Deleveraging

So, being a financial guru isn’t all groupies, untold wealth and babes throwing underwear at you. Well, not consistently.

I’m in trouble on this blog if I use too many pictures of women, fat people or cleavage. (Puppies, kittens and bears are okay.) Can’t say ‘Muslim.’ Sure as hell can’t comment on runny-nosed little screamers. If I mention gold, I spend the next fourteen hours pawing through Armageddon links. And it matters not what I decide to discuss – bonds, preferreds, equities or the orange guy’s shorts – a bunch of investment terrorists who know everything move onto the blog and establish a beachhead. Of course, I am routinely accused of being sexist, anti-Boomer, Albertaphobic and a rabbly, inconsequential, failed political outcast.

As true as some of that may be, the most determined critics come back with two indefatigable points: Housing prices in Canada have not yet tumbled and, while sales have slowed, there seems no shortage of people lining up to buy. So, they conclude, the endless adulation and fawning media attention I bask in is largely undeserved. Sigh.

So, what is a tarnished guru to do? Explain it away, I guess, in the hopes the lingerie barrage will continue.

There is, after all, only one reason we had a real estate boom in the middle of a recession, and that’s cheap money. Mortgages at 1.5%, purposefully created by the monetary authorities to send us into an orgiastic buying spree (it worked), were then augmented by a sense of panic as Ottawa threatened to tighten mortgage rules and as the HST approached. Meanwhile a massive runup in prices, created by virtually free money, sparked bidding wars as property virgins fretted they’d never again be able to buy. Finally, our conservative, carrot-up-the-butt bankers decided to throw gas on it all with no-doc loans, cash-back offers, first-timer promotions, below-prime variables and an everyone-gets-financing attitude.

In almost all of the above – cheap money, teaser rates, lowered lending standards, greed, house lust, panic and price plumping – we aped the Americans. Now, for reasons which escape this wizened, booted, broken scribe, critics think we’ll escape the consequences Americans reaped.

Won’t happen.

The current buying activity, along with the refusal of many vendors to face reality (their last chance in a generation to sell at current prices), is zombie real estate. It moves. But it’s dead. These buyers are indeed greater fools, and no less a luminary than Mark Carney – Bank of Canada dude and blog reader – has been trying to make just this point.

This week he dropped a report stating the obvious: the economy this summer sucked. He also said the suckiness will continue, likely until the end of 2012. But between the carefully measured words was a message quite unmistakable – it could get worse. And we could follow the USA down its middle class-destroying, house-hugging path.

“If there were a sudden weakening in the Canadian housing sector, it could have sizable spillover effects on other areas of the economy, such as consumption, given the high debt loads of some Canadian households,” is the way he put it. For a central banker, this is the equivalent of dressing like Don Cherry. Look at me, dammit.

And he’s right. Cheap money created unaffordable real estate and made everyone forget about sound investing and prudence. Debt will change all that.

More evidence came today from the brave hearts at TD economics, where a surprisingly frank and useful report has been published (read it here) on the stupidity of our collective actions. Personal indebtedness is now “obsessive”, has tripled in the past two decades, and will screw a lot of households if there’s any kind of financial shock.

Canadian families are now just as indebted as American ones, but while the Yanks are spending less and saving more, we’re doing the opposite. In fact, TD says it expects our debt levels will swell even larger over the next five years, at which point only Allah knows what will happen.

“Canadian personal indebtedness has become excessive relative to what economic models would predict as appropriate. Growth in personal debt must slow relative to income growth over the coming years or else the risks of a future deleveraging will increase.”

The culprit asset, of course, is housing. We just couldn’t resist all that house porn. Now about70% of us own homes and with prices rising, it means a huge amount of net worth is buried in this one thing. Too bad. It also makes us as vulnerable to a wealth hurricane as American (or British, or Spanish, or French, or Italian or Irish) families discovered when it became clear the supply of greater fools had been exhausted.

So, this is why I do what I do. Warn of the inevitable. Try to guide your money into safer harbours. Explain the trends and gathering clouds. Offer better strategies than granite and stainless. Explore contrarian paths. Battle the extremists and special interests, the pumpers and the doomers.

And if I throw in a Venus in the mud, deal with it.

Despite house boom: debt up, assets down

Hear Garth here:

Calgary
EVENT FULL Thursday October 21, 6 pm, Leacock Theatre, Mount Royal University. Reserve seats here.

TONIGHT Thursday October 21, 7:45 pm, Chapters Dalhousie, 5005 Dalhousie Dr. NW

Toronto
EVENT FULL Tuesday November 9, 7 pm, Double Tree Hilton, 655 Dixon Road (airport strip). (Note: Additional seats will be available here on Monday, November 1)

202 comments ↓

#1 Kevin on 10.20.10 at 9:08 pm

Interestingly enough it seems that the drop in spending in the US is all from people in bankruptcy. In other words it is only people that have been forced to stop spending. The rest have still not learned to live within their means.

#2 What Goes Up, Must Come Down on 10.20.10 at 9:12 pm

The schoolteacher ask Billy Bob: “If you have twelve sheep and one jumps over the fence, how many sheep do you have left?”

Billy Bob answers, “None.”

“Well,” says the teacher, “you sure don’t know your subtraction.”

“maybe not,” Billy Bob replies, “but I darn sure know my sheep.”

— As told by Prof. Henry T.C. Hu of the University of Texas School of Law

#3 Dodged-A-Bullit-in Alberta on 10.20.10 at 9:14 pm

Greetings: This is to good to resist Garth!!! You used another forbidden word “Allah”. For shame. Go sit in the bad doggy box. The wrath of Calgarians will be upon you.

#4 TaxHaven on 10.20.10 at 9:20 pm

Day after day I read The Vancouver Sun and assorted other MSM rags. Woman throws cat in trash bin. Justin Bieber sets teens afire. Local governments approving massive developments. And the never-ending soap opera of cops-chasing-grow-ops, “our mission” in PakIraqafghanistan and the gangster “threat”….plus Dancing With The Stars.

But never a hint of life in the real world. No sign of growing indebtedness, of falling living standards, of precarious jobs. Nothing about how long cheap money might be with us. Not a worry about the viability of an economy in which just about everyone runs a real estate franchise, a tanning salon, another nameless restaurant, or offers barely-viable massage, yoga, “web-page trouble shooting”, aromatherapy counselling or assertiveness training courses…

For every wealthy civic employee or well-paid mid-level business manager there must be 1,000 real people on penurious service sector or fixed incomes living lives of quiet financial desperation. But you never hear of it…

Cheap money is a curse, punishing the saver and investor in favour of what-should-be irresponsible borrowers backstopped by governments. But I suspect, with incestuous governments, central printers and an interconnected worldwide banking oligarchy all buying one anothers’ debt issuance, cheap “money” will be here for a while.

Then comes RAGING PRICE INFLATION. And I’ll have the last laugh.

#5 MythBuster on 10.20.10 at 9:24 pm

Garth:

Keep doing what you are doing, for several reasons:

1) Your writing is as hilarious as you are brilliant. I look forward to it every day.
2) We who follow the big picture know with certainty that you are right. So you are doing the right thing.
3) The pictures you show are in line with the changing public sentiment – ‘political correctness’ is going out of fashion. It is a bankrupt ‘rule’ that is as bankrupt as those who owe underwater mortgages and have not down payment to renew their mortgage

Too bad those who do not see or do not want to see the big picture have just one strategy, and that is telling those who see: ‘Shut up!’.

As was said before me: Do your thing and let them holler. Sooner or later (probably later) they will realize the truth you spoke and their own folly.

Keep going strong!
All the best.

#6 Hovering on 10.20.10 at 9:26 pm

amen

if only I could get my parents to LOWER THEIR F***ING ASKING PRICE they might sell their house rather than stubbornly list it at the price the guy down the block sold for 2 years ago

sigh

I hope they don’t get screwed

(they’ll want to live with me..)

#7 Contrarian Canuck on 10.20.10 at 9:26 pm

Yup….TD gets it. Things will get ugly!

http://financialinsights.wordpress.com/2010/10/20/td-gets-it-do-you/

#8 Taxpayer like everyone else on 10.20.10 at 9:27 pm

“I am routinely accused of being sexist, anti-Boomer,
Albertaphobic and a rabbly, inconsequential, failed
political outcast.” – Garth

Quit bragging.

#9 Jake on 10.20.10 at 9:28 pm

For the love of Buddha Garth, no more references to religion or deity. With Ganesh as my witness, if I have to endure anymore of your heretical slander I will round up invisible men fearing people everywhere and we will come for you. In the name of Napi, Zeus, and the holy spirit,

Amen

Oh yeah, may Horus be with you in Calgary tonight.

#10 Herb on 10.20.10 at 9:29 pm

Nothing wrong with that muddy Venus. Bet she’d clean up well.

#11 AxeHead on 10.20.10 at 9:36 pm

#3…it was a joke, sheesh.

Garth, you have to stop showing pictures of my wife…but, not sure what she’s doing with that Hummer, I own a Landcruiser and her flurting with that thing is close to adultry.

3 years ago, 70% of my net worth was in real estate. Now only 12% invested in real estate and that mortgage debt is tax deductable. Hope others see the debt writing on the wall, keep up the proseltizing Garth.

She says hi. — Garth

#12 JRH on 10.20.10 at 9:38 pm

Can anyone explain the relationship between CMHC and Boardwalk rentals?

#13 Dude in vic. on 10.20.10 at 9:43 pm

Here in victoria they are sure pushing the ads lately on the radio. Every break it’s silver springs, kettle creek, west hills, and others advertising.
“If your working and breathing” come on down!

The dev’s are starting to hurt.

#14 Blackberry guy with shades on head on 10.20.10 at 9:45 pm

Anyone aware if any of our great Canadian banks have any significant exposure to this next foreclosure wave (mortgagegate II – revenge of the robo-signers) in the us?

I know there will be reprocussions here regardless (for that and the reasons garth is talking about) I’m wondering about direct exposure.

#15 antonio on 10.20.10 at 9:48 pm

Interesting TD report but it suggests that the tipping point will be significant rises in interest rate. When is that likely given the current softness. In fact it is likely to go in the opposite direction. In the meantime this renter’s kids want a backyard and his mother is nagging him to death to buy!

Lease a backyard. Muzzle mom. — Garth

#16 Republic_of_Western_Canada on 10.20.10 at 9:48 pm

#10 Herb
Nothing wrong with that muddy Venus. Bet she’d clean up well.

What she needs is a good hydraulic winch.

#17 TaxHaven on 10.20.10 at 9:48 pm

I have a sneaking suspicion that, somehow, the G-20’s governments, central printers, “primary dealers” and major banking empires are all surreptitiously – and probably through proxies – buying one anothers’ debt.

#18 Republic_of_Western_Canada on 10.20.10 at 9:51 pm

…and some good rubber.

#19 squidly77 on 10.20.10 at 9:59 pm

Many realtors, mortgage brokers and housing specs post on housing bubbleblogs with the soul intent of degrading the discussion, myself, the more they attack the harsher I become.

#20 Boomer62 on 10.20.10 at 10:05 pm

#6 Hovering

When you go to troubled-youth summer camp next year, your mommy and daddy will sell the house at any price just to be rid of you. I doubt they will leave a forwarding address.

#21 groundzeropat on 10.20.10 at 10:11 pm

Nice pic and a great chart Garth. Correct me if I’m wrong but don’t stock traders who go by “technical analysis” will say the “stocastics” chart that Garth posted means the tide is turning. They nicknamed this widening gap the alligator mouth. The wider the opening the greater the drop. Looks to me the light green line started to overtake the dark green line about 2008.

#22 Dan in Victoria on 10.20.10 at 10:22 pm

I finished up early today and decided to take some time and putter around the house.
I was down on my knees with a paint brush sizing up some unpainted trim, when a thought occured to me.
(I know i know sometimes it happens.)
What if I’m wrong about this, what if my years of experience, and my gut feeling is totally wrong and there is no correction?
You know what, it would be great.
Many lives will not be ruined, many marriages will be saved, small children will grow up in their fancy houses. They will go to school and have all the latest gadgets.
They will be able to have all the latest fashions.
Mom and Dad will have the perfect life. The perfect jobs.
The perfect kids.

Note to self… follow instructions on can, paint in a well ventilated area…..

#23 Soylent Green is People on 10.20.10 at 10:33 pm

I assume this is one of the fatties you were talking about?

#24 Derek on 10.20.10 at 10:44 pm

Garth,

The only blogs worldwide that are must-reads for me are yours, Steve Keen’s in Australia, and Mark Wadsworth’s in the UK. I love your humorous writing style and your no-nonsense message. Keep on writing posts like today’s and you will stay on my must-read list for a long time.

Thanks. Don’t change.

#25 Calgary Illusion on 10.20.10 at 10:53 pm

Possible QE2 estimates range from between 500 billion to 7 trillion dollars. If there is a QE2 launch, a housing price decline here in Canada will likely stall – setting your timelines even farther back. If QE2 does happen, gold will continue to perform well in this environment. Excellent blog!

#26 dark sad person on 10.20.10 at 10:54 pm

There is, after all, only one reason we had a real estate boom in the middle of a recession, and that’s cheap money. Mortgages at 1.5%, purposefully created by the monetary authorities to send us into an orgiastic buying spree (it worked), were then augmented by a sense of panic as Ottawa threatened to tighten mortgage rules and as the HST approached. Meanwhile a massive runup in prices, created by virtually free money, sparked bidding wars as property virgins fretted they’d never again be able to buy. Finally, our conservative, carrot-up-the-butt bankers decided to throw gas on it all with no-doc loans, cash-back offers, first-timer promotions, below-prime variables and an everyone-gets-financing attitude.

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

Strange-I said almost that exact thing today on this blog (in so many different words-of course) and my right to free speech-was attacked by a few here-
Even hints of the Gestapo coming for me):

Anyway G-maybe we can shoot some hoops in the slammer together-

I’ll be the practically illiterate-tattooed-orange shirted- sporting eyebrow earrings-shaved head-prison chic bitch-looking guy-

Heard tobacco is in Vogue-as currency there-

http://www.youtube.com/watch?v=gj0Rz-uP4Mk&feature=fvst

#27 kitchener1 on 10.20.10 at 10:57 pm

Wow, Garth did you pull that one out of your personal album? Is that your wife posting besides your Hummer?

here is the funniest part about todays BoC speech.

Going back to 08 and the financial fiasco we had, all the smart guys (or supposed) were out there preaching and telling us things will get better in 6 months, then 12 months, then another 6 months, now its 24 months lol.

I wish I had the time to dig up all the file video footage of F and his pal Mark, this thing is will make an awesome video montage one day.

See, if they came out and said things will be bad for 4 years, we would have had panic, these way is better for the sheep (or frogs as in being boiled alive in a pot but unaware).

side note, 4.99% interest rate for 10 years fixed is an awesome rate to lock in at, espically if we get inflation 3-4 years out at a rate of 3-4% which to me seems very likey once we dig ourselves out of this recession.

my guess is that even now, with delfation on the horizon, consumables like food/gas/utlitlties etc.. are all rising, the HST alone put on 6% onto almost everything we purchase, so at 4.99%, its almost like free money.

#28 camcool on 10.20.10 at 10:58 pm

I’ve been reading this block since nearly the beginning, yet I don’t post much.

Today I couldn’t resist.

Garth, I have noticed that your more recent daily entries have cleaned up most of the spelling mistakes and grammatical errors. Did you recently hire a proofreader?

For everyone else who posts comments on this blog, please try to clean up your spelling and grammar. Especially if you want your point to be taken seriously.

Take a look at this simple chart for some of the most common grammatical mistakes that people make.

http://theoatmeal.com/comics/misspelling

If your post if full of spelling errors and grammar issues, your credibility takes a hit. Think about it!!!

#29 Burnt Norton on 10.20.10 at 10:58 pm

Here is a well-written article on the subject that provides an interesting historical perspective without going off the paranoid deep-end. There is even some hopeful foreshadowing.

http://www.globalresearch.ca/index.php?context=va&aid=21504

For the well-informed critical thinkers out there, a defensive financial posture certainly seems prudent at this particular point in history.

#30 joseph on 10.20.10 at 11:04 pm

(Puppies, kittens and bears are okay.)

But Garth, what about a bear eating a kitten while a puppy watches???

#31 warren on 10.20.10 at 11:08 pm

We have Just sold our Home here in Vernon and will move into a rental . We have a 6 month lease
I will realize aprox $220,000 dollars in profit . We have NO other debt. my yearly income is aprox $45,000 gross and My wife’s is $12,000
we don’t believe we should re invest in real estate at this time as we have been following the market
and believe it is going to take a real turn down . With all that being said We are part of the generation that are using our home equity as retirement funds .
we have some money in rrsp’s $25,000, a wcb pension for me, $630 month and will have a small pension from my current job when 60 aprox $450.00 dollars two years away . my
wife Ria works two days a week and has no pension and will only receive the oap at 65… she turned 57 yesterday. Question What do we do with the Money from our home??
Should we ever contemplate a home purchase? I need some advise .. any suggestions ..The house deal closes at the end of November.

#32 For Sale: Canada on 10.20.10 at 11:08 pm

More Venus’s in the mud please…

#33 Basil Fawlty on 10.20.10 at 11:10 pm

Jim Rickards was interviewed today on KingNewsWorld and he indicated that the losses to banks associated with mortgage gate could total a trillion dollars. The banks do not have this money in reserve, so here comes TARP II and guess who gets to pay for it? That’s correct boys and girls, socialize the costs of the privatized profits. Same as it ever was, same as it ever was…

#34 nonplused on 10.20.10 at 11:14 pm

Well, that means there are still 30% of Canadians chomping at the bit to buy. And I bet those 30% are the ones who have the money to drive prices up from here! (ha, ha for those who can’t read sarcism.)

#15 – I rent a 4 acre back yard complete with $350 trampoline and $200 electric quad the little spoiled brats can bomb around all they want on without leaving the yard, for far less than the “opportunity cost” of buying the place.

Plus, it seems to me cheaper. So far, in the 2.3 years we’ve been here, the land lord has replaced the hot water tanks, the fridge, the dishwasher, then fixed the new dishwasher 1 month out of warrantee (stupid modern electronic control cards are crap), replaced the sump pump in the septic, paid the taxes, and suffered depreciation on the house probably in the order of $50,000 based on the drop in average house compared to the “value” of this one.

Plus it’s more flexible. We thought we wanted the acreage life, but we’re leaning now towards being closer to the places we like to go. If we decide to move, there is no $30,000 realty fees and legal costs.

Real estate always goes up, over the long term, because the dollar always goes down. But sometimes land prices have gone up faster than the dollar went down (like right now) so there are corrections and they can be very painful. Go take an Advil now and get the jump on it.

My guess is we will trade through these prices one day – in 10 to 15 years. Until then renting is fine, and really, even people who own move on average every 5 years so save the realty fees and rent. Every time you move you get a year’s rent free by avoiding realty fees. Plus you avoid all the upkeep. Yes, renting is throwing money out the window. But owning can be too, especially if you “buy high”.

I even trim the bushes and keep up the yard in my rental. The first year I was here I didn’t trim the bushes because “it wasn’t mine”. But then I figured, “that bush is blocking my view, and I would have to trim it if I owned it, so it’s coming down!”

The only real downside is that the house really needs a new deck. If I owned it, I would replace it myself, so that when I sold it in 2 to 7 years the new owners could enjoy it, whereas now I have to go fishing instead. So instead, if we step through a rotted out board, I just spend $5 dollars at Rona and replace that board and forget about it. I don’t even tell the landlord. He isn’t going to replace the deck, so I spend a tiny bit here and there to keep the place up but nowhere near what I used to spend renovating places I owned.

We’ve even added a couple of “Ikea” permanent fixtures that make the place more livable. But the total is less than $200. We’ll leave them when we go, and they fit in nice too, but heck if you can compare that to realty fees and leaving them anyway when you sell.

#35 EJ on 10.20.10 at 11:23 pm

TD whining about too much debt? That’s a hoot. The crack dealers are complaining that their customers becoming addicts and overdosing.

You don’t need new regulations, just stop lending deadbeats so much money!

#36 vomitingdog on 10.20.10 at 11:23 pm

I like the photo, Garth. But don’t you think she should go on a diet? She’s a bit thick in the middle and especially through those thighs.

#37 BrianT on 10.20.10 at 11:24 pm

Denninger covers what many blogs are now saying-the whole mortgage securitization business was fraudulent from the outset http://market-ticker.org/

#38 vreaa on 10.20.10 at 11:24 pm

Spot The Speculator #21
Toronto: Couple in 50’s;
$500,000 home; $650,000 in three rental housing properties.

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

& for more ‘Spot The Speculator’ anecdotes:
http://vreaa.wordpress.com/category/18-spot-the-speculator/

#39 McLovin on 10.20.10 at 11:33 pm

On the same day TD Securities published a detailed report saying we are not in a bubble and all the reasons people have been using to say we are, such as price to rent and price to income don’t apply to Canada for various reasons.

I am not sure if you have read it Garth but it is a complete joke. In fact, I bet it will be the report people refer back to in 3 yrs and laugh like the people who said Las Vegas was different in 2007.

If you need the report I will email it to you.

#40 InvestorsFriend (Shawn Allen) on 10.20.10 at 11:37 pm

Garth said:

a bunch of investment terrorists who know everything move onto the blog and establish a beachhead.

Garth, I am not a terrorist.

#41 cody on 10.20.10 at 11:46 pm

I second #12’s question.

#42 InvestorsFriend (Shawn Allen) on 10.20.10 at 11:49 pm

Garth posted the graph from TD (he gives a link to TD as well)

The TD graph shows debt to income at a record 146% Yikes!

I can’t argue that is bad…

But TD also has a graph at page 6 of their report that shows people are spending just 9% of their income servicing debt, down from 14% in 1990 (though up from recent lows of about 6.7% in 2005.) So people can afford the debt right now.

The problem as Garth says is if interest rates spike a ton of people will be road kill. The sh*t will hit the fan and fly all over causing among other (arguably) bad things, house prices to fall. GDP will fall too as people would then be forced to devote a much bigger percentage of income to debt service. Let’s see you take debt service back up to 14% and consumer spending falls 5%. That is called recession.

#43 Off the Leash on 10.20.10 at 11:55 pm

Many realtors, mortgage brokers and housing specs post on housing bubbleblogs with the soul intent of degrading the discussion, myself, the more they attack the harsher I become.
#17squidly77

You know you do a good job of that yourself without our help right? I won’t mention the use of “soul” instead of “sole” as I’m sure there’s a grammar Nazi somewhere around who’ll catch up with you on that one… Or is it just my errors and omissions they watch for? Is the use of the word Nazi too offensive to use on this blog?

Really squids, we don’t operate that way but I can understand how you might come to think so. “He that can not reason is a fool. He that will not reason is a bigot. He that dare not reason is a slave.”

#44 Devil's Advocate on 10.21.10 at 12:02 am

Are you a slave to your fears squidly?

#45 Patz on 10.21.10 at 12:12 am

OK this has gone too far now. It’s bad enough that Garth has to find Muslims interesting! I happen to know for a fact that there is a Greek Orthodox Reeve in Southern Ontario. Do we here about her? Noooooooooo!

But in the last round of comments at #107 The Original Dave said:
“Nash is about 6 feet tall, he’s white, and he’s Canadian.” Nash is 6’3″ dammit! Your diatribe against white, Canadian NBA players is disgusting.

That’s it, just like DA I’m gonna quit this blog and go sit on a rock somewhere.

Oh yeah, (he said as if in afterthought) Canadian RE is a buffalo herd and it’s headed straight for Head—Smashed in Buffalo Jump.

#46 chibidani on 10.21.10 at 12:15 am

*throws panties*

Thanks as always for reminding me that while I want a house, it is SO not worth it right now. So I’ll bide my time and buy in a few years, or a decade, or whenever I can get a house that isn’t going to take 70% of what we make!

#47 Nostradamus Le Mad Vlad on 10.21.10 at 12:18 am


“I am routinely accused of being sexist, anti-Boomer, Albertaphobic and a rabbly, inconsequential, failed political outcast.”

Welcome to us Trailer Park Trashers! You’re now officially one of us deadbeats, good-for-nothing Porta-Potties!

“. . . we’ll escape the consequences Americans reaped.” — Not a squirrel in heaven’s chance (unless Loosifur’s in charge).

Next round of US foreclosures begins momentarily. When do the Cdn. mtgs. reset? After the mfg. jobs have gone overseas?
*
Treasury Debt Default Ummm, not really. “America’s Bright Future After U.S. Treasury Debt Default”

Civil War (French Revolution) Two “WILL AMERICANS FOLLOW FRENCH EXAMPLE OF MASS CIVIL UNREST?”

Re: The previous link. Buy gold and / or silver. See when / if the feds. place restrictions on how much one can buy.

Bacteria have discerning tastes as well!

The world appears to be becoming a hotspot in and of itself. Just what the elite want — more turmoil, depopulation via frankenfoods and other things.

Detroit RIP. The opposite of Hiroshima in 1945.

Will the US debt swallow them whole? And what of C-H-F?

Don’t fool around with currencies. Or the market.

#48 Kathy on 10.21.10 at 12:21 am

I live in a small southwestern Ontario town about half way between London and Owen Sound. Two weeks ago our town had it’s first foreclosure. The couple were in their sixties. My youngest son also came home from school and told one of the kids in his class was moving. This child’s parents were walking away from their house. Last week, he came home again to tell me another child was leaving. The same thing again. Their parents were walking away from their house. He was really upset. I had to reassure him that we would be okay because we rent and do not own a new car. No debt. I must of aroused his curosity because he went to school and ask the other kids if their parents had any debt. He came home completely dismayed because every child in his classroom was aware their parents were in serious debt. This is a class of 12 year olds and they now know what debt is. For the parents out there who think they can hide their debt from their kids, give your head a shake. It is not working.

I tried to explain budgeting and living within your means. It has been tough the last few years saying no when other parents were saying yes. The next few years are going to a hard learning curve for many.

#49 TheBestPlaceOnEarth on 10.21.10 at 12:22 am

Walked by the Olympic Village, and all I can say is WOW is it looking great. It was abit slow to start sales but it looks like things are starting to take off. The Recreation Centre was being heavily used, people enjoying the seawall with the World Class view and lots of lights on with owners enjoying The Best Place on Earth. People need to understand that sometimes an Initial Public Offer is slow out of the gate until the market catches up to a great thing. The Olympic Village reminds me of the first introduction of the Blackberry or Iphone. It’s going to takeoff and go higher overtime. It just keeps getting better out here every minute of the day. Did I mention The Best Place on Earth has the leanest and healthiest people along with the wealthiest. But that’s another story for another time. Pleasant dreams all. you can be we’re sleeping soundly with our failsafe homes

#50 Devore on 10.21.10 at 12:22 am

#17 TaxHaven

I have a sneaking suspicion that, somehow, the G-20′s governments, central printers, “primary dealers” and major banking empires are all surreptitiously – and probably through proxies – buying one anothers’ debt.

G20? Isn’t Brazil about to bail?

#51 Alan on 10.21.10 at 12:25 am

Tax Haven, yep, you got it. Now all you have to do is get on the gravy train.

#52 Tim on 10.21.10 at 12:48 am

Keep posting the nice pics Garth and you can say muslim if you want, he’ll this is Canada. Anyone that doesn’t like it, well they can go f… Despite Harper’s intentions, this is still a free country. We’re too damn politically correct and I’m fed up with people being so uptight about it. I still doubt that we’ll have a big correction in the near future with interest rates still at near record lows. Only the dupes who bought with little money down will be hit.

#53 april on 10.21.10 at 12:53 am

#7 Mythbuster.
I’m with you. Well said.

#54 Grandpa Grinch on 10.21.10 at 12:58 am

Speaking of slogging though conspiracy theory links:

http://www.zerohedge.com/article/guest-post-covert-origins-af-pak-war-road-world-war-iii

Anyone who reads this article and identifies the easily verifiable information will find it digusting.

#55 Don on 10.21.10 at 1:11 am

“#19 Squidly77
Many realtors, mortgage brokers and housing specs post on housing bubbleblogs with the soul intent of degrading the discussion, myself, the more they attack the harsher I become.”

I feel the exact same way.

Sell NOW or lOOSE a lot of money!

In fishing for sharks this is referred to as Chuming

#56 realpaul on 10.21.10 at 1:28 am

The debt many people have is driving them completely psychotic. The solution some have happened on is ‘to take on more debt’ and deny that anything can possibly derail the train. From where I sit…it boggles the mind…once semi reasonable people…moving up and having more children…after job shocks in their companies and general industry as well as the general economy both local and global. As if doubling the size of your box and your bills will make it all magically go away. I’m talking executives…in companies where re-orgs, downsizing, outsourcing, lay offs and redundancies are as common as Walmart underwear.

Is there something in the water that has produced this mass hallucination of debt forgiveness and econo-miracle in Canada versus the rest of the world. The papers have printed the information…the BOC gov has challenged people with some of the truth…even F has poured out his sould and told Canadians that they are in for a rough ride. So where does this sense of immortality come from? Has the bathwater become potable?

I stood behind a postie in the Superstore who had pulled out five credit cards as he tried to pay and had every one denied. I am sensing that this state of affairs runs from the bottom right through to the top…..as if it can never happen here…and then only to someone else.

#57 don bool on 10.21.10 at 1:48 am

Blackberry guy with shades on head on 10.20.10 at 9:45 pm

Anyone aware if any of our great Canadian banks have any significant exposure to this next foreclosure wave (mortgagegate II – revenge of the robo-signers) in the us?

I know there will be reprocussions here regardless (for that and the reasons garth is talking about) I’m wondering about direct exposure.

Not to worry ! The banks are free and clear of risk. Our Conservative government purchased all the toxic real estate loans from the banks through the Canadian Mortgage And Housing Corporation.( CMHC ) Just like Fanny and Freddy in the States CMHC is the government, which is you and me. Keep your fingers crossed and hope the ass doesn,t completely fall out of the real estate market because the public owns this crap now. Not sure of the exact amount, but we bailed out the banks to somewhere in the neighbourhood of as little as $75 billion to as much as $120 Billion dollars ?. You can be assured this was not a bank bail out though, as stated by our straight shooting Prime Minister and Minister Of Finance. Flaherty said it was a good investment in the future for Canadians because these motgages( ABCP ) are undervalued and in the future will rise in value. With Flaherty and Harpers logic i would think they,d be scooping up the States and Fanny and Freddies ABCP for future capital gains for the Canadian public. I,m sure that,s what Harper meant when at the hight of the recession he said this is a great buying opportunity. After all! He,s a trained economist eh !

#58 hobbitt on 10.21.10 at 2:06 am

I read through your post several times today, but I didn’t see the information from TD. Big red letters say “read it here”, but it doesn’t show up on my screen. Maybe you need to post it differently?

#59 Coho on 10.21.10 at 2:11 am

If the game is to gut the middle class, then what amount of wealth can people expect to have in the end? Shouldn’t a bigger fear be the gutting of the middle class rather than running out of money, as we‘ve heard here so many times before? If the middle class is in the process of being gutted then isn’t running out of money a given for the vast majority of us? What needs to change is the intentions of our leaders or else we’ll be fighting a losing battle. It is like they’ve adopted a “there is no tomorrow” policy. Do they not have children and grandchildren whose futures they are concerned about? Do they not care about other peoples’ children and grandchildren? Are they willingly selling us out or are their hands tied, and by whom?

As it stands now, our real buying power has diminished over the last several decades to the point where in order to keep this consumer economy going, a real estate super bubble needed to be created to give us the illusion of wealth to encourage frivolous spending. It is no wonder we’re in debt up to our eyeballs!

Savers are perceived as responsible, but are not rewarded because of low interest rates. How many savers in the throws of utter frustration have sunk money into a losing cause in an attempt to garner a decent return? And if there are too many savers sitting on their cash, it is not good for business. Meanwhile, spenders are criticized for being irresponsible, but they help keep people in their jobs (most probably in China and India) because they spend. And they love low interest rates!

It is a haywire world and a very divisive world! Odd that “doomers” and “extremists” abound, particularly during a time of shooting wars, religious wars, economic wars, financial wars, currency wars, technological wars, war on drugs, war on poverty, war on cancer, war on hunger, war on disease…war on everything and everyone! Lots of war,…tons of it…not winning any, though…not supposed to it seems…just a lot of distraction…and the money funding these so called wars keeps funnelling into the same hands.

Oh well, I guess it is politically correct to be cautiously optimistic about the direction of mankind. After all, we don’t like being out of our comfort zone. Speaking of which, I’d like to order a granite countertop and stainless refrigerator with a house around it.

#60 Front line, UK on 10.21.10 at 2:12 am

UK adopts a ‘slash and burn’ austerity budget

I’m in the UK and let me tell you, Austerity is front line here in Europe. Thousands of UK’ers just got their pink slips from the Gov’t last night and we know more than a few already who did ourselves. Riots in France, Riots in Greece, it’s somewhat unsafe to visit anywhere in Europe right now. But I agree with the Austerity measures, Europe and the UK have it right and Canada/US needs to follow. Even China raised their prime rates.

Debt never equals wealth. Pay it back now before it gets out of hand. Canada, are you listening?

I’ll keep the blog readers up to date on what’s happening here in the UK/Europe and what’s coming to Canada.

“On Wednesday, the UK’s Conservative finance minister George Osborne announced historic austerity budget cuts. Government spending will be cut by 19% over four years, and almost 500,000 government employees will be laid off according to Reuters. Osborne said that Britain’s budget deficit of 11% of gross domestic product (GDP) left him no option to such drastic action if the country was to avoid a Greek-style fiscal meltdown.

This came at a time when France is facing another day of massive strikes, riots and demonstrations over pension reform” – Generational Dynamics.

#61 Grandpa Grinch on 10.21.10 at 2:17 am

You too can have your tax payer paid chauffer drive you to a homeless shelter, throw change at homeless people and yell at them to get a job – all while drunk…AND get recognized for your hard work!

http://www.edmontonjournal.com/news/Eight+Albertans+receive+order+excellence+awards/3702599/story.html

#62 Jody on 10.21.10 at 2:23 am

Lovely picture. Wow! Talk about some assests! How do I invest in those?

#63 hobbitt on 10.21.10 at 5:42 am

A WARNING to you Garth. The Buildaburger Group are blocking your website so we can’t see the TD report at”read it here”. I’ve even re-started my computer and can’t see it.

got to go now before they trace this address.

#64 Consider This on 10.21.10 at 5:59 am

AT #1: Kevin, did you miss the entire point of Garth’s writing? Nononono, you’re actually mistaken. The drop in spending in the U.S. is not because people are in bankruptcy. They’re SAVING MORE at a rate of positive 6%, while Canadians have a negative 2% savings rate. LOL If anything, increased bankruptcies would probably SPUR spending as overall indebtedness would be alleviated. Face it, Americans are acting more responsibly than Canadians, and they have been for quite some time (at least two years more). Also, one point to make here… Canadian indebtedness EXCEEDS Americans’ – it is not on par or equal with it. Just an FYI. So, clearly, Canadians are more caught up in the junkie house-buying and material possessions thingy… not the Americans.

#65 Peter on 10.21.10 at 6:03 am

Hi Garth,

You could say ‘muzzie’ that has a harmless diminutive ring to it. Kind of cute.

Breasts are ok, but you have to strategically place the little black stars…

Don’t pick on fat people, they did it to themselves, unless they ask for by going to the beach or something.

What’s not to dislike about ‘gen-entitlement’ (aka ‘boomers’)? They deserve it! All of it.

Gold? Shiney! :)

#66 jman on 10.21.10 at 6:13 am

#28 Camcool……”If your post if…”. Glass houses.

#67 X on 10.21.10 at 6:27 am

Interesting to see what the BOC does. Low rates have cause debt levels to rise. High rates will hurt our recover/exports/dollar.

#68 Brian1 on 10.21.10 at 6:29 am

Our debt to income ratio is 147 while the states was 160.TD says that ours is not a lot.Meanwhile Britain approaches 150 and they are laying off 490,000 public servants. They are in trouble.TD also says house prices will rise 5% per year.
70% are homeowners. Does that mean that 30% are renters?

#69 dd on 10.21.10 at 6:43 am

“and will screw a lot of households if there’s any kind of financial shock.”

What do you mean ‘if.”

#70 dd on 10.21.10 at 6:49 am

#15 antonio

“In the meantime this renter’s kids want a backyard”

Kids that play in the backyard? It is a passing fancy. 1/2 hour they will be back on the computer.

#71 Erikson on 10.21.10 at 6:49 am

Hummer is really sexy

That’s why I chose the pic. — Garth

#72 Moneta on 10.21.10 at 6:54 am

http://housingpanic.blogspot.com/
———–

I followed his blog in its heyday. If you read it you will notice the evolution from 2005-2008.

I read Garth’s blog to get and feeling of where we are in the cycle here in Canada.

#73 Apsalar on 10.21.10 at 6:56 am

I live in the Ottawa area, and had occasion to drive out to Barrhaven to meet some friends for dinner last night. Driving along Strandherd Road, I was absolutely amazed by the amount of new housing that was built or being built; hundreds of new homes that weren’t there just a few months ago. I though of this blog, and I truly had to wonder who would be buying all this real estate. I also had to wonder if I drive by the places in another few months, if the development will still be ongoing, or would it be stopped.

I guess I’ll know when I drive by in a few months’ time :)

Great article as always Garth. Part of the attraction is the refusal to be politically correct.

#74 Moneta on 10.21.10 at 7:00 am

One thing I have learned in the last decade is that you can lead a horse to water but you can’t make it drink.

People NEED to make their own mistakes no matter how right you are. People will see what they want to see when they need to see it.

All you can do is take care of yourself and those who are open to your help. And even then, something always comes out of nowhere. Life is what happens when you’re making other plans.

All clichés but in the end, when we understand that we don’t have as much control as we’d like to think, we respect others a little more.

#75 pbrasseur on 10.21.10 at 7:02 am

Garth – You seem to take pride in the (presumed) fact that Mark Carney reads this blog (who wouldn’t?), but do you think F reads it too? Now that would be icing on the cake. ;)

#76 Moneta on 10.21.10 at 7:17 am

If the game is to gut the middle class, then what amount of wealth can people expect to have in the end? Shouldn’t a bigger fear be the gutting of the middle class rather than running out of money, as we‘ve heard here so many times before? If the middle class is in the process of being gutted then isn’t running out of money a given for the vast majority of us? What needs to change is the intentions of our leaders or else we’ll be fighting a losing battle. It is like they’ve adopted a “there is no tomorrow” policy. Do they not have children and grandchildren whose futures they are concerned about? Do they not care about other peoples’ children and grandchildren? Are they willingly selling us out or are their hands tied, and by whom?
————
For most, I don’t think the gutting is a goal but a consequence.

We’ve been living above our means for a few decades. Why should we be living like kings when more productive people in the emerging world are living in dumps? They can’t keep on financing our consumption forever without ever wanting some for themselves. We’re 1 billion living the big life. Imagine just 1 billion more living like us out of the other 5. That means a little more sharing… and probably a lot more deforestation and pollution.

If you ask me, our leaders are flying by the seat of their pants.

#77 Medic on 10.21.10 at 7:25 am

#31
I don’t know what you should do with your profits, but don’t think anymore that you are “using your home equity to finance your retirement”. That 220 grand is cash and is much more valuable than home equity. Nobody can take it away from you once you cash out. To have that amount of money fall from the sky on your salaries is outstanding and you made a wise decision to sell. JMHO.

#78 Kaganovich on 10.21.10 at 7:29 am

Coho

If the game is to gut the middle class, then what amount of wealth can people expect to have in the end? Shouldn’t a bigger fear be the gutting of the middle class rather than running out of money, as we‘ve heard here so many times before? If the middle class is in the process of being gutted then isn’t running out of money a given for the vast majority of us? What needs to change is the intentions of our leaders or else we’ll be fighting a losing battle. It is like they’ve adopted a “there is no tomorrow” policy. Do they not have children and grandchildren whose futures they are concerned about? Do they not care about other peoples’ children and grandchildren? Are they willingly selling us out or are their hands tied, and by whom?

Your comment points to ubiquitous but mostly implict dilemna between political (collective action) and personal (individual action) ways of tackling the complex problems the majority of Canadians are facing right now. This dichotomy is manifested daily in many of this blog’s comments. While Garth advocates some form of personal balanced portfolio defense against the upcoming morass, much of his writing hints at the politcal machinations that have had a hand in bringing about this debt drenched nightmare we are heading into. There is indeed a class war being waged, but as Buffett pointed out awhile ago, us plebians only brought our F game to the battlefield. Most of the left are too busy worrying about their identities to bother with the economic matters (see yesterdays comment thread concerning Garth’s inclusion of Calgary’s new mayor in his blog post).

This will change though.

#79 Moneta on 10.21.10 at 7:29 am

I tried to explain budgeting and living within your means. It has been tough the last few years saying no when other parents were saying yes. The next few years are going to a hard learning curve for many.
———-
My daughter is 9 and has been asking us why we are so poor… because we live in a small house compared to all her friends.

You try and explain this to a 9 year old without her going to her friends and telling them her parents are probably carrying too much debt.

At 9, she knows the basics of a mortgage. Debt was the last thing on my mind when I was her age!!!

#80 Kaganovich on 10.21.10 at 7:34 am

#35 EJ

Debt junkies. I know some.

http://theautomaticearth.blogspot.com/2010/10/october-20-2010-fear-and-loathing-in.html

#81 BrianT on 10.21.10 at 7:34 am

Re QE2, the whole premise promoted by the MSM that Bernanke can magically create “wealth” through moving taxpayer funds around is absurd. In fact, if one was interested in strong and sustainable USA economic growth, literally the last thing you would do would be to gift billions or trillions of taxpayer dollars to speculators/fraudsters.

#82 OttawaMike on 10.21.10 at 8:09 am

Garth,
I take strong offense to today’s picture. That is an H3 Hummer based on the crappy Colorado 5 cylinder pickup truck chassis. Not really a true Hummer.
The only true Hummers are the H2 or H1.

Please take down the photo immediately.

I expect better from a professional journalist like you.

#83 SM on 10.21.10 at 8:22 am

Great post,

Too true that we all whinge about the minor things that we take issue with (myself included), rather than the sum total – which is an excellent resource of valuable advice. Your insight has no doubt protected my family’s financial future in a major way. Thank you for what you do, and please ignore our base, whiny instincts!

#84 SM on 10.21.10 at 8:24 am

Sorry – meant to say “rather than appreciate the sum total”

Some of us need to focus on our proof reading skills.

#85 Love this Blog on 10.21.10 at 8:32 am

#60 Front Line in the UK
Thanks for the update, keep ’em coming.

#86 David B on 10.21.10 at 8:45 am

OttawaMike on 10.21.10 at 8:09 am

There is a truck or something called a Hummer in picture, strange I can see only a young gal in brown sneekers!~

#87 Ottawa S. on 10.21.10 at 8:57 am

#34 nonplused on 10.20.10 at 11:14 pm

Well, that means there are still 30% of Canadians chomping at the bit to buy. And I bet those 30% are the ones who have the money to drive prices up from here! (ha, ha for those who can’t read sarcism.)

I’m one of those 30%, and I guess I have the money to drive prices up more. I got pre-approved yesterday (based on my finances alone – without my husband in the picture) for a $400K mortgage with 25 years amortization, and $500K if I go 35 years. I know my net income after all deductions though – what are the banks thinking offering me that much? I’d be house poor.

After looking at twenty houses I came to my senses. There is one we want for a very unique features and location, and we decided if it’s not this one, we stop looking and watch the market and wait. Luckily, the realtor and seller completely turned me off of that house with their responses to my concerns/reasons for offering the price I was willing to offer:

What you saw in the room under the pool is not mold but rather black paint.

And about the moldy old window we saw lying in the garage, it

…was purchased at a garage sale and was never part of the house or addition. The thought was to use it in case she needed the glass but she never did.

Yes, people drag home really moldy old windows and keep them around in case they need the glass. Yes, people paint a corner in the basemenet ceiling with black spots (with some green and brown mixed in) and then just stop, leaving it looking like crap.

That was only part of it. Let’s just say, I still believe realtors and CREA represent pure evil.

#88 Ottawa S. on 10.21.10 at 9:02 am

#73 Apsalar on 10.21.10 at 6:56 am

Driving along Strandherd Road, I was absolutely amazed by the amount of new housing that was built or being built; hundreds of new homes that weren’t there just a few months ago. I though of this blog, and I truly had to wonder who would be buying all this real estate.

Suckers are. If you were looking at Mattamy’s Half Moon Bay and Strandherd sites, they are true Kuality with a “K”. Complete garbage. I warned friends about buying there after seeing them under construction, and they didn’t listen. Now, they are having problems. Surprise, surprise. The foundations were sinking as they were being framed for crying out loud! Drop something heavy on the asponite floor, and it will crash through to the level below (at least before cheap carpet is holding it together). This type of construction is criminal. Not to mention how badly the trades working there are treated.

#89 Devil's Advocate on 10.21.10 at 9:07 am

Real estate values will continue to drop as they have. Here in Kelowna “average” price peaked at around $520,000 and is now down around $450,000. I do expect that “average” price will continue to drop to about $400,000. Prices will then bump along bottom for several more years before they rise back up to their past highs. I do see a pent up demand though that once that “average” price does break through $400,000 will in all probability push it back above $400,000. And for those “better than average” homes the market is proving very active. By better than average I am talking about those homes in that “average” price range but better located, better maintained, better merchandised.

Interest rates are what make housing affordable right now for many. If you buy a home at today’s astonishingly low mortgage rates locking in for 5 or so years by renewal time you will have passed through the real point of price capitulation and see prices stabilized and very likely on the road to modest increases once again. The benefit of these low interest rates well offsets the equity bleed likely to be incurred. That equity bleed will not long after be reinstated.

Of course this is not a strategy for anyone considering a short term real estate hold. This is a longer term strategy and even then one which must be entered into with due diligence and a keen eye toward acquiring a better than average home as that described above. Long term (5 plus years) buying a home today is just as safe or safer a purchase as it has ever been.

My point is I do believe we are in somewhat a safe zone right now when contemplating how things might unfold over the next 7 to 10 years. You can’t time the markets with exactness. The best you can hope to do is avoid buying at the peak and selling at the low. Buying today you are doing so well off the peak… maybe not at the low but getting closer to it. Certainly you would be buying at “low” interest rates – there is no denying that.

Unless you are of the notion that real estate will forever more never again increase in value, a prudent purchase today within your means is probably about as good as it’s going to get until the next economic failing. That next economic failing is a good 15 to 20 years away as we must work through the next robust economic period first.

Prices have rarely ever been so negotiable
Prices are down a good 10.0%
Interest rates are at historic lows.

Vultures take heed… it is a good time to buy or at least so very, very near that optimally good time to buy that you ought to at least be out shopping now

Have at ‘er Blog DAWGS… I just know you’re gonna wanna gnaw on this one. ;-)

#90 Nibs on 10.21.10 at 9:10 am

The social fallout of a dying credit bubble…
Public sector unions beware!

http://financialinsights.wordpress.com/2010/10/21/the-social-fallout-of-a-dying-credit-bubble/

#91 Live within your means on 10.21.10 at 9:16 am

#11 AxeHead on 10.20.10 at 9:36 pm
#3…it was a joke, sheesh.

#11 – I think #3 was being scarcastic.

#92 Jake on 10.21.10 at 9:23 am

#28 Camcool,
If you want to be taken seriously on this blog, get a life. I’m sure there are some fascinating grammar blogs out there where you can rub shoulders with your own kind.

#93 BrianT on 10.21.10 at 9:25 am

Good to know the taxpayers are getting their money’s worth http://www.thestar.com/news/crime/article/878647–more-officer-bubbles-cartoons-online?bn=1

#94 Canada Leading Indicator on 10.21.10 at 9:27 am

Canada Leading Indicator Falls for first time since April 2009 on Housing

http://www.bloomberg.com/news/2010-10-21/canada-leading-indicator-falls-for-first-time-since-april-2009-on-housing.html

#95 mark on 10.21.10 at 9:27 am

http://market-ticker.org/akcs-www?post=169846 watch this. This is big time bad for investors…I know many docs that are screwed, screwed, screwed. Losses in the millions due to rental property losses and then they discover the property title is not secure either…..tshtf scenario is here.

#96 Kevin on 10.21.10 at 9:34 am

#64 Consider This

http://www.georgewashington2.blogspot.com/2010/09/american-consumers-are-not-deleveraging.html

From a peak in 2005 of $13.1 trillion in equity in residential real estate, that value has now diminished by approximately half to $6.67 trillion!

Yet outstanding household debt has in fact increased from $11.7 trillion to $13.5 trillion today.

Folks, those who claim that we have “de-levered” are lying.

Not only has the consumer not de-levered but business is actually gearing up – putting the lie to any claim that they have “record cash.” Well, yes, but they also have record debt, and instead of decreasing leverage levels they’re adding to them.

In short don’t believe the BS about “de-leveraging has occurred and we’re in good shape.” We most certainly have not de-levered, we most certainly are not in good shape, and the Federal borrowing is what, for the time being, has prevented reality from sticking it’s head under the corner of the tent.

#97 BrianT on 10.21.10 at 9:36 am

Lira is absolutely correct-you cannot have a viable society where the backbone of the country thinks that following the rules and the law is for suckers and chumps http://gonzalolira.blogspot.com/2010/10/this-is-what-brian-and-ilsa-said-to.html#more

#98 613 Happy where I am on 10.21.10 at 9:40 am

The thing I love about Garth’s blog is the way he manages to say the same thing in a million ways…

Your wit is outstanding… the one thing that stands out in my mind was the comment made by an American “Don’t you get CNN up there???”… I think we are at the edge of a cliff but don’t know it because we are looking back and marvelling at the “stability” of the Canadian economy…

Although Garth’s message is very sage advice, it underscores a very serious situation which we are all about to encounter whether we want to or not. No, we are not different… just slower!

#99 BrianT on 10.21.10 at 9:46 am

Bernie Madoff would be proud: the US (and Cailfornia) taxpayer gives money to JPM at 0% and JPM turns around and lends it back to the California government at 3% http://www.bloomberg.com/news/2010-10-19/california-seeking-about-6-billion-bridge-loan-this-month-lockyer-says.html

#100 Moneta on 10.21.10 at 9:48 am

You try and explain this to a 9 year old without her going to her friends and telling them her parents are probably carrying too much debt.
——
Oops. Writing before my coffee.

You try and explain this to a 9 year old without her going to her friends and telling them their parents are probably carrying too much debt.

#101 CTO on 10.21.10 at 9:54 am

#76 Moneta

“If you ask me, our leaders are flying by the seat of their pants”.

You are RIGHT!
They have not a clue how to preseve wealth for our part of the world for longer than the next year, so. it’s up to the individual.
They know whats coming…they can’t stop it.
The demacratic system replies only on short term goals to master the voters. This is what they will concentrate on.

#102 fancy_pants on 10.21.10 at 9:55 am

The link to the article below makes me sick to my stomach. Many poor folks in the US are losing their homes over minute unpaid property taxes.

It was the irresponsible and greedy bankers who set the stage for the collapse, only to be indirectly bailed out by taxpayers now to turn around and prey back upon the very folks who took their yoke and will bear the financial brunt.

What a system. Doesn’t work when it is tied to the hip of this human condition we call greed. Greed rears it’s ugly head everywhere and that is what will bring us down too. Wait and see, the day will come when all this will be played out here as well.

http://huffpostfund.org/stories/2010/10/new-tax-man-big-banks-and-hedge-funds

#103 David on 10.21.10 at 9:56 am

YOU ROCK GARTH.

They laughed at Peter Schiff, and a number of others who were warning about the housing bubble in the US for almost two years before it burst.
Hardest thing in the world is to know your right, exactly why you are right, and not be able convince enough people, or help most avoid the catastrophe.
(People often forget that Cassandra was RIGHT).

Keep on keeping on Garth, because your blog is saving a lot of young people I know from making the mistake of their lifetime. You provide the star power to convince my friends of the absurdity of paying a half million dollars for a 40 year old run down shack.

And as for the pictures…they might well be the best part of your blog. Your blog has intellect, humour, and visual stimulation.

Its the whole damn package!

As for the realtors barbs, well, you’ve been called worse things by better people.

Take care,

David

#104 Apsalar on 10.21.10 at 10:03 am

@BrianT

“Re QE2, the whole premise promoted by the MSM that Bernanke can magically create “wealth” through moving taxpayer funds around is absurd.”

That almost sounds like fraud to me…..

#105 Brass Balls on 10.21.10 at 10:10 am

#19 Squidly ” the more they attack the harsher I become.”

Then explain why you’re so silent on this blog:

http://albertarealestatewatch.blogspot.com/2010/10/edmonton-market-update.html

#106 Jeff Smith on 10.21.10 at 10:12 am

Some guy got fed up with a condo he bought.

http://www.yourhome.ca/homes/realestate/article/878857–lifelong-renter-at-a-certain-age-ownership-can-become-a-burden

#107 oortog on 10.21.10 at 10:16 am

Not going to argue about market fundamentals. Garth’s numbers grok, no problems there.

There are some other bigger fish to fry. We are not an island, but we are on firmer footing.

This is a Real Estate blog, and comparisons between the US and Canada are common.

At one point, Garth was big on “Sell Canadian, Buy American”. That was before he knew about the foreclosure fraud going on. I’m not sure any of us would want to “Buy American” now. Who has the title?

The whole mortgage mess in the US is turning into a huge scam. Now to be sure, 1.5% teaser rates and long amortization terms can cause a bubble in a market. I’m not disputing that…

However, I can tell you that every single mortgage note in Canada is tied to a lender.

I would really like he hear Garth’s take on the fraud in the US. If the banks are found fraudulent, and this rabbit hole goes as deep as I believe it does (the same property note being sold multiple times to different buyers), then all bets about the entire Western economy are off. This fraud taps into every Western financial institution.

This is a mess that can collapse everything… worldwide… period.

#108 Mtl RE Observations on 10.21.10 at 10:30 am

I believe that more people are aware of the deleveraging that is about to happen than the media and realtors let on.

There were four units for sale in the condo project where we owned and sold in July. Now, there are 18 units for sale. That’s nearly five times more.

Isn’t it supposed to slow down in the fall? Well, I guess not in terms of number of listings. It’ll be interesting to see the actual sales numbers.

#109 Kevin in Winnipeg on 10.21.10 at 10:36 am

I think the banks are going through a “he who smelt it, dealt it” stage. TD shouts out about personal debt and when the %#[email protected] really hits the fan, they can wash their hands of situation because they warned us…. even though they were the cause.

Why would a bank care about personal debt when they are in the business of creating it?

#110 WINNIPEGER on 10.21.10 at 10:46 am

Bank of Canada governor Mark Carney told reporters Wednesday he “wouldn’t obsess about the third quarter,” saying Canada’s employment has returned to pre-recession levels.

But the central bank governor said there are still risks to the economy.

“There are three downside risks relating to Canada’s international competitiveness, global growth prospects and the possibility of a more-pronounced correction in the Canadian housing market,” Carney said at a news conference Wednesday.

#111 Patz on 10.21.10 at 10:48 am

#28 camcool,
“I’ve been reading this block (sic) since nearly the beginning, yet I don’t post much. … If your post if (sic) full of spelling errors and grammar issues, your credibility takes a hit. Think about it!!!”

Everybody’s a critic, eh?

#112 Chaos on 10.21.10 at 10:49 am

G Man

You can be our Man of La Mancha…

Sing it LOUD, Sing it Proud, Sing it in your Hummer with the windows down, playing at level 14 so that the whole world can hear!

And so let us begin…

To dream the impossible dream
To fight the unbeatable foe
To bear with unbearable sorrow
To run where the brave dare not go

To right the unrightable wrong
To love pure and chaste from afar
To try when your arms are too weary
To reach the unreachable star

This is my quest
To follow that star
No matter how hopeless
No matter how far

To fight for the right
without question or pause
To be willing to march into hell
For a heavenly cause

And I know if I’ll only be true
To this glorious quest
That my heart will will lie peaceful and calm
When I’m laid to my rest

And the world will be better for this
That one man, scorned and covered with scars
Still strove with his last ounce of courage
To reach the unreachable star

Show tunes, you gotta luv’em.

#113 Junius on 10.21.10 at 10:50 am

#49 Thebestplaceonearth,

You are clearly delusional. The OV is quite simply dead. Long term the neighbourhood will fill in because the location is just too good. I certainly hope so for the sake of all of us Vancouver tax payers.

However you buried the lead in the story. The OV demonstrates the end of the Vancouver housing boom. Too many buyers were pulled forward over the past few years to fill the supply it is done.

Comparing a housing development to the Iphone or a blackberry is simply absurd. These are game changing and innovative technologies. The OV is a real estate development.

Get a grip on reality.

#114 Devil's Advocate on 10.21.10 at 10:54 am

Some should heed the actions of people I personally know of who in 1981 thought then that the situation was so bleak and beyond all hope that they took their lives. Yes they ended it – caput, finished, done, over, no more, gone for good, gave it all up.

Don’t tell me this time is different. This is life… it has its ups and it has its downs. This down is nothing compared to what many have gone through or are going through. It to shall pass and when it does you will see how out of context you took it. Let’s just hope for your sake you don’t let yourselves get so caught up in the moment as those I once knew in 1981 but only remember now.

You grow stronger by overcoming challenges. You learn by failing. If you are not failing you are not trying and if you are not trying you will never succeed. Never quit.

#115 Got A Watch on 10.21.10 at 10:56 am

Garth, telling the truth is a thankless task. As you have discovered. Nobody likes a guy who punctures their most cherished illusions.

I picture it as little DEBT flags above each house for the debt-burden the inhabitants carry. Condo towers don’t have room to fit all the flags. They say ‘$500K’, ‘$350k’ etc etc. Street after street, city after city. Everyone wanted to proudly fly the biggest flag.

Bravely waving in the wind, a sign of CONfidence in the economy. But some flags are down, here and there, staggering and falling, to finally lie flat on the ground. The other flags proudly refuse to look down at their fallen brethren. But when enough have fallen, recognition will come. Too late.

#116 dark sad person on 10.21.10 at 11:07 am

#79 Moneta on 10.21.10 at 7:29 am

You try and explain this to a 9 year old without her going to her friends and telling them her parents are probably carrying too much debt.

At 9, she knows the basics of a mortgage. Debt was the last thing on my mind when I was her age!!!

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

It’s a good thing that kids understand debt-
They will come to understand it much more as we progress backwards-
In fact debt will be shunned completely by your daughters age group and her kids will grow up understanding and despising debt-almost as well-but not quite as much and then the next generation that follows will somehow see-like the present day boomers do/did-that borrowing is a faster way to prosperity then to simply save-because prices outpace savings-
These 3rd generational trends-where wealth stops being passed on and is lost-like what’s happening now-is a part of the Kondratieff cycle-that we never seem to break and it’s all about “interest rates” and”attitude” in mass–

http://photos1.blogger.com/hello/101/3984/1024/K-Cycle-Interest-Rates-1880-2000.0.jpg

paste–can’t lift the link-

富不过三代 (fu bu guo san dai) =
Wealth does not pass three generations

Year zero: First generation: Wealth creation

Year 45: Second generation: Wealth preservation

The parents ensured that their three children didn’t have to experience hard times. The children attended decent enough schools and were fortunate enough to mix with similarly privileged friends. There is general unease in the family however, as the second generation gain independence.

The pressures of wanting to keep up with the lifestyles of their wealthier friends, coupled with an unfortunate down-turn in the economy, results in a halt in savings and as a result the R10.5m family wealth no longer enjoys any debit order increases. In addition, the capital base is required to maintain an income for the folks who have now retired.

Year 75: Third generation: Wealth destruction

(here we are today)

#117 PTDBD on 10.21.10 at 11:07 am

Very good posts today from TaxHaven #4, #56 RealPaul #57 DonBool #59 Coho. thanks for those, appreciated them all.

Oh, one last thing while I’m sucking up…Thanks to The Garth for keeping Blog format going.
:-) going forward :-)

#118 David B on 10.21.10 at 11:20 am

By JEFFREY SPARSHOTT
WASHINGTON—Fannie Mae and Freddie Mac’s regulator said Thursday that the companies could end up costing the government $363 billion as they absorb losses from bad mortgages

Yup stand by for a boom in Canadian Real Estate as those good 0/40 & 0/35 yr Flaherty mortgages will be covered by the Canadian Shield!

#119 Front line, UK on 10.21.10 at 11:25 am

#105 Brass Balls “Then explain why you’re so silent on this blog ” .. “#19 Squidly ” the more they attack the harsher I become.”

Brass Balls, sorry to bud in here, but no one reads that blog, it’s full of mis information and hate for each other. Realtors like BearClaw vs non-Realtors. Waste of time that blog.

#120 Coho on 10.21.10 at 11:28 am

#107 oortog,

It appears the rabbit hole goes deeper than even the most informed people have suspected or cared to consider. Maybe even Garth is raising his eyebrows lately?

Our “reality” changes every day doesn’t it? What is mocked as extremist views and paranoid delusions today are becoming self evident truths tomorrow.

Assumming the worst and multiplying it by ten should get us close the “reality” of our (the common peoples’) predicament.

We’re getting dragged through the mud, just like that pretty gal in the photo. How did she manage to keep her hair clean?

#121 Lorne on 10.21.10 at 11:36 am

#45 Patz…not that this is in any way significant on a Real Estate blog…but since you seem quite agitated by Steve Nash’s height….well, let’s say he is “listed” at 6’3″…but I am 6’3″ and have stood beside Steve and I am taller!

Now, how do you feel about buying a house today?

#122 Apsalar on 10.21.10 at 11:37 am

@ #88 Ottawa S. on 10.21.10 at 9:02 am

“Suckers are. If you were looking at Mattamy’s Half Moon Bay and Strandherd sites, they are true Kuality with a “K”. ”

Jeez….how do these developers get away with providing housing that is so substandard? I mean, aren’t there building codes to follow????

Thanks for that Ottawa S. I don’t think you could persuade me to buy a brand new house from any of the big developers anyway, given some of the stories I’ve heard. I live in a modest 40-year-old semi that is not sucking me dry financially and I manage to live quite nicely within my means. I bought my house to have a place to live, not as an investment, and I’ve really learned a lot from reading this blog.

#123 tim on 10.21.10 at 11:48 am

Garth,

Do you have recommendations for fee based advisors for people without much bucks, just starting to invest?

#124 BrianT on 10.21.10 at 11:50 am

#114Devil-You are too negative-without all this fraud gold and silver wouldn’t be performing nearly as well.

#125 The Original Dave on 10.21.10 at 11:51 am

I have a rant!

Was at a wedding over the weekend. A colleague who I don’t see very often was sitting at the same table. He asked me “so, did you buy a house?” my response was “nah, we’re renting”. He freaked, saying “what the hell, just go and buy a house man. You’re throwing your money away”.

This got the attention of everyone (10 people) at the table. Some know how I feel. One or two know of triple digit returns in my portfolio.

It takes a lot to bite your lip and not say anything. I felt like laying a complete smack down on this guy as we’re on different galaxies when it comes to investing and money. Somehow, I kept quiet.

For those unfamiliar with bubble behaviour (as I like to call it), this is it. Normal people who don’t know much about money and investing become condescending and all – knowing. In fact, you know what they’re going to say before they say it.

This type of talk and attitude tells you how big the bubble is. Look out below.

#126 Another Opinion on 10.21.10 at 11:57 am

I applaude you Garth for writing the way you do. I might not always agree with the words and may shake my head at some of them, but freedom of speech is one of our most cherished rights.
If someone is offended by something you write they should exercise their free choice and not read the blog.
Lot’s of other opinions out there for them to read!

#127 JM in London on 10.21.10 at 11:58 am

#76 Moneta on 10.21.10 at 7:17 am

I agree that our fearless leaders are flying by the seat of their pants – and also the reason there are no conspiracies coherent enough to be anything close to effective.

I’ve found some very interesting hope here today in your next post and in

#48 Kathy on 10.21.10 at 12:21 am

The little sponges just might pick up a thing or two!

#82 OttawaMike on 10.21.10 at 8:09 am

and the H2 is a gussied and jacked GM SUV chassis…

#128 junius on 10.21.10 at 12:05 pm

#114 Devil’s Advocate,

You said, “You grow stronger by overcoming challenges. You learn by failing. If you are not failing you are not trying and if you are not trying you will never succeed. Never quit.”

This is a good, positive message. I agree.

I look forward to the time when the denial stage of our current economic situation has passed. When the reality sinks in and we begin to turn to long term solutions. We have not even begun to recognize the causes of the coming storm and how our societies short term approach to life and our economy brought about so much financial hardship. My personal angst comes when I see people simply not prepared to deal with reality or, worse, trying to dupe the greaterfools for personal gain.

I know I often appear gloomy and pessimistic in my blogs I actually spend my day working to bridge the old economy with the new economy. I see enormous potential for change coming over the next few decades. I see a bright future once we have thrown off the mental shackles that hold us in the past.

#129 thecomingdepression on 10.21.10 at 12:21 pm

I’m in trouble on this blog if I use too many pictures of women, fat people or cleavage. (Puppies, kittens and bears are okay.) Can’t say ‘Muslim.’ Sure as hell can’t comment on runny-nosed little screamers. If I mention gold, I spend the next fourteen hours pawing through Armageddon links. And it matters not what I decide to discuss – bonds, preferreds, equities or the orange guy’s shorts – a bunch of investment terrorists who know everything move onto the blog and establish a beachhead. Of course, I am routinely accused of being sexist, anti-Boomer, Albertaphobic and a rabbly, inconsequential, failed political outcast.
I don’t think you would have to wade through anything if you just got rid of your “feelings” and portray the facts! The facts are: More debt incurred by governments the more Gold rises. When debt is reduced or paid off Gold goes Down. I don’t get that you can’t get it. Its as simple as a “fact”. Muslims: As the Chancellor of Germany states” MultiCulturism Has Utterly Failed: We Cannot Live Together” You are stating facts about the housing collapse in Canada. Its a fact, things can’t go up forever, they always come down. Stick to the facts. I have feelings about “things” too but can’t write about for fear I might hurt someones feelings. Stupid, but people can’t deal with “things”.

#130 tran, Calgary on 10.21.10 at 12:29 pm

http://toronto.ctv.ca/servlet/an/local/CTVNews/20101020/bank-canada-economy-101020/20101020/?hub=TorontoNewHome

“There are three downside risks relating to Canada’s international competitiveness, global growth prospects and the possibility of a more-pronounced correction in the Canadian housing market,” Carney said at a news conference Wednesday.

#131 dark sad person on 10.21.10 at 12:43 pm

This is simply unbelievable.

This is not an allegation by a layperson. It is an allegation by a sitting judge. It is a rank statement of corruption at the highest regulatory levels in our government’s alleged protection system for investors.

That’s twenty years of not acting as a judge but rather an announced and fulfilled intent to protect the corporate interests irrespective of the merits of the case. It is rank fraud and the Judge accused remains on the bench.

FOR TWENTY YEARS IT IS ALLEGED THIS INDIVIDUAL HAS INTENTIONALLY ****ED DEFRAUDED INVESTORS BY DENYING THEM THEIR DAY IN COURT.

What lawful recourse do we have left in this country when this level of rank corruption goes on for years, remains un-addressed, and continues to this very day with ZERO intervention by anyone in Congress or the Executive branch?

What choices, other than placing a stick in one’s teeth and consenting to judicial **** or open sedition do the people have left when there is no recourse to the law?

I thought I’d seen it all.

I was wrong.

http://ragingdebate.com/economy/sorry-we-no-longer-live-in-a-republic-must-read#comments

#132 Patz on 10.21.10 at 1:01 pm

Unbewivabull! I listened to Bill Good on CKNW* talking with Prof. Tsur Sommerville from UBC Business/RE division today discussing whether it was better to rent or own. Not once did they put it in context of the PRESENT market! People phoned in and gave their anecdotal experience to prove their point one way or the other but no one warned that it was risky to buy at the top of a teetering market.

*Why do I bother to listen? Fair question (even if I asked it). Because it’s my small connection to the MSM which I generally pay no attention to.

#133 jess on 10.21.10 at 1:13 pm

109 Kevin in Winnipeg
….. all those ” innovations” by the innovators

This paragraph had me confused in that TD Report:

…”There are risks to this outlook. Historically, the
number of bankruptcies have been tightly tied to labour
market conditions, but as of late they have been
much higher than would be suggested by the rise in the
unemployment rate. The number of bankruptcies per
capita during this recession was 50% higher than the
1990s recession – despite the stronger performance
of the domestic economy and labour markets this time
around. And, despite a stunning recovery in Canadian
employment, the level of bankruptcies and insolvencies
have remained elevated – likely a consequence of the
level of debt. The implication is that one needs to be
more cautious when looking at the unemployment rate
as the traditional driver of delinquencies, as greater
emphasis is likely required on the level of indebtedness.”

#134 DMB on 10.21.10 at 1:20 pm

Don’t read the comments Garth, don’t respond to the comments. Personally, I like your blog a lot and I like your not-politically-correct pics and comments, they are my funnee for the day. As a feminist, a mom and a grandmom, I simply don’t take it personally. Easy enough.
I thought my Humanities Prof was a sexist, jerk, but he was still my favourite Prof, I think it had something to do with he knew more than me and presented it with sexist flair to get my attention.

#135 jess on 10.21.10 at 1:20 pm

Highlights

http://strategis.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br02508.html

Insolvency Statistics in Canada — August 2010
The total number of insolvencies (bankruptcies and proposals) in Canada increased by 1.9 percent in August 2010 from the previous month. Bankruptcies decreased by 0.4 percent, whereas proposals increased by 7.2 percent. Over the past 10 years, there were only three years when the total number of insolvencies filed in the month of August was higher than the total number filed in July.

The total number of insolvencies in August 2010 was 12.4 percent lower than the total number of insolvencies in August 2009. Consumer insolvencies have decreased by 12.1 percent, while business insolvencies have decreased by 20.6 percent.

For the 12-month period ending August 31, 2010, total insolvencies decreased by 2.5 percent compared with the 12-month period ending August 31, 2009. This is mainly due to a decrease in business insolvencies.

Business insolvencies for the 12-month period ending August 31, 2010, fell by 18.5 percent compared with the 12-month period ending August 31, 2009. A reduction in the number of insolvencies in the professional, scientific and technical services; administrative and support, waste management and remediation services; and real estate and rental and leasing sectors contributed to this decrease.

From 1989 to 2009, the proportion of insolvent consumers between 18 and 34 years of age has fallen steadily (from 12.9 percent to 4.4 percent among those 18 to 24 years of age and 43.0 percent to 22.3 percent among those 25 to 34 years of age).

Over the same period, the proportion of insolvent consumers among older age groups has increased (from 11.3 percent to 24.7 percent among those 45 to 54 years of age and among those 55 years of age and above the proportion has more than quadrupled from 4.6 percent to 20.6 percent).

#136 Live within your means on 10.21.10 at 2:00 pm

.#74 Moneta on 10.21.10 at 7:00 am
One thing I have learned in the last decade is that you can lead a horse to water but you can’t make it drink.

……………..

So very true Moneta. I have 2 sisters. One sold their home and bought a condo/townhouse ’cause housing will only go up. She’ll soon be 61 in Jan. and her hubby is a few yrs. older. They haven’t worked for the last few yrs. Lived off inheritance & prolly My her pension which took a nose dive. She’s not allowed to discuss their financial situation. They plan on selling in 3 yrs. Tried many times to convince her to rent instead of buying.

My older sis (67) has always been a shopaholic and ran up her cards to the max. At one time, her bank wouldn’t even give her a bill payer loan. When she retired (co downsized) she paid off all cards. She & hubby live in a condo/townhouse which is paid off, but each has a separate bank account and is responsible for certain bills. Yesterday she finally told me she cannot manage from one month to another so charges the remainder. Doesn’t surprise me as she’s still buying clothes, household items, some of which she hasn’t returned in time so offers them to me or friends. She makes all kinds of excuses. Unfortunately, one of her friends loves to shop also, but has a good pension.

#137 Ritenote on 10.21.10 at 2:02 pm

Hey Garth,
More contrarian, less knuckle-draggin’ please?!
Your evolved self is so much more interesting…

#138 Waiting and watching in Kelowna on 10.21.10 at 2:04 pm

DA: I almost believe your motivation in posting here may
be well-intended…. But come on! According to the omreb’s stats sales in sept 2010 are down almost 50% yoy. Yet you honestly think that we are near the bottom? Seems unlikely to me. Real estate is so over priced here as far as average household income (45000, I believe, according to the city of Kelowna), and we have the second highest unemployment rate in Bc(10.5%, according to ei). I like reading a realtors perspective on all this, but not if it seems like you are purposely misleading people. Or maybe you are just as delusional as the rest up here??

#139 Live within your means on 10.21.10 at 2:09 pm

.#112 Chaos on 10.21.10 at 10:49 am

And,

If

If you can keep your head when all about you
Are losing theirs and blaming it on you;
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or, being lied about, don’t deal in lies,
Or, being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise;

If you can dream – and not make dreams your master;
If you can think – and not make thoughts your aim;
If you can meet with triumph and disaster
And treat those two imposters just the same;
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to broken,
And stoop and build ’em up with wornout tools;

If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breath a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: “Hold on”;

If you can talk with crowds and keep your virtue,
Or walk with kings – nor lose the common touch;
If neither foes nor loving friends can hurt you;
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run –
Yours is the Earth and everything that’s in it,
And – which is more – you’ll be a Man my son!

#140 Waiting and watching in Kelowna on 10.21.10 at 2:24 pm

Re: my previous post: I was referring to NET income.

#141 jimsum on 10.21.10 at 2:26 pm

The Americans are not spending less and saving more. Americans have not reduced their debt by paying it off, they have reduced by defaulting on the debts. Here’s an article showing that all the American “savings” of the last few years have really been defaults:

http://blogs.wsj.com/economics/2010/09/18/number-of-the-week-defaults-account-for-most-of-pared-down-debt/

#142 Investorfriends mom on 10.21.10 at 2:26 pm

Shawny, are you working on getting mommies money back? you know, the one you lost in your gambling addiction. Please Shawny, mommy is hungry and cold.

#143 Brian1 on 10.21.10 at 2:35 pm

Devil’s Advocate; How can you win if you don’t lose.

#144 joseph on 10.21.10 at 3:26 pm

I really wanted to go to the talk tonight Garth but alas I have to work and my clients needs take priority…

Have you ever thought of recording these talks through Canada and posting them on youtube?

#145 The Original Dave on 10.21.10 at 3:32 pm

just looked on MLS and in Brampton, there’s homes that are less than $300,000. I’ve heard that older parts of Brampton are nice with mature neighbourhoods (trees, greenery) and there’s a lot of older, retired people.

I don’t know much about Brampton. I’m sure prices will be taken down there too, but it seems like they already have started coming down. There’s one house listed for $214,000.

Heck, if I had to buy in Toronto, I’d rather drive 20 minutes and pay 50% less in Brampton

#146 The Original Dave on 10.21.10 at 3:36 pm

#127 thecomingdepression on 10.21.10 at 12:21 pm

I’m in trouble on this blog if I use too many pictures of women, fat people or cleavage. (Puppies, kittens and bears are okay.) Can’t say ‘Muslim.’ Sure as hell can’t comment on runny-nosed little screamers. If I mention gold, I spend the next fourteen hours pawing through Armageddon links. And it matters not what I decide to discuss – bonds, preferreds, equities or the orange guy’s shorts – a bunch of investment terrorists who know everything move onto the blog and establish a beachhead. Of course, I am routinely accused of being sexist, anti-Boomer, Albertaphobic and a rabbly, inconsequential, failed political outcast.
I don’t think you would have to wade through anything if you just got rid of your “feelings” and portray the facts! The facts are: More debt incurred by governments the more Gold rises. When debt is reduced or paid off Gold goes Down. I don’t get that you can’t get it. Its as simple as a “fact”. Muslims: As the Chancellor of Germany states” MultiCulturism Has Utterly Failed: We Cannot Live Together” You are stating facts about the housing collapse in Canada. Its a fact, things can’t go up forever, they always come down. Stick to the facts. I have feelings about “things” too but can’t write about for fear I might hurt someones feelings. Stupid, but people can’t deal with “things”.

————————————————

G Man, can I do this for you?

Here I go…..

Say, how’s that depression working out for you?

#147 DM in C on 10.21.10 at 3:40 pm

#129 dsp

“What lawful recourse do we have left in this country when this level of rank corruption goes on for years, remains un-addressed, and continues to this very day with ZERO intervention by anyone in Congress or the Executive branch?”

Uh, bud? This is a Canadian blog. Not that we don’t empathize with your issues….but really not relevant.

#148 James in Vancouver on 10.21.10 at 3:46 pm

Mr. Turner (I think you deserve that respect Garth)..

I have been reading your blog for a few years now. Thank you for the efforts you put into what you do. I appreciate very much that you share what you know and what you think. I admire your fortitude for withstanding the nasty comments that may come your way and persevering nevertheless. You may not be a politician anymore but you continue to be a public servant.

I will admit to being one of those “MLS breath” visitors to your blog. You are indeed funny, witty and insightful Sir.

I keep a close eye on the real estate market because I am a very ordinary, average, blue collar Canadian who wants a home to live in and enjoy. I am not looking for an “Investor Alert!” crack shack in a drive-by shoot’em up neighbourhood with the obvious and distinct looks and odours of the enormous “illegal” drug industry. I wonder how so many multiple billions of real dollars are made and moved through the real economy without anyone in a position of power noticing?? Actually the answer is quite obvious isn’t it? One thing that is undeniable is that unless all this activity takes place on the Moon, some form of real estate right here in Canada is required to “house” this enormous, untaxed, unregulated industry.

I began saving for a home at 17 which I always hoped would be a house with some land, to work and play with. Until the obvious bubble we are in the housing market was just that; a market. Now it is clearly a casino or worse. A fact about casinos is that there are some winners but many more losers. The historical housing chart simply doesn’t lie so please show it as often as you can Garth.

I have owned one house and one condo in my lifetime. I exited the real estate market just before the Great Recession and sold above asking and I have been renting ever since at a very affordable rate. I sold because I was informed by people like you, although I don’t remember if I knew of your blog then or not. What is important is that I know of your blog now and it is helping me from making a big financial mistake. You help me bolster my patience when it is faltering. After all our homes, in whatever form they come in should be places to live not places to gamble on.

I do my best to stay informed and I read a wide variety of information; from smart blogs like yours to the works of the Roubini’s, Krugman’s, Schiff’s and Case’s of the world as well as the most reputable financial financial publications worldwide.

I hope you continue to do you what you do because I believe your advice will save those that listen to you and weigh the evidence you present from financial loss. Be it great or small a loss is a loss.

One thing is for sure. The “too big to fail” policies we have witnessed have and will continue to be for the benefit of the corporate world and the very wealthy. Clearly there is no such policy for the 70% of the Canadian population you speak of who are financially responsible for their home. Each is on his or her own.

Thank you Mr. Turner for doing your part to return the Canadian housing casino to what it should be; a housing market.

#149 Devil's Advocate on 10.21.10 at 3:53 pm

”DA: I almost believe your motivation in posting here may
be well-intended…. But come on! According to the omreb’s stats sales in sept 2010 are down almost 50% yoy. Yet you honestly think that we are near the bottom? Seems unlikely to me. Real estate is so over priced here as far as average household income (45000, I believe, according to the city of Kelowna), and we have the second highest unemployment rate in Bc(10.5%, according to ei). I like reading a realtors perspective on all this, but not if it seems like you are purposely misleading people. Or maybe you are just as delusional as the rest up here??”
#136 Waiting and watching in Kelowna

Yes I seriously do believe what I wrote at post #89.

#150 Devil's Advocate on 10.21.10 at 4:02 pm

#141 Brian1

If you are not occasionally losing you are not trying hard enough. You need to push yourself, – within reason of course. Each time you lose you learn something so that next time you do better and may likely succeed or get closer to succeeding. In order to win you need to loose a few. Too many quit when they are at the very doorstep of victory where they can put that which they learned to its best use. When mining for gold you gotta move a hell of a lotta dirt to get to those gold nuggets.

The world is full of very wealthy people just like you and me. It is not so much “luck” that got most of them there. More often than not it was perseverance that got them there and constant learning.

Think of the movie Groundhog Day.

#151 Devil's Advocate on 10.21.10 at 4:03 pm

#141 Brian1
An education is a bargain at any price… why would you ever want to waste that which you paid so dearly for?

#152 Vancouver_Bear on 10.21.10 at 4:05 pm

Consumer confidence lowest since downturn: poll

http://www.cbc.ca/canada/ottawa/story/2010/10/21/nanos-canadian-consumer-confidence.html

#153 Ret on 10.21.10 at 4:11 pm

Crack cocaine. Oh that’s the building industry around Hamilton, Oakville, Burlington and Milton. There are no jobs for the buckaroos, so get them building more houses. How else can they make the payments on those silver-balled black pickup trucks?

The Floridiots went the same way to keep people employed. At least when it all blew apart in Florida, they still had some sandy beaches.

#154 kitchener1 on 10.21.10 at 4:33 pm

Seriously, to the naysayers out there. Start listening to F and Carney and economists report.

The only stat that matters is the personal debt stat.

peak credit!

How is the economy to grow when the public at large is 150% in debt/income. Now, take the general population and factor in that at approx 35-40% have NO DEBT, ZERO, NADA, ZILCH.
Extropalate that into that 150% # and its really more like 175%

Now factor in that something like 7 out of 10 folks already own homes, home ownership is at the highest level ever in Canada.

Now look at the demographic charts, and factor in boomers leaving the workforce, downsizing etc.. they will looking at selling their assets at roughly the same time. This assets (homes, stocks, bonds etc..) all require a certain number of buyer for prices to remain constant, less buyers equals a decline in price.

Now for stocks/bonds, its a worldwide maeket but for RE its not

#155 Jason on 10.21.10 at 4:40 pm

Correction Garth, Italy experienced a housing boom but did not experience a mortgage/credit crisis because of their strict lending standards, look at the numbers, unlike in the US, Ireland and England. Its very hard to get a mortgage in Italy – have you tried (I have) ? The British banks were even accusing the Italians of protecting their banks from take overs (the British wanted to raid the Italian banks because the Italian banks were flush with capital, ie., they did not buy into MBS). Unfortunately for the Brits, the Italians sent them on their way. If Canadians aren’t careful we may end up like the US, UK, Spain and Ireland.

#156 David on 10.21.10 at 4:56 pm

The deleveraging is part of the current deflationary cycle. Consumer debt levels for housing and day to day living far outgrew the real economy up until 2008. The economy is now shedding jobs far faster than it is creating them and the few new jobs that are being created tend to be of the part time minimum wage service sector variety. This is not a happy scene.
Actually to the chagrin of some, well educated boomers who lose their jobs are left stranded on the shoals of paying off a mortgage, are the first to have their resumes go through the shredders, too young to retire and economically lost.
Incomes are going to have to rise substantially or housing prices are going to have fall significantly to keep this Ponzi show going.

#157 David on 10.21.10 at 5:00 pm

Here is an excellent article on the reality for the boomer generation.

http://www.thenation.com/article/155184/face-american-lost-generation

#158 jess on 10.21.10 at 5:27 pm

first lien… second lien who gets what

http://blogs.alternet.org/speakeasy/2010/10/21/the-elephant-in-the-foreclosure-fraud-room-second-liens/?utm_source=feedblitz&utm_medium=FeedBlitzRss&utm_campaign=alternet

#159 Old_is_Gold on 10.21.10 at 5:27 pm

#154 kitchener1 on 10.21.10 at 4:33 pm

_______________________________________________
Good post! Makes total sense!

#160 Kip on 10.21.10 at 5:42 pm

AWW! Don’t you just hate it when doomsday doesn’t arrive on your schedule? I know I sure do!

Keep preaching Garth! Maybe someday you’ll be right. Someday.

Kip

#161 Two-thirds on 10.21.10 at 5:55 pm

Garth,

If I had a hat to wear, I’d take it off for you today.

Great post, responses and stance.

This is the only blog that I read consistently and will continue to do so – even if I do not agree with you from time to time.

When I get kicked out of my job for reading blogs, I’d like to become a professional blogger, so that I too, can experience your glamorous life (lingerie barrages and all).

You’re among the best that Canada as a nation has to offer to its children, so thank you for doing what you do and keep up the good fight.

Oh, and I’m offended by the colour scheme of your blog – it’s too… uninteresting. ;)

#162 Mike Turner on 10.21.10 at 6:07 pm

It’s different in Florence it’s 2 Euro for a bottle of wine…

#163 Nostradamus Le Mad Vlad on 10.21.10 at 6:13 pm


On this gorgeously warm, sunny day in Kelowna, with nary a thought to bother the ever-increasing creative white space between my two external antennas on the head, a fleeting thought crossed my mind, like two gigantic oil tankers going their separate ways at night.

From deducing #17 TaxHaven’s comments — “. . . a sneaking suspicion that, somehow, the G-20′s governments, . . .”, along with the lead pic of the Hummer and the TD report about Cdns. being more indebted, this song sprang to mind.

This was followed almost simultaneously by [So the] G20 can’t (or won’t) stop the currency wars and peace talks (HAH!) between the two Koreas are going nowhere fast.

#143 Brian1 — “How can you win if you don’t lose.” — Reminds me of DMX’s lyrics to Phil Collins’ “In The Air Tonight”:

“. . . Its just what you got comin’ sometimes you don’t know / What you askin’ for, did you ask for more? / Is it comin’ in the air? Yeah its getting’ closer / Let ’em know that amidst all this confusion / some of us may do the winnin’ / But we all do the losin’ its just who does the choosin’. . .”

Who does the choosin’? Y’all have yer own POV’s, but always remember that no matter how bad things may seem to be, all universes are unfolding as they should and there is nothing that anyone can do about it.

That was exciting, but too much for me to handle. BTW, is the lady in the pic a salesperson for Hummer? Someone has taken selling to a new level!

#164 Love this Blog on 10.21.10 at 6:19 pm

I need some comments. I have a 10G RRSP, that fell to 8200 RIGHT after I bought it (crash) It is now almost back to 10G……I would like to cash it in to pay down my debt. Can anyone say why I shouldn’t? Yes, the tax penalty…..but I got the benfit when I bought it, so should break even, no?

#165 Mike Turner on 10.21.10 at 6:24 pm

It’s a blessing and a curse great the night before not so much the next day. Much like real estate in Canada it seems…

#166 john m on 10.21.10 at 6:29 pm

Its only a matter of time till reality hits and our standard of living heads for the toilet..and its already starting.I find it quite amazing that a few damn fool con men with very little common sense have managed to destroy the futures of so many.

#167 45north on 10.21.10 at 6:45 pm

Here’s an easy-to-understand chart from Baltimore Maryland which is to say that Baltimore has 12 months inventory which means that it’s very very hard to sell.

http://weblogs.baltimoresun.com/business/realestate/blog/2010/10/changing_balance_of_power_between_home_buyers_and_sellers.html?source=patrick.net#banner

my impression is that most of the country has 6 months inventory

anybody think differently?

#168 45north on 10.21.10 at 6:46 pm

most of the country = most of Canada

#169 camcool on 10.21.10 at 7:10 pm

Re #28 and those of you who responded to it…

I appreciate everyone who replied to my original posting.

Who would have thought that I would make a spelling mistake within my post about cleaning up spelling mistakes and using proper grammar.

Can someone tell me if that mistake was verbal, situational, or dramatic?

#170 Ryan on 10.21.10 at 7:14 pm

Great pre-presentation appetizers! Go Garth go!

#171 Nostradamus Le Mad Vlad on 10.21.10 at 7:14 pm


0:41 clip “This is the fraud behind the foreclosure fraud.” wrh.com.

More legal BS — Media spins one thing, judge says another.

Rare Earth Minerals China has stopped REM from going to the US.

BP I thought BP had gone the way of the dodo bird, but not so. They are still good liars.

Fraud Inc., etc. “And yet the mainstream media still by and large hasn’t connected the dots.” Guess who controls the m$m?

1:22 clip If this apartment building didn’t collapse when a large plane crashed into it, why did the WTC towers collapse?

Was it because asbestos was the main insulating material, and lawsuits were going to be making the rounds, along with the twin towers making yearly losses?

Obviously. He has done his job exceedingly well. Palin vs. Clinton in 2012?

10:04 clip Inside Job. How banxters steal money.

Yesterday was 20-10 in 2010, but today it’s a 6.7 shake and quake of California.

80% “In mid-2006, I discovered that over 60 percent of these mortgages purchased and sold were defective,” Bowen testified on April 7 before the Financial Crisis Inquiry Commission created by Congress. “Defective mortgages increased during 2007 to over 80 percent of production.”

The Art and Cost of War “When you control the debt of war, the players are mere pawns.” 1:43 clip.

As property taxes rise, look for this kind of scam to eventually happen here.

Arctic Winter Nature is the best way to hazard a guess!

#172 OttawaMike on 10.21.10 at 7:23 pm

#122 Apsalar
#88 Ottawa S.

When I arrived in Ottawa 20 yrs. ago from Toronto i immediately noticed the poor condition of the capital’s housing stock. This applies to old and newly built.
This city is full of poorly built and maintained homes.

My anecdotal evidence says it’s worse than the dwellings around the GTA. I have read housing analyst reports stating that the housing stock here is some of the best but those are the same guys reporting no bubbles now.

#173 OttawaMike on 10.21.10 at 7:27 pm

JM in London

The H2 is built on a Yukon Denali chassis stretched wider. It is one of the few half decent platforms GMC builds.

But yeah, still a crapmobile.

#174 S.B. on 10.21.10 at 7:39 pm

I saw a Poorsche err I mean Porsche in Toronto today bearing license plate: MLM PAYZ

At first glance I thought it said MLS

Got me thinking, MLS is like an MLM because the greater fools shuffle goods of dubious value among themself for inflated prices, meanwhile the top “upline” – the MLS agent – always reaps a cut of the action.

The Don, the Godfather, the Agent always takes a cut of the action. I’d say 80% of agents are throwaways.

The proof? Just read some of the MLS or home flyer listing. Most are error-ridden garbage if they even bother to write something or include a picture. They’re not even trying!

#175 Devil's Advocate on 10.21.10 at 7:43 pm

FYI

Single family sales this month to date in the Central Okanagan = 101

For the same period last year 2009 = 167

And for the year prior to that exorbinately robust year they were just = 67

#176 Devil's Advocate on 10.21.10 at 7:44 pm

FYI
Single family sales this month to date in the Central Okanagan = 101
For the same period last year 2009 = 167
And for the year prior to that exorbitantly robust year they were just = 67

#177 dark sad person on 10.21.10 at 7:51 pm

#147 DM in C on 10.21.10 at 3:40 pm

#129 dsp

“What lawful recourse do we have left in this country when this level of rank corruption goes on for years, remains un-addressed, and continues to this very day with ZERO intervention by anyone in Congress or the Executive branch?”

Uh, bud? This is a Canadian blog. Not that we don’t empathize with your issues….but really not relevant

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

uh bud?

If you owned property in the US or if you had Investments in the US or if you had a business in the US or if you simply owned stocks on the US markets-

Would you still say its “irrelevant” in light of those “few” instances i just gave?

There’s many more such concerns to “Canadians” that “transact” with the US and “Due Process of Law” would be “extremely” important-to those business or private Investors etc.

Get out much?

#178 Long Time Lurker, 1st time Complainer on 10.21.10 at 7:55 pm

Oh for crying out loud. Garth, I like coming to this site, I even like you. The pictures I could care less about. It’s the locker room that spills over into the comment section that makes me feel unwelcome…there’s a reason why I leave the house when the hubby has his boys over.

#179 charles on 10.21.10 at 7:58 pm

Busy, busy night behind enemy lines.

#180 Patz on 10.21.10 at 7:59 pm

#121 Lorne
“#45 Patz…not that this is in any way significant on a Real Estate blog…but since you seem quite agitated by Steve Nash’s height….well, let’s say he is “listed” at 6’3″…but I am 6’3″ and have stood beside Steve and I am taller!

Now, how do you feel about buying a house today?”

What’s funny is that you brought up Steve Nash and I was just riffing on it, i.e. I was joking. I guess I should have put a smiley face on it so you would know. :)

#181 daystar on 10.21.10 at 8:04 pm

Mark Carney warns of trouble ahead if a housing correction hits Canada. He speaks of recovery risk, specifically high consumer debt levels and a housing correction creating a downside risk to growth from the 8:05 minute mark of the video:

http://www.cbc.ca/video/player.html?category=News&zone=money&site=cbc.money.ca&clipid=1620557861

Jonathan Tonge talks about the signifigance of listings over sales ratios and their signifigance:

http://americacanada.blogspot.com/2010/09/21-tipping-point-revisited.html

It shouldn’t be too hard to connect the dots as to where all this is headed or how and why we arrived at this place.

#182 molsoncdn on 10.21.10 at 8:17 pm

the reason americans are saving and canadians are not is simple. americans aren’t as smart.
who in the hell wants 0.5% for putting money into a savings account?
hopefully one day you’ll wake up from that dream your in!

#183 traderdude on 10.21.10 at 8:21 pm

If you are a TRADER (which I am) you are now heavily short gold and long the US dollar…and short gold stocks a plenty..the daily bullish sentiment on gold just hit a record high, i.e., too many gold bulls…that is when the pros switch sides and start shorting…the investors just keep hanging on….

The gold chart just hit its up trendline, which is when us traders pound gold short. Only the gold chart and sentiment data matter, and not much else. Not QE2, not the news, not the collapse of the US$, blah blah. The problem with gold owners is they don’t get when the party is over.

If you are hanging on to Barrick Gold, etc., good luck to you…

#184 HouseBuster on 10.21.10 at 8:33 pm

#145 The Original Dave – The last place you want to live is Vancouver, the next to last place you want to live is Brampton.

#185 Jason on 10.21.10 at 9:05 pm

Just out from your show at Mount Royal, it was one of the best presentations I’ve seen in a while, humors, educating and fun. With equally gracious hosts, Mount Royal should be congratulated on a first rate show. A wonderful event and I hope you return again. Thanks.

#186 Willy H on 10.21.10 at 9:10 pm

Garth – Don’t change a damn thing on this “pathetic blog” !

#187 marcus aurelius on 10.21.10 at 9:28 pm

#89 Devil’s Pompous is Baaack….

Quoth the Pomp-Man:

“Interest rates are what make housing affordable right now for many. If you buy a home at today’s astonishingly low mortgage rates locking in for 5 or so years by renewal time you will have passed through the real point of price capitulation and see prices stabilized and very likely on the road to modest increases once again. The benefit of these low interest rates well offsets the equity bleed likely to be incurred. That equity bleed will not long after be reinstated.
Of course this is not a strategy for anyone considering a short term real estate hold. This is a longer term strategy and even then one which must be entered into with due diligence and a keen eye toward acquiring”

TRANSLATION: “I am a real estate salesman. It’s a ‘strategy’ to overpay for a house (asset) that is about to lose you significant personal wealth (if you have a sizable downpayment) or bust you out on a default (if you are from Planet Yathink, and believe you can carry against the tsunami coming at you). But the “longer term” strategy is to give me a commission today for selling you a grossly overpriced asset, so we can all watch you hold and sweat for many years, cursing your wife, beating your children and telling any Joe who will listen “why did I believe that undereducated moron from BC who talked me into this??”

Here endeth the lesson. Keep reading this guy – he’s a walking advertisement for why real estate salesmen are at the bottom of the evolutionary mud. Too funny.

#188 garthfan on 10.21.10 at 9:34 pm

“Women are meant to be loved, not to be understood.”

Nobody said it was gonna be pretty.

#189 Boomer62 on 10.21.10 at 10:31 pm

#154 kitchener1

You’ve made considerable progress this term and can move towards the front of the class. In the future, be more careful with your conclusions and proof read your work.

#190 Bill ( Peterborough) is a FRAUD on 10.21.10 at 10:35 pm

#173 OttawaMike on 10.21.10 at 7:27 pm

Yep, the whole Denali/1500 line is pretty decent until you encumber the beasties with brick “styling” and extra (both H2 and Escalades) weight. Know an RE agent who has one down here all gussied with the requisite stickers who asked if he could join “the boys” for a night of romping. Apparently (WISH I was there for it) he took it pretty much stock (horrible OEM tires) and they left it for the rescue truck the next morning in the third mud hole it sank into. The problem? Everyones winches on the mostly Jeeps he was with just couldn’t yank the monster out of the thick goo.

H1 is the only good one I think if you can fit it down the trail that is!

#191 The Original Dave on 10.21.10 at 10:55 pm

The gold chart just hit its up trendline, which is when us traders pound gold short. Only the gold chart and sentiment data matter, and not much else. Not QE2, not the news, not the collapse of the US$, blah blah. The problem with gold owners is they don’t get when the party is over.

If you are hanging on to Barrick Gold, etc., good luck to you…
————————————————-

that’s awesome to think that you’re that relevant when it comes to investing. Have you heard about the 10,000 pound gorilla called China? They’ve got $2.5 trillion in reserves (yes, that was with a T). There’s a currency war between U.S and China now and the Chinese are shorting U.S dollars for the time being. This will probably continue until the G20 meeting in November.

None the less, the trend continues until Chinese money says otherwise. At some point, going into USD will be great. I’ve been debating when myself, but as soon as you think it’s time, there’s a huge rally in every single thing possible.

#192 junius on 10.21.10 at 10:56 pm

#187 Marcus Aurileus,

Agreed. One of DA’s worst post yet.

In 5 years interest rates will be at least 6% and quite possibly higher. The renewals on the mortages that reset at this time will put many into negative equity and send many Canadians closer to bankruptcy. This is when the CMHC will have to start paying off bank mortgages.

His argument is deeply flawed. Every 1% of interest creates a 10% increase in the monthly mortgage payment. Most people can barely manage now.

5 years from now will be a different world and we will be miles and miles below today’s real estate values.

#193 The Original Dave on 10.21.10 at 10:57 pm

#145 The Original Dave – The last place you want to live is Vancouver, the next to last place you want to live is Brampton.
———————————–

why is Brampton bad? Have you lived there? I’ve heard there are some nice neighbourhoods. The older neighbourhoods.

#194 GTAInsider on 10.21.10 at 11:16 pm

Garth., most of these buyers in GTA unbuilt homes are agents and investors (which thinks they can never lose money in real estate) . As I spoke to few Asian worshippers for the past week to get insights on what they are doing (bunker down or not), they said “Who cares about a bubble because we are loaded up on these bubble talks already from these developers and wait for these newbies, new arrivals asians to cream them up on higher prices as they dont care how much is the price but their only concern is how many cars can I park in my garage and driveways”…

#195 GTAInsider on 10.21.10 at 11:19 pm

The second things is buying a home in the GTA area and if they are Asians, they are often creamed up of downpayments from MOM & DAD’s and their MOM & DAD also deeply believe GTA has no more lands and price can only go up and up forever..so here is what they teach what they call investment philosophy to their kids like they are in Hong Kong or China..”No stocks, No mutual funds, No preferreds, No ETF , Have lots of cash and suck into real estate cause you will never lose…”

#196 Devore on 10.21.10 at 11:20 pm

#183 traderdude

Oh, a technical trader… let us know how that works out for you. Do you even know what the short interest in gold is? It’s at over 5 months of world production, and has been for well over a year, I’m sure gold bulls are already trembling in their boots.

The good news it that you’ll be joining such illustrious players such as JP Morgan, which just had a multi-billion dollar margin call, and all the other major metals shorts who are busy unwinding and covering their short positions.

#197 dark sad person on 10.21.10 at 11:20 pm

#183 traderdude on 10.21.10 at 8:21 pm

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

I like the USD here-but only because it’s just “time” for a bounce and i think QE-2 may not get off the ground-which will send it flying on any announcement of austerity-

Gold is overbought here and i agree too much bullishness-
I’m always long Gold-I never move out of my core position of Majors-but i do hedge them and have been hedged for a few weeks now-

The thing is with Gold in this climate of uncertainty-anything can happen and if something unforeseen pops out of nowhere-the usual “unseen”-
Gold can blow away all TA and force a sizable squeeze and can move in tandem with the $ and they’ve traded together lots of times-as-competing currencies-in a flight to safety-

So-i think we could tag the 65 WMA + – 1000

The problem with cockiness is-the market loves to humble-

#198 Bill ( Peterborough) is a FRAUD on 10.21.10 at 11:24 pm

#173 OttawaMike on 10.21.10 at 7:27 pm

Me and my beast:

http://www.flickr.com/photos/xterragurl/5103580583/

#199 Increasing that 1% on 10.22.10 at 12:05 am

#193. The Original Dave, re: Brampton

Brampton’s sprawled out quite a lot over recent years. You gotta do your research as to what you’re looking for, for Brampton. Itizzdifferent there.
Though you may meet people outside of there, who’d lived there previously, most do seem to stay a long time.

#200 Derek on 10.22.10 at 12:45 am

Dalhousie Chapters may not have had free food and drink but Garth served up a satisfying main course of commonsense followed by a dessert of well-informed answers for the fine questions provided mainly by the female and Muslim members of the redneck audience. We all drove off in our Silverados feeling well satisfied with what we’d heard from the man they call “The Ontarian”.

#201 Devil"s Advocate on 10.22.10 at 1:15 am

#192 junius

Maybe we will have occasion to communicate on the way back up and then compare notes. Unless you truly believe the direction we are headed will never undo?

I feel I must tell you junius that I do sense a hint of despair in your writing that is of concern. You are clearly one of the more intelligent DAWGS. There is indeed much to be concerned about in what lies ahead. There will be challenges and those challenges will require men like you to rise to the occasion and set wrongs right. You will not be so well poised to meet and defeat those challenges without being of positive mind.

It is one thing to know our social failings, it is another to give in to them.

#202 Devil"s Advocate on 10.22.10 at 1:40 am

#192 junius

BTW CMHC does not pay off defaulted mortgages. CMHC pays out the shortfall between the balance owed and the proceeds of the sale. For example if the mortgage balance stands at $300,000 and the proceeds of the sale after expenses is just $280,000 the bank receives the net $280,000 proceeds of the sale after expenses and CMHC pays to the bank the remaining $20,000. Even then the bank must jump through very stringent hoops to prove that they did their very best to mitigate their loses all the way back to when they first approved the borrower. If CMHC can prove that the bank was negligent in granting the credit in the first place they can deny the claim – in the preceding simple example a claim of $20,000..

Now figure the costly premiums those borrowers paid to insure such loans and I think you would find that CMHC does not face such precarious financial liability as you think. CMHC insurance is not cheap – not at all considering the liability CMHC assumes. Trust me CMHC is doing just fine… and so too are the banks by the way.