It will be pushed into commodities (inflation), gold, and silver. Watch food and basic living prices increase.

Funny how this is now front and centre in the G&M and in your articles. The Feds have been doing this for at lease a decade. It is not new.

#39 Jeff Smith on 10.17.10 at 10:37 pm

Sad news, one of modern day famous mathematician has passed away. Rest In Peace, Benoit Mandelbrot.

http://tucsoncitizen.com/three-sonorans/2010/10/16/mandelbrot-father-of-fractals-passes-on-to-the-next-dimension/

#40 Johnny C on 10.17.10 at 10:37 pm

Garth, I totally agree with your post. I have talked to so many people who are close to selling their homes and all of their agents are advising them to wait until early 2011. They think the market is going to pick up. However, I agree that a TONNE of listing will be out and not a lot of buyers to scoop them up.

Unfortunately I have delayed purchasing a house for almost 2 years (late 2008). At the time I told my newly wedded wife that we would only be renting for 2-3 months and the market would crash in Spring 2009. We all know what happened in 2009 (interest rates down, listings down) and sales surged. We have been renting ever since.

Friends and family critizise us every day (calling us cheap and full of s**t thinking that the market is going to crash). I am now at a point where the pressure has been mounting so much that we have to buy now before X-Mas.

I wish I could wait until the Spring as I believe we could save and additional 50-75K. But it’s either the wife or the house.

Good luck to everyone!

#41 sotrue on 10.17.10 at 10:40 pm

In Van #11…your comment is sooooo true even in the GTA/ Agree with you 100%

#42 john m on 10.17.10 at 10:42 pm

“To be accurate, the province received $3.1 billion for Highway 407. The kiddy plan will cost $1.2 billion per year. And why are taxpayers responsible for providing universal day care? — Garth” ,<<<<<<<…how very true!…Nothing but a vote buying move sucking more money from already overtaxed citizens to provide baby sitting services for other peoples children.

#43 john on 10.17.10 at 10:43 pm

I agree with Phil perhaps your forecast is incorrect. It has been 4 years now since you predicted this (from when you began writing Greater Fool).

#44 dd on 10.17.10 at 10:44 pm

#22 steve p

“The fed does do not set interest rates the market does
the fed follows the market.”

The fed is setting interest rates all along the curve. From day rates to 10 year rates. It just depends what it is going to target. However this magic show can and will only last so long. The audience will soon figure out the tricks are all an illusion.

#45 Jacen on 10.17.10 at 10:45 pm

#11 InVan: You’re missing a key statistic; the already incredibly high levels of home ownership in Canada, as a lot of demand has been pulled forward which traditionally would’ve had to wait for a d/p before making a purchase. There isn’t a never-ending supply of buyers. Demographics are not in Canada’s favour, believe it or not.

Which leads to mynext point; universal daycare is a carrot to help increase the size of families in Canada. The boomer demographic time-bomb means the ratio of tax payers to retired people is going to be more out of whack than it has ever been in history. Anything that can increase our birth rate has and will be pursued, this is just a start.
Besides, it’s high time that young families are subsidized instead of the vampiric boomer generation.

As for being a indoctrination plot Lebowski; you need to get outside more, and watch less X-files reruns.

Global warming as a hoax? Just follow the money. Who stands to benefit more? And by more, I mean on the order of hundreds of billions (trillions even) more. The average scientist did not take up that occupation for the money; not like investment bankers, Oil execs, and such. Why would 99% of the scientific community need to make this stuff up? I find it saddening that some commenters here are dimwitted enough to think they’d do it for the profit motive. There’s MUCH more money to be made by being a Global Warming denier in the scientific community, and be funded lavishly by Oil companies, than there is in researching reality. Yet less than 1 in a 100 do so. People comment on RE Agents being greedy, yet Global change deniers are not held up to the same light. Pretty hypocritical, if you ask me.

Next you’ll tell me we never landed on the moon either (because it’s made out of cheese…!).

#46 john m on 10.17.10 at 10:59 pm

Personally i think a crash is inevitable and necessary.A whole lot of people have to face reality…things are not good,not the same and will not be for years. The more money we borrow the longer before anything will start getting better.Its not business as usual and our leaders better start facing reality or we are going to be buried in debt we will never get out of(if we aren’t already).

#47 squidly77 on 10.17.10 at 11:11 pm

This mess will take years to straighten out, it began with Reaganomics and will end….when it ends.

I watch with baited breath and wonder how the U.S. foreclosure-gate will play out. Banks are gonna get slammed for sure, could be a rocky week.

#48 pez on 10.17.10 at 11:12 pm

#11 In Van

Totally agree with you on this one. Like you, I dont profess to have a crystal ball, but I am astonished at home ownership to self worth. In fact, I hate to say I have proven it myself. Made the gross mistake of giving our home away in Vancouver for $350,000 less then it would be today if we kept in. Happened for the 3 minutes that real estate went flat here in nov 2008.
Now we are renting and have just been evicted as the new chinese owners ( paid 1.4 million lot value, sold in 3 days) want to level the place and put up some monstrocity for their children…
feeling like a puppet at the whim of some smarty pants who was bright enough to hold onto their asset. My self worth is totally shot and although I dont care about granite and stainless, it was nice to feel security in having a place that gained a ton of equity that some jerk couldnt throw you out of..

anyway, prices arent going anywhere here in Van –
Garth says, “The inevitable result will be deflationary – when everybody expects prices to keep falling, so they put off buying until prices fall, which means they fall.”

sorry dude but no one is expecting prices to fall, there is a renewed positive sentiment by the media whores and the lemmings will follow that… prices are not falling, in fact they are up…..

#49 wes_coast on 10.17.10 at 11:20 pm

You hit the nail on the head. Deflation and/or deleveraging is how its going to be for the next decade or so. You always mention how there will be growth in stocks in the near future. I’d love to pick your brain about where you see that growth. Is it Canadian companies that are tied to emerging market growth? I’d love to hear some points on where opportunity will be in all this mess. Let’s face it – there’s always opportunity for the brave and innovative. You oft time mention sector ETF’s – but – what sectors are you seeing with growth amongst the funk the West is in? Anyhow – if you don’t tip your hand to us I won’t take it personally but I’d be ever grateful if you do.

#50 Victor from Vancouver on 10.17.10 at 11:23 pm

There is a very good solution for high real estate prices in Vancouver- move to a place where real estate is more affordable. Or buy an investment real estate in a place where prices already reached bottom. And that’s what I plan to do. Will likely buy outside of Vancouver and outside of Canada soon and who knows maybe even move. Vancouver doesn’t get better, I think it will just get worse in the future anyways- more people, more crime, more bums on the streets, same old 1 million dollar houses that don’t look like anything rich, and no good business or job opportunities, so why stay here.

Some notes regarding investing in recessionary times:
From my experience (and I personally watched high inflation preceding the collapse of the USSR, hyperinflation in post-Soviet Ukraine and Russia in 1991-1994, Russian default and real estate crash in 1998, and recent real estate crash in Ukraine in 2008), I know that good investments in bad times are stocks, real estate and gold. Stocks are the best, this is where profits can be huge. Real estate is very good as its post-depression appreciation can be in a range of hundreds of percents. Gold is still OK but it will not make you rich- all it can do is to preserve certain part of your wealth (you lose on transactions, taxes and price changes). And of course the worst of the worst is cash in a bank account- this is a guaranteed loss. I am talking about the situation when a big crash already happened which is not the case in Canada (yet?). I need to note that I have no experience of pure deflation. When I mention prices here, I mean prices expressed in hard currency. For example US dollars used to buy stocks or RE in Russia. Until recently, US dollar was a hard currency with respect to Russian currency, so when stock or RE in Russia goes up or down I am referring to prices in US dollars (USD is still a hard or reference currency but it gradually loses its “hard” status in Russia). When local currency is used, everything becomes terribly distorted due to currency manipulation by local government.

Actually it is a very interesting question for me now what currency should be used as a reference for RE prices in Canada. For all foreign buyers the reference currency is and will be USD. Therefore Canadian real estate is getting more expensive for foreigners now due to higher exchange rate of CAD. This must have some effect on Canadian RE market but I lack economical knowledge to predict it.

#51 45north on 10.17.10 at 11:32 pm

TryingToBePatient: <All day kindergarten is nothing more than vote-sucking day care? Are you serious when you say this?

Here’s Elizabeth Warren talking about the Coming Collapse of the Middle Class. 57 minutes! She says that even though most mothers are now working the family is under severe financial threat.

http://www.youtube.com/watch?v=akVL7QY0S8A&feature=related

I challenge anyone seriously interested in the Canadian family to listen to it. To me, the conclusions apply directly to the Canadian family because they apply to me. My mother stayed home and my father went to work. No apology.

I would argue that all-day kindergarten is just a continuation of the housing bubble. She says that the American family is now spending 76% more on housing than it did 30 years ago and that American mothers are now working full time to pay for it. All-day kindergarten is a subsidy to families with working mothers who (the families) spend a much high percentage of their income on housing than they did 30 years ago.

Just as the Federal Conservatives find it to their political advantage to inflate the housing bubble so too do the Provincial Liberals.

#52 HouseBuster on 10.17.10 at 11:35 pm

#21 We’re getting a bit off topic here but go back to 1867 and check out the Constitution Act (or British North America Act). There’s a reason that there has been a separate Catholic school system in Ontario for 143 years.

And how do you come up with untold billions? Separate or not those schools are needed. I remember Catholic high schools that were originally made for 400 students that held 1200 students. Public high schools on the other hand were always state of the art. It’s not until fairly recently that Catholic high schools have come a bit more up to standard.

#53 wes_coast on 10.17.10 at 11:43 pm

#15 Trying to be patient said:
All day kindergarten is nothing more than vote-sucking day care??? Are you serious when you say this??? Research world wide points to the importance of foundational learning in the early years! In the midst of such economic uncertainty perhaps the timing of this implementation was hasty. Whether or not it was intended to lure votes, you just slapped a lot of dedicated educators smack in the face. That just doesn’t become you

———–

Taking the tax dollars from moms and dads and forcing them to work more and more – spending less time with their kids is a slap in the face to the most important educator a child should have: their parents.

http://www.theprovince.com/mobile/story.html?id=3684313

The province article finds that its mostly middle class kids – who’s parents are drowning in housing debt and other financial burdens and have no time for their kids – are the ones I’ll prepared for kindergarten. Adding more tax burden is not the answer. The government is the least efficient in managing capital. Seeing as parents are the ones sowing the seeds of the future of this country – they should pay the least taxes of any demographic and be with their kids. After all – without the next generation – who will fund all these outrageous pension schemes (including those of the dedicated educators).

#54 HouseBuster on 10.17.10 at 11:48 pm

#24 – Are you in character because that sounds like something The Dude would say?

#55 Calgary situation on 10.18.10 at 12:04 am

i hope they allow standing audience at your mount royal speaking audition. i will be there..

#56 Calgary situation on 10.18.10 at 12:04 am

sorry, i meant speaking event.

#57 Nostradamus Le Mad Vlad on 10.18.10 at 12:08 am


A Musical Interlude for Ben Bernanke and his Buddies!

Gold vs. Paper — A never-ending debate.

Neither was the USSR able to take Af’stan, but the WH is so cocky. They’ve already lost.

HAARP working overtime? Plus this. “HAARP is a weapon of mass murder . . .”

European Civil War? Not just Greece, France, Spain or Latvia.

Saturday I put forth a question — What happened to the 34th miner in Chile? Apparently the number 33 has some significance in the Masonic order, but I don’t know what it is. Plus this.

Fireworks in the sky? “. . . this is a huge magnetic filament nearly encircling the entire Sun, it is now currently directly facing the Earth. If sunspot 1112 does erupt, could the entire filament explode into a massive CME?” Plus this.

Ireland is as mad as hell and ain’t gonna take it anymore.

#58 TS on 10.18.10 at 12:16 am

20 TheBigLebowski on 10.17.10 at 9:29 pm

You may want to check financial dictionaries…. a hard asset is the same as a tangible asset and does include real estate….these are assets that have physical existance.

#59 LB on 10.18.10 at 12:22 am

#12 Winnipeger:

Canada has already recently changed its CPP retirement regulations. Early retirement at a reduced pension at age 60 will no longer be an option. It has been raised to age 62. It appears we are not so different from the French or Greeks, just more unaware and apathetic as yet.

#26 Phil

Patience is a virture that will be rewarded-whether it be in waiting 1 year or 5 years for price declines in ANYTHING. In the meantime, we must identify and pursue the other choices in housing that optimizes lowest expenditure, while maintaining liquidity, flexibility and no debt.

This ensures and maintains a position of strength in a clearly declining real estate market, ready to purchase property OUTRIGHT and which does not exceed 35% of one’s total net worth.

Re: Deflation. It has already begun. What better way to position oneself to take advantage of this than to have CASH IN HAND,appreciating in value -ie NOT held on deposit in banks, or any where else where it is “invested”, earning minimal interest as well as taxed and is not immediately accessible.Given the global bailouts and recent changes to reduce Canadian financial institutions capital ratio requirements, where do we really think our money is benefitting us and is most secure – with us or with them?

#60 Devore on 10.18.10 at 12:24 am

Well, in case there was any confusion, let it be known nobody trolls Garth’s blog as well as Garth.

Regarding Japan, anyone feel like Japan might just be in big big trouble in the near future? With its extremely low interest rates, and public debt sucked up by internal demand, with plummeting savings rate (from mid-teens to barely above zero), aging population (1 in 4 are over 65), will the Japanese need to flog their debt abroad soon? Who will accept 1.5%, when they can get 3% from Germany or US? If japan is forced to double their rates, what will that do to their budget, where already 2% of their revenue goes to servicing their massive debt?

#61 TS on 10.18.10 at 12:27 am

Here’s a link to an intersting piece about the threat of deflation and the Japanese experience for the past 15 years or so….

http://globaleconomicanalysis.blogspot.com/

#62 dark sad person on 10.18.10 at 12:34 am

No doubt a dose of asset deflation is on the way. This comes after we lost a ton of jobs, many of which will never be replaced, after households have run up the biggest, steamiest pile of debt in history and amid total stagnation for salaries and wages. The inevitable result will be deflationary – when everybody expects prices to keep falling, so they put off buying until prices fall, which means they fall.

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

Yes and they never just revert back to the mean-prices always overshoot to the downside-same as the upside-

This is what bottom will sound like-
Never buy a house-
Never invest in the stock market-
Never borrow money–
Deflation will never end-
Buy Gold–

At that point-the opposite will be true-

About Sarah-
Hot or not-
I’d pick her for a leader over any of the buffoons we have to choose from-at least she knows how to hunt-

#63 groundzeropat on 10.18.10 at 12:55 am

Mark my words, the new home/condo developers & builders will lead the price decline. I personally know 3 people who are home builders and they are sweating right now. I drive vancouver/richmond everyday and see a lot of new houses/condos for sale while new ones are still being built. These guys borrow money to finance their projects and they can’t be sitting unsold very long while interest payments pile on. With the HST in suspended animation until the vote in Sept. 2011 no one is going to be buying a NEW house for the next 11 months. I work in the new car sales industry and prices of new vehicles have fallen through the floor over the past 10 years. For example, a 2011 Toyota Corolla is the same price as it was in 2001. With the bleed out in new car pricing used car pricing natually fell as well. Watch for the new house listings to discount their pricing then put on your seat belts.

#64 OnlyTheBankersLaugh on 10.18.10 at 1:11 am

Do you home school your own kids? What a devastating thought. — Garth

Belly laugh.

#26 Phil ….. Markets will remain irrational much longer than you think possible and until it becomes so obvious that they were so. And then sentiment turns sharply and there is a stampede to the exit…. do not become a greater fool even at these low rates. Your house could lose 5 years of rent in a hockey season when things turn.

#65 tran, Calgary on 10.18.10 at 1:44 am

#13 Keith in Calgary,

“bought two Ralph Lauren business suits for $189 each yesterday….original sticker was $499, then $399, then $299, ”

Which departmental store did you buy the above from?
Thanks

#66 dark sad person on 10.18.10 at 1:59 am

Here is a good graph illustration of the insane CDO leverage that somehow-has to be unwound–

http://static.businessinsider.com/image/4cb5f7357f8b9a497cb60100-915-/image.jpg

#67 TheBigLebowski on 10.18.10 at 2:04 am

Do you home school your own kids? What a devastating thought. — Garth
Everything I state on here I can back up with facts . I have no reason to lie to the people on here. I can sleep soundly at night knowing I only tell people the truth. The day will come when you must aswer to your maker Garth, How well do you sleep knowing that most of what you state on here are half truths and misdirection and will hurt allot of people.

#68 Jon on 10.18.10 at 2:19 am

Garth, I’m one of your neighbors to the south and a big fan of your site. I managed to survive the worst of our crash and actually came out ahead, so far. Thanks to people like you.

The reason I’m writing to ask you to stop spoiling the show for us down here! America finally has a chance to give up the title of the most arrogant people in the world! We sat and watched Japan suffer for 10 years and then made the exact same mistakes they did. Now we get to watch Canada get the same “we’re smarter than everyone else” attitude and suffer the same fate as we did.

So although I would greatly miss your insightful and candid posts, please don’t spoiling it for those of us who are thoroughly enjoying the show!

It’s like a classic movie you can watch. We may know how it ends but that does not mean it is not fun to watch over and over again!!

#69 hobbygirl on 10.18.10 at 4:20 am

The thesis has been clear: sales demolish first, prices later. If you can’t be accurate, at least be patient. — Garth

Any theory can be proven correct if given enough time and patience. No doubt we’ll have another war/depression/famine or whatever followed by good times. The big question is indeed WHEN (our lifetime, who knows). If I knew with any precision I’d be a lot better off.

#70 Robert Wilson on 10.18.10 at 4:22 am

thanks for the post

#71 Brian1 on 10.18.10 at 4:33 am

Phil; I think it gives us more time to prepare, if we can.

#72 gold bugger on 10.18.10 at 4:56 am

Few people in Canada right now are compelled to sell, so prices as recorded by organized real estate will hold firm for a while. Those who don’t sell at their fantasy price simply remove their homes from the market.
It’s when job losses pile up and people have to sell, well, that’s when competitive price reductions really start to take hold.
But without that catalyst, prices don’t have to fall. At all.

#73 Waiting and waiting on 10.18.10 at 6:29 am

“#26 Phil on 10.17.10 at 9:51 pm
This is getting unbearable. Earlier we were waiting for the fall/winter to commence looking and early 2011 to commence selective vulching… Now we are hoping for listings next spring to even begin the downward slide??”

The desperation is building on both sides.
Who will break first?
As the years go by and my net worth goes up, a couple hundred thousand is looking less and less important.

As for renting, it is not the same.
Maybe I will hate ownership and the headaches it brings, but right now I want some of the things not available with renting.

#74 Nancy on 10.18.10 at 7:05 am

No, Garth, all-day kindergarten isn’t “daycare.”

Too many Ontario kids are starting school completely unprepared, unable to learn or focus, due to incompetent parenting. These kids become deadweight on society later in life. The idea is to intervene when they’re young, before the problem gets out of control.

A stitch in time saves time. Paying for an extra half-day of kindergarten for two years is cheaper than paying welfare for many years.

Consider that Ontario has already made it illegal for kids to drop out of school at age 16. That increased taxes too, because high school classrooms are full now till graduation day. Should Ontario cut this program too, to save a few bucks? Or is it in the taxpayer’s interest to have maximum graduation rates?

Investments in the future are hard to justify because we can’t see the benefits right now. That doesn’t mean they’re not there.

If politicians decide they really need to spend on “stimulus,” I’d far rather see them spending it on something that will make a difference to the future than on stupid things like putting more people in prison and repaving already-paved roads.

#75 BrianT on 10.18.10 at 7:15 am

#44Jacen-If I had a nickel for every time someone made your illogical argument I would have a very big pile of nickels. Climate change is REAL and this real climate change is being used to transfer gigantic sums of money to a bunch of grifters. Yes, probably most scientists have integrity, however Al Gore isn’t a scientist (anymore that Glenn Beck is). News flash: Goldman isn’t in the planet saving business-if those guys could short the entire ecosystem and bring it down we wouldn’t be having this discussion right now.

#76 BrianT on 10.18.10 at 7:22 am

#60Devore-it is all relative-the UK makes Japan look very healthy.

#77 Willy H on 10.18.10 at 7:42 am

To be accurate, the province received $3.1 billion for Highway 407. The kiddy plan will cost $1.2 billion per year. And why are taxpayers responsible for providing universal day care? — Garth
——–
ETR 407 Toll Highway $400M EBITA, $100M Exp/Deprecation per year = $300M Profit
Cost Savings One School System = $500M per year
Cut Heritage Language Program = $120M per year

All of the above almost covers all day K-garten. Unfortunately Ontario sold off an essential piece of infrastructure RE for a song. Currently worth $10Billion+

Apparently the 407 was not good enough for the province but the CPP Investment Board under the Fed’s are about to pick up 10% for a measly $900M+

I think we can agree to disagree on this one.

Do you research. 407 was sold for $3.1 billion in 2002. Since then the highway owners have spend over $2 billion on improvements, and a minority stake is now valued at $900 million. On balance, the sale price was reasonable since the province has had the money for eight years. I sure hope you are not an economist. — Garth

#78 David B on 10.18.10 at 7:44 am

The question is:

Will Canadians tighten their purse strings to the same extent that our American cousins have as the vast majority are now in debt up to their arm pits and one paycheck away from disaster?

Just may the ode trip home from Tim’s same few expensive homes for sale as was in summer. Most to all even fewer smaller homes sold, no new listings, hopeful building continues in new areas all couched with sparse open house signs yesterday.

Spin it anyway y’all like, but looks like a real slow down to me.

#79 Love this Blog on 10.18.10 at 7:45 am

Negative equity

http://www.canadabubble.com/bubble-watch/1449-down-at-heart-in-docklands.html

#80 bruce corell on 10.18.10 at 8:14 am

2 weeks to Nov. 1st. “GTA inventory of homes that are conditional sales come due end of Oct. This represents
15 to 20 % of Inventory of resale. We are looking at decrease of 10% on Nov 1st.” This is note from Remax in GTA. BUBBLE IS HERE NOW……Remember this because whomever reads this will remember this for the next 10 years…..

#81 Mathew Gibson on 10.18.10 at 8:15 am

# 15

All day kindergarten is nothing more than vote-sucking day care??? Are you serious when you say this??? Research world wide points to the importance of foundational learning in the early years! In the midst of such economic uncertainty perhaps the timing of this implementation was hasty. Whether or not it was intended to lure votes, you just slapped a lot of dedicated educators smack in the face. That just doesn’t become you.

Pile on all the lipstick you want. — Garth”

This is only the second time I have been shocked and disappointed with something Garth has written. For a man who revels in revealing the truth of a situation, to sit smugly behind his own ignorance is just like the “Durango Guy” he excorciates in this blog entry.

While I disagree with Ontario funding all-day kindergarten (a misnomer – it isn’t all day) at inflated union rates of pay at a time when we should be in serious fiscal restraint, contemporary early learning programs offer high-quality education, play and socialization in safe environments. Only the ignorant belittle them.

I have taught elementary, secondary and university classes. Disagreeing with you does not equate ignorance. — Garth

#82 Keith in Calgary on 10.18.10 at 8:24 am

#65 Tran, Calgary……..

It was in SEARS Chinook…….but I think the sale was only this weekend and ended yesterday.

#83 Mathew Gibson on 10.18.10 at 8:29 am

Axehead wrote:

“I put 2 children through public education system. In my opinion, 50% of what ‘dedicated’ educators do is babysit from Kindergarten to grade 12. 6 hour days, 4 days a week, 9 months per year, all prime holidays off, coffee in the classroom, no ties, movies.

Teachers are 2nd on my list of public leaches besides realtors. 1.2 Billion was pure political.”

So, if I understand you correctly, you willingly put your children through an education system you abhored, and at public expense.

First, apologise to your children for failing to take them out of a system you believed was not good for them, then write a cheque out to “fellow tax payers” for the cost of that education. About 20k should do it.

#84 Mathew Gibson on 10.18.10 at 8:53 am

I have taught elementary, secondary and university classes. Disagreeing with you does not equate ignorance. — Garth

Having taught a few elementary classes does not equate with a genuine understanding of early childhood learning (whether you agree with it, or not). You’re putting on lipstick yourself here, Mr Turner.

(Disclosure: I am not employed as an ECE in the province’s all-day kindergarten program and my child is not enrolled in the program.)

#85 Amarillo on 10.18.10 at 9:04 am

Re the subsidized day care, I gotta go with Garth on this one. It’s just another liberal ploy to brainwash our kids. It’s called social engineering. Get ’em young and when they get older, they won’t realize that the teachers’ union has similarities to Jimmy Hoffa’s Teamsters. Get ’em young and teach them that God is dead and that evolution is gospel, you bet.

#86 Willy H on 10.18.10 at 9:04 am

Do you research. 407 was sold for $3.1 billion in 2002. Since then the highway owners have spend over $2 billion on improvements, and a minority stake is now valued at $900 million. On balance, the sale price was reasonable since the province has had the money for eight years. I sure hope you are not an economist. — Garth
________
A 250% increase in tolls certainly provided them with a nice chunk of change for the extension.

Even John Tory admits this was a big mistake and he would never have sold it.

#87 john m on 10.18.10 at 9:14 am

73 Nancy on 10.18.10 at 7:05 am……. Hogwash!

#88 Devil's Advocate on 10.18.10 at 9:25 am

Some Interesting KELOWNA REAL ESTATE STATS

Thus far for the month of October 2010 (MTD to October 15) there have been 68 single family residential sales in the Central Okanagan Division of OMREB (Kelowna).

Of the 68 single family residential sales this month to date 8 were sold for over $1,000,000 including a $2.3 mil sale, a $3.0 mil sale, a $5 mil sale and the sale of a $10 mil 5,535 square foot home on a 29 acre lakeshore estate.

There were 24 homes sold this month in Kelowna for $400,000 or less with the least expensive sale being that of a 4 bedroom, 2,000 square foot half duplex for $265,000.

For the same period last year (2009) there were 118 single family homes sold of which 3 were sold for $1,000,000 or more, 50 sold for $400,000 or less.

Those are the raw stats. Make what you will of them. Me? Being our there showing properties to clients in all price ranges I can tell you there is no shortage of homes for anyone to choose from. The rich can afford to be picky and pay “bizarre” prices for that which they want. As you work your way down the ladder there is adequate housing for the less financially endowed – they just can’t afford to be so picky. Hasn’t it always been that way?

I can show you a nice two bedroom condo for $124,000 which will provide you adequate shelter. No it doesn’t have in-suite laundry or an ensuite bath – for that you have to have more money. But it will shelter you from the cold and provide a comfortable warm place to rest your head within walking distance of a host of services.

Maybe things are not so bad. Maybe it’s perception more than reality. Maybe our expectations have become too lofty. I grew up in 1,500 square foot home with one bathroom and three bedrooms where Mom Dad and four children lived quite nicely. We seem to believe we deserve more than that now.

Bottom line… don’t give me any bullshit that Kelowna is unaffordable. Ya there are a disproportionate number of ultra expensive homes here and hockey players ready willing and able to buy them. But there are also available an adequate number of lower priced homes people can afford. It’s jus that the people who can afford those don’t want them. They want to live in a 5,000 square foot residence on a 29 acre lakeshore estate too.

#89 Junius on 10.18.10 at 9:48 am

#48 pez,

If you think anyone here believes in your fairytale you have another thing coming.

Now take those sunglasses off your head and get back in your Durango.

#90 Junius on 10.18.10 at 9:51 am

Keith in Calgary,

You said, “I know climate change is a hoax”.

Really. That confident are we? When the vast majority of scientific evidence supports it what are your credentials?

Or is it just a convenient opinion from someone in Oil land?

#91 fancy_pants on 10.18.10 at 9:52 am

Oh dear, any discussion involving children and all sorts of pro-kid-give-them-everything activists crawl out of the woodwork.

Nobody is saying anything against all-day kindergarten in itself, it is wonderful – but in context of the economic conditions it is just another irresponsible use of $ that isn’t there.

It is all about living within your means, as a person, family or gov’t. Very few can do it. Evidence is everywhere.

…but I’m sure when these kids are grown up and look back they will see that their time in kindergarten played a pivitol role in their financial success…and why not, they will be paying for it in increased taxes multiple times over.

So yes, in context it is lipstick on a pig.

#92 Devil's Advocate on 10.18.10 at 9:58 am

Further to and in support of #80 Mathew Gibson’s comment on # 15

“I have taught elementary, secondary and university classes. Disagreeing with you does not equate ignorance.” — Garth

Careful now Garth. There is a big difference between a guest lecturer and a full time professional teacher. We think it is easy to teach having all been in school for 12 years or so. There is a HUGE difference between being a full time professional educator who prepares and executes an educational “plan” day in and day out all year long and someone who stands in front of an audience and talks of what they know. One is teaching the other is lecturing or entertaining.

Only the true teachers who read this blog will understand that of which I speak… if you Garth are truly one of them (a trained and accredited teacher) you too will appreciate my comments.

P.S. as you know I am not a teacher but a REALTOR who’s profession, as it seems all, is equally misunderstood. Professionals make it look easy to the layperson… try doing it with success day in and day out year after year – kindergarten on up.

#93 Prof ANON on 10.18.10 at 10:21 am

@ 30 Randman and everyone with similar opinions.

Okay, assuming that you are one of the most reasonable and capable parents on the planet, and also assuming that your children are some of the best adjusted, smart, and motivated children around; what about all of the other parents and children?

I don’t have kids. I don’t plan on having them. Generally, I don’t like them. If the parents are the gushing type, I dislike them even more. However, I am eternally thankful for the teachers and the school systems that attempt to instil a work ethic, a bit of social rationality, and a foundational knowledge of science/reading/math. Without teachers, society would be a lot more like the Lord of the Flies than it already is.

Sure the education system could be run better. However, I suspect that those people who are the most critical have no idea how difficult and how stressful it is to deal with self-righteous belligerent parents and the hoards of ignorant thugs and divas that are their progeny.

#94 MikeT on 10.18.10 at 10:31 am

First, don’t bash the additional money for kids’ education. Even if you don’t have any, today’s kids will pay your pension tomorrow, so the better they will be educated, the higher salaries they’ll have and the more money for you in the end Think about it.
Second, I will tell you this: my older kid went to JK this year (not the full-day one, so I’m not biased) and when I asked the principal what the kids are supposed to know by the end of SK, he told me it’s not what they know (reading, counting, etc.) that’s important; what actually is important is their “social skills” – the skills of being part of the group, of interacting with other kids in a positive manner, etc. I think I heard it somewhere… Oh yeah, it was during my early school years – in USSR in the eighties of the last century. Now, I’m worried!!!

#95 john m on 10.18.10 at 10:42 am

82 Mathew Gibson on 10.18.10 at 8:29 am

Axehead wrote:

“I put 2 children through public education system. In my opinion, 50% of what ‘dedicated’ educators do is babysit from Kindergarten to grade 12. 6 hour days, 4 days a week, 9 months per year, all prime holidays off, coffee in the classroom, no ties, movies.<<<< absolutely right and i have two neighbors who are teachers and the state themselves all they are is babysitters..a lot of kids are uncontrollable and there is not a damn thing they can do about it…and if school is canceled for a day the phone lines are buzzing with people calling in bitching because they have to pay for a babysitter.As far as the educational system of today goes we have university graduates who can't spell and are unable to do simple math without a calculator. The cost to citizens for the many government vote buying schemes such as this is grossly unfair.I have neighbors that have 5 children and from what i read they are pulling in about $15,000 a year in baby bonus ,the mother does not work and now we should pay for all day babysitting so she can go shopping? I think not!!

#96 Bilbo Bloggins on 10.18.10 at 10:42 am

Met up with an old friend. His company recently laid of about 30% of their staff. Happened pretty quick, over 6 months or so. Affected staff mostly in their 50s and up.
The ones making good money previously and afflicted with house lust (trophy homes, etc).
Good luck finding a new job or unloading the McMansion.
Quite brutal.

#97 ralph on 10.18.10 at 10:59 am

#87 (Devil’s Advocate)

What you write may be true but it all comes down to income. Except for the lifestyles of the rich and famous, income levels just do not support present real estate prices in Kelowna.

#98 rory on 10.18.10 at 11:04 am

#84/91 Devil’s Advocate

On #84 …finally something good + I agree …good insight and then you do this …jeez DA.

“P.S. as you know I am not a teacher but a REALTOR who’s profession, as it seems all, is equally misunderstood. Professionals make it look easy to the layperson… try doing it with success day in and day out year after year”

Talk about slapping lipstick on a pig …I think you could be the poster boy/bot for Revlon.

#99 Thetruth on 10.18.10 at 11:06 am

F And C are busy devaluing our C$ and were not talking about versus the US$. I’m talking about vs the rest of the world. Now Cdns can sit back and watch as foreigners pour in and buy our assets at a discount…
Be they Potash, a restaurant , a farm, a house, and an education. Isn’t this treason as the policy negatively affects most Cdns?

#100 Suburban John on 10.18.10 at 11:10 am

Some facts.
All day kindergarten is gradually going to be “taught” by ECE teachers, not the current overpaid teachers. Kindergarten teachers at the top of the grid earn $91K in the GTA, the same as all public school teachers and very close to high school teachers and college professors. ECE teachers will earn much, much less. ECE teachers are currently “helping” in the classroom and the teachers have been given notice by their unions that they need to be looking at grade 1 or higher in coming years.
I have two relatives who are kindergarten teachers and they are the first to admit that all-day junior kindergarten is a waste of money. The kids aren’t even toilet trained. Yes, it is now organized theme play. Officially, “play-based learning”. (Yeah, right)
This will not have any improvement in the educational outcomes of students. Our k to 12 educational system is abysmal. How do I know? I’m a college prof and my international students are head and shoulders above the crap coming out of Ontario high schools. But don’t blame the teachers. It’s the curriculum from Queens Park, media, role models in sport, and society’s lack of respect for any intellectual endeavour.
The education system has been in decline for decades. Just a year ago I found my father’s grade 13 notes from 1944. Jaw dropping! I don’t think I would have been able to complete grade 13 (and I graduated high school in the top 5-10%.
So, as I tell my students…you’re now paying to learn things that used to be free.

#101 Jane on 10.18.10 at 11:13 am

Trying to be patient and Johnny C:

Parents are giving their kids up to daycare when they are infants, spending no time raising their own. Of course they want all day kindergarten. That half day at home is a great inconvenience to parents. Thank goodness for teachers who care about these kids. These parents need to work out how much they are actually making after the costs to work two full-time jobs.

Johnny C you are gonna lose your wife too when you can’t afford anything past the mortgage, or end up broke altogether.

#102 mid-Ontario on 10.18.10 at 11:19 am

The September results are in for this area (Grey-Bruce) and a new record for home selling prices was set at $227,267. Sales are down just 8% y/y.

I could say that the price increased 4% from August and that is 48% y/y projecting into the future. That of course would be misleading.

Down the road, Garth’s view may pan out but the number of “greater fools” seems to be greater than many of us imagined. It may take a world event that touches locally to shake reality into those around us. It is quite clear that the active “greater fools” are not interested in understanding the big picture of uncertainty beyond Canada.

#103 Cash Heavy on 10.18.10 at 11:21 am

#91 Devil’s Advocate “as you know I am not a teacher but a REALTOR who’s profession, as it seems all, is equally misunderstood. Professionals make it look easy to the layperson”

Please, a realtor IS NOT A PROFESSIONAL CAREER, period. It’s a SALES career.

Ok, if you will admit to calling a Futureshop, used car or door-to-door salesperson a professional then, ok.

But a realtor is no doctor, lawyer, engineer or dentist.

#104 Got A Watch on 10.18.10 at 11:23 am

” Do you research. 407 was sold for $3.1 billion in 2002. Since then the highway owners have spend over $2 billion on improvements, and a minority stake is now valued at $900 million. On balance, the sale price was reasonable since the province has had the money for eight years. I sure hope you are not an economist. — Garth
________
A 250% increase in tolls certainly provided them with a nice chunk of change for the extension.

Even John Tory admits this was a big mistake and he would never have sold it.”

——————————————————–

Even more important, how much have the tolls on 407 brought in over that period? What is the total of the revenue stream over the lifetime of the highway? My point is that if it is such an attractive investment that Spanish pension funds or whomever want to pay big bucks for it, maybe there is some value there. Taxpayers and toll payers are paying so somebody else can make money, when it could have been done in-house.

A Government should not lose control of basic infrastructure. Enronization can occur.

The 407 is the most expensive toll road in North America I read somewhere. Even if it is not THE most, it is not cheap by any standard. I fail to see any logical reason why this should be so, other than a ridiculous monopoly. The charge is out of proportion to the cost.

Either a society can either afford it’s basic infrastructure, or it can’t. If it’s the latter, hard to see how you can have a growing functional economy. So on a general basis, I oppose privatization of basic infrastructure or a cash cow like the LCBO. Even if it is a ‘profit-sharing’ plan, as usually the taxpayer gets to share the loss more than the profit. We should own the 407 and collect the profits (and keep the tolls a bit lower).

It’s not just an accounting exercise to keep revenues up, which was the original reason for the sale wasn’t it, the Gov of the time was hard up for ca$h.

#105 Moneta on 10.18.10 at 11:26 am

Teachers are 2nd on my list of public leaches besides realtors. 1.2 Billion was pure political
———–
The workplace is one giant daycare for 99% of workers.

It’s amazing how judgemental we all are. The system is FUBAR. We’re all in this together.

#106 emanon on 10.18.10 at 11:28 am

Another month coming and going in Toronto with a decrease in sales but yet again another price increase.

GTA REALTORS® Report Mid-Month Resale Housing Market Figures

TORONTO, October 18, 2010 — Greater Toronto REALTORS® reported 3,012
sales through the Multiple Listing Service® (MLS®) during the first two
weeks of October 2010.
This represented a 17 per cent decrease compared to the 3,631 sales
recorded during the same period in 2009. Year-to-date sales amounted to
71,988, representing a three per cent increase compared to 2009.
The average price for October mid-month transactions was $444,644 – up
seven per cent compared to the average of $414,479 recorded during the
first 14 days of October 2009.
http://www.torontorealestateboard.com/consumer_info/market_news/news2010/pdf/nr_mid_month_1010.pdf

#107 Devil's Advocate on 10.18.10 at 11:36 am

#102 Cash Heavy

Again, “professional” is not by “association” but by “being”.

#108 David B on 10.18.10 at 11:42 am

Speaking with a very close contact who had visions of ocean front property in the 900K range now will wait as the agent called them to tell them another client has made it known they will putting in a bid. My only advice to them was not to get into any bidding wars, it appears they were listening. I told them not to worry as there will be others and should this fall through it will be around come spring along with others.

#109 Moneta on 10.18.10 at 11:48 am

…but I’m sure when these kids are grown up and look back they will see that their time in kindergarten played a pivitol role in their financial success…and why not, they will be paying for it in increased taxes multiple times over.
———-
Are you saying that as a society we can’t afford to pay daycare so parents can go to work?

Sorry, but we’ve got huge issues if we can’t afford to go to work because daycare costs too much.

This is proof we’ve got huge priority issues in this country.

Maybe living within our means, is all about multi-generational homes and grandparents helping out raising the kids. I can see many boomers having a fit reading this.

#110 Devil's Advocate on 10.18.10 at 11:48 am

#97 rory

Yes and don’t think I didn’t see a comment such as yours coming as a consequence. Had I not concluded with disclosure some new here might have thought me a teacher and lambasted teachers as “overpaid babysitters” thinking me a self serving proponent of THAT profession. Really, you DAWGS can be so predicatable.

All jobs are seen as easy by those who don’t do them every day.

#111 Moneta on 10.18.10 at 11:57 am

Sorry, but we’ve got huge issues if we can’t afford to go to work because daycare costs too much
——–
I’ve seen the difference between a system with private and public (Qc vs. Ontario) and let me tell you there is a huge difference.

When it comes to daycare, the system based on private care just does not compare. It’s a patchwork. Daycare providers know they are in demand and fix their own schedules which does not fit demand. Kids get shipped from one school to the other for the after-school program and there are waiting lists. It’s hell.

In Quebec, kids stay at their own school. It’s there when you need it and you can go to work with peace of mind.

If you’re a woman, it’s there when you need it and it’s worth every penny.

Is this a societal responsibility? — Garth

#112 Moneta on 10.18.10 at 12:04 pm

1.2 Billion was pure political
———-
And women getting the right to vote was political also.

#113 Antonio on 10.18.10 at 12:04 pm

Latest Toronto numbers still make me feel that the jury is out. We could be the biggest suckers on this board. Declines are slowing and price keeps rising. There was no information about supply.

You misread the numbers. Everything is on track. — Garth

#114 R on 10.18.10 at 12:16 pm

Hey, don’t knock all day kindergarten. It allows people to go out make the much needed cash to survive without losing it all back to the day care racket.

#115 T.O. Bubble Boy on 10.18.10 at 12:25 pm

GTA numbers are interesting… the burbs (905 area code) are hurting — down 19% vs. 15% for the core. Also – price increases vs. 2009 are smaller in the 905.

The craziest statistic of all: the average price of a detached home in the 416 area code went up 16% to $734,089!!!

There must have been some sales of $5M and $10M houses to hit that type of number???

#116 eaglebay on 10.18.10 at 12:32 pm

#45
The climate has been changing for billions of years and will continue to do so for many more billions of years.
Why are the Moon and Mars getting warmer?
Maybe the Sun has something to do with it?
Remember, there are as many scientists “deniers” as scientist being convinced of this “global warming” BS.
Now, I’m going for a drive so that I can feed the plants their daily dose of essential CO2.

#117 BrianT on 10.18.10 at 12:34 pm

Lots of talk-“Fraud isn’t legal because a big bank does it” but absolutely zero enforcement-Skilling and Fastow obviously didn’t grease the right palms http://finance.yahoo.com/tech-ticker/article/535513/%22This-Is-Criminal%22%3A-Foreclosure-Process-%22Rife-with-Fraud%2C%22-Barry-Ritholtz-Says

#118 Moneta on 10.18.10 at 12:35 pm

Considering that

– We are going from 5 workers per retire to 2/1
– More women than men go to university
– Most degrees don’t generate big incomes
– 25% of kids live with single moms

We need policies that will get and keep educated/skilled workers (i.e women) in the workforce.

Quality and afforable daycare is a start.

#119 eaglebay on 10.18.10 at 12:37 pm

#40 “I wish I could wait until the Spring as I believe we could save and additional 50-75K. But it’s either the wife or the house.”

Guess which one I would pick.
You could always get my wife for free.

#120 Randman on 10.18.10 at 12:40 pm

Friends and family critizise us every day (calling us cheap and full of s**t thinking that the market is going to crash). I am now at a point where the pressure has been mounting so much that we have to buy now before X-Mas.

I wish I could wait until the Spring as I believe we could save and additional 50-75K. But it’s either the wife or the house.

FOR GOD’S SAKE !!! BE A MAN!!!

GET RID OF BOTH!!

#121 Devore on 10.18.10 at 12:52 pm

#110 Moneta

Now this is something that has always boggled me.

There is obviously tremendous demand for day care. Why are there so few? It seems like a great opportunity for someone enterprising to make good money and grow their market quickly. What stands in the way? Regulations and inflated costs making it unprofitable?

On another note, as the population pyramid obviously inverts, will governments push to encourage a new baby boom? Subsidizing young families and additional children? The last boom was brought on by a drastically increased national/economic stability and a positive future outlook (and all the men coming back home from the war). With the way the economics of children work out today, who can AFFORD to have children? Right away, you’re looking to either halve your income (stay at home), hire a nanny, or find a day care, a huge rise in costs (or cut in income), to say nothing of the expense of raising the little devils.

#122 Soylent Green is People on 10.18.10 at 12:53 pm

Why are women responsible for birthing for free future tax payers.

Honestly.

#123 dark sad person on 10.18.10 at 12:56 pm

Education is a good topic-

So–we send our kids to school to learn-
They come out after 15 or so years with a degree and loaded to the ass in Student loan debt and have no job that fits their Educational training-so they flip patties at McDonalds and have to bunk in with their parents in order to help both sides survive and “mostly” none have a clue wtf went wrong–

Education is great-but why are they never taught about the most important reasons for getting an education and what to do-when-they do get a job-or how-the economic planet ticks-learning about things like-“Money” and the management of it–
Of course–if they were taught that–they wouldn’t have borrowed so much money to get an Education–
Ohhhh but I forgot–even “if” they were taught Economics in School–they would still end up in the same bind–because-
Keynesian Economics–would tell them-that “this” cannot happen–because–
All Governments need to do-to reverse any adverse Economic conditions–is–
Print Money and stuff Banks full of it and all you need to do is pay Taxes and all will be fine–

This all works great-in fact-we can see how well it works-by today’s example-
Gold?
Forget about that “old relic” nothing to understand there–
Just borrow and spend-cuz-it all works out tomorrow–

#124 realpaul on 10.18.10 at 1:04 pm

The deflation scare is all a smoke and mirrors campaign to secret additional debt onto the books while the public is shaking in their boots. Deflation….simply doesn’t exist. In fact inflation is raging. Wholesale prices of commodities continue to upspiral and tricky devices such as reduced packaging and weights are not fooling anybody.

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/inflation-stagflation-and-you.aspx

#125 Spiltbongwater on 10.18.10 at 1:06 pm

Is this a societal responsibility? — Garth

No, but it does seem to be election strategy with virtually every party promising government funded childcare in some form or another. These campaign promises,(similar to the bible), are not worth the paper they are printed on.

#126 Mister Obvious on 10.18.10 at 1:09 pm

#69 hobbygirl:

“Any theory can be proven correct if given enough time and patience.”

No, any theory can’t. Consider one of physics most famous experiments. In 1887, the ‘Michelson-Morley Experiment’ set out to prove the existence of ‘either’, the much postulated medium through which electromagnetic energy travels through space. Instead, they succeeded in conclusively proving the exact opposite. Not a single physicist today continues to believe in the existence of ‘either’.

http://en.wikipedia.org/wiki/Michelson%E2%80%93Morley_experiment

#127 HouseBuster on 10.18.10 at 1:10 pm

Is this a societal responsibility? — Garth
—————————————–
No it’s not but it sure is nice to have.

#128 pez on 10.18.10 at 1:16 pm

#101 Mid Ontario and Junius 88 – very well said Mid Ontario, a nice dose of reality

Junius, I know you dont take well to anyone who presents anything remotely contrary to your black view. Now get on public transit, as I know you cant afford a Durango OR a home, and have a nice day in the sun huh?

signing off Garths blog for good, you guys are just too intolerant and myopic

#129 Jeff Jones on 10.18.10 at 1:17 pm

The thesis has been clear: sales demolish first, prices later. If you can’t be accurate, at least be patient – Garth
=================================

Didn’t you call for this to happen in 2008? Could it be that the ‘thesis’ is clear, but wrong?

And I was correct in 2008. — Garth

#130 wetcoaster on 10.18.10 at 1:23 pm

Devils advocate, so you think living in Ratland with all the druggies and gang members is a suitable place for first time buyers and they should just suck it up ? Grab a brain, Kelowna is just as over valued as the rest of the province. Try to get a job there that pays over $12 an hour. Even the trades guys are screwed by the developers on a regular basis and eventually leave town.

#131 Jeff Smith on 10.18.10 at 1:32 pm

some spokes person from Treb says “The GTA resale market is balancing out …”. Hehehe.

http://www.moneyville.ca/article/877053–gta-home-sales-slide-again-in-early-october?bn=1

#132 realpaul on 10.18.10 at 1:33 pm

some people can’t remember what happened two weeks ago…so lets go back just a few days and regroup.

http://dollarcollapse.com/uncategorized/now-start-watching-interest-rates-part-2/

#133 C on 10.18.10 at 1:34 pm

#114 Toronto Bubble Boy.

I thought the same thing regarding the (905) numbers. They seem to be quite weak.

#134 Jeff Smith on 10.18.10 at 1:35 pm

The conflicting views between C and the economists.

http://www.moneyville.ca/blog/post/877093

#135 junius on 10.18.10 at 1:39 pm

#127 pez,

Actually I drive a new Honda – yes it is a hybrid. However I do take the Olympic line to the airport.

I can tell by your response that I hit a nerve – so clearly your story is fiction as suggested. The angry bull line of “you can’t afford it” gives it away.

#136 Evangeline on 10.18.10 at 1:42 pm

#62
((About Sarah-
Hot or not-
I’d pick her for a leader over any of the buffoons we have to choose from-at least she knows how to hunt-))

…and how to run a small business, and how to govern a state, and how to bring a budget under control, and how to negotiate with oil companies. Under her governorship the oil companies started paying Alaskan citizens each $1,000 a year (going from memory) out of their revenues.

#137 Linda Pearson on 10.18.10 at 1:44 pm

#94 john m on 10.18.10 at 10:42 am

…I have neighbors that have 5 children and from what i read they are pulling in about $15,000 a year in baby bonus ,the mother does not work …

HAHAHAHAHAHAHAHEEHEEHEEHEEHEEHEEHEEHEEHAHAHAH

You’re just a hoot. Thanks for the laugh!

#138 Devore on 10.18.10 at 1:45 pm

#126 HouseBuster

Is this a societal responsibility? — Garth

No it’s not but it sure is nice to have.

A lot of things are “nice to have”, but when times are lean you have to prioritize to the “must have”.

The boomers mantra was “we owe it to ourselves” (to borrow money from future generations), is ours going to be “we owe it to our children” (to borrow money from them)? Will they be as thankful to us as we are to the boomers (har) when taxes are 80% and 50 cents of every federal dollar goes to paying interest on debt?

#139 junius on 10.18.10 at 1:49 pm

#87 DA,

I drove through Kelowna on the weekend (in my new Honda). I noticed a number of price reductions on properties right on the highway. Same thing in Vernon.

It appears to me based on your stats that pretty much the same thing is happening in the OK valley as the lower mainland.

High price and “once in a lifetime” properties are still changing hands because the super rich don’t care. In fact, as in the West side of Vancouver, there are now some premium properties available that don’t often go to market.

However the bulk of the market is heading down in sales and price. There appear to be fewer and fewer first time buyers and now fewer people trading up.

Isn’t this pretty much what Garth is saying is happening?

#140 junius on 10.18.10 at 1:51 pm

#127 Pez,

Pez = Bull dispenser. Enough said.

#141 Bill Gable on 10.18.10 at 1:51 pm

>>”Bottom line… don’t give me any bullshit that Kelowna is unaffordable. Ya there are a disproportionate number of ultra expensive homes here and hockey players ready willing and able to buy them. But there are also available an adequate number of lower priced homes people can afford. It’s jus that the people who can afford those don’t want them….”

Oy vey.

I think we have a winner in the “Fogged Brain” award – and you will receive a copy of Mr. Turner’s latest book.

Hockey players?

PLEASE.

#142 Painted Toenails on 10.18.10 at 1:51 pm

For Sale signs litter the neighbourhoods I walk and drive through every single day. My friends with the new waterfront house who bought, sans conditions, and put their ‘old’ waterfront up for sale. New realtor, $50 thousand dollar haircut, still no takers. A colleague of mine bought a $350 waterfront home in Washington State (formerly worth over 7) where they enjoy sailing their boat and BBQing with the other Canadian vultures. That’s the good side. The bad? They have had their Vancouver home up for sale for over 8 months with no takers. They are going to take it off the market when it expires. Another friend bought a ‘weekend’ place in the Sunshine Coast as they are going to retire in just over a year. They planned to sell their Van home but guess what? Same sad story… no offers on their existing house.

Last one, a former neighbour, bought on Saltspring and kept the house in Vic until they were finished the renos on the new place. Now can’t sell the Vic house.

Look around you kids. Garth is right. The first part is HERE, NOW. Homes are not selling. The prices are beginning to drop but – again – like Garth said, first the denial, then the price decreases.

Each of my friends has been in denial. Each. One.

Only 1 has dropped their price so far but the other three have taken their homes off the market.

What happens when they all put them back up in, yup, Spring 2011?

Prices plunge, that’s what. and the folks who have to keep their homes on the market in the meantime are the first to feel the pain. They will have to drop first.

Time to make hay! Time to take your money and use it to your advantage! Be one of the smart ones!

Kipling’s “If” Wiser words will never be spoken. Google it if you don’t know it already. Then read this blog again. Finally, take action or wait, depending on your current position.

#143 Devore on 10.18.10 at 1:56 pm

So another rate announcement from Bank of Canada tomorrow. Any thoughts?

As I’ve posted elsewhere, I’m guessing Carney will say he sees the economy less lukewarm than it was recently, with no need to further raise rates at this time. I’m not hearing on MSM too much noise about how well things are going, and plenty of doom and gloom especially around housing and our trading partners, so I think everything is in place to announce a freeze.

#144 Evangeline on 10.18.10 at 1:57 pm

#47

((his mess will take years to straighten out, it began with Reaganomics and will end….when it ends.))

Actually it started with affordable housing policies and the Community Investment Act that ‘encouraged’ the breakdown of traditional underwriting rules for mortgages. That seminal breakdown led to a chain reaction of breakdowns all the way down to foreclosure-gate.

#145 Evangeline on 10.18.10 at 1:59 pm

in my last post “Community Investment Act” should read “Community REinvestment Act”

#146 poco on 10.18.10 at 2:01 pm

#59 LB your post is totally wrong

CPP benefits for a reduced pension did not go from age 60 to 62 –no change in that area

you should become more aware and not so apathetic in your postings

http://www.fin.gc.ca/no8/data/09-051_1-eng.asp

#147 betamax on 10.18.10 at 2:11 pm

#40 Johnny C: “I wish I could wait until the Spring as I believe we could save and additional 50-75K. But it’s either the wife or the house.”

If that’s what she’s like, then you’re going to lose her later over something else anyway, at which time she’ll end up with that house you overpaid for. Better to bail now. I’m 100% serious.

#148 45north on 10.18.10 at 2:13 pm

T.O. Bubble: GTA numbers are interesting… the burbs (905 area code) are hurting — down 19% vs. 15% for the core.

Tony: he doesn’t mean Brampton! He means everything in the 905 belt but excluding Brampton!

#149 jess on 10.18.10 at 2:13 pm

hum…liar documentation?

“AGF Trust provided millions in loans to many of the Prosporex investors. The loans were to be invested in RSP eligible investments only. But some of the money was invested by Prosporex in foreign exchange currency markets, in violation of the loan requirements. Both AGF Trust and some investors say they were completely unaware of this violation. In an interview with W5, AGF Trust President and COO Mario Causarano insisted that AGF followed the required rules in making the loans and is not licensed to determine whether the investments were appropriate. He insisted that it was clearly the responsibility of the dealers, who arranged the loans on behalf of the investors, who should have directed the funds into eligible RSP investments as claimed in the loan applications.

The Ontario Securities Commission (OSC) is the regulatory body responsible for overseeing Ontario’s capital markets. They launched an investigation into Prosporex Investment Club Inc. in 2009 and allege that most of the approximately $24 million of investors’ money raised was lost. The OSC’s Statement of Allegations claims that “false promises and unrealistic forward looking statements about investment returns were made to the investors.”

http://www.ctv.ca/CTVNews/WFive/20101015/w5-taken-on-faith-101016/

#150 Evangeline on 10.18.10 at 2:17 pm

#1
((you don’t have to Albert Einstein to realize that giving taxpayer funds to banks which then turn around and buy treasuries with those same funds is Madoffian economic policy at its finest. ))

As I said in another post on another thread, I find the timing suspicious: isn’t it annual bonus season?

#151 Alan on 10.18.10 at 2:19 pm

Given the next housing debacle in the US has just begun (banks can’t foreclose because the paperwork was improperly filed and in such cases, the defaulted property owner apparently doesn’t owe anything if the bank does not have the correct paperwork!)

Canada’s housing market with non-recourse mortgages will be a shining example -no different than how our Cdn banks look to the rest of the world after the US banking fiasco.

It is different out here. There I said it! Bring it on.

#152 Alan on 10.18.10 at 2:21 pm

Typo -should say “recourse mortgages”

#153 Moneta on 10.18.10 at 2:31 pm

There is obviously tremendous demand for day care. Why are there so few?

My experience tells me that it’s because:

– most women don’t want to do it. Why would they have 0-1-2 kids and then babysit more of them??? Why do boomers prefer golf to babysitting 5 day per week

– it’s not very profitable if you give the level of care parents expect.

– most women who stay at home can afford to stay at home. It’s hard enough caring for your own kids…

– women can get much better paying jobs

The list goes on…

#154 ralph on 10.18.10 at 2:35 pm

Kelowna came in #6 nationally for crime rates in Canada polled by Macleans. RCMP superintendent says that’s BS and blamed it on the high number of tourists to the area.

Ya right!

#155 Moneta on 10.18.10 at 2:36 pm

Is this a societal responsibility? — Garth
—————————————–
No it’s not but it sure is nice to have.

———-
I think it is. Look at comment #117

#156 jess on 10.18.10 at 2:38 pm

143 Evangeline tax avoidance or affordablility? and

The complaint alleges:
53. The “Trusts” coming to Court are actually Mortgage Backed Securities (“MBS”). The Servicers, like GMAC, are merely administrative entities which collect the mortgage payments and escrow funds. The MBS have signed themselves up under oath with the Securities and Exchange Commission (“SEC,”) and the Internal Revenue Service (“IRS,”) as mortgage asset “pass through” entities wherein they can never own the mortgage loan assets in the MBS. This allows them to qualify as a Real Estate Mortgage Investment Conduit (“REMIC”) rather than an ordinary Real Estate Investment Trust (“REIT”). As long as the MBS is a qualified REMIC, no income tax will be charged to the MBS. For purposes of this action, “Trust” and MBS are interchangeable….
56. REMICS were newly invented in 1987 as a tax avoidance measure by Investment Banks. To file as a REMIC, and in order to avoid one hundred percent (100%) taxation by the IRS and the Kentucky Revenue Cabinet, an MBS REMIC could not engage in any prohibited action. The “Trustee” can not own the assets of the REMIC. A REMIC Trustee could never claim it owned a mortgage loan. Hence, it can never be the owner of a mortgage loan.
57. Additionally, and important to the issues presented with this particular action, is the fact that in order to keep its tax status and to fund the “Trust” and legally collect money from investors, who bought into the REMIC, the “Trustee” or the more properly named, Custodian of the REMIC, had to have possession of ALL the original blue ink Promissory Notes and original allonges and assignments of the Notes, showing a complete paper chain of title.
58. Most importantly for this action, the “Trustee”/Custodian MUST have the mortgages recorded in the investors name as the beneficiaries of a MBS in the year the MBS “closed.” [Emphasis added.]

ForeclosureGate: Time to Break Up the Too-Big-to-Fail Banks?
Monday 18 October 2010

by: Ellen Brown, t r u t h o u t

#157 dark sad person on 10.18.10 at 2:41 pm

#123 realpaul on 10.18.10 at 1:04 pm

The deflation scare is all a smoke and mirrors campaign to secret additional debt onto the books while the public is shaking in their boots. Deflation….simply doesn’t exist.

*******************
As i was saying in #122

********************
From your link

Concern over deflation, Wall Street’s current favorite “phantom menace,” has reached near hysterical levels lately, so it was interesting to note that the Producer Price Index for July had gained more than 4% year over year.

In addition, regarding the Consumer Price Index, Jim Stack made the point in his most recent newsletter that the first half of 2010 had seen a 2.1% annualized increase — this from a highly publicized statistic that everybody and his brother knows understates inflation. That’s not to say that certain items haven’t declined in price, but such a reading from the CPI is obviously not your grandfather’s deflation.

In such an environment, people eventually come to understand that their paper money is depreciating in value over time, so stores of value (which protect against the impact of government money printing), such as gold, benefit as well.

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

How many Trillion world wide in stimulus did it take to goose “some” prices up by 2-4% over a year?
Meanwhile-assuming the US–
House prices have fallen 50% and on top of that-lies the CDO market levered anywhere from 30-90-120/1
And that wide gearing is winding backwards-daily-

So tell me-is deflation outpacing Inflation?

Also–about Gold-he’s got most of that assbackwards as well-

Gold does retain its buying power in Inflation-but that’s about all it does-
Houses/RE/Commodities is where you want to be–

Do these Analysts ever really prove to themselves-that what they say is true?
They see–but they don’t “look”

“Look”
A Commodity chart-does this look like Deflation is “non-existent”
(not that prices define inflation or deflation-only “likely’ a symptom of one or the other)

http://www.barchart.com/chart.php?sym=%24CRB&style=technical&p=MO&d=L&sd=&ed=&size=M&log=0&t=CANDLE&v=0&g=1&evnt=1&late=1&o1=&o2=&o3=&x=75&y=9&sh=100&indicators=&addindicator=&submitted=1&fpage=&txtDate=#jump
*****************

A Gold chart–how well did Gold do-in the Inflation of the 80’s-90’s–
Gold was a poor place to be-it was in a 20 year Bear Market-
So was the Long Bond–

The long Bond and Gold-both-say something “different” happened in 2001-

http://www.barchart.com/chart.php?sym=GCZ10&style=technical&p=MN&d=X&sd=&ed=&size=M&log=0&t=CANDLE&v=1&g=1&evnt=1&late=1&o1=&o2=&o3=&x=45&y=7&sh=100&indicators=&addindicator=&submitted=1&fpage=&txtDate=#jump

http://research.stlouisfed.org/fred2/series/TP30A28

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

Why can’t these so called “analysts” understand this?
Maybe because they learned those assbackward- impossible Keynesian economics in University?

Can they explain why these Keynesian Multipliers-they relied so heavily on–stopped working?

http://3.bp.blogspot.com/_nSTO-vZpSgc/SZzYPiH691I/AAAAAAAAFpc/5B_Od1tGKSU/s1600-h/demand.png

http://4.bp.blogspot.com/_nSTO-vZpSgc/SZzZtStc2EI/AAAAAAAAFpk/gzygqs0mKRA/s1600-h/wages.png

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

I can explain why–
Because you cannot expand Inflation past the point of borrower exhaustion and you cannot borrow and spend your way to prosperity–and–
When they run out of bubbles to blow and Credit freezes–Deflation occurs–
Always–

#158 Debt's Dark Embrace on 10.18.10 at 2:41 pm

#128 wetcoaster on 10.18.10 at 1:23 pm

BINGO !
………………………………………………………………………
Devils advocate, so you think living in Ratland with all the druggies and gang members is a suitable place for first time buyers and they should just suck it up ? Grab a brain, Kelowna is just as over valued as the rest of the province. Try to get a job there that pays over $12 an hour. Even the trades guys are screwed by the developers on a regular basis and eventually leave town.

#159 Brandon on 10.18.10 at 2:45 pm

*Doesn’t have kids and doesn’t want to pay for other people’s babysitting*

#160 Debt's Dark Embrace on 10.18.10 at 2:45 pm

#140 Bill Gable on 10.18.10 at 1:51 pm
………………………………………………………………………
BINGO !

Oy vey.

I think we have a winner in the “Fogged Brain” award – and you will receive a copy of Mr. Turner’s latest book.

Hockey players?

PLEASE.

#161 Debt's Dark Embrace on 10.18.10 at 2:51 pm

#138 junius on 10.18.10 at 1:49 pm

BINGO !
………………………………………………………………………
#87 DA,

I drove through Kelowna on the weekend (in my new Honda). I noticed a number of price reductions on properties right on the highway. Same thing in Vernon.

It appears to me based on your stats that pretty much the same thing is happening in the OK valley as the lower mainland.

High price and “once in a lifetime” properties are still changing hands because the super rich don’t care. In fact, as in the West side of Vancouver, there are now some premium properties available that don’t often go to market.

However the bulk of the market is heading down in sales and price. There appear to be fewer and fewer first time buyers and now fewer people trading up.

Isn’t this pretty much what Garth is saying is happening?

#162 jess on 10.18.10 at 3:09 pm

…continued
Why were the mortgage notes not assigned to the
trusts in the first place?
The reason the mortgage notes were never assigned may be that there was no party legally capable of accepting the assignments. Securitization was originally set up as a tax dodge; and to qualify for the tax exemption, the conduits between the original lender and the investors could own nothing. The conduits are “special purpose vehicles” set up by the banks, a form of Mortgage Backed Security called REMICs (Real Estate Mortgage Investment Conduits). They hold commercial and residential mortgages in trust for the investors. They don’t own them; they are just trustees.
The problem was nailed in a class action lawsuit recently filed in Kentucky, which accuses banks of violating the famous Racketeering Influenced and Corrupt Organizations Act – also known as RICO – a law originally passed to go after organized crime.
The suit claims that Mortgage Electronic Registration Systems (MERS) and the banks violated the RICO Act, a law originally passed to prosecute organized crime. Heather Boone McKeever, a Lexington, Kentucky-based lawyer for the homeowners who are bringing suit, said in an interview with Bloomberg, “RICO comes in because the fraud didn’t just happen piecemeal. This is organized crime by people in suits, but it is still organized crime. They created a very thorough plan.”

#163 bruce corell on 10.18.10 at 3:18 pm

1st 2 weeks of Ocober results are out.
Toronto is at avg. price of 444K This is due to 2 things TREB is not telling. 1 Condo sales and cheap houses are down dramtically. Large home sales are up but avg price is down 20%. You can now get a home that was $700 in May for 630K. Thats a 10% drop in 5 months. Nov. 1st will see sales and prices tumble not seen since 1991..

#164 Moneta on 10.18.10 at 3:35 pm

There is obviously tremendous demand for day care. Why are there so few?
———
I think it’s also due to rigid mindsets and rigidities in the system.

For example, in Quebec you get before and after care for school aged children for 7$ a day in all schools.

In Ottawa, it’s 25$ per day and not all schools offer it. When they do, there is usually a waiting list.

Yet it makes no sense at all because there is no way they could lose money on it. By school age the ratio caregiver to child is more than 20/1. So 20*25$ = 500$. There is no way it costs them 500$ to run this thing. Even at 7$ per day it can work.

Why don’t all schools have it? Because they don’t care. It’s not in their mandate. And parents usually only have a few years of inconvenience so it’s not worth fighting for it because by the time it is set up, their own kids have grown up,

In the meantime, many schools here in Ottawa are half full and could be consolidated, relieving millions of dollars that could go for daycare. Maybe that’s why they’ve decided to add junior k.

Now as for the younger children 0-5, there aren’t that many relative to the working population and IMO people are complaining for nothing. Working mothers need help for these 4 years and offering quality daycare is not asking for too much.

The ones holding the strings are clinging to that image of 1950s nuclear family when in reality, millions of Canadians didn’t really enjoy great quality of life in those days. If they did, women wouldn’t have rushed to leave the house and the divorce rate woldn’t be what it is.

#165 Victoria Mortgage Broke-er on 10.18.10 at 3:38 pm

Condo prices decreasing?

Check out some deflation at Bear Mountain in Victoria at http://bearmountain.ca/Home/Live/Properties.aspx

#166 T-Dot Homeowner on 10.18.10 at 3:50 pm

Garth can you please confirm where this 0.1% growth forecast for early 2011 came from? I haven’t seen that forecast from anyone.

Here. — Garth

#167 Moneta on 10.18.10 at 3:56 pm

#166 20/1. So 20*25$ = 500$.
——-
Correction. It’s 15-20$ per day = 300-400$

#168 wetcoaster on 10.18.10 at 4:02 pm

Devils Advocate,

Looks like K-Town is just the place I want to take my family too to buy your so called affordable shack. Don’t forget to teach them how to duck. Si Senor !

http://www.vancouversun.com/news/Police+fear+more+drugs+violence+coming+Mexican+cartels+begin+operating/3686327/story.html

#169 wetcoaster on 10.18.10 at 4:05 pm

Isn’t Bear Montain where the ex-CEO guy hasn’t paid his mortgage since February and they want people to buy his leftovers ? Still overpriced at those levels, guess the Dubai guys think the same.

#170 Northern Dirt on 10.18.10 at 4:05 pm

#161 Brandon
*Doesn’t have kids and doesn’t want to pay for other people’s babysitting*

…………………………………………………………………………

Exactly. If you can’t afford them, don’t have them.
Isn’t the Morgantaler clinic still covered by OHIP?

#171 BrianT on 10.18.10 at 4:11 pm

On the comedy front, you have to got to hear this unbelieveable pile of BS from this salesman’s salesman-the Empire strikes back-what a joke coming from the ultimate insider http://www.realclearpolitics.com/video/2010/10/17/obama_on_gop_the_empire_is_striking_back.html

#172 john m on 10.18.10 at 4:24 pm

138 Linda Pearson on 10.18.10 at 1:44 pm

#94 john m on 10.18.10 at 10:42 am

…I have neighbors that have 5 children and from what i read they are pulling in about $15,000 a year in baby bonus ,the mother does not work …

HAHAHAHAHAHAHAHEEHEEHEEHEEHEEHEEHEEHEEHAHAHAH

You’re just a hoot. Thanks for the laugh<<<<<<<<<< Typical response from an uninformed individual..suggest you do some research on how much government funding actually is…in fact a few months ago there was a mortgage application mentioned on this site where a family with 4 children was receiving over $12,000 a year in baby bonus from the government which they were using as income on their mortgage application….so "miss hahahee" do the math :-)

#173 kathy on 10.18.10 at 4:44 pm

TREB mid Oct numers prices are way up. what’s going on………………..?

#174 dark sad person on 10.18.10 at 4:45 pm

#164 jess on 10.18.10 at 3:09 pm

**************
On Ellen Brown-

Anyone who can read-can understand her and she knows her stuff and this story should be mainstream-but-well we know how that works-with our darling Media-that we subsidize to the tune of Billions and we instead bitch about kids and parents getting a free ride off taxpayers-which maybe we should bitch about too-but I’ll stay out of that one-
So our Politicians on both sides of the border and in fact across the Globe-carry on as if it’s just a small glitch and they’ll make a new law to replace the one they scrapped at the “Bankers” requests-that allowed this to happen and everything will continue to roll along-

Of course we hear–it’s been priced into the Market-
Guess what–no it hasn’t-
I don’t think the full impact of this has been realized by the Market yet-

The Lawyers are coming and with Lawyers comes disclosure and $$ and just maybe-a day of reckoning for all the fraud-that has become our Financial system-

#175 palebird on 10.18.10 at 4:46 pm

#41 Johnny C
I read posts similar to yours and I have to wonder if you people ever really look in the mirror..because one day it is going to hit you hard..if a spouse and/or family is forcing your hand you better run..it will not end well..owning a property or some other asset does not make a life, you are just buying membership to some club that you probably do not really want to belong to and, similar to joining a gang, it is very difficult to extract oneself in one piece..good luck with that..

#176 DaBull on 10.18.10 at 4:51 pm

Here is the actual news release from CEBR

New Cebr forecasts for the United Kingdom economy show growth of 1.6% in 2010 and 1.3% in 2011, 1.4% in 2012, 1.8% in 2013 and 2.4% in 2014.

Cebr’s central forecast for growth in Q1 2011 is only 0.1%, which implies that there is nearly a 50% chance of negative growth for that quarter.

Only one quarter of possible negative growth.

Here’s another great research article from them;

The bank bail out makes a profit!

http://www.cebr.com/?p=256

Who woulda thunk it. Government actually making money from supposedly giving money away.

#177 Live within your means on 10.18.10 at 5:12 pm

#59 LB on 10.18.10 at 12:22 am
#12 Winnipeger:

Canada has already recently changed its CPP retirement regulations. Early retirement at a reduced pension at age 60 will no longer be an option. It has been raised to age 62. It appears we are not so different from the French or Greeks, just more unaware and apathetic as yet.

March 2010

How does my age affect the amount of my pension?
Although your CPP retirement pension usually starts the month after your 65th birthday, you can begin receiving your CPP retirement pension anytime after age 60. Your monthly payment is smaller if you begin receiving it before age 65, and larger if you take it after. The CPP offers you flexibility with respect to the age you retire. You can take your pension as early as age 60 or receive a larger pension if you wait until you turn 65 to begin receiving it.

•If you start your pension between 60 and 65: The CPP reduces your pension amount by 0.5 percent for each month before age 65, calculated from the time you begin receiving your pension. The maximum reduction is 30 percent, which applies if you start receiving your CPP pension on your 60th birthday. This adjustment is permanent–if you choose to start your pension before age 65, your reduced pension amount does not increase when you reach 65.

http://www.servicecanada.gc.ca/eng/isp/pub/factsheets/retire.shtml

You can still take your CPP at 60 but the feds decreased the amount you’ll receive for each month you receive it prior to age 65. When I took CPP at 60 the breakeven point was 76. Not sure what it is now.

#178 Live within your means on 10.18.10 at 5:17 pm

PS to my previous post to #59 LB on 10.18.10 at 12:22 am

Should have asked if he/she knows if anything has changed since March 2010 as I haven’t heard/read of any changes since then.

#179 Confused in Victoria on 10.18.10 at 5:30 pm

I told my bank manager today that I wanted to sell my house, pay off lines of credit get out of debt. He said don’t sell Victoria is different – they are not making anymore land.

When is this going to end?

#180 junius on 10.18.10 at 5:36 pm

#153 Funny Alan,

You said, “Canada’s housing market with non-recourse mortgages will be a shining example -no different than how our Cdn banks look to the rest of the world after the US banking fiasco.”

Here we go again.

First of all, Canadians can still go bankrupt.

Secondly, the party on the hook in Canada is probably going to be the CMHC and not the bank which means the tax payers directly through the federal gov’t.

Thirdly, if people are being made poor by their mortgage payments it means they aren’t spending money somewhere else. This slows the overall economy.

A shining example of how to create a house poor society. You are putting lipstick on the pig again.

The lesson needs to be that access to cheap credit for extended periods of time creates bubbles that eventually burst and destroy lives. Until this lesson is learned everything else is just bull roar.

#181 Canada is not USA on 10.18.10 at 5:39 pm

Garth
Do you still read John Maudlins weekly letter? This weeks letter was very disturbing (even more Disturbing is I have never seen John write such a prediction).
I was really quite worried.

What are your thoughts that if the analysis is correct and that the biggest crisis in the USA is yet to come…..who now owns the house. Could this really begin a banking collapse?

When the US catches the flu the world will…… and then we still have not got out the Europe debt crisis. makes one want to hide the money. I never believed in gold till I read that article.

One last question as you worked on the hill, could the government put in currency restrictions on the public? I do not worry about Canadian banks but if the world is on the edge of a cliff?
Then again who would ever ever believed the war measures act?
Cheers

#182 andthen on 10.18.10 at 5:43 pm

When you can borrow 50 billion and spend like candy is that realy growth?

#183 Tryingtobepatient on 10.18.10 at 6:04 pm

To Axehead,
Never was a moniker more aptly named. Perhaps Blockhead. I’m sorry you are disappointed in the way your kids turned out. Maybe it was because they saw the kind of disrespect for education in its entirety you modelled. I, too, have kids who went through the Ontario Public School System. One of my kids is a corporate executive: the other is a well-respected and published surgeon. Sure there are some teachers who are not great. The same is true for lawyers, doctors, realtors, authors, etc. But to paint them all with a hateful brush tells me there’s something a little dysfunctional in your attitude which your kids picked up.
BTW–I agree with Nancy’s message.

I agree that perhaps this was not the year for this kind of expenditure (full day kindergarten) and given the election in a year’s time, the motive is transparently obvious. What I find objectionable is the disdain demonstrated by some of you (Garth too) for a job you wouldn’t dream of doing, and would probably fail miserably trying.

What’s sad is you living vicariously. — Garth

#184 ALBERTAGUY on 10.18.10 at 6:12 pm

Garth, According to Dalhousie Chapters, you are not speaking there, only doing a book signing?

They wouldnt take my name and said it was ‘first come first served!’

Sheesh! Better bring your riot gear.

I think they are fearing the worst. Tough. — Garth

#185 Derek on 10.18.10 at 6:17 pm

#174 john m said in response to Linda Pearson

Typical response from an uninformed individual.

Not really, john. I think you missed the point. She was laughing because you said that a mother of 5 children doesn’t work. The mother may not have a wage but she is definitely working for at least 16 hours a day keeping on top of a brood like that.

To be frank it was difficult to treat the rest of what you said seriously when you had just written something so unintentionally funny.

#186 Seen this in the US, now its in Canada on 10.18.10 at 6:18 pm

@ Devil’s Advocate

I’m from Kelowna as well and I’m starting to see sellers beginning to capitulate on their outrageous pricing. And by the way the homes you say are affordable are mostly dumps. I know I’ve looked.

Here in Kelowna everyone wants to become a millionaire through real estate flipping, not by actually earning it through improving their skills, productivity, education, and thriftiness!

Sad but true.

#187 Devil's Advocate on 10.18.10 at 6:27 pm

#160 Debt’s Dark Embrace

RE: RUTLAND

Ya wanna live on the “right side of the tracks” ya gotta pay. Ya don’t have the money to pay then… yes suck it up and buy in Rutland or get yer ass in gear and earn some money….

BTW More homes in Rutland (a area of Kelowna renowned as lower end) are owned outright than any other area of the city – ANY. That says something and what it says is not bad of Rutland – not in the least.

Are you really the arrogant elitist you are coming off as Debts Dark Embrace or just a wanna be elitist?

#188 Devil's Advocate on 10.18.10 at 6:34 pm

#131 wetcoaster

Ditto my last post which should have been dirrected at you first and then Debt’s Dark Embrace…

Again… More homes in Rutland (a area of Kelowna renowned as lower end) are owned outright than any other area of the city – ANY. That says something and what it says is not bad of Rutland – not in the least.

#189 Devil's Advocate on 10.18.10 at 6:40 pm

“Teachers are 2nd on my list of public leaches besides realtors. #106 Moneta

It must absolutely SUCK to be you.

#190 Jeff Smith on 10.18.10 at 6:42 pm

>To be accurate, the province received $3.1 billion for
>Highway 407. The kiddy plan will cost $1.2 billion per
>year. And why are taxpayers responsible for providing
>universal day care? — Garth

Now now Garth, just because you don’t have kids. Think of us who do want to have kids. This is a great plan. Be a little generous will ya!

#191 Live within your means on 10.18.10 at 6:42 pm

.#75 Nancy on 10.18.10 at 7:05 am

I’m with you Nancy, even tho we have no children.

#192 Live within your means on 10.18.10 at 6:45 pm

#86 Amarillo on 10.18.10 at 9:04 am
Re the subsidized day care, I gotta go with Garth on this one. It’s just another liberal ploy to brainwash our kids. It’s called social engineering. Get ‘em young and when they get older, they won’t realize that the teachers’ union has similarities to Jimmy Hoffa’s Teamsters. Get ‘em young and teach them that God is dead and that evolution is gospel, you bet.
……………..

That’s one of the most ridiculous posts I’ve read on this blog.

#193 Jeff Smith on 10.18.10 at 6:47 pm

>#24 TheBigLebowski on 10.17.10 at 9:39 pm
>Actually that agenda was planned back in the 70′s and
>goes much deeper than votes. The earlier the
>government system can get a hold on kids the less
>influence the parents will be able to instill their family
>values. Children will begin to look at the system as their
>parents and the indoctrination process of the kids into
>whatever agenda the government wants to instill can
>begin sooner. By the second grade children will be
>ardent CO2/global warming believers, they will be
>already neck deep in the “Global Community ”
>brainwashing curriculum. The sooner a child can be torn
>away from their parents , the more malleable they are
>to government brainwashing. Soon kids will be shipped
>off to government boarding schools as soon as they can
>walk, and the parents will have to make an appointment
>to visit, that’s the plan

Yep, I can just imagine. Just like they did in Brave New World. …how lucky you are to be an epsilon, look at those poor alpha workin so hard. …how lucky you are to be an epsilon, look at those poor alpha workin so hard.

nah… It will be more like. … the canadian government loves you, care for you, when you grow up, you will give 75% of your earnings to the goverment as tax.
… the canadian government loves you, care for you, when you grow up, you will give 75% of your earnings to the goverment as tax.

#194 dd on 10.18.10 at 6:53 pm

Bank of America and Wells Fargo are one of the largest owners of real estate in the US. Watch for more termoil in the stock market next year.

#195 timbo on 10.18.10 at 6:55 pm

#159 dark sad person,

I can explain why–
Because you cannot expand Inflation past the point of borrower exhaustion and you cannot borrow and spend your way to prosperity–and–
When they run out of bubbles to blow and Credit freezes–Deflation occurs–

—–
while i agree with part of what you are saying I ask that you give an answer to the current situation because you seem to feel that the current course does not work.

the fed is going to print money to keep the banks liquid no matter what so QE2,3 or 4 will be the course. You cannot have the money supply contract by debts defaulting in a recession, it will self feed .This is not a US policy but a developed world policy and will be the course unless someone can offer a real alternative that does not shrink the money supply suddenly.

The QE will be lifted when housing hits bottom and then we will have inflation kick in. The US dollar will rest at a point where it can bring back a stable job growth by exports alone and not the credit frenzy stimulus that has been the driver.

what the fed is doing is the correct course and hopefully we learn to put away the visa and pay cash for 1 generation until the memory fades, but we have to put the VISA away slowly……

Canada will print, like everyone else, to cover losses our banks are taking from US real estate. They must keep our banks solvent, no matter what.

I also predict that when BC real-estate starts to drop, Ottawa will bring out more stimulus and cover losses, no matter who is in power.

The key to the recovery will be to bring back jobs that have gone offshore. Visa and the housing boom have been the main drivers with China and other lenders well aware that cannot last forever. I do not endorse tariffs but I do think the WTO could have some walk-sways if deals cannot be reached. Free trade does not work when you compete against cheap labor. Wages have not risen ….its just that we have put both parents to work cut back on the birthrate,expanded our debt to keep the same lifestyle. If it keeps going the grandparents are going to have to move in and work to support.

and lastly to all that blame a worker for making too much money:
a teacher or union member is not the problem.The problem is the system. There might be some slack but to generalize a group that works for the public or is organized for wage stability as the cause of this is bizarre. Blame banks and usury laws that have run our economies into the ground.

#196 Bill Gable on 10.18.10 at 7:09 pm

For my pfennig: Mr. Mauldin is, along with our vivacious host, one of the clearest thinking analysts in the business.

Mr. Mauldin, like Mr. Turner, writes in plain english and also never cops a plea. (* If they don’t know, they don’t pile snow on the table, if you catch my drift – how refreshing).
You can check John Mauldin here – and don’t be surprised if you see a lot of what Mr. T. has been telling us about, echoed.

Take heed, grasshopper.

http://www.johnmauldin.com/frontline.html

#197 jess on 10.18.10 at 7:23 pm

dark sad: greed begats greed so who really are the printers?

The strategy is called securities lending
(e.g)cashco,sigma etc….

http://www.nytimes.com/2010/10/18/business/18advantage.html?_r=2&ref=business

#198 Jacen on 10.18.10 at 7:32 pm

#76 BrianT

What makes the argument illogical? And where’s the hard math to show that Scientists and ‘grifters’ (whatever that means in this context) will make ‘gigantic sums’ of money? I much more respect engineers and scientists who invent something for the betterment of society than investment bankers and RE agents contribute nothing (the ‘real’ grifters and leeches in our modern world). By implication, it would appear you don’t want to award creativity and entrepreneurship.

We already know about the billions that are made when nothing is done. What percent of profits do you think Husky, etc will surrender if carbon trading is introduced?
Estimates show that profit will be hit by ~10% or so to start. That’s peanuts, not to mention there would be a corresponding reduction in the corporate tax rate as well, so an end result of virtually nil cost to most businesses. Why do you think it’s getting support?
In Australia, the heads of BHP and Rio Tinto (two of the biggest miners in the world) have both come out publicly to support carbon trading. Why is that? And no, their not being blackmailed in some vast Al Gore-organized conspiracy.

As for ‘profiting’, last time I checked most major technologies that would be used to ‘green’ our society would be provided by a publicly traded company. So the money wouldn’t go to ‘grifters’ but those who aren’t ignorant to see what the future holds for us and invest appropriately. Too bad deniers will be blinded by their pedantic arguments to ride the wave.

This is civilization moving forward. Those who pine for the glory days of leaded gasoline will not be missed.

#199 ralph on 10.18.10 at 7:36 pm

#131

If you think that Rutland (area of Kelowna) is the only place that has drugs and gangs then you need to get out more.

#200 squidly77 on 10.18.10 at 7:39 pm

Devils Advocate

Seems your main purpose posting lately is just to chastise people that don’t see things your way. Your really becoming quite sad.

#201 Nostradamus Le Mad Vlad on 10.18.10 at 7:41 pm

#25 Cashman — Please, you flatten me with compliments! In theory, the Amero is just that — a theory. There was another but I’ve forgotten the name.

Could be this — 10:35 clip Not quite the Amero, but a new gold-backed currency. Everything’s falling apart at the seams.
*
#28 The Dude — Right on! TBL rolls out some great posts — hang in there!

#176 dark sad person — “. . . the full impact of this has been realized by the Market yet-”

It’s about to receive a full-fledged dose of liquid poison. See Second Wave is almost here and Hilton Hotels Commercial RE . . . no more need be said!

Fraudclosure + Unemployment equals a lot of the same stuff happening in Europe right now — anger.

Ooohh! A lawyer(!) reveals somewhat more than is expected!

Civil Unrest Not hard to figure out.

Taxes “Would those be the homes of the people whose taxes BAILED OUT THOSE VERY SAME BANKS, the same banks whose reckless gambling with derivatives wrecked the economy, making it impossible for Americans to pay ever-higher taxes they never agreed to in the first place? Those banks??!? The last official act of any government is to loot the nation.” wrh.com. The CPC are doing the same with us, and we’re letting them.

The Inner Sanctum of BCCI.

Gas Stations shut in France.

CC See for yourself. Not man-made, so it’s ten times as deadly.

Drones “Drone technology was developed by the Israelis, who routinely use it to bomb the Gaza Strip. Is the same thing happening in Pakistan?” A didgereedoo thought: Will it be Hillary versus Palin in 2012? Seems Obama has lost it. Plus this. The US has to resurrect the dead guy to start another war!

#202 LB on 10.18.10 at 7:44 pm

A better question would be: should funding a military that actively trains its citizens to threaten,hurt and kill others, to benefit only some, continue to be the social responsibility that it currently is? You can redirect my tax dollars away from that and towards publicly funded childcare anytime.

Childcare,like funding for all vulnerable populations such as those with physical and mental health issues, at-risk seniors, etc, SHOULD be the social responsibility of any so-called more advanced society, along with public funding for basic services which ALL citizens have contributed to and will benefit from, such as education,health care and infastructure. How a society takes care of its most vulnerable, is, in fact, what DEFINES it as being more advanced.Just because childcare hasn’t been publicly funded up to this point in Canada, doesn’t mean it shouldn’t be.

However, it seems that our governments,both provincial and federal, are currently thinking it may be in their own best interests to fund childcare, not so much for political reasons, but because it would enable more workers to work more,which will result in more income tax revenue for these deficit governments( “increased worker productivity” in government jargon means “workers paying more taxes”).

Additionally,changes in gender roles these past 30 years has more men and women sharing equally ALL work, both outside and inside the home,including childcare. From this shared participation has come a broader appreciation and understanding by our society as a whole of the necessity and value of the work of childcare.

At the same time,with smaller families, schools in most districts are closing and staff are being laid off. In an effort to better utilize schools, and to meet more families needs, schools began to provide space for after-school care. This initial step to provide on-site after school child care was very well received by both parents, schools and communities

We are now seeing the the next logical progression in this,which has been to incorporate “all day kindergarten”, which has been embraced by schools as they are, in effect, increasing student populations which in turn ensures schools remain open, facilities are utilized and staff is retained. It also further addresses parents’ increasing need for all day childcare.

In BC, the discussions now are about how to next incorporate pre-school shildren into the mix (3 & 4 year olds), which are typically now operated privately, outside the public school system. With this anticipated incorporation of preschools into the public system, too, a large contingent of ECE’s will also be brought into the union fold.

This consolidation of childcare and educational services by the state appears to be meeting everyone’s needs in establishing extended viability for schools and staff while facilitating easier access to consistent,secure and reliable child care for families.

However,in these changes,the needs of children under 6 must remain paramount and addressed. Publicly funded childcare and early education programs should remain flexible and optional,NOT become compulsory for those families who do not want or believe their child will benefit from the extended periods of time spent in these more structured settings.

#203 45north on 10.18.10 at 8:07 pm

dd: Watch for more termoil in the stock market next year.

Definition of TURMOIL

: a state or condition of extreme confusion, agitation, or commotion

http://www.merriam-webster.com/dictionary/turmoil?show=0&t=1287448506

#204 Daisy Mae on 10.18.10 at 8:08 pm

Rutland.

A name change might help….

#205 Debt's Dark Embrace on 10.18.10 at 8:12 pm

#188 Seen this in the US, now its in Canada on 10.18.10 at 6:18 pm

BINGO !
………………………………………………………………………
@ Devil’s Advocate

I’m from Kelowna as well and I’m starting to see sellers beginning to capitulate on their outrageous pricing. And by the way the homes you say are affordable are mostly dumps. I know I’ve looked.

Here in Kelowna everyone wants to become a millionaire through real estate flipping, not by actually earning it through improving their skills, productivity, education, and thriftiness!

Sad but true.

#206 45north on 10.18.10 at 8:18 pm

Things are afoot that have a huge bearing on how long this bubble will go on, and what the price of houses will be in the near future.

http://thehousingbubbleblog.com/?p=6237#comment-1843657

that got my attention!

#207 Devil's Advocate on 10.18.10 at 8:34 pm

”Devil’s Advocate; I’m from Kelowna as well and I’m starting to see sellers beginning to capitulate on their outrageous pricing. And by the way the homes you say are affordable are mostly dumps. I know I’ve looked.” #207 Debt’s Dark Embrace

Prices are most definitely dropping, I never at any point in my participation here said they were not and would not. I might disagree with you greatly on to what degree they will drop.

With respect to the rest of your comment – what’s your point? All you have proved is that your expectations are greater than your pocketbook will allow at this time. You’d best wait it out. Good luck on that one by the way because waiting is speculating and speculating is gambling and gambling is largely a matter of luck.

#208 Devil's Advocate on 10.18.10 at 8:37 pm

“Rutland. A name change might help….” #206 Daisy Mae

It’s actually a very distinguished name and not just around these parts. That being said there once was a movement afoot to change it.

#209 Gravy Train Gang Bang on 10.18.10 at 8:44 pm

At #79: DavidB, its already too late. Canadian household indebtedness EXCEEDS American household indebtedness. Also, Americans are at a POSITIVE 6% savings rate, while Canadians are at NEGATIVE 2%. You do the match. The Canadian RE melt is already happening, which means it cannot be stopped. It only gets worse from here, meaning Canadians will not only have more indebtedness than Americans, but Canadians will soon hold underwater mortgages too. That creates a tremendous snowball affect. And, as reports are indicating, Canadians are already beginning to see and feel the tangible outcome of underwater mortgages. This, coupled with the level of indebtedness AND the negative savings will only complicates the matter. The time for tightening the purse strings was over five years ago. Sorry, but that’s the way it is. Believe me when I say this, we’re far worse screwed than our cousins to the South.

#210 Devil's Advocate on 10.18.10 at 8:50 pm

“Devils Advocate; Seems your main purpose posting lately is just to chastise people that don’t see things your way. Your really becoming quite sad. #202 squidly77

Really? I prefer to think of it as inform them of some alternate thoughts. In fact I find it the Blog DAWGS who generally are insistent that things be accepted their way. In fact, even when I agree with them, they find fault in my comment because they are so caught up in anger over their witch hunt of the perpetrators of their fate they can not see nor hear anything but that which they want to see and hear.

Take these last interchanges for example… read them again squidly and tell me where I was so emphatically condemning the opinion of others. Yet the DAWGS find grossly malicious fault in my comments.

And they wonder of their lot in life??? I’d say the natives are becoming rather restless in their disenfranchisement. They ought look no further than the bathroom mirror to know their foe.

#211 Devil's Advocate on 10.18.10 at 8:57 pm

”Here in Kelowna everyone wants to become a millionaire through real estate flipping, not by actually earning it through improving their skills, productivity, education, and thriftiness!” #188 Seen this in the US, now its in Canada

I think the moniker you used says best my response. This is not just a Kelowna phenomena

#212 Devil's Advocate on 10.18.10 at 8:58 pm

Back to work… 7:00PM client appointment… good bye

#213 Taxpayer like everyone else on 10.18.10 at 9:16 pm

204 LB

“Childcare…..SHOULD be the social responsibility of any
so-called more advanced society……….”

You’re scaring me. I always thought that the decision to have and care for children was the parents responsibility.
And that’s all I have to say about that.

158 Jess – I confess to skipping many of your posts but that one I feel asks an essential question. Is ownership
of the “security” different than ownership of the
mortgage? My very general thought is “yes” from just expecting how lawyers would have set these up.

#214 BrianT on 10.18.10 at 9:41 pm

#200Jacen-Promise me you will never grow up-your niavete is so charming.

#215 dark sad person on 10.18.10 at 10:02 pm

#197 timbo on 10.18.10 at 6:55 pm

while i agree with part of what you are saying I ask that you give an answer to the current situation because you seem to feel that the current course does not work.

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

And you call “this” working?
If it was working-why would they need QE-2-3 and all the rest you cite?

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

You cannot have the money supply contract by debts defaulting in a recession, it will self feed .This is not a US policy but a developed world policy and will be the course unless someone can offer a real alternative that does not shrink the money supply suddenly.
***************

I have no idea-what you mean by “it will self feed” –but–
I can show you how money supply can contract in a recession and not only contract-but contract at Warp Speed–like it’s doing–

First–you have to understand–that “credit” is part of the money supply–the ‘biggest” part

Here is your total “circulating Currency “supply”–almost up to 1 Trill $

http://research.stlouisfed.org/fred2/series/CURRCIR

Money itself (currency) cannot contract–it’s always somewhere-but–
It can be “taken out” of circulation-Savings/MMMF’s/Matresses–etc
as this chart shows–Velocity/Spending is collapsing-
and QE–has had little effect–

http://research.stlouisfed.org/fred2/series/MULT

Here is the Credit supply–

Look at that ominous trend break-on a 40 year chart–also note the amount–10 Trillion$

http://research.stlouisfed.org/fred2/series/TOTBKCR

M2/Credit-is almost 9 Trillion $
http://research.stlouisfed.org/fred2/series/M2NS

So–almost 19 Trillion in Credit supply-compared to 1 Trillion in actual Circulating Currency–

Here is your debt drain (contraction/deflation) of all the printed money that was stuffed into banks–

This below–shows you’re wrong about your below statement–
“{You cannot have the money supply contract by debts defaulting in a recession, it will self feed}”

these charts are the ratio of loan loss provisions to nonperforming loans.

http://4.bp.blogspot.com/_nSTO-vZpSgc/TH3ykTmnQ7I/AAAAAAAAJQg/_qCrdQcKd1Q/s1600/ALLL1.png

http://1.bp.blogspot.com/_nSTO-vZpSgc/TH3zc3aWPSI/AAAAAAAAJQw/ARecj0iOqzY/s1600/ALLL2.png

http://2.bp.blogspot.com/_nSTO-vZpSgc/TH3zGfNxpOI/AAAAAAAAJQo/HdAuyim-2bI/s1600/ALLL3.png

http://2.bp.blogspot.com/_nSTO-vZpSgc/TH30FqgkDzI/AAAAAAAAJQ4/aYws-I1byVo/s1600/ALLL4.png

http://2.bp.blogspot.com/_nSTO-vZpSgc/TH30oRkdmwI/AAAAAAAAJRA/_cCdN2PmFK8/s1600/ALLL5.png

Keep in mind–some of these are 40 and 60 year charts–
the violent trend breaks sure as hell don’t look anything like-the Inflationary past looked like–

http://research.stlouisfed.org/fred2/series/CBBHCTCMAHDFS

http://research.stlouisfed.org/fred2/series/CBBUSAATCMAHDFS

This one-tells you that the amount of credit outstanding/held by Commercial Banks as Unemployment climbs and people lose their jobs and default-which transfers the bad loan–back onto Bank balance sheets-will continue climbing-
Stimulus has not changed the course-nor will it–

http://research.stlouisfed.org/fred2/series/CBUSCCBTCMDODFS

The QE money?
Very little ends up in the Economy–
The Fed holds it and allows Banks to borrow at 0% dicount window and buy Government Bonds that pay yield and-that-
is all QE is meant to do–
This is how Banks are trying to recapitalize-by profiting from the spread–
It’s also–“supposed” to allow Banks to lend and they would–but–most that would borrow are not credit worthy and the few that are-don’t want to borrow-

If you want to see if Inflation is getting a foothold-which it can’t and wont-until “Consumers” get their hands on the money and spend it
All you need to watch is the M1-MULT above (Velocity)

The rest of your post–I never mentioned anything about-to my knowledge–although–
I disagree with a lot of it–but–that’s another story-

This part–

{what the fed is doing is the correct course and hopefully we learn to put away the visa and pay cash for 1 generation until the memory fades, but we have to put the VISA away slowly}

Bernanke does not have friggen clue-how to stop deflation-because if he understood–one simple thing-
Which is—Sentiment has shifted-if he had a clue-he would know he’s hooped–I think only F is more brainless–
The Market has spoken–its game over for Inflation–

#216 On the sidelines from Calgary on 10.18.10 at 11:13 pm

Just saw this …
Customer default sale at Riverpoint Real Estate in Calgary

The ad in the online Herald said something like other people’s problem is your opportunity …

http://www.riverfrontpointe.com/?utm_source=calgary%2Bherald&utm_medium=catfish&utm_term=default&utm_campaign=riverfront%2Bdefault (see little triangle on right hand bottom)

#217 WINNIPEGER on 10.19.10 at 10:59 am

The whole LePage real-estate pumping article….

http://www.digitaljournal.com/pr/139240

#218 Hell in a Hand Basket on 10.19.10 at 2:45 pm

Deflation doesn’t have to be a bad thing. Properly managed deflation could allow us to work less but still maintain our standard of living.