Won’t end well

Some people don’t learn.

Sitting on a treeless street in a soulless hood in troubled town is a little castle. Actually, I think it was made in a developer’s factory a mile or two away, on an assembly line. Like every other house around it, the joists are composite – sawdust and glue – the sheathing is oriented strand board (more wood bits and glue), covered with stucco, face brick and some stones.

Hugely successful mass subdivision builder Mattamy Homes created this house, and most of modern Milton – a hour’s drive west of downtown Toronto (maybe two hours on a bad day) – and called it the Woodlilly model. On a 35-foot lot (like this one), it sells for $457,000. That’s more than the average house in Toronto, a hugely bigger market where there are actually trees, and a hundred grand higher than the median price Canadians pay for a piece of real estate.

But this house is unique. It has no back yard to speak of. And it’s packed with the kind of upgrades that make young couples on Property Virgins horny. Tumbled travertine flooring, upgraded baseboards (‘Honey, look at them…’), marbled backsplash, soaker tub and (of course) granite & stainless.

It has no furniture, which might tell you something. And it’s listed for $624,900.

I mention this because it appears some fool bought a new house (for $457,000), poured in another fifty grand (the worst money anyone could spend), and is looking to flip it for (minus commission) a hundred thousand profit. The odds of this happening are wicked slim, unless a rich Asian investor comes straight from the airport with a backpack full of cash. And why would a successful person like that want to live in a town where the new Boston Pizza on the side of the 401 is considered high-end dining?

All this goes to my topic: expectations. They are alive and well, and about to be dashed.

As I’ve said for a few months now, the eventuality of deflation is certain. And although it won’t be permanent, it sure will be painful on streets like Nunn Court.

Let’s review a few current events you may have heard of. Like 50,000 students marching in London yesterday, trashing buildings, protesting an austerity budget in Britain which will triple tuitions. And, of course, help diddle the middle class as that country tries to stave off a deficit hell. In Ireland, rumours the IMF will be rolling in any day helped drive national bond yields to a stunning 8.76%, or a premium of more than 6% over similar German bonds. At that price, Ireland can’t even afford to issue any.

In Washington Obama’s blue-ribbon panel on how to rescue America has proposed $3.8 trillion (yeah, with a ‘t’) in spending cuts. It would hack payments to those useless old people (seniors, as they’re known) and the unproductive slackers in society (called the sick), as well as ending mortgage-interest deductibility – guaranteed to make the housing crisis last forever.

Capital gains would no longer get a tax break (bye-bye stock market), child care would get no break and the retirement age (for reduced benefits) would eventually soar to 69 years. “This country’s out of money and we better start thinking,” said the commission’s head. “Without tough choices, we’re on the most predictable path toward an economic crisis that I can imagine.”

In Canada the prime minister announced days ago he’s going on a listening tour across the country before we get a ‘tough love’ budget from the elfish little heartthrob, F. Recently, as you know, sixteen million Canadians just got HST’d, while a few million others had their sales tax rates increased. The government will spend $55 billion this year it doesn’t have, much of it on stimulus programs which seem not to have worked.

Households here are the most indebted ever. Mortgage loans now total over a trillion dollars. Canadians used their houses like ATMs last year, taking out $41 billion, much of it to live on and pay debts. We owe $1.46 for every dollar earned. And, by the way, has your salary increased lately?

Welcome to the next few years. Deflation will lick at our heels, our jobs and our houses. The US Fed can spend all the money it wants, but it will likely just make the situation worse – deepening debt without firing up the North American economy. It’s a world in which the last thing smart investors will do is make a single bet – on stocks, on houses or on gold. This is the time for defensive moves, a balanced mix of assets, tax avoidance and liquidity.

Maybe it’s not the time to be flogging a $457,000 house for $624,900.

But, like I said, most people don’t get it. They think inflation. Can’t fathom what’s coming. Don’t understand the wealth destruction to occur.

They challenge me all the time on this, pointing to continued high real estate values as proof my best-before date was decades ago. Of course it was. Ask my wife. But that won’t change what I’ve told you many times – falling sales levels are far more telling than eroding prices. It’s all you need to know.

But wait, here’s Nobel Prize-winning economist Paul Krugman, writing in the New York Times. He just plagiarized me:

“So the news that the U.S. housing bubble is over won’t come in the form of plunging prices; it will come in the form of falling sales and rising inventory, as sellers try to get prices that buyers are no longer willing to pay. And the process may already have started.”

Actually, he wrote that in 2005. Learn history. Or repeat it.

206 comments ↓

#1 nibs on 11.10.10 at 10:17 pm

House price declines in US similar to Great Depression…

http://financialinsights.wordpress.com/2010/11/10/rate-of-us-home-price-decline-parallels-great-depression/

#2 TheBestPlaceOnEarth on 11.10.10 at 10:22 pm

Inflation is what is happening not deflation
http://www.bloomberg.com/news/2010-11-11/china-s-october-inflation-accelerates-to-4-4-fastest-pace-in-two-years.html

Are you in China? — Garth

#3 The Apocalyptic One formerly Old is Gold on 11.10.10 at 10:27 pm

Now that the cold weather is coming, seems like the blog pictures have become cold as well. Don’t go too politically correct on us or they may send you back to Ottawa – duh!

#4 tran, Calgary on 11.10.10 at 10:31 pm

I am seeing more forclosure listings in the FREE
weekly/monthly magazines in Calgary. Is this
for real or just a marketing gimmick?

#5 The Apocalyptic One formerly Old is Gold on 11.10.10 at 10:33 pm

On a more somber note, I think Canadians are gonna get hit harder in the nether regions than our Yankee neighbors when the ‘austere’ budget is unveiled. This may be the last Merry Christmas of the first half of this decade if not the entire decade. The fat lady is all warmed up and will be heard singing loud and clear from sea to shining sea in the coming year. Buy silver, its not too late!

Err. Deflation means money gets more valuable. Silver less. — Garth

#6 Kitchener1 on 11.10.10 at 10:45 pm

Here is the main reason for delfation:

BoC or Fed can print and create as much credit as they like. They are trying to increase the velocity of money and to get people to spend more.

However– there is nothing any govt in the world can do to acutally get people to buy things- nothing.

The housing market bailed out middle class america and canada for most of the decade, bad financial mistakes went unpunished and homes became ATM;s.

BUT, when people start saving, shunning credit, then we have a problem (great for the people) bad for govt (they are short term- political). Our economy and the future of current political parties depends on people spending– more spending means a growing economy and a larger tax base to spend (promise more goodies come election time).

When people stop buying and demanding better value, companies compete for our business, that means a shrinking profit margin and that means lower stock price and more layoffs. Companies dont expand- unemployment becomes structal, and as things get worst, it repeats itself, people see their neighbours hurting and they put off spending and we get what the US is in. No confidence, bad economy. with the fed throwing everything and the kitchen sink at the problem to no avail.

#7 TaxHaven on 11.10.10 at 10:47 pm

NOT real estate. Watch the U.S.!

Price inflation WILL arrive – or already is here – but it will strike things you NEED, or must pay for. Things with pricing power. Things you’ll use your last dollar to get, credit deflation or NOT.

Stuff like food, flour, California veggies, cheese, meat, gasoline, heating oil & gas, basic clothing, medical care, taxes and most imports…

Perhaps we won’t suffer as much as the U.S., what with their weak dollar, but fixed costs will most certainly rise. Canada will suffer high structural unemployment, wgae stagnation, downsizing and terrible sales figures courtesy of the strong loonie, courtesy of the resource economy.

Not housing. Real estate, real returns on bonds, bank deposits, many stocks, cash, salad shooters, motor vehicles, white goods, nail salon treatments, swimming pool installations and any fixed-payment securities will perform poorly – and get cheaper.

Oh, and poodle-grooming services. That’s a lead-pipe cinch…

#8 SRV ES339 on 11.10.10 at 10:50 pm

So cynical Garth… that report isn’t so bad… if you’re rich!

You forgot to mention the reduction of top tax rates from 35% to 23%… and corporate tax from 35% to 26%. Oh, and one last gem… no more taxes on off shore corporate profits.

Wonder if it was a JPM or Goldman guy that wrote the report?

#9 T.O. Bubble Boy on 11.10.10 at 10:51 pm

“elfish little heartthrob” – classic!

The most shocking part of that Mattamy-upgrade place is that the realtor felt the need to write 13 full lines on MLS to describe it!!!

IT’S A MATTAMY HOME! Anyone looking to buy this place knows what a Mattamy home is… they are the only thing you see for miles and miles in lovely Milton.

Oh – and the “Farm Museum” is actually the Ontario Agricultural Hall of Fame… but regardless — is this really worth mentioning in the description? Is there a big market for being walking distance to the Aggie HOF?

#10 T.O. Bubble Boy on 11.10.10 at 10:56 pm

Australia looks to keep the housing bubble going by…. copying CMHC?!?!?

http://seekingalpha.com/article/236098-australia-following-canada-into-a-financial-black-hole

Who loves Ponzi Schemes? Aussies Aussies Aussies – Oy Oy Oy!

#11 Cranky Cyclist on 11.10.10 at 11:05 pm

“Nobel Prize-winning economist” indeed! From the official site at http://nobelprize.org/nobel_prizes/economics/nomination/ comes the following quote (scroll to the bottom):
“The Prize in Economic Sciences is not a Nobel Prize. In 1968, Sveriges Riksbank (Sweden’s central bank) instituted “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel”, and it has since been awarded by the Royal Swedish Academy of Sciences, Stockholm.”

This prize was invented by bankers to legitimize the “science” of economics. Let’s be honest – economists can’t even predict the past!

We listen breathlessly to the pronouncements of Bernake, Greenspan and (heaven forbid) Harper at our peril.

#12 Sean on 11.10.10 at 11:09 pm

Hi Garth,

With the talk of tax hikes where is the discussion of reducing government staff in Canada. This is happening in the U.S. at local and state levels but nothing so far in Canada.

#13 Debt's Dark Embrace on 11.10.10 at 11:09 pm

Fundamentals don’t mean squat anymore. That’s why the economists always get it wrong. Their economic models don’t work anymore. Low interest rates and brainwashing, these are the new “fundamentals”. Everything else is just numbers.

#14 Coho on 11.10.10 at 11:11 pm

With F’s pending sermon of a tough love budget and Goldman Sachs CEO Lloyd Blankfein declaring he’s doing “God’s work” we’re surely in good hands. Aren’t we fortunate to have such well meaning leaders in our midst?

Of course, many people feel they’ve been sold out, looted, and deceived by politicians and banksters alike, but really….a much worse thought is that these people actually believe what they’re saying.

#15 mel on 11.10.10 at 11:12 pm

Always believed deflation first, inflation later. Temporary inflation due to Fed. Q1-Q2 easing is temporary manupulation that not only will fail, but will cause ‘temporary inflation’ that will make things worse, not better.

Otherwise, I agree with everything you said Garth.

#16 The Apocalyptic One formerly Old is Gold on 11.10.10 at 11:14 pm

Gas prices, food prices, natural gas prices, taxes, service charges, user fees, there will be DEFLATION in such necessiteis but rather massive INFLATION. Deflation will be found only in things people can no longer afford to buy such as houses, cars, fur coats, TVs, Ipods, dining out etc. So Garth’s implied mantra that DEFLATION is coming across the board is patently and provably false (just glance at the price of a liter of gas next time you’re out driving). There will be no deflation that will benefit the masses but high inflation that will shaft them. Will cash be king in the days ahead? For a brief period perhaps but eventually it will be worth less and less, no protection whatsoever. Garth may debate this point but no way can he disprove it – so we will wait and see which scenario plays out.

#17 Hector's Corpse on 11.10.10 at 11:17 pm

Is this ethical….

My wife and I went to an open house last Sunday.The listing realtor at the open house stated offers would be presented to the seller as received.

After stewing on the idea of making an offer we messaged our realtor today seeking an opinion. Shortly thereafter got a call back saying she had spoken with the listing realtor (we did not ask her to do this). Listing realtor apparently stated he had heard of one other person expressing interest, however no offers had been received. Further goes on to say that if we make an offer he will let the other realtor know before presenting our offer to the seller. Further went on to tell our realtor what the other “potential” buyer would put in his offer.

This sounds like total crap. I really don’t understand how all the discussion occurring between realtors prior to an offer being presented is considered ethical.

Reaffirmed my decision to look instead at for sale by owner listings.

#18 The Apocalyptic One formerly Old is Gold on 11.10.10 at 11:18 pm

CORRECTION to my last comment / Gas prices, food prices, natural gas prices, taxes, service charges, user fees, there will be DEFLATION in such necessities but rather massive INFLATION.

=======================================
I meant there will be NO DEFLATION in such necessities…

#19 Basil Fawlty on 11.10.10 at 11:23 pm

Many people are predicting deflation and this makes sense given we have just gone through the largest debt based credit bubble in history. However, precious metals, commodities, food and base metals are all rising as the Fed and other central banks print money, a weak US dollar pushes dollar holders into non-dollar assets and those seeking better yields move into stocks and commodities.
Given that the US is increasing the money supply at an unprecedented rate, how can anyone be so sure of deflation in the short to medium term? Is there some evidence that the Fed will quit printing?

#20 TheDude on 11.10.10 at 11:23 pm

In Ireland, rumours the IMF will be rolling in any day helped drive national bond yields to a stunning 8.76%-garth.

Yes, the IMF, the self appointed global book keeper looking to enslave us all with its loans.

In Canada the prime minister announced days ago he’s going on a listening tour across the country-garth

This will only work if his hair do doubles as a satellite dish.

#21 Bottoms_Up on 11.10.10 at 11:26 pm

#24 Causaline on 11.10.10 at 3:00 am
—————————————–
Use the “Access to Information” act to your advantage:

http://www.tbs-sct.gc.ca/tbsf-fsct/350-57-eng.asp

For a very small fee you can get 5 hours of government time (for searching for the information that you require). You can do this formally or informally, the former gives you more ‘rights’ per se.

#22 Basil Fawlty on 11.10.10 at 11:32 pm

This article does not indicate deflation. Although it does indicate a government with no choices left, except QE.

http://www.channelnewsasia.com/stories/economicnews/view/1092653/1/.html

#23 Deciding when to sell on 11.10.10 at 11:33 pm

Garth, I’m the woman for whom you signed a copy of your “antique” book from 1982.

I wonder whether you or the dawgs could comment on the outlook for rural property in the 905. We live on a big forested acreage south of Campbellville with a small cedar log cabin. Lots of firewood, clean water, and squirrels. No public transit. We will want to sell in the next few years, but not quite yet, and while we can afford to lose some equity in the meantime (easy come, easy go), obviously we would prefer not to lose too much. For planning purposes, can we assume that a place like ours will lose value at the same rate as Milton or Toronto? Or faster, like cottage country, or slower, like farmland? Any idea?

Irene

#24 TS on 11.10.10 at 11:36 pm

8 SRV ES339 on 11.10.10 at 10:50 pm
So cynical Garth… that report isn’t so bad… if you’re rich!

You forgot to mention the reduction of top tax rates from 35% to 23%… and corporate tax from 35% to 26%. Oh, and one last gem… no more taxes on off shore corporate profits.

You are selectively picking details out of the presidential report… while it is true that the individual tax rates will decrease – that comes with the elimination of virtually all of the tax breaks (like deducting mortgage interest) now available to individuals in the US. The net impact of these changes is an INCREASE of $100 BILLION in personal income taxes.

#25 Bottoms_Up on 11.10.10 at 11:36 pm

#110 GregW, Oakville on 11.10.10 at 2:06 pm
———————————————
You have been worried about fluoridated water for years. Get over it. Do you not realize there are risks and benefits to this (much like there are risks and benefits to getting the polio vaccine, but in these cases benefits far outweigh any risks)?

There are many benefits to fluoridating water, and Health Canada is doing their best to protect and promote the health of Canadians, and therefore one should not be concerned about what is in their drinking water:

http://www.hc-sc.gc.ca/hl-vs/iyh-vsv/environ/fluor-eng.php

Another thing you should know is that lots of things cause cancer: alcohol, cigarette smoke, BBQ’ed meat, even chemicals found in coffee are carcinogenic. However, carcinogenesis is a very complex process, and, given that very intelligent and dedicated people are working on this stuff (perhaps even more intelligent and dedicated than you), I’m inclined to believe they are doing a good job and making the right decisions.

You want to worry about something? Why don’t you worry about getting hit by lightning or by a car while crossing the street, or about what’s in the air that you breathe in Oakville? Now those are things you should be concerned about! ; )

#26 Timing is Everything on 11.10.10 at 11:41 pm

#6 Kitchener1 said – “BUT, when people start saving, shunning credit, then we have a problem (great for the people) bad for govt…”

True, but it is not a problem. It is a good thing. Opportunities await. Cash is where its at.

Ottawa and the 10 amigos (plus those two or three thingys up north) and EVERY municipality, will just have to shrink themselves, for starters….or there will be a real tax revolt (and an even larger underground economy)

We need fewer rules, less bureaucracy, less taxes and therefore smaller government all round.

#27 Timing is Everything on 11.10.10 at 11:52 pm

#7 TaxHaven said – “Oh, and poodle-grooming services. That’s a lead-pipe cinch…”

http://www.privatjokr.com/index.php/2005/05/27/poodles_i_don_t_get_it?blog=6

#28 CP on 11.10.10 at 11:53 pm

Deflation is great. We can just follow the Fed and print a bunch of money to pay off the national debt and devalue the currency. That will help everyone, especially the manufacturers. The only reason not to follow the Fed is that devaluing the currency causes inflation, but since the worry of the day is deflation, it all works out. Once we’re back down to 80 cents of a greenback, shut down the presses. Follow the Fed! Follow the Fed!

#29 Cookie Monster on 11.10.10 at 11:59 pm

House prices will collapse soon but will not be very deflationary since any mortgages that do default won’t disappear since the paper was written the money has been freed, the loonies have all flown the coup ^^^^.

House prices will drop and people will try to save but the credit expansion was the easy part, the credit contraction will not be quite so easy.

There’s never deflation, there’s never less money in the system, its always going to be inflation, governments will never, ever, never, without a doubt, ever let deflation happen, never. It can’t happen and it won’t happen.

Inflation all the way, it’s already here the cash boom is hitting a store near you. The stimulus waste fest is nearly complete and the bills will all be paid so stock up now before it’s to late.

#30 hobbygirl on 11.11.10 at 12:00 am

Forget gold or US greenbacks, buy Chinese redbacks. Call me a commie, but the reality is China is now an emerging economic superpower, much like the US once was when the greenback gained its strength many years ago. China is quietly preparing itself to use its own currency as a basis of foreign trade and is appealing to far east countries (well, maybe not Tibet) for being perceived as strong and reflective of their economy. The US dollar used to be perceived as strong, instead today it is only viewed as manipulated. Uncle Ben knows for the short term he can do this, but not for much longer at which time he will retire at no consequence to himself.

#31 dd on 11.11.10 at 12:07 am

…But wait, here’s Nobel Prize-winning economist Paul Krugman…

OK … I see where you are misguided. Paul Krugman. You mean Mr Paul “the Fed hasn’t printed enough money” Krugman.

#32 Cookie Monster on 11.11.10 at 12:15 am

Government benefits of inflation:
1)Money loses value and debt is monetized making debt repayment easier over time.
2)Tax revenues are increased due to wage increases pushing workers into higher tax brackets.
3)CPI is purposely under reported to save money on government programs indexed for cost of living increases.
4)Inflation is a subtle tax on all savings, not just this years wages.
5)Inflation (increasing the money supply) allows government to spend more money than it can raise in taxes and bond issues alone, it’s the third line item in the government’s revenue stream.
6)Inflation drives up asset values generating exaggerated capital gains taxes, adding to government revenues.

Deflation has all the opposite effects and since the government controls the money supply there will always be inflation and never deflation. Some assets might inflate more than others and then deflate sometime later, but that money simply move elsewhere and doesn’t disappear, at least not for long.

#33 dd on 11.11.10 at 12:16 am

…Deflation means money gets more valuable. Silver less. — Garth…

Deflation means the Fed stops printing money. OK say that is the case. What do you think will happen?

1) It is called a treasury or bond failure. Bond market collapes and US dollar massive decrease.
2) The US will not be able to pay off its debts (it has to print money). It is called a default.
3) Massive …. massive austerity, right now. They won’t do it. Why cut back like this when you can do it over time (cook a lobster on low heat).

#34 nonplused on 11.11.10 at 12:16 am

You can say what you want about those glue beams Garth, they are awesome! Just don’t get them wet and leave them wet.

The chip board they use on the outside of the house, on the other hand, is crap. Get them wet and they fall apart in a few years. I saw a jerkalope build a fence out of that stuff and paint it. Even with the paint it was a total disaster in 5 years, and it was only wet when it rained. Plywood doesn’t like water either, but it deals with occasional water with much more grace and survivability than chip board. Probably lasts 2 – 3 times as long under similar conditions. And then there is the old 1×4’s they used in the old days. It will finally expire about the same time as the plywood even though it’s 30 years older, and the chip board will already be long gone. Structurally not as good, but it doesn’t delaminate.

That’s the advantage of real wood. It rots, sure, but not that quick, get even pine wet and dry it and it’s fine, and cedar or pressure treated lasts a very long time.

But those glue beams hold a lot of weight for their size and cost. To bad if you get water though.

I can’t believe you quoted Krugman. I am even more nonplused that he said something that made sense or turned out to be true. He is normally so far over to the left you’d think he was the banker in a game of Monopoly, just handing out money whenever someone passed go or landed on “Community Chest”. But he has the Nobel, where as I only got voted “most likely to have already totaled his car” in high school.

The gist of your story though, defines the Canadian market right now. People strangely believe that if they buy a house, for whatever price, they can then sell it for “what they want to get out of it”. It’s a weird psychology. “I’m selling a house!” “Hey, I like that house, how much?” “Well, I want enough to retire.” “Excuse me?” “1 million dollars.” “But my realtor tells me you paid $340,000 in 2001!” “Yes I did, but I won’t sell for less than 1 million.” “OK, talk to you later.”

#35 Nostradamus Le Mad Vlad on 11.11.10 at 12:30 am


With all the yakkity-yak stuff about de- and inflation, Definition of Stagflation also raises its hand. Between de-, in- and staggeringly popular jamflation, where does QE3 play its role?

“Won’t end well . . . Some people don’t learn.” — Are these the ones still in KG or pre-school? How will they cope in Grade One? Where are Mr. Dressup and Mr. Rogers when we need them?

Keep in mind that exterior events are playing a much larger role than Cdn. RE values.
*
Lead pic. gives a clear indication of where North American jobs have gone, not returning for a few generations.

4:14 clip Great song, catchy tune and beat. F*%^ The Fed!

Lotsa ifs, ands or buts. Possible reason why there will not be a new world currency.

China’s trade surplus has gained weight.

2:18 clip US sends tsunami of useless, printed money to swamp a lotta countries.

Didn’t think much of those CDS anyway, but taxpayers still bailed Wall St. out!

Marxism Obama, Mr. and Mrs. Clinton and many others, etc. Plus — Control Freak Soros runs the WH.

This bubble somewhat explains all the bubbles we’re having here.

North America Goodbye, So Long and Farewell. We all had a blast, but now the bill collectors are here demanding repayment.

Ummm, oh shit. “Here’s another reason Bernanke is printing. He needs to get cheap money into the economy so that it finds its way into the hands of states like California, who will otherwise be suffocated in debt.”

#36 Jeff on 11.11.10 at 12:34 am

Garth,

I like your blog a lot, agree with your real estate views and am actually quite impressed with your writing skills.

Anyways, I’ve noticed that you’ve been saying that you believe that inflation is further out on the horizon and that we will experience deflation first. So before I post what my comment was going to be, I thought I’d ask you what your definition of inflation is? Is it higher prices or an increase in the money supply?

#37 canali on 11.11.10 at 12:36 am

hey Garth: seems you were talked about on the ”Real Estate Talks” forum…the topic in forum was “Fall of 2010 Real Estate Market”
…see below…c’mon Garth, go on over there and kick some ass!

Top
Re: Fall of 2010 Vancouver market…..
by Thompson » Tue Nov 09, 2010 10:11 pm

Patiently Waiting wrote:
Johnny must love it when more young families mortgage themselves at 12X their incomes for a moldy crackshack. Children raised by the internet while parents work at 3 jobs each. Kraft dinner for supper.

Rot in hell, Johnny.

If Johnny has such power to influence the Market or young families’ decision, don’t you think he actually save lots young families from the situation that you just described? Because Johnny is right about the market since day one.

I think Mr. Garth, or Bears, is the one you should put your finger on. He cried market crash since year of 2000. Do you know how many people follow his advice to sell their homes before 2004? And how many young families missed the train and were priced out by the market to follow Garth’s music in one book after another?

Someone rots in hell, but not Johnny.

Thompson
Real Estate Talker

Posts: 3794
Joined: Wed Dec 12, 2007 10:15 pm
Top

#38 canali on 11.11.10 at 12:37 am

further to my post above, sorry forgot to add, but here is the weblink:
http://www.realestatetalks.com/viewtopic.php?f=8&t=58529&start=15

#39 nonplused on 11.11.10 at 12:42 am

Actually, I have another story of how bad it’s gotten out there.

I vacation with my family in the same general local every year (trailer, even though I know Garth hates RV’s.) I have for various reasons become “friends” with many of the locals. One of them is a builder.

Last year my friend the builder started driving me around to underway but not yet rezoned properties his peers were developing (these people have their own road building equipment since that’s how they make their money, building logging roads) where I met with the eager builder who had a plan they submitted but no subdivision approval yet and they took time from their busy grading efforts to walk me around the property.

This year, it was even worse. Instead of being shown properties, the builder was trying to sell me his house. His logic? Well, why shouldn’t he be able to retire to Las Vegas winters? Why is he working so hard? Don’t get me wrong, his house was beautiful, and very master craft in every way. But he was also floating to me a sale price that was more than twice what it cost him to build it in the last 3 years.

It is a beautiful home. But on the other hand I can enjoy the area in my trailer for $25,000 I spent on it (probably stupid) and park where ever I want. Party is down on the crown land, dirt biking? I’m right next to the campfire. At the lake, we’ll boat? Government campground. $25,000 was stupid to spend on a trailer now I know, but it has kept me out of the “vacation property” market. I can’t loose more than $25,000. I’ll take that hit.

I’ve got another friend who’s selling his trailer because he bought a recreational property. So, no more camping with his brother, who doesn’t have his means. No more flexibility. And he has to go out there every other weekend to mow the lawn, even if he’d rather do something else.

Recreational property sucks. The wise stay in hotels. For those of us who were unwise and had children, it’s tents or trailers. Especially if you want to go on occasion somewhere they don’t have hotels.

And a $5000 dollar used tent trailer will do. Heat, fridge, some water, off the ground. You don’t have to be a fool and buy the big rig to make all the kids and wife happy like I did. But be warned: that’s how I started out. The persuasion ensues, from all of them.

#40 realpaul on 11.11.10 at 12:44 am

Speaking of China,,,years of acrimony have apparently vanished under the bright lights of the G20….this just on the wire.

“China gives green light to invest in Canada
Take the “Gone Fishing” sign down from the window. Canada is open for business again.

Aweekafter the Harper government blocked BHP Billiton’s bid for PotashCorp.,Finance Minister Jim Flaherty announced Wednesday in a pressrelease that China’s government has cleared that way for some of the country’s investors to plow as much money as they want into Canada.

Chinamaintainssomething called the Qualified Domestic InstitutionalInvestor Program,which determines which money managers get to investoutside China, andwhere. China’s banking, securities and insuranceregulators all mustagree before the institutions and investors theyregulate can investabroad. On Wednesday, Mr. Flaherty saidthat the insuranceregulator gave the green light to Canada, matchingearlier decisions bythe banking and securities authorities.

Chinese insurance companies have more than $106-billion to invest, Finance said in a press release.

ForMr.Flaherty, the agreement represents a victory won through leg workandface time. Over the last couple of years, the Harper government hastakena totally different approach with China, dropping the publiccomplaintsabout the country’s human rights record, and insteadfocusing on buildingtrade-and-investment links.

“WhenI was there in January 2007, wehad some discussions about some issues,and there was not a lot ofprogress right after that,” Mr. Flahertysaid in an interview afterarriving in Seoul for the Group of 20 Summit. “This year has been quite different…It is indicative of an increasingly positive relationship.”

And, Mr. Minister, what is the, er, net benefit to Canada?

“More investment,” Mr. Flaherty said. “We are open for investment, despite that one particular investment that was disallowed.”

#41 ALE on 11.11.10 at 12:55 am

#18 The Apocalyptic One formerly Old is Gold

zero hedge does a nice deconstruct of the 4.4% china inflation claim.

gas is 92.9 here in calgary. that’s .50+ less than the peak and the average of the last 18 months

Inflation is a certainty but it isn’t here now or for the near future (2-3years min).

#42 Patz on 11.11.10 at 1:04 am

Isn’t austerity wonderful! (Too bad we don’t have an emphatic punctuation mark denoting sarcasm). Governments and greed bags have trashed the economy and left the environment a collaterally damaged basket case. And now somebody’s got to pay for it. Damn right! And that somebody’s U. What you expected the perps to pony up? A little naive aren’t we? The big boys play; little boys pay.

So we don’t go after the bonuses but the pensions and social security of people who don’t have much to begin with. And to add (literally) insult to injury the right wing sleazoids blame the victims.

Since the early 70s and especially when Raygun and Thatcher spread the joy of trickle down (on?) wages flatlined like a patient etherized upon a table. So let us go then you and I and leave our class, you know the one that used to be in the “middle.” Stick a fork in it.

Coming to a country near you!%&*

#43 Oleksandr on 11.11.10 at 1:05 am

#6 Kitchener1 “… shunning credit, then we have a problem (great for the people) bad for govt (they are short term- political).”

You are right. Moreover, it is not only the main reason for deflation
but also the key reason for all problems.

Instead of adhering to good old – money must be earned, people look for a credit to get unearned goods. Mental corruption?

Governments and politicians of all countries always do resolve the next elections concerns, and nobody really cares to think about country in the long term.
Doing those “bailouts” they actually think about themselves. Stay in power for any price.

The dark side of democracy.

#44 dark sad person on 11.11.10 at 1:07 am

Inflation and Deflation are not about prices-
They are about Money and Credit supply-

Prices can be influenced by one or the other and so can prices be driven by Weather-Geopolitical events-supply/demand and speculation-

If the price of your mortgaged $500K home drops by 50% and your grocery/heating and electric go up by 50%
Which has the biggest negative impact on your personal net worth?
If you lose your job or your income falls-which is happening-is that Inflationary or Deflationary-
If people don’t or can’t borrow and spend-which is happening-is that inflationary or Deflationary?

When Governments print money and give it to the banks and the Banks wont lend to poor credit scores and those with good credit scores wont borrow-which is happening-is that inflationary or Deflationary-

You see it’s not really about how much money has been printed-it’s about what that money is “doing”
In order for all that printed money to act like money-it has to circulate in the Economy-otherwise it’s nothing-

If the Banks do not release that money through credit-then it doesn’t circulate-

IF Credit is contracting faster then it is expanding-that is Deflation-
If peoples net worth is contracting faster then its expanding that is Deflation–

If Banks are taking the money Governments are giving them and not lending it into the Economy-but instead speculating in the Market and driving up prices-which they are-then that is simply speculation-

Prices are Governed by affordability/demand and that will eventually outweigh speculation-
It doesn’t mean it wont be painful getting there-it doesn’t mean prices cannot always be too high-
Look at the 30’s-people went hungry because governments paid Farmers not to produce and invoked trade barriers so as to keep prices high in some far flung Keynesian pipe dream-that high prices would eventually cause more spending-
This is where we are today-
Same problem-same worn out proven failed-clueless Government solutions-

There is only one solution to this and it would work-
Get Governments out of the Market and let the Market sort this out-
You bet it will be financially painful-but it will be fast and “prices” of goods and service will become affordable-buyers will step up and a recovery will follow-from much lower but manageable levels-

Just don’t hold your breath waiting for it to happen-

#45 604genX on 11.11.10 at 1:16 am

Krugman happened to slam that report on how to solve the US deficit. It appears the authors are simply right-wing types who believe cutting taxes for the rich makes sense 9while slashing social services for the needy). Here’s Krugman’s blog entry today:

http://krugman.blogs.nytimes.com/

It’s a great blog too. He’s nailing macro events as well as real politic of the Obama Administration decisions.

“November 10, 2010, 1:43 pm
Unserious People

OK, let’s say goodbye to the deficit commission. If you’re sincerely worried about the US fiscal future — and there’s good reason to be — you don’t propose a plan that involves large cuts in income taxes. Even if those cuts are offset by supposed elimination of tax breaks elsewhere, balancing the budget is hard enough without giving out a lot of goodies — goodies that fairly obviously, even without having the details, would go largely to the very affluent.

I mean, what’s this about? There is no — zero — evidence that income taxes at current rates are an important drag on growth.”

#46 Patz on 11.11.10 at 1:20 am

If you live in the lower mainland—that would be the greater Vancouver area for the most part—you’re probably familiar with the ongoing borefest called the debate on how to fund our future mass transit. As Garth has often said governments will be/are looking for more ways to prime their pump at your expense. Taxes, fees fines whatever.

Here’s one local mayor’s idea of a “fair” way to pay for mass transit: take a cut of property appreciation. Rationale? Well if a sky train station goes into your neighborhood your property value goes up right? So, it’s only fair that Translink (the regional transit authority) take a cut of the profit. Mr. Mayor says it would only be right to leave the owners some of the profit. Some?

Aside from the fact that this is another leader who thinks housing only goes up imagine the mess a system like this would make. Muni knocks on your door to tell you that your house has appreciated $100 K and they’re going to asses $50K for transit. Don’t have the cash? Take out a HEL. Well this is one nightmare that’s unlikely to come true mostly because there’s a bigger nightmare waiting for your head to hit the pillow—your house is going down in price, way down.

#47 islander on 11.11.10 at 1:20 am

There is no reason why strong deflation in housing cannot be concurrent with strong inflation in consumer goods. The coming deflation in housing is obvious for all the reasons outlined daily on this blog. Inflation in commodities and energy arises both from supply constraints and monetary easing. It is an extreme over simplification of the economy to just read the statscan headline CPI number and make a determination about where price levels are. There is little doubt that the CPI in its current form is an animal of political expediency in that most defined pension plans and gov’t programs are indexed directly to the CPI calculation.
The ongoing debate of inflation vs. deflation that goes on here daily reveals a lack of understanding. Both can occur simultaneously and have devastating effects on society as boomers see their RE assets decimated at the same time that their savings are over run by inflation.
This will not end well.

#48 ekstso on 11.11.10 at 1:28 am

It is better organized here:

http://csper.org/renaissance-20.html

http://csper.org/debunking-money-cspers-2nd-.html

MUST SEE ALL!!!

#49 Marty on 11.11.10 at 1:29 am

It’s a zero sum game.

In order to appreciate inflation or deflation in a fiat money system one must first understand how it actually functions.

There is money of account, which is numbers in computers and considered outside of circulation as they are not chasing goods and bidding up prices at your grocery store.

There is also money of exchange, which is the money that is in people’s hands, bank accounts, stocks, available to them by credit card etc… anything that can be spent today.

When more money of exchange enters the economy (money supply) enters the economy there is inflation.

More money of exchange only enters the economy if it has first been created as money of account.

So both type of money are linked but only money of exchange is capable of creating price inflation on the street, excluding currency devaluation.

When the Fed prints money its in effect only adding money of account. This may remain the case but if the money of account seeps into the economy as money of exchange then purchasing power of each dollar if affected negatively.

When a loan is not paid back, i.e. mortgage, it will cause only an entry in the money of account ledger to indicate a bad debt. Since this money never entered the market it did not contribute to inflation, however the accessibility of credit did allow for bidding up of the real-estate prices.

The bank gets to write off the bad debt and gets a tax break. The borrower is now no longer eligible to create credit in the banking system, thereby reducing future expectations of money of exchange in circulation.

So we have 10 million Americans without work that will not be able to create increase money of exchange. This should be deflationary but it will not be, since it will be perceived as a loss of faith in the U.S. bank notes (economy) and will increase the cost of borrowing for the U.S treasury. This will result in Fed having to increase money of account which will result in money being leaked into an already week economy with little credit which will drive prices of commodities up due to lower production and higher energy costs, and will keep the housing market depressed until jobs/production of value return.

You will see inflation in commodity prices in USA which will affect CANADA. However, both USA and CANADA will remain stuck in deflation. Foreigners will demand more Bank notes to trade with us which will make imports expensive (inflated).

#50 Joseph [Original] on 11.11.10 at 1:35 am

Your stuff is not just factual but, as others have already stated before me, are also incredible literary pieces. I just finished watching 2 trailers of the upcoming Narnia film, and came to your blog immediately after, and felt like I was transformed from film to literary wonder. I can honestly say that 50% of the reason I come to this blog is to simply soak in your blog entries. They’re real masterpieces. I never miss one. Your calling wasn’t politics, it was really to put together literary works of the scale of Lord of the Rings and Narnia, and you do it so effortlessly. What a gift!

#51 Midas on 11.11.10 at 1:53 am

It’s pointless to talk about generic price inflation or deflation when different people have different assets and different needs.

What does make sense is to refer to the inflation or deflation of the money supply.

#52 GregW, Oakville on 11.11.10 at 2:12 am

Hi Garth, fyi 50 sec video, (watch Ben’s reaction) reaction.)

Greenspan Admits Bankster System Creates Fraud
November 10, 2010

Number of banksters in prison… zero.

http://www.infowars.com/greenspan-admits-bankster-system-creates-fraud/

Some mits even say:
We all know the so called “Federal Reserve” is a mafioso group of private banks who got Congress to abdicate their Constitutional power over our Nation’s money.

Since Congress does not have the power to give up their Constitutional powers as defined and strictly limited in the Constitution by using a proxy Bankster, illegal and un Constitutional crimes are running amok and unhindered.

#53 Fist Full of Dollar$ on 11.11.10 at 3:13 am

#12-Sean

The BC Gov’t is in Year 2 of a 3 year plan to eliminate 3,500 jobs. This is after approx. 25-30% of the total BC Gov’t workforce was eliminated between 2002-2004. Do those numbers satisfy? The reduction in gov’t service hurts all taxpayers.

Maybe you might hear about gov’t staff cuts if the MSM wasn’t so busy pumping the real estate market. People losing jobs just isn’t as SEXY!!!! Stainless and granite anyone?

#54 Sargon on 11.11.10 at 3:26 am

“In Canada the prime minister announced days ago he’s going on a listening tour across the country”
———————————————————–

Yes. A tour where he only ‘listens’ to those who will
feed his megalomania with gushing praise.

#55 hobbygirl on 11.11.10 at 3:39 am

I would like to re-iterate a comment I made earlier, to buy Chinese redbacks. I am speaking of a strictly economic benefit. Being Remembrance Day and out of respect for those with moral and ethical issues on China I am sure there are many other opportunities elsewhere for economic gain, but this one just appears to be a no-brainer.

I just read that China`s leader wanted the British PM to remove his poppy which I found offensive. My late dad and grandfather served in battle in both WWI and II and I`ve seen the psychological damage dad experienced as a result in having to sleep in trenches amidst dead soldiers amongst other autrocities he witnessed and participated in for King and Country, secrets he kept til his dying months and afterwards in military records he kept away. I would hope that China stops being the bully and we can work cooperatively for economic gain. If not we need to bring our industries back home.

Yes I will eat crow (or squirrel) on this one.

#56 VanLarry on 11.11.10 at 3:41 am

Inflation is what is happening not deflation
http://www.bloomberg.com/news/2010-11-11/china-s-october-inflation-accelerates-to-4-4-fastest-pace-in-two-years.html

Are you in China? — Garth
===============
I can’t help but just laugh at this one.

#57 Devore on 11.11.10 at 3:55 am

#17 Hector’s Corpse

This sounds like total crap. I really don’t understand how all the discussion occurring between realtors prior to an offer being presented is considered ethical.

Ever wonder why they go away to do their “negotiations” when you have an offer? How can you have any negotiations behind closed doors, with the two parties not even present! Even the Sandra chick on HGTV always goes away to “present the offer”. WTF? Why do realtors feel the need to hide things, if it’s all above board? Don’t want your clients to see how you really “earn” your money?

What a dirty business. Amateur hour.

#58 Gerry B on 11.11.10 at 3:56 am

“…streets like Nunn Court.” To see what Nunn Court is like, go to maps.google.com, search for “Nunn Court, Milton, Ontario, Canada”, click the “A” marker and choose “Street view”. Google’s images are a bit out of date, so all the houses are under construction. Gives you a really good idea of what’s under the stucco and brick!

#59 Behind the Numbers on 11.11.10 at 4:07 am

2 Quick Points:

Deflation: I’ll side with Garth on this one.

1. I agree, there is price inflation, but as Old points out, it’s inflation in the SMALL costs, not the BIG costs. I would rather save $100,000 on a house or $10,000 on a car (deflation) and pay an extra 25 cents on a loaf of bread (inflation).

2. London Riots in my town. Surprised us Londoner’s here as riots have been going on all over Europe over austerity measures for several months now. Students were protesting higher fees (currently 15,000 per year) and cut backs in University funding. Ironicly, the UK is modeling austerity measures off of the “successful Canadian model of the 90’s” or at least that is what the tele and radio is telling us.

Expect more protests around the world and even in Canada I’m sure. I heard there was a riot in Seattle yesterday as well.

#60 dd on 11.11.10 at 6:29 am

Deflationist … money will buy more goods in the future.

More food, more oil, more health care …

HA.

#61 Darryl on 11.11.10 at 6:50 am

Garth called the elimination of mortgage-interest deductibility months ago. Good call.

#62 The Apocalyptic One formerly Old is Gold on 11.11.10 at 7:12 am

O them big bad seniors – they are the cause of the problem!!!

Deficit panel targets Social Security and taxes

Quote: (Reuters) – Leaders of a presidential commission proposed raising taxes and the retirement age among bold ideas on Wednesday for slashing the U.S. budget deficit, but faced a difficult task in winning the support of Congress.

Days after voters vented their fury over government red ink in midterm elections, commission co-chairmen Erskine Bowles and Alan Simpson floated proposals that they said would bring $4 trillion in deficit reduction through 2020.

The banksters are Robin Hoods in reverse, they take from the lower and middle rungs of society, and filter it all to the top. What’s being waged in the economic arena is perpetual war (more and more indebtedness) for perpetual peace (the illusion of a soon coming recovery that will NEVER, repeat NEVER materialize.)

Call is Apocalypse, call it Armageddon, call it Doomsday, call it the end of the world, on the Economic front it has already started, we’ll see what happens next on the political, social and military fronts.

The Middle Class is dead, long live the serfs!

#63 Tripp on 11.11.10 at 7:30 am

Garth, what an accurate description of the modern suburbia.
Interestingly enough, all those charming, livable and walkable European and NA towns and villages are exactly the opposite of Milton.
Their layout is based on very old urban planning principles, going back to the period of time commonly known as The Dark Ages…

#64 Shane on 11.11.10 at 7:38 am

Garth, it seems like inflation is happening gas is almost 1.10 a litre in the GTA, housing prices are still going up? all the metals just keep going up copper/silver/gold also cotton.

Shane

#65 bigrider on 11.11.10 at 7:56 am

Watched Big City Broker yesterday, Brad Lamb’s nonsense TV.
The episode entailed one of Brad’s seminars, $25 bucks a head to get in. In this one he went on to state how a small downpayment on a condo after expenses and rent nets him a 20.5% rate of return. He went further to state how even Warren Buffett has not averaged 20.5% annual on Berkshire. He said people greatest obstacle to success in RE is fear. Overcome your fear was his message ..BUY.
One of his dumb agents had a newbie stunt man looking to buy an “investment property” condo AFTER cashing out his RRSP’s that were “going nowhere” according to the investor. I swear to you I’m not making this up. The investor stated repeatedly on the show that he was concerned about that massive amount of buildout in condos in T.O and how he felt that might be a”problem” for his “investment”. Dumb F– brad agent of course dissuades him of his fears and convinces him to buy a 450 square foot starter. He asks “who would live in a 450 foot shoebox” agent responds ” a renter”.
Show flashes back to Brad at the front of the seminar, overcome your fears, buy your first property, rent it out was his advice.
What a bunch of a–holes that whole Lamb team creeps are.

#66 Moneta on 11.11.10 at 8:06 am

1. They’re preparing to increase CPP premiums or increase the benefit age but of course they won’t dare impose such drastic changes on boomers. They’ll impose these on Gen-X and Gen-Y with th excuse that they still have time to plan. This means Gen-X and Gen-Y will need to put even more money aside to fund their future.

2. They expect taxpayers to fund public underfunded pensions while 75% don’t have a pension fund of their own and will already need to increase savings as per 1.

3. In terms of education, our leaders are still foaming at the mouth, in awe of practices going on south of the border and have this idea that we have to raise tuition fees instead of restructuirng it… Even if the US situation is a nightmare. This means that Gen-X and Gen-Y will need to pay more for their kids’s tuition but where will the come come from if it’s been used for 1. and 2. ? And let’s keep in mind that while many of their parents had an empty nest and managed to put money aside while in their 50s, many Gen-X and Gen-Y will still be paying their kids’ diapers and/or daycare at that age!

How can people actually think these farcical housing prices can survive the coming mega household cash crunch?

#67 Herb on 11.11.10 at 8:12 am

When people stop buying and demanding better value, companies compete for our business, that means a shrinking profit margin and that means lower stock price and more layoffs.

– Kitchener 1 @ #6)

An unintentional nailing of how the economy now operates. Keep buying crap marketed at you regardless of losses, and everything’s fine. Stop being an easy-sell sucker and demand value for your money, and the economy seizes up. Wow!

#68 Moneta on 11.11.10 at 8:28 am

With the talk of tax hikes where is the discussion of reducing government staff in Canada. This is happening in the U.S. at local and state levels but nothing so far in Canada.
———–
Won’t happen until real esrate prices drop like a rock. Not there yet but it’s coming.

#69 Moneta on 11.11.10 at 8:31 am

Fundamentals don’t mean squat anymore. That’s why the economists always get it wrong. Their economic models don’t work anymore. Low interest rates and brainwashing, these are the new “fundamentals”. Everything else is just numbers.
———
Fundamentals always work. Revenues – costs = profits.

The models don’t work because they practice garbage in, garbage out. Revenues are always assumed to go to the moon and externalities are always dismissed.

For the last 20 years, we’ve been burning our furniture to heat our house. People are just on the cusp of understanding this.

#70 S.B. on 11.11.10 at 8:37 am

About the economy:

1. Creating a slave underclass?

“Unemployed people in Britain who refuse a job face losing welfare payments for as long as three years under the biggest changes to state benefits since the system was created more than six decades ago. ”

2. Rats fleeing the ship?

“Insider Selling Volume at Highest Level Ever Tracked
By: John Melloy
Executive Producer, Fast Money

The overwhelming volume of sell transactions relative to buy transactions by company insiders over the last six months in key leading sectors of the market is the worst Alan Newman, editor of the Crosscurrents newsletter, has ever seen since he began tracking the data.

The strategist looked at insider trading activity amongst the top ten companies that make up the Nasdaq such as Apple [AAPL 318.03 1.95 (+0.62%) ], Google [GOOG 622.88 -1.94 (-0.31%) ] and Amazon [AMZN 173.33 3.06 (+1.8%) ].

Then he analyzed the biggest members of the Retail HOLDRs ETF like Gap [GPS 20.12 -0.07 (-0.35%) ], Target [TGT 54.58 0.12 (+0.22%) ] and Costco [COST 64.45 0.23 (+0.36%) ], as well as the top insiders in the semiconductor industry at companies such as Altera [ALTR 33.83 0.33 (+0.99%) ], Broadcom [BRCM 42.38 0.32 (+0.76%) ] and Sandisk [SNDK 40.28 0.40 (+1%) ].

The largest companies in three of the most important leading sectors of the market have seen their executives classified as insiders sell more than 120 million shares of stock over the last six months. Top executives at these very same companies bought just 38,000 shares over that same time period, making for an eye-popping sell to buy ratio of 3,177 to one.

The grand total for the three sectors are “as awful as we have ever seen since we began doing this exercise years ago,” said Newman, who was ahead on such trends as the dangers of high-frequency trading and ETFs before the ‘Flash Crash’. “Clearly, insiders are seeing great value only in cash. Their actions speak volumes for the veracity for the current rally.”

#71 Moneta on 11.11.10 at 8:54 am

What does make sense is to refer to the inflation or deflation of the money supply.
——
And which one would that be?

M1? M2? M3? MZ? or does it include the one which
includes illiquid assets that can be easily collaterized?

#72 Moneta on 11.11.10 at 8:57 am

Deflationist … money will buy more goods in the future.

More food, more oil, more health care …

HA.
——–
But only the top 0.1% will have any money.

#73 Aussie Roy on 11.11.10 at 9:01 am

#47 islander – EXCELLENT

I can only hope others read your entry.

Aussie Update.

http://blog.lvrg.org.au/2010/11/price-indices-say-housing-has-peaked.html

http://www.theage.com.au/business/surprise-jump-in-jobless-rate-20101111-17oe7.html

#74 np on 11.11.10 at 9:19 am

Err. Deflation means money gets more valuable. Silver less. — Garth
___________________________________________

??… so.. silver at $27.50/oz, has been getting less valuable??

and copper now at over $4?? has been getting less valuable?

Gold at $1410??
Crude oil at $89
Cotton??
Wheat, Corn, Soy??

these things are all getting less valuable??

The point of investing is not to know where we are, but where we are going. — Garth

#75 Steven Rowlandson on 11.11.10 at 9:31 am

Garth in the case of a deflation silver might not be less valuable. In the last depression there was lots of silver around as bullion and coinage. It was all available to the market at some price and it was money. Since then the lions share of that metal has become consummed through micro useage in the production of consummer goods.
The last number I saw regarding silver stockpiles for the world was 1.25 billion ounces and alot of that might be paper silver as in EFTs. How does the stockpile go from 60 million ounces in 2005 to 1.25 billion this year unless some of it is fake paper silver?
Silver bullion reserves may be 1/5th or less than the gold stock pile. May be silver should cost 5 times the gold price as a minimum market price.
Therefore this time around silver should do pretty good.

Steven

Deflation means currency grows in value and commodities do not. There is plenty of silver in the world, as those buying it up today will discover. — Garth

#76 ttyl on 11.11.10 at 9:35 am

There seems to be a consensus that we will have deflation followed by severe inflation.
The severe inflation I assume will make my $200000 rrsp less valuable
So maybe I should cash out my deflated dollars, pay the tax, and put a very big downpayment on a house.
I do need someplace to live. Doesn’t it make sense to at least buy an asset that I can use with my soon to be inflated away rrsp.
Does buying a house when the purchasing power of your money is high and prices are low, make sense?
I’m 60 years old.

Sell your investments and pay 50% tax. Invest in a deflating asset with your life savings at age sixty. All to avoid 5% inflation when you money can earn double that. This is a joke, right? — Garth

#77 Tony on 11.11.10 at 9:39 am

RE: #56 VanLarry

The only thing that will inflate will be China’s currency. If you can remember far enough back both China and India were simply played as ponds on a chessboard for the benefit of Americans. It worked out short term but China produces nothing but junk and right now it isn’t helping America. Soon America will freeze out China with tariffs on all their goods.

#78 tre on 11.11.10 at 9:45 am

Garth, at those prices you would be better off to buy a country acreage and build a house yourself. Clearly, we are in the last throws of the real estate boom and now is not the time to be in the game.

Ever put in a septic? — Garth

#79 Boombust on 11.11.10 at 9:50 am

“…a much worse thought is that these people actually believe what they’re saying.”

Already been covered. It’s known as “Blackwhite” in Orwell’s “1984”.

#80 Incubus on 11.11.10 at 9:52 am

Meanwhile in the USA

http://www.businessinsider.com/zillow-market-report-unprecedented-decline-2010-11

#81 WINNIPEGER on 11.11.10 at 9:57 am

http://www.winnipegfreepress.com/local/province-blocks-homeowner-trying-to-sell-house-on-cheap-106943283.html

#82 molson cdn on 11.11.10 at 10:08 am

its been SO GREAT to have the USA government shorting the gold and silver bullion on the comex. i was able to accumulate (cheaply) so many coins and bars while everyone was asleep reading this “how to invest blog”. i only made 44% on silver in 1 yr and 26% on gold in 1 yr by not listening to garths advice.

oh 1 more thing, we are in an inflation mode and not deflation, garth. Get with the times–your still stuck in the 90’s.

#83 Devil's Advocate on 11.11.10 at 10:09 am

#17 Hector’s Corpse

That’s an easy one. Your agent is a dud… fire them and hire a new one capable of managing the process to your advantage.

Have your agent stealthly determine the availability of the other parties, write the offer, call the sellers agent on short notice and tell them they have an offer open for acceptance or counter for a one hour window. If countered say you need 24 hours to turn it around. A counter is actually a good thing for a number of other reasons. They will bitch and complaiin that you gave them just one hour yet ask for 24?!?! Tell them that’s the way it is. Now while it is back in YOUR court their hands are effectively tied from dealing with any other offer until the expiration of the “open for acceptance time period”. They can take backups pending collapse or submit to you writen notice of withdrawl but really it’s a buyers market and chances are they will work with you. If there is another buyer and that buyer makes a backup offer pending the collapse of yours you will have some time to strategize before the competition begins. Chances are though that the other buyer will say to their agent “We’ll wait it out. We don’t want to get into a pissing contest.”

The objective is to close the window of opportunity on the other buyer.

Yes it is a buyers market but these things (multiple offers) do happen, as you have found out. You still need to have or be a shrewd negotiator in your corner even in a buyers market.

Your agent did nothing unethical beyond providing you incompetent services. The “buyer beware” in real estate is limited to the services you hire.

#84 BrianT on 11.11.10 at 10:15 am

Great article by Mish today on the Cisco Systems Ponzi Scheme-you have got to wonder exactly how many US companies are being run solely as shareholder exploitation scams http://globaleconomicanalysis.blogspot.com/

#85 Steven Rowlandson on 11.11.10 at 10:17 am

Garth earlier this year at a CFTC meeting Jeff Christian disclosed that 1 percent of all trades in silver were for real silver. That means that 99 percent are paper silver . Garth implied and paper ounces are not real ounces. Most of the stockpiles have been leased out sold off and consummed thanks to the banks, short sellers and the Silver Users Association. Those leased ounces of silver are still counted as an asset by the banks but never the less those ounces are now paper ounces and are therefore fake ounces. Fractional reserve banking applies to more than just the official currencies Garth.
Creating paper silver works as long as you don’t have to show people real silver to prove its backing. Its the old goldsmiths scam being run in modern times Garth.

As for people finding out that there is more silver out there than they think, how is that proveable unless people can see physical evidence? Lots of silver around? I’ll believe it when I see it all!

Steven

#86 Toronto McMansion on 11.11.10 at 10:21 am

Garth is completely right. Europe and the USA are going through austerity measures and there will be deflation in non-essentials and inflation in essential goods (food, gas, oil) minus housing.

Don’t buy a house, invest in stocks with essential goods such as oil and gas. It doesn’t matter that inventories are above seasonal averages, they will go up and up….

#87 Devil's Advocate on 11.11.10 at 10:25 am

#57 Devore on 11.11.10 at 3:55 am
#17 Hector’s Corpse

The reason the buyer is not present at the offer presentation is, invariably, to do so muddys up the negotiation process. One of the reasons you have an agent negotiate on your behalf is to remove emotion from and bring objectivity to the negotiations. An experienced agent is a skilled negotiator and can generally forecast three or four moves ahead. Not many buyers are so sophisitcated they can keep a good poker face let alone their mouths shut.

On the other hand, as a listing agent, I love to see it when a selling agent shows up with their buyer in tow… actually more aptly put – when a buyer shows up with their agent in tow we know we’ve got a deal. The mere fact the buyer has taken it upon themselves to insist upon being their speeks volumes of their intent and motivation to buy. And that their agent allowed it iindicates a turkey shoot is about to commence.

#88 Devil's Advocate on 11.11.10 at 10:27 am

“being there speaks” sorry not time to proof read.

#89 Devil's Advocate on 11.11.10 at 10:34 am

#57 Devore on 11.11.10 at 3:55 am
#17 Hector’s Corpse

But you both should endeavour to buy or sell your next home yourselves without the services of a skilled professional as clearly you are both sophisticated real estate investors and negotiators who know the fundamentals well. Aftger all it really is so easy all it takes is a six week correspondence course. ;-)

#90 np on 11.11.10 at 10:37 am

“Deflation means currency grows in value and commodities do not. -Garth”

and this is clearly where your whole arguements fall apart. Governments are PRINTING CURRENCY AT WILL. When you print currency out of thin air, IT’s value drops vis-a-vis commodities, wages, etc etc.

“The point of investing is not to know where we are, but where we are going. — Garth”

that is quite true. when you are talking about commodities, they HAVE had a 10-year bull market. HISTORICALLY, the average bull market in commodities has lasted 16 years, with 10 being the shortest, and 30 being the longest.

given that there is no actual end in sight to the commodity bull market, it’s likely to go on a few more years.

#91 Joseph on 11.11.10 at 10:44 am

The point of investing is not to know where we are, but where we are going. — Garth

Quite true, but Garth has been saying for months now that we are experiencing deflation… Commodity prices clearly would suggest otherwise.

I’m no gold/silver bug, FAR from it, I’m very conflicted on the topic, it sure looks like a bubble that will burst which is why I didn’t get in at $1100, $1200, $1300 or now $1400. On the other hand the numbers suggest a very small minority of people have gold in their portfolio, its not like the stock market bubbles where bell boy’s were giving stock advice.

So is gold and silver in a bubble or is it the USD losing value (i.e Inflation)?

#92 Makeorbreak on 11.11.10 at 10:50 am

Oh no, this will not end well!

http://www.usatoday.com/money/economy/2010-11-10-stimulus-jobs-layoffs_N.htm

#93 dark sad person on 11.11.10 at 10:55 am

71 Moneta on 11.11.10 at 8:54 am

What does make sense is to refer to the inflation or deflation of the money supply.
——
And which one would that be?

M1? M2? M3? MZ? or does it include the one which
includes illiquid assets that can be easily collaterized?

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

Money supply

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

The above shows the printing-
From there you need to see where the money is going-

We know it’s ending up in Banks and we can see that by looking at Bank reserves-below-

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

From there you need to see if any of that money is making its way into circulation-below (Velocity)

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

M1 is not a good indicator because of deposit Sweeps that happen nightly-
(Greenspans little trick to increase deposits by sweeping checking accounts into savings-in order to increase reserve levels to allow for FRB reserve requirements of 12-1–

M2 is also not a good indicator because it counts money deposited in MMMF’s-which does not mean an increse in money supply-
Money in MMMF’s moves from your pocket into a fund-

M3 is worse-because it includes M2 and MZM-

MZM = Money of zero maturity

This is money that’s available on demand but the problem with counting it is-there is no way to tell what the money is doing or where it is sitting when it’s inside of MZM-
It could be in circulation to some extent-but not necessarily-so it is a poor indicator-

Credit supply is much more important than Cash supply-

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

(keep in mind-that is a 70 year chart and that sharp trend break is significant)

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

40 year chart above and look at the break down–

Note the total crash in credit Velocity below-

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

These ominous trend breaks are not indicative of our Inflationary past-they are clear indicators of Deflation-

Deflation = Decrease in Money and Credit Supply”

If money is being printed and not circulating in the Economy-it is not “Inflationary”

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

#94 Tom on 11.11.10 at 11:00 am

To: #65 bigrider on 11.11.10 at 7:56 am
The people marketing the condo’s as investments kind of forget to disclose that rental vacancies are increasing in major metropolitan areas. I suspect the fall report will show another increase. CMHC does not include private condominiums for rent. A huge amount of condominiums hitting the market next year in Toronto. Not many have been built to be occupied by purchaser.
http://tiny.cc/oag7y

#95 Basil Fawlty on 11.11.10 at 11:01 am

“There is plenty of silver in the world, as those buying it up today will discover. — Garth”
World annual silver use, exceeds annual production.

#96 Nancy on 11.11.10 at 11:05 am

OMG is Don Pittis of the Globe and Mail quoting Garth?

http://www.cbc.ca/money/story/2010/11/10/f-vp-pittis-benefits-of-inflation.html

#97 sal on 11.11.10 at 11:06 am

The inventory and prices in my neighbourhood are already on this path. Several homes have sat for a while on the market and now are featuring “new price” on the for sale sign. Checking MLS occasionally they have all dropped 5-10% asking price. I check the mail last night and I have a ton of junk mail from agents and real estate related people asking for a “free home value assessment”. I also note that banks are no longer sending me free credit increases or credit line approvals without me asking for them anymore. On top of that in my profession thanks to the Ontario gov, salaries have plummeted for contractors and any new recruits to come will have to make do with a 20-30% salary lower than mine. But it will only be time before I am asked to take a pay cut or be shown the door. So I go through deflation in my salary, but at same time cost of living inflates due to taxes and cost increases. Aren’t the times we live in wonderful?

#98 McLovin on 11.11.10 at 11:13 am

Ya, Kelowna is doing just fine…
(If 50% off is fine)
http://www.realtor.ca/propertyDetails.aspx?propertyId=9871356&PidKey=-205234100

I stick to it, Kiami will be the Miami and ground zero of the crash. In percentage terms it already is.

#99 Moneta on 11.11.10 at 11:14 am

With bond yields getting closer to 10% in many European countries, it’s hard to believe there will be much investment going on on Canada!

How long can our yields stay at 2% if our government does not jump on QE?

#100 Nicky on 11.11.10 at 11:17 am

@Bottoms Up
You have to be kidding me. You truly believe the propaganda from Health Canada.
The same Health Canada that fired Dr. Shiv Shopra for doing his job protecting Canadians from adding BGH to our dairy food supply?
Health Canada has no proof that adding toxic waste from the phosphate industry to your water is safe because no trials have been done.
Not one.
You are the guinea pig.
Since when should a municipality have the right to be my physician?
If I want fluoride I can get in toothpaste, mouthwash, dental floss and the dentist, and besides it’s in everything you eat and drink, so you are getting plenty.
In keeping with the Hippocratic oath, no physician medicates anyone without their permission.
Educate yourself a little more buddy before opening your pie hole.

#101 realpaul on 11.11.10 at 11:36 am

How did those Trudeau Liberals screw this country up so much when even a small town Ontario paper can ‘get it’?

http://www.citizen.on.ca/news/2010-11-11/Editorial/Globalization_said_failing_western_economies.html

Not only is Globalization a negative for Canada but it has failed western economies generally. The ‘multi cultural experiment that Trudea and his cronies envisioned has turned this country into a low wage tax payer subsidized refugee camp….with no way to pay for the largesse.

#102 Basil Fawlty on 11.11.10 at 11:37 am

A topical film:

http://www.xtranormal.com/watch/7570703/

#103 Moneta on 11.11.10 at 11:52 am

Not only is Globalization a negative for Canada but it has failed western economies generally
—————
You think globalization is uniquely a liberal ideal?

#104 PTDBD on 11.11.10 at 11:57 am

“Daddy, the toilet doesn’t flush, the house is freezing, the electricity is off and my mouldy sandwich has no tuna. Is that Inflation or Deflation?”

Shut up kid and lick the granite countertop again!

#105 The Original Dave on 11.11.10 at 12:00 pm

#44 dark sad person on 11.11.10 at 1:07 am

—————————————————–

The above post at #44 by Dark Sad Person is one of the best comments I’ve ever read here. Completely summed up the inflation/deflation argument. There isn’t anyone on here that is more accurate in regards to that topic.

#106 Art-Vandelai on 11.11.10 at 12:04 pm

I’m still not so sure I buy the deflation argument either. As another poster mentioned, we might see “consumer” deflation – led by prices on things like electronics, toys and granite countertops. But when we look at assets (with the exception of RE) we are currently seeing massive inflation. Equities are seeing substantial price increases (with no consumer demand to justify them). Central banks are printing money to buy bonds, and have given every indication they intend to continue doing so for at least the next decade. And the prices of things of value – gold/silver, oil, base metals, rare earths, objets d’art…etc, have been experiencing hyperinflation over the last 2 months.

Bernanke and cronies are attempting to reflate the last bubbles (US housing and stocks) to bring the wealth effect back and resuscitate bank balance sheets and consumer spending. In fact the money is not going into the last bubbles, it is flowing into the next bubbles. But assets are only worth what the next person (the greater fool) is willing to pay for them. Wealth on paper is just that. As we saw a few months ago in he “flash crash”, that wealth can disappear in the blink of an eye.

When Canadians have the bulk of the NW in real estate, and it deflates, we have deflation. The point is how all this will affect consumers, investors and homeowners and the opportunities that opens for others who understand the trends. You only see the trees. — Garth

#107 BrianT on 11.11.10 at 12:07 pm

Great article by Matt Taibbi on the descent of the US legal system into the third world cesspool http://www.rollingstone.com/politics/news/17390/232611?RS_show_page=0

#108 Aussie Roy on 11.11.10 at 12:14 pm

#98 Nicky on 11.11.10 at 11:17 am

In my capital city in Australia we have had Fluoride in our water for 40 years. Not that I’m in favour of it. My point is there are 4 major cities which have had flouride in their mains water supply for more than 40 years and 3 capital cities which do not, along with some regional areas. Every time this subject is researched and these regions compared there seems to be no unexplained health concerns. Whether it actually helps prevent decay in children, the studies suggest it does. However once you hit pubity these benefits vanish.

Kinda funny you in Canada having this debate there is a regional town here who is currently fighting to keep flouride out of their water.

Just to be clear I’m not a supporter of flouride just pointing out there are many places in the world that have had it in their water supply for years, perhaps looking at some data from these cities might provide some balance.

#109 dark sad person on 11.11.10 at 12:17 pm

Those who would buy the CNY and sell the USD should understand that China has not popped its RE bubble-
What will that do to the CNY?
Hard to say but China is highly dependent on exports and with the Global decrease in consumption-the question then becomes-manufacture and sell what to who?

Here’s an indicator of an Inflationary/Insanity blowoff in China-

http://www.youtube.com/watch?v=ektMQGbW3wk&feature=player_embedded

Every day since the announcement of QE#2 the USD has gained-doesn’t mean it can’t crash but so far-so good-

http://www.barchart.com/chart.php?sym=DXZ10&style=technical&p=I&d=X&x=38&y=10&im=&sd=&ed=&size=M&log=0&t=CANDLE&v=2&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=100&indicators=&addindicator=&submitted=1&fpage=&txtDate=#jump

Buy the CNY and sell USD?
Might work out but it could be awhile for the payoff-
Reality will come to China as it did in the US and now here–

http://upload.wikimedia.org/wikipedia/commons/2/25/CNY-USD_1989-.svg

#110 PTDBD on 11.11.10 at 12:18 pm

A lot of whirling dervish velocity of money financial wizards here debating inflation/deflation…Is it really so complicated?

Check your gut or budget every month and the answers become obvious.

Even more obvious is the fact that 2% of the world population doen’t need a steenkin budget. They’re making out like bandits. No worries for them – money is no object. The rest of us are just…dispensable.

#111 Devore on 11.11.10 at 12:21 pm

#42 Patz

Since the early 70s and especially when Raygun and Thatcher spread the joy of trickle down (on?) wages flatlined like a patient etherized upon a table.

Funny you should blame faux-capitalism of Reagan and Thatcher for flat real wages for decades. You know what else happened in the 70s you should be blaming instead?

#112 Cookie Monster on 11.11.10 at 12:22 pm

When Canadians have the bulk of the NW in real estate, and it deflates, we have deflation. The point is how all this will affect consumers, investors and homeowners and the opportunities that opens for others who understand the trends. You only see the trees. — Garth
________________________-
This is where I think you’re mistaken, the inflated mortgages have already been written, a house price collapse does not reduce the mortgage dollars already paid to sellers over the last decade. So what if the sticker price on the market drops by 50%, everyone feels poorer and spends less, true, but the money never exists until someone takes out a HELOC or moves larger (bigger mortgage). As of now the inflation is already baked in, market sticker prices can drop but that will not reverse the credit expansion we’ve already experienced.

Credit expansion is easy, contraction not so much.

#113 The Original Dave on 11.11.10 at 12:29 pm

Garth, it seems like inflation is happening gas is almost 1.10 a litre in the GTA, housing prices are still going up? all the metals just keep going up copper/silver/gold also cotton.

Shane
———————————————————

dude, can you have a wider scope? That’s just a mid-term trend. Some people on here are declaring inflation and hyperinflation a certainty! Colleagues of mine are doing the same. I know the reversal will be coming soon because of the chatter I hear. There’s highs and lows in between. Prices have gone up lately, does that mean they’ll only go up going forward? When prices were down a year and a half ago, did it mean they’d only go down going forward? This is what happens – prices fluctuate – but a multi-year outlook, in my opinion, has prices of many assets, including many commodities, moving downward.

#114 Bottoms_Up on 11.11.10 at 12:32 pm

#98 Nicky on 11.11.10 at 11:17 am
————————————————–
Hey Greatest Fool,

Does it hurt that my ‘pie hole’ speaks the truth, that is, Health Canada makes decisions based on scientific evidence and weighs the credibility of that evidence?

http://www.hc-sc.gc.ca/ewh-semt/consult/_2009/fluoride-fluorure/draft-ebauche-eng.php#t5

“The weight of evidence from all currently available studies does not support a link between exposure to fluoride in drinking water at 1.5 mg/L and any adverse health effects, including those related to cancer, immunotoxicity, reproductive/developmental toxicity, genotoxicity and/or neurotoxicity. It also does not support a link between fluoride exposure and intelligence quotient deficit, as there are significant concerns regarding the available studies, including quality, credibility, and methodological weaknesses.”

#115 PTDBD on 11.11.10 at 12:34 pm

++++++++++++++++++++++++++++++++++++
Prestidigitation for the levitation nation

A bearded financier of academic veneer,
Strolled arm-in-arm with his companion
Engrossed with interest, they promptly stepped off the canyon.

“We’re heading for Doom & Gloom!” cried The Maestro,
“Don’t worry” said Bernanke, waving his magic hankie,
“From you, I’ve learned prestidigitation and obscufacation,
to achieve never-ending levitation”.

Greenpsan looked at him askance,
as he promptly soiled his pants.
Finally accepting the full gravity of the situation.
++++++++++++++++++++++++++++++++++

Ode to all “Financial Experts”

Everybody knows…
when your wheels are spinning,
when you’re just not winning,
it’s not time to step on the gas
unless you’re a complete fubar ass.
Everybody knows.

Everybody knows…
when you’re stuck in the snow,
you can’t make it go,
by going in high gear
you’ll only instill fear
by making interest so low.

It may seem perverse,
to try the reverse,
to sit there and think,
admit to being a complete dink.
You’ve jumped the shark like Fonzi
Everyone’s seen your tiny Ponzi.

Now, everyone knows.

#116 Devore on 11.11.10 at 12:38 pm

#59 Behind the Numbers

1. I agree, there is price inflation, but as Old points out, it’s inflation in the SMALL costs, not the BIG costs. I would rather save $100,000 on a house or $10,000 on a car (deflation) and pay an extra 25 cents on a loaf of bread (inflation).

That’s a myopic view. It’s not just about you.

This kind of price biflation affects people very unevenly. Those who cannot afford to buy houses or cars or new TVs do not get to benefit from this “deflation” of yours, instead all they see are higher prices for the things they must buy daily.

The fact that CPI is very low, aside from it being a barely credible political tool, doesn’t tell the whole story. Ever heard of “value deflation”? Lots and lots of stuff you buy is getting smaller, but costs the same. From the holes in Fruit Loops being bigger, to restaurant plates and glasses getting smaller, to TV dinners looking a little grayer, to a pint of beer “evaporating” quicker, to having one less piece of beef jerky in the bag. Less filling, same great price! But oh, prices aren’t going up.

#117 Behind the Numbers on 11.11.10 at 12:48 pm

“Deflation means currency grows in value and commodities do not. There is plenty of silver in the world, as those buying it up today will discover. — Garth”

Exactly.

And that’s exactly what the Spanish found out too. Like the metal bugs here, Spain was hit with that same bug too and took to the oceans to find silver and gold. Well, they found it in Mexico, so much of it in fact that it crash the market. Spain found out that Silver and Gold doesn’t always shine.

As Garth says, Silver is not as rare as you think… infact, there are MASSIVE TONNES of it:

Silver:

In Earth’s Crust (mg/kg) 7.5×10-2
In Earth’s Ocean (mg/L) 4.0×10-5

http://www.eoearth.org/article/Silver?topic=49557

and amazingly enough there is MASSIVE AMOUNTS of Gold on the Earth too:

Gold

Abundance
In Earth’s Crust (mg/kg) 4.0×10-3
In Earth’s Ocean (mg/L) 4.0×10-6

Shhhh…. But don’t tell the gold bugs and Silver pumpers!

#118 Devil's Advocate on 11.11.10 at 12:50 pm

#96 McLovin on 11.11.10 at 11:13 amYa, Kelowna is doing just fine…
(If 50% off is fine)
http://www.realtor.ca/propertyDetails.aspx?propertyId=9871356&PidKey=-205234100

I stick to it, Kiami will be the Miami and ground zero of the crash. In percentage terms it already is.

No one said there was a shortage of fools back in 2006. Check out that developers latest development “Mission Mountain”… (what a farce). This developer is one of those pump and dumpers that give the development community a bad name. Again though McLovin you point to an isolated unique example which is, all-be-it real, extreme. On the other hand it is such extremities which pull the “average” down to what it is amid the existence at the other end of properties which have actually still increased in market value this year.

#119 Moneta on 11.11.10 at 12:56 pm

Here is an example of the evolution of price per square foot for 3 different house in Montreal’s West Island from 1995 to 2008

House price in K:
1995 2001 2008
1300 120 150 279
1800 155 200 379
2300 200 275 550

Price per square foot (adjusted for land):
1300 $54 $58 $138
1800 $58 $69 $155
2300 $65 $87 $196

If all houses are of the same vintage, they should be selling at the same price per square foot. But the 1300 in form the 19050s. The 1800 from the 1970s and the 2300 from 1990s.

The 2300 trades at a premium per suqare foot because it is new. In 10-15 years it won’t be so new so the price pwer square foot will converge towar tthat of the 1300 and 1800.

A completely renovated 1800 square foor house was selling at 155$ per square foor when a McMansion was sellintg at more than 200$ per square foot.

Anybody who thinks they’ll be making money on their McMansion long term are dreaming.

The last 5 years was a flipper’s market not one for long term holds.

#120 AM on 11.11.10 at 12:56 pm

88 Devil’s Advocate on 11.11.10 at 10:34 am

“But you both should endeavour to buy or sell your next home yourselves without the services of a skilled professional as clearly you are both sophisticated real estate investors and negotiators who know the fundamentals well. Aftger all it really is so easy all it takes is a six week correspondence course.”

DA…You gave some useful insight and showed us your knowledge of your trade…then we get the back hand slap. No wonder you and the realturd population get no respect.

#121 BrianT on 11.11.10 at 12:59 pm

#014Art-Uncle Ben better hurry up on the printing-CSCO has burned up 18 billion so far today.

#122 garthfan on 11.11.10 at 1:05 pm

On predictable paths,

According to the Washington Post, it’s hard to say where bombs will explode – http://www.csmonitor.com/World/terrorism-security/2010/1111/Cargo-plane-bomb-would-have-detonated-over-Canada-not-the-US-say-new-reports. Thank goodness Scotland Yard was accidentally on the job.

Icarus didn’t listen to his father either and kept on flapping his wings.

#123 BrianT on 11.11.10 at 1:25 pm

#115-Behind-good numbers-maybe you could tell us what the potential supply of digital fiat currency is (you could round your answer to the nearest quadrillion).

#124 GregW, Oakville on 11.11.10 at 1:26 pm

Hi #25 Bottoms_Up, (I made fluoride post yesterday and was hoping to leave it today, buy you posted first today.)

re: You have been worried about fluoridated water for years. Get over it. Do you not realize there are risks and benefits

I have seen, read and here first hand the science regarding fluorides toxic effects on the human body. The risks do not out way the supposed benefits.
For good science based information, this is a good place to start.
http://www.fluoridealert.org

I don’t think human beings should be force to be exposed to second hand cigaret smoke either.
You might recall the longtime it took governments to act on the mounting science that was telling us second hand smoke was causing harm the people. The science has been mounting for some time that fluoride is causing harm to people. Waiting for the Government to act is not in your best interest, based on the available science we have at hand and I’ve seen.

I took the time (one week) to attend the University of Toronto, “world fluoride conference, it’s effects on the brain and soft tissue of the body.” Medical Doctors, Dentist, Dental Researcher, Toxicologist, other Scientist, PHD, DR., from all over the world, presented there researchers and explanation as to why water fluoridation is simple a BAD idea that needs to stop. Even winner of Nobel prizes in medicine have called for the end of water fluoridation. See video at link.

I have see the science and do all I can to avoid fluoride exposer now!
I no longer drink and cook with my regions (Burlington/Milton/Oakville) fluoridated water.
I unfortunately can’t afford to stop being force to bath and shower in it!!!

Bottoms_Up, you should get yourself informed first. Don’t force your fellow human beings and families with kids to be exposed to this known toxin. Feel free to expose ‘yourself’ to fluoride, I wouldn’t, and I try not too as much as I can.

Why do you think the public should be mass medicated with fluoride or anything, using the public water supply?
There is no informed consent. I have gotten myself informed and DO NOT consent.
The dose is not controlled. How much water do you drink? How much additional fluoride exposure do you get from foods or drugs?
Are your kidneys working well?
Is your thyroid function perfectly ok?
Do you have a good diet to help counter fluorides toxic effects?

Even the American Dental Association has come out and said infants should not be exposed to fluoride. Have all new mothers heard this and know how to prevent exposer or can afford to have fluoride free water? Can our society real afford to have more people with reduced IQ and less brilliant people?

FYI: brital (carbon) filters do not remove fluoride and boiling fluoridated water only makes it more concentrated. Water fluoridation needed to stop!

Why does the west have so-called unexplained disease and suffering?
Form what I have learned water fluoridation is certainly one of the bullets in the smoking gun of plausible causes.

I have been convinced that our society can not afford to keep force human beings to drink fluoride and bathing in it by adding it to the drinking water supply.

FYI: a pea size amount of tooth past has about the same amount of fluoride as a large glass of water 250ml. Your tooth past tube tells you DO NOT SWALLOW, to call poison control if you swallow more than a pea size amount. How does drinking fluoridate water even make any sense to you? Any very small benefit to cavity reduction is from topical application, not from being forced to drink water with added fluoridating compounds!

Get yourself informed.
The book you see first on the site/link is free to read online at google books, said author.
The 29 min free info video (scroll down) on the site is informative.
Making a copy of the video and ask your Doctor to look at it because you have some concerns and of course they are the Medical Doctor and they can better tell you if you should have concerns.(As one way to help get the information to other people that can be helpful with stopping water fluoridation in your area..) Tell your friends and family.

Your local Dentist is not the problem, they just have been misinformed. Help them find the newest good science info. They are only human too.

The 2006 NRC report: Fluoride in Drinking Water A scientific Review of EPA’s Standards,
can be found and read for free at the site above.

Get involved and get your local Government representative informed and tell them you do not want to be forced to drink fluoride! You Do Not want to bath and shower in it either!!!

Let them know if they don’t stop water fluoridation you will run for there job and get the job done for your fellow human beings/neighbors if they can not do the right thing based on the good science that is available.

Help them get up to speed on the newest available science info, the above link has lots of good info. based on good science!

#125 Kitchener1 on 11.11.10 at 1:43 pm

Here is a link to Zerohedge

http://www.zerohedge.com/article/insider-selling-hits-all-time-record-45-billion-prior-week-everyone-getting-out-market

Insider selling at the highest point ever recorded.

Keep and eye on this, as in the past, COT reports were pretty good at foreshadowing trends.

Regarding Gold/Silver–

right now its a huge battle between the shorts covering there spreads, the retail investor has not yet even jumped into the trend……….yet.

IMO, its a Asian vs West game, looking at the volumes of Gold/silver, any dump in price is followed by large asain buying, they are buying the dips and putting a price support under $25 silver– trying to do that for $1400 for gold. Its basically a trading war between the west/east. The commoditty desk at JP morgan/goldman are hurting right now. It happens all the time just in different sectors.

If and its a matter of If not when, the large buyers in Asia demand delivery, thats when the huge rises will happen.

#126 Toronto McMansion on 11.11.10 at 1:48 pm

With QE2, there will be inflation everywhere in the U.S., including their lowered housing. My American friends are already started buying up low cost housing as it is near the bottom with the U.S. inflationary measures.

The only way to avoid inflation is to buy gold and oil– even though they are over-abundant and/or useless commodities. Even though there is an excess supply, buy oil and gas as at least they have uses!

#127 Tim on 11.11.10 at 1:49 pm

End the tax deductability for capital gains from stocks? That would decimate the market. What’s the likelihood that would happen?

#128 Coho on 11.11.10 at 1:53 pm

Fifty Ways to Impress Your Friends

This is the plan, Stan
No need to be coy, Roy
This house is for you, Drew
Just listen to me

Why do you rent, Trent
Go buy a house, Klaus
Impress your mom, Tom
Just take it from me

Look at the granite, Janet
You just have to have it
It goes with your chair, Clair
Buy it if you dare

Take on the debt, Bret
No need to worry yet
Money is free, Lee
You heard it from me.

How do you pay, Jay
You don’t need to know, Joe
Just sign on the line, guy
Don’t it make you feel fine…

http://www.youtube.com/watch?v=298nld4Yfds

#129 pablo on 11.11.10 at 1:54 pm

And, by the way, has your salary increased lately?-garth.

There’s lots of people out there in different jobs and in various industries that haven’t seen any meaningful increase, if any at all in their salaries/wages. Now is the perfect time for a tough love budget from happy harper and fatso flagherty……..Not.
The banksters and the politicos should be stripped of their assets and thrown into the deepest darkets hole we can find.

#130 pablo on 11.11.10 at 1:58 pm

But this house is unique. It has no back yard to speak of.

“ravine view” I maybe showing my age, but in my day they would’ve called that a DITCH!

#131 Drake on 11.11.10 at 2:02 pm

St. George (Carlin) warning in 2008:

http://www.youtube.com/watch?v=hYIC0eZYEtI&feature=related

#132 Devil's Advocate on 11.11.10 at 2:02 pm

#118 AM on 11.11.10 at 12:56 pm88 Devil’s Advocate on 11.11.10 at 10:34 am

DA…You gave some useful insight and showed us your knowledge of your trade…then we get the back hand slap. No wonder you and the realturd population get no respect.

Slap my hand by carte blanche slapping the hand of my profession because you made the mistake of hiring one of the bimbos we allow to be accredited, of which any vocation has it’s fair share, and you might well expect a retaliatory or defensive retort. What might you do under similar circumstances? Criticism is one thing, ignorant criticism is something entirely different.

Admittedly, I had second thoughts about that post (#88) but really, the REALTOR slamming on this blog is largely unwarranted and I am just the guy to rally to our defences. Besides such hand slapping invariably seems to please the pups and poodles more than useful information as they look for something to bark and bitch and gnaw on. They need to be thrown a bone once in a while – it livens up the place. Y’all love it you know that. Come on now admit it. You miss me when I’m gone.;-) Childish antagonizing on my part? Hell ya! Such are the latitudes afforded by anonymity. Eliminate that from these blogs and 200 posts per would whittle down to 50 easily. (ya go ahead say it; “the bulk of which are DAs” ;-) )

Again, the extent of buyer beware in real estate is limited to the level of representation you hire. Which is not so far removed from the saying “one who represents themselves in court has a fool for a lawyer”. Because one had a bad experience does not mean all do. Statistically we’d be out of business were that the case.

But I am glad you found the information in those two preceding of my posts of value. They are but the tip of the iceberg. Be nice and you might get more of them and less of the hand slapping.

#133 jess on 11.11.10 at 2:03 pm

26 Timing is Everything

“EVERY municipality, will just have to shrink themselves”

…those interest rate swaps “exit fees” are job killers.
Wall Street Takes $4 Billion From Taxpayers as Swaps Backfire (Bloomberg)And how many more are coming due 100b. or so?

#134 Lonnie Gerber on 11.11.10 at 2:04 pm

Suggestion to Garth and webmaster – would you considered adding a vote up/down feature for comments? Have comments highlighted by editor?

There are gems in the comments (bundled with clunkers) – highlighting gem-like comments will be great.

#135 Toronto McMansion on 11.11.10 at 2:25 pm

I believe the expression is:

A man who is his own lawyer has a fool for his client.

That said, we are going to $100/barrel oil shortly!

#118 DA

Again, the extent of buyer beware in real estate is limited to the level of representation you hire. Which is not so far removed from the saying “one who represents themselves in court has a fool for a lawyer”.

#136 Soylent Green is People on 11.11.10 at 2:27 pm

Harper on a Listening Tour? More like the Mime Tour.

http://pushedleft.blogspot.com/2010/11/stephen-harper-on-his-2010-mime-tour.html

#137 jess on 11.11.10 at 2:31 pm

I am getting increasing calls to “refinance”

and weren’t they cosy with Lehman?

March 21, 2002

Home Mortgage Lender Settles “Predatory Lending” Charges Settlement Could Mean As Much As $60 Million in Consumer Redress Nearly 18,000 borrowers could receive as much as $60 million dollars in compensation under the terms of a settlement of a lawsuit involving a California-based home mortgage lender and its chief executive officer.

The settlement with First Alliance Mortgage Company (First Alliance) was announced today by the Federal Trade Commission; the states of Arizona, California, Florida, Illinois, Massachusetts, and New York; AARP; and private attorneys for class action plaintiffs and for individual plaintiffs with unfair lending claims. The settlement must be approved by a federal district court in Santa Ana, California.

http://www.ftc.gov/opa/2002/03/famco.shtm

==============
Hudson to Hudson | Michael Hudson
10 Nov 2010 … There was one problem: Ameriquest almost never made home purchase mortgages. It was a refi shop. In 2004, less than one quarter of 1 percent of its loans went for …. using “boiler room” sales pitches to peddle mortgages with Rube … as a financial “sweat shop” specializing in “high pressure sales …
michael-hudson.com/2010/11/hudson-to-hudson/

#138 Devil's Advocate on 11.11.10 at 2:34 pm

#122 GregW, Oakville FYI: a pea size amount of tooth past has about the same amount of fluoride as a large glass of water 250ml. Your tooth past tube tells you DO NOT SWALLOW, to call poison control if you swallow more than a pea size amount.

Yes, my wife told me about this…

#139 Devil's Advocate on 11.11.10 at 2:36 pm

RE: “Yes, my wife told me about this…” – DA

Oh now come on now! You pups and poodles are just plain SICK!

#140 Devil's Advocate on 11.11.10 at 2:38 pm

Note to self… scrub lables from all tooth paste tubes

#141 Coho on 11.11.10 at 2:39 pm

As Nicky pointed out, fluoride is in so many things. The fact that people are apathetic, unaware and buying into the propaganda is proof enough that fluoride is doing what it is intended to do…dumb down and/or make the public docile.

Just because we aren’t dropping dead from the stuff doesn’t mean it is benign. And since when do authorities care so much about dental health that this stuff is found in so many things that we consume? Give us a break. Some of us aint that dumb. I would hope the contrarian attitude goes beyond the price of housing, at least for some of us.

Cancer and diabetes were almost unheard of at the turn of the 20th century, yet they are epidemics now. If there was as much concern about physicall illness as there is about our so called dental health we’d be a much healthier society in every respect. Instead we are over-stressed, over-medicaded and undernourished…and soon we’ll all be broke. Maybe someone should write a song “Fifty Ways to Screw Your People”.

#142 Fuzzy on 11.11.10 at 2:40 pm

Gotta love the way that US Deficit Commission recommended cuts in Social Security, Medicaid, Fannie/Freddy … but not a peep about military or defense.

Rock on Military Industrial Complex!!!!

#143 Devil's Advocate on 11.11.10 at 3:04 pm

That is actually illegal in some states…

If the FDA finds out you have removed the lables you could face a significant fine.

#144 Devil's Advocate on 11.11.10 at 3:05 pm

Oh man….. you guys are real SICK ya know that?

#145 sk76driver on 11.11.10 at 3:06 pm

I just got back from a 3 week trip to Thailand where I worked in the slums on various small construction projects helping elderly who have basically been forgotten about. Whether by their kids or the gov’t,,,,doesn’t matter. I went because it was time to give some back. Fixed the roof for a grandpa, his house was the size of my walk-in closet. Also replaced the roof and built 2 toilets for another grandpa whose house is the size of my master bedroom but he has 12 family members living in the house. Why do I write this? Because these people are at the bottom and they are surviving. How will the Canadians who have ridden the debt hog til it collapsed make out when their world implodes and they are on the street with nothing? The way I figure it? You’re screwed!!

#146 bridgepigeon on 11.11.10 at 3:08 pm

Greg W; long rant, but you are correct, all the info’s out there…lot’s of stats on stress too… deep breaths…
Coho; so nice to make a point with music and poetry, if we could all be like that…thanks for the smile

#147 triplenet on 11.11.10 at 3:13 pm

#23 – Deciding when to sell
…….you said:
We live on a big forested acreage south of Campbellville with a small cedar log cabin. Lots of firewood, clean water, and squirrels. No public transit.

5% of the people want to live in the outback with no municipal services. No water, sewers, electricity, paved roads, local schools, health facilities, substandard housing (cabins) etc., etc.
On a good day in a good year that’s the chances of your property appreciating in value.
Hedge your bet by purchasing a condo in Toronto or Vancouver.
Or quit asking silly questions.

#148 Mtl RE Observations on 11.11.10 at 3:16 pm

Moneta, I enjoy reading your perspective on things. On days when I can’t read everyone’s comments, I skip to those where Garth has replied – and to yours. Thanks!

#149 TS on 11.11.10 at 3:18 pm

Another blatant ‘shill’ piece to encourage people to buy a home now…..

http://yourmoney.ca/real_estate/home_buying_resource_guide/b5240a1a

Too bad so many uninformed people believe this crap!

#150 Jen on 11.11.10 at 3:23 pm

Just heard a commercial on the radio trying to shill cars using the D word. You can now get a civic for 1999 prices. Guess all those 60-month free financing schemes have failed to find buyers in Calgary, high median incomes be damnned.
I’m debt free, just rented a one-bedroom apartment for 400/month less than it would cost to own and am laughing all the way to the bank. Thanks Garth!

#151 allister on 11.11.10 at 3:24 pm

What the debtors never seem to grasp is that they are always the first to suffer because they ndon’t own anything. It was that way in the 1930s, the 1980s and it will be in the future.

An example is the people is saw on TV with tears in their eyes because they lost their house and everything, even though they previously had a $200K job, and the other couple that had a booming business of $10000/mo. but now have nothing.

If you have a million dollar house with a million dollar mortgage ITS THE BANKS HOUSE. If you are leasing or making payments on a beemer ITS NOT YOURS.

Debtors use other peoples money to put on appearances. They are always one paycheck from the street.

If you want securely then stay out of debt and build equity.
Anyone who loans you money is not your friend.

#152 BrianT on 11.11.10 at 3:27 pm

Over 19 BILLION wiped off CSCO today-that has got to be nearing record territory.

#153 Patz on 11.11.10 at 3:35 pm

We are tethered to the US economy in ways that are not healthy for our own at least not in times when theirs is in such shambles. Despite our efforts, good ones at that, to move towards Asian and Euro markets the US is still our main dance partner.

The US economy is roughly 70% consumer driven so much of our economy is dependent on the health of their buying power. How good/bad is it?

You hear a lot about household deleveraging in the US now but how is that being accomplished? According to Moodys it’s by debt default. It would take rising wages to accomplish it by the healthier way of paying down debt from excess capital. Debt default of households amounts to somewhere north of $400 bn since 2007.

Which means that for most of the rest (who haven’t defaulted) they are just getting by servicing their debt. Much of that is at risk of default as well.

Government transfer payments such as unemployment benefits, food stamps, social security etc. now make up a record 25% of consumer spending! That compares to an average of 10–11% for the past 40 years.

Given that, what happens when the new congress with their slash and burn, pour the tea, mentality takes their seats?

Given the above plus the well–known state of their housing market, where and when is the jobs/spending recovery?

Which brings us back to us. Even if we could (doubtful) offset most of our dependence on the US we’re still going to take a hit to jobs, economic performance and—you guessed it!—real estate. And when we begin to hear that giant sucking sound who are we going to turn to for help?

#154 Moneta on 11.11.10 at 3:41 pm

Why do you think the public should be mass medicated with fluoride or anything, using the public water supply?
There is no informed consent. I have gotten myself informed and DO NOT consent
———
My Gaaawdddd! If I did research on everything that is slowly killing me I wouldn’t have anymore time to obsess about real estate­. Can’t let that happen.

#155 McLovin on 11.11.10 at 3:41 pm

Devil’s Advocate # 82, 86, 116, 130

Please just go away! You promised us that you would go away and “check back at Christmas”.

Do you deliver on your promises like this to you clients? (Oh wait you guys call them customers)

#156 DaBull on 11.11.10 at 3:43 pm

#44 dark sad person on 11.11.10 at 1:07 am

You see it’s not really about how much money has been printed-it’s about what that money is “doing”. In order for all that printed money to act like money-it has to circulate in the Economy-otherwise it’s nothing.

That’s called the “velocity of money”. During and just after a recession it always slows down. But just wait for the day when it picks back up.. If the Central banks timing is bad on reining in all that liquidity (printed money), look out “INFLATION IS A COMING BIG TIME”. Until then the US will just have to settle with currency deflation, which I think they want anyway. It will make imported goods more expensive and exported goods less. Canadian businesses relied on this for years to keep their share of the export market. In Canada it was a cheap dollar instead of innovation and technology. No it’s the US’s turn to play the game.

Personally I think it’s going to be a long long time before the US central banks will have to rein in liquidity, maybe a decade or so and if the US has low rates, so will Canada. So get used to low interest rates, they will be here for a while yet. We are after connected at the hip to the US.

#157 MikeT on 11.11.10 at 3:46 pm

Gotta love this Street View image from Nunn Court:
http://maps.google.ca/maps?f=q&source=s_q&hl=en&geocode=&q=Nunn+Court,+Milton,+Ontario,+Canada&sll=49.891235,-97.15369&sspn=24.456745,55.546875&ie=UTF8&hq=&hnear=Nunn+Ct,+Milton,+Halton+Regional+Municipality,+Ontario+L9T+2X5&ll=43.492845,-79.884145&spn=0,0.021694&t=h&z=16&layer=c&cbll=43.493507,-79.889405&panoid=i-63-C97jNSts6C6Kz9fVQ&cbp=12,153.04,,0,14.86

#158 David B on 11.11.10 at 4:00 pm

Garth you are getting better with age …. but heck we who stop by here daily are also …..

“Better at understanding the world around us”

#159 jimmy on 11.11.10 at 4:03 pm

I worry. I worry about flouride now. Is there buy real estate chemicals put in Vancouver’s drinking water?

#160 MarcFromOttawa on 11.11.10 at 4:09 pm

Record high prices for Ottawa and Montreal

http://www.chpc.biz/

#161 RickOShea on 11.11.10 at 4:09 pm

The government can be relied on to lie about GDP which they invariably over state, unemployment – always under stated, and inflation as it relates to ‘cost of living – CPI/consumer price index’ – understated in spades given their huge vested interest in doing so.

In the US at least, energy and food for example, have been taken out of the calculation which makes the number meaningless to working stiffs.

Check out this web site http://www.shadowstats.com/
It gives a much more accurate picture as to what’s really going on.

#162 BrianT on 11.11.10 at 4:45 pm

#151Patz-Yes. One thing-there is no such thing as a sustainable “consumer driven” economy-all such creations are Ponzi schemes by definition-eventually the consumer runs out of money because there wasn’t enough emphasis on productive investment and savings. The US economy will continue to deteriorate until it is no longer a “consumer driven” economy-at that point it may or may not recover.

#163 betamax on 11.11.10 at 4:52 pm

#55 hobbygirl: “I just read that China`s leader wanted the British PM to remove his poppy which I found offensive.”

the Chinese mistakenly saw it as a reference to the China-Brit ‘Opium Wars’, not WWII, which China also fought in against the Japanese and experienced horrific losses. Google “Nanking massacre” for examples.

#164 GenXer on 11.11.10 at 4:54 pm

“This is where I think you’re mistaken, the inflated mortgages have already been written, a house price collapse does not reduce the mortgage dollars already paid to sellers over the last decade. So what if the sticker price on the market drops by 50%, everyone feels poorer and spends less, true, but the money never exists until someone takes out a HELOC or moves larger (bigger mortgage). As of now the inflation is already baked in, market sticker prices can drop but that will not reverse the credit expansion we’ve already experienced.”

Cookie – this is incorrect. As soon as a loan default occurs, the asset has to be written down to market value. This is what has been fueling massive credit destruction in the US, far greater deflationary pressure than the fed can print their way out of. We enjoy the benefits of leverage when banks create money on the upside, but the downside is leveraged too.

No need to panic though, a full 500 basis point increase in interest rates is required to start this process, which won’t happen for at least 60 days.

#165 Debtfree on 11.11.10 at 4:57 pm

@134 Thanks for the links . I haven’t laughed this hard in awhile . The only thing the harpo hears is the tinnitus in his head sadly for our country he likely thinks it is his God speaking to him. A listening tour of the country . If he doesn’t take questions .What the hell is he listening to? The wind blowing through his ears I guess.

#166 GregW., Oakville on 11.11.10 at 5:02 pm

Hi #143 sk76driver,
re: How will the Canadians who have ridden the debt hog til it collapsed make out when their world implodes and they are on the street with nothing? The way I figure it? You’re screwed!!

At lease it doesn’t ‘snow’ in Thailand where you worked in the slums.

#167 Patz on 11.11.10 at 5:03 pm

#105 Brian T
article by Matt Taibbi on the descent of the US legal system into the third world cesspool
http://www.rollingstone.com/politics/news/17390/232611?RS_show_page=0

Reposting this Brian because it is so very good. If you want to know what ‘foreclosuregate’ is about this is the primer. So many ignorantly blame homeowners for “taking on too much debt” or “not paying their f*king bills” etc. This is what really happened and it going on now. It is a massive CF and is perpetrated by the banksters with homeowners playing the stooges.

Coming to a country near you!

#168 dd on 11.11.10 at 5:21 pm

.#89 np on 11.11.10 at 10:37 am
“Deflation means currency grows in value and commodities do not. -Garth”

True. But I really don’t see currency being of more value when goverment policy going forward is to make it cheap compared to others.

The issue tomorrow is financial health of countries and whether bond holders will need to take a good hair cut. Most developed countries cannot pay their debt back regardless of what kind restraint is coming. Period. Investors will buy what they can. It is the time for assets were there is no counterparty risk.

#169 stanley on 11.11.10 at 5:33 pm

@115
You forgot to mention how much it would cost to get that silver out of the crust at such low concentrations. Even mining it at high concentrations is expensive, and is not bringing enough silver into the market to meet demand.

Garth is a top caller. He will be right about real estate eventually. All these years calling for a top and the price kept going up. It will be the same story for gold and silver. But you will have missed out of a lot of money in the meantime.

He did not know to buy silver at $5 an ounce. So he did not know where the price was going. And he still does not know where the price is going. He will call the top until it happens then he will think he was right all the time.

#170 Ontario Joe on 11.11.10 at 5:37 pm

I thought Devil’s Advocate had left?

#171 Live within your means on 11.11.10 at 5:52 pm

#99 realpaul on 11.11.10 at 11:36 am
How did those Trudeau Liberals screw this country up so much when even a small town Ontario paper can ‘get it’?
………………

And now your cons are screwing this country.

#172 steve p on 11.11.10 at 6:10 pm

“Don’t understand the wealth destruction to occur”

it wasn’t real wealth

#173 Deciding when to sell on 11.11.10 at 6:15 pm

#145 triplenet

#23 – Deciding when to sell
…….you said:
We live on a big forested acreage south of Campbellville with a small cedar log cabin. Lots of firewood, clean water, and squirrels. No public transit.

5% of the people want to live in the outback with no municipal services. No water, sewers, electricity, paved roads, local schools, health facilities, substandard housing (cabins) etc., etc.
On a good day in a good year that’s the chances of your property appreciating in value.
Hedge your bet by purchasing a condo in Toronto or Vancouver.
Or quit asking silly questions.

Well, that was useful.

You were right that we have a well and septic system, but, believe it or not, we do have electricity, paved roads, two schools within 10 minutes, hospital within 15, and the cabin will outlast anything built by Mattamy. We are 15 minutes from Milton and Burlington, 20 minutes from Cambridge and Guelph. I’m not asking whether the property will appreciate. I’m asking whether anyone has any opinion on how fast it will depreciate.

#174 Nostradamus Le Mad Vlad on 11.11.10 at 6:15 pm


#160 dark sad person on 11.11.10 at 12:09 am — “They still have the biggest guns–”

Indeed, but what they don’t have is the up and coming young people to replace the boomers who are retiring from military service. This is where #162 GregW’s comments about Bill S-510 come in useful, when applied to depopulation.

With a SS plan that isn’t there anymore (Clinton looted it to make the deficit look good), it is easier for the WH and Pentagon to give free rein to Monsanto to kill us boomers off, allow illegals to come in from Mexico and elsewhere and re-build their military.

But every dog has its day, including the Rothschilds, Rockefellers, the Roman Catholic Church (they only have one pope to go before their cycle concludes), and the same with empires / currencies.

It will take quite a lot of water and flotsam to pass under the bridge, but when the cycles have shifted from west to east, the coast will be a little clearer.

Whether we’re around to see it is another matter!

#162 GregW, Oakville on 11.11.10 at 1:56 am — “Hi #139 Nostradamus, glade you’re still with us!”

G’day Greg. Still here and as frutty as a nootcake!
*
#20 TheDude — “Yes, the IMF, the self appointed global book keeper looking to enslave us all with its loans.”

3:18 clip The Rothschilds control the IMF, gold markets and are worth (at last count) US$500 trillion.

Sheeple (society) in general, does not have the slightest idea of who pulls the strings here (but not for much longer, as nothing lasts forever).

Most have been conditioned by the m$m and parents to accept things for what they are and keep plodding along in this futile game created by the few, and a lot of it is their own fault for not questioning their MPs and MPPs, along with others in positions of power.

Nothing wrong with that (just stupidity rearing its ugly head again), except we were told that we could acquire this through further borrowing instead of having to actually earn it.

But the ever-burgeoning deficits equates us getting closer to a feudal system, where we are their slaves, they are the masters. The wealth of the middle class is shifting to the elite (banxsters), who in turn are buying up everything from countries’ resources, infrastructure and paying govts. off to keep quiet about the whole thing.

Most people are idealists, not realists. In a perfect world it would work, unfortunately we live in a self-destructive world of worshiping money above morals.

Even the simplest ethics in life — Do all you have agreed to do, do not encroach upon others or their property and do unto others as you would have them do unto you — would lead to a much simpler, straightforward way of life for all.

Beds Are Burning by Midnight Oil with lyrics. BTW, Peter Garrett, former frontman for MO was — at one point — a politician down under, but the song describes what the world has to go through in order to have a slightly better life.

Will it ever happen? Maybe things will cool off a little when the cycles have eventually shifted and the people in the west have learned to live well within their means. However, food shortages and supplies will be contract to reduce the world’s population.

Medias (not blogs like Garth’s) will give us BS spin as to why this is happening. People are already feeling the crunch and some are even questioning “Why is this happening”? Good post.
*
Speaking of societal paradigm shifts / changes . . .

#175 Mikey the Realtor on 11.11.10 at 6:18 pm

Hey DA, nice to see you back, I know some of the pups and poodles have been gnawing at your ankles again but be strong, we realtors can take heavy criticism and still make a hefty profit doing it.

I just picked up a couple of fools, oh I mean clients who are looking to buy, one couple wanted to spend about $350, but so far I have been able to convince them that they need at least $450 to buy their dream home. How am I doing so far? please evaluate my performance.

#176 Bobby on 11.11.10 at 6:29 pm

Hey, Devil’s Advocate is back. Now it is about the great negotiating skills of a professional……..realtor.

Let me tell you the one about the buyer presenting an offer and the sellers offering a counter. Apparently the two agents agreed amongst themselves that buyers reaaly wanted the house. Then the buyer makes another offer, this time much less than his first. The sellers agent says that isn’t fair and his first offer is still valid. No says the buyer, you have refused the first offer so the second, lower offer is now my offer. By the way, the buyers agent refused to present the second offer and was fired.

In the end the house was bought for a significantly lower price.

Tell me again about the negotiating skills of realtors. DA you make me laugh!

#177 S.B. on 11.11.10 at 6:58 pm

hehe.

http://www.wired.com/magazine/2010/11/st_essay_ownership/

Abandon Ownership! Join the Rentership Society!
By Chris Suellentrop November 1, 2010 | 12:00 pm | Wired November 2010

Photo: Mauricio Alejo
In the American mind, renters are regarded as an unsavory lot, willful dissidents from the American dream. They do things like put cars up on cinder blocks in their front yard or, worse, live in your basement. The vision of an Ownership Society was about more than just houses, but the promotion of homeownership was, for a time at least, its most successful element. You know the story by now: The rate of homeownership climbed to almost 70 percent, sellers walked out of closings trundling wheelbarrows full of cash, and the phrase “granite countertops” seemed to hold as much promise as “plastics” did in The Graduate. Then it all fell apart. We woke up in a Rentership Society, and it’s starting to look permanent. And you know what? Thank goodness. Ownership, it turns out, is for suckers

#178 Patz on 11.11.10 at 7:01 pm

#29 Cookie Monster House prices will collapse soon but will not be very deflationary since any mortgages that do default won’t disappear since the paper was written the money has been freed, the loonies have all flown the coup ^^^^

Whatever you’re drinking, I wouldn’t mind a little hit. Goes for the rest of the post as well.

#179 Mikey the Realtor on 11.11.10 at 7:09 pm

Thats not the way we do it Bobby, as a buyers agent I contact the sellers agent as soon as I have word that my client is interested and with what his maximum price is, I do all this behind closed doors, then both of us agents are playing our cards againts the buyer so we can get the sale at maximum price..capiche? higher the price higher the commish.

#180 Milhous Plumbers on 11.11.10 at 7:18 pm

Milton don’t even have a pool – they have to swim in Kelso.

#181 canali on 11.11.10 at 7:19 pm

things not looking well for Ireland, despite bailouts from a few yrs ago….
http://www.thestar.com/news/world/article/889489–financial-meltdown-leaves-celtic-tiger-a-mewling-kitten

#182 BrianT on 11.11.10 at 7:19 pm

#171-Decide-how big is the property and what is the current market value?

#183 jess on 11.11.10 at 7:47 pm

Just What is Bernanke Up To?
Thursday, 11/11/2010 – 9:24 am by L. Randall Wray
…adding excess reserves to bank portfolios will not, by itself, do anything if the overnight interest rate has already been driven down to its near-zero target. QE2 proposes to add another $600 billion of excess reserves — but whether banks have $1 trillion or $10 trillion in excess reserves will have no impact.
Read further as he explains
http://www.newdeal20.org/2010/11/11/just-what-is-bernanke-up-to-26615/

#184 Nostradamus Le Mad Vlad on 11.11.10 at 7:49 pm

#33 dd — “1) It is called a treasury or bond failure. Bond market collapes and US dollar massive decrease.”

Been quite a lot of ‘net chatter over the past while about this happening. Sooner or later is when — BAM! — we’ll all find out!

#40 realpaul — “China gives green light to invest in Canada”

Interesting. I mentioned that after the original deal was quashed, it would be curious if a Chinese company made a $60 bln. or so offer to buy Potash in Jan. or Feb. 2011.

Stranger things have happened!

#41 ALE — In Kelowna, gas is 1.07.9 / litre for comparison.

#44 dark sad person — “There is only one solution to this and it would work-Get Governments out of the Market and let the Market sort this out-Just don’t hold your breath waiting for it to happen-”

You are correct, unfortunately. Govts. will never admit that the private sector is far more capable than is given credit for.

Instead, we given bone-headed liars like C-H-F. Because voted them in, we get what we deserve.

#62 The Apocalyptic One formerly Old is Gold — “The Middle Class is dead, long live the serfs!”

Stop this planet, I wanna get off! Break on through to the other side — that’s where the REAL enjoyment of life is!

#70 S.B. — “About the economy: 1. Creating a slave underclass?”

Yup. See the 3:18 clip I put in last night about the Rothschilds, etc. They are the masters, we are their serfs.

#113 PTDBD — “admit to being a complete dink.”

C-H-F? If the shoe fits . . . !

#142 Devil’s Advocate — And a perverted sleazebag as well!

#143 sk76driver — Great post! Always good to see one’s first-hand experiences from a different perpective on life being written, whether positive or negative. My brother spent six weeks in central India a few years ago, helping to build an extension on to a hospital.

The village is so small, it’s not even on a map, but he said it was the best six weeks of his life!

#185 jess on 11.11.10 at 7:49 pm

Foreclosures rise in suburbs, rural areas
Paul Willen, a senior economist at the Federal Reserve Bank of Boston, said the foreclosure crisis is slowing in cities largely because subprime lending stopped around 2006 and by now most of those borrowers have already saved or lost their homes. “It’s now prime loans where all the new foreclosures are happening,’’ he said

http://www.boston.com/business/personalfinance/articles/2010/11/11/foreclosures_rise_in_suburbs_rural_areas/

Bank of America is suing its mortgage insurance company over denied claims.”
http://www.charlotteobserver.com/2010/11/11/1828344/bofa-sues-mortgage-insurance-provider.html

#186 Devore on 11.11.10 at 8:03 pm

#175 S.B.

Abandon Ownership! Join the Rentership Society!
By Chris Suellentrop November 1, 2010 | 12:00 pm | Wired November 2010

The bottom is near! You heard it here first.

#187 WINNIPEGER on 11.11.10 at 8:54 pm

http://www.winnipegsun.com/money/2010/11/11/16093896.html

huge pension shortfall

#188 Herb on 11.11.10 at 9:00 pm

#159 MarcFromOttawa,

OREB can shove its propaganda. There is a reason why its stats are skimpy.

Direct observation of the central area: small and old houses around $320K are selling, anything over $340K is slow to stagnant, and expensive homes sit. The “New Price” and “Reduced” RE brokers are getting more and more listings.

It will be a hard winter for sellers in Ottawa, followed by a terrible spring.

#189 Real Estate Realist on 11.11.10 at 9:07 pm

As a long time lurker here, I can only laugh at some of the comments and dread reading others.

As a top producing Realtor in the BC Interior for 20+ years, I call bullshit on Devil Advocate’s previous posting.

#82 Devils Advocate “If countered say you need 24 hours to turn it around. A counter is actually a good thing for a number of other reasons. They will bitch and complaiin that you gave them just one hour yet ask for 24?!?! Tell them that’s the way it is. Now while it is back in YOUR court their hands are effectively tied from dealing with any other offer until the expiration of the “open for acceptance time period”.

I for one am so impressed with your negotiating prowess, I’m sure I would pee myself the minute I faxed you my offer………

What you fail to tell all of the “unwashed slobs” that read these comments is that you’re being misleading.
My Sellers may counter your Buyer and they may even give them the 24 hours they requested. That does not however, “tie their hands”. If we get a better offer or just feel like waiting for someone else (because you and your Buyer are a-holes) in that 24 hour period, all we have to do is give you notice in writing that we are revoking our counter.

Bang! Now you and your savy Buyers are sitting there wondering what just happened and if you’re as good an agent as you brag to be? As long as your Buyers don’t accept the counter before we revoke it we’re free to do as we please, so take your phony negotiating prowess and pump it somewhere else.

I’m certain that the real estate market is overdue for a major correction and I’ve been handling a lot more foreclosures than usual. Hell, I just wrote two letters for people who intend to claim bankruptcy because they paid too much for their homes. I’m just doing my job, helping Sellers unload their homes for the best price they can in this market.

Just because you won’t accept what is happening in your market doesn’t give you license to mislead everyone here.

I am very aware of the Okanagan Mainline RE Board statistics and it’s plain ugly. Like most Realtors that have only been licensed in the boom years, You have no idea how really bad the real estate market can get.

#190 Nostradamus Le Mad Vlad on 11.11.10 at 9:07 pm


Easy to understand why BoA is going under, esp. when pulling stunts like this. Would be interesting to see if the CEO, CFO — all the top guns — receive in the way of severance when the ship sinks.

2:55 clip Agree / disagree doesn’t matter. We’re screwed anyway.

Ahhh to be rich and foolish.

Hmmm. “Short version: the bank makes a 25% bonus if they foreclose! The financial incentive is to take away people’s homes and bury the over-sold mortgages in the wreckage.” wrh.com.

Something funny going on here. Someone may have twisted Turkey’s arm to get this far, but this and this may have something to do with it.

3:01 clip I’m A Believer — NOT! I’m A Denier, mainly because I’m not going to be down here for a long time, only a good time.

First the Icelanders, then the French — now the Germans and Brits. In Germany, police are at the breaking point. Austerity is working very well for the elite.

Latest QE will throw the world out of kilter (as if it isn’t already).

SS and Slash SS Is this why Obama has openly encouraged illegals to come in and cause mayhem? “Today’s news reports efforts by the government and the very rich to drastically cut social security benefits. Although the media may react in shock as if this is a new and unexpected development, the fact is that WRH reported this trend back in 1998 when it became obvious that the Clinton administration was looting the cash set-aside for the baby boomer retirements to manufacture its phony budget surplus.” wrh.com. Six individuals control 94% of the m$m, so avoid them like the plague. It is also clear what the CPC will do if handed a majority.

Russia “Translation: thanks to Bernanke’s “quantitative easing”, the US dollar is about to become the kryptonite of the currency trade.” wrh.com.

Greg W. — You may be interested in this. Monsanto is also included.

Hilary manages to shoot herself in the foot again, with a sawed-off rifle (blunderwuss).

Global Koolaid Better to stand alone and ignore the mass herd.

Pope St. Gore of the Alchemissed pocketed US$18 mln. from this scam.

#191 Timing is Everything on 11.11.10 at 9:07 pm

#131 jess

This is the article link…thanks

http://www.bloomberg.com/news/2010-11-10/wall-street-collects-4-billion-from-taxpayers-as-swaps-backfire.html

#192 Timing is Everything on 11.11.10 at 9:09 pm

#132 jess

Sorry, #132 jess not #131

#193 Devil's Advocate on 11.11.10 at 9:28 pm

#175 Bobby

Not enough information to evaluate if they were acting appropriately or not. Sounds like the buyers agent was doing a good job for their buyer client. What did you expect? The are after all called “buyer’s agents” Will say though that one can always find an in competent agent just as there are incompetents in any field. They tend not to last long in real estate though.

#194 Joe Realtor on 11.11.10 at 10:13 pm

#65 Bigrider said:
“What a bunch of a–holes that whole Lamb team creeps are.”

You couldn’t be more correct. Any time I’ve had any dealings with them, I’ve thought the same thing – albeit in more colorful language.

Listing agents not responding to offers that can only be faxed in, ignoring irrevocables and another agent hanging up on me when I asked something about one of his listings that should have been ON the listing. I get the impression they all seem to think they’re above it all (ethics, REBBA and the law), and emulate the boss too much.

We’re not supposed to “boycott” or not show a listing just because its from a certain Brokerage or person, but more than a few Salespeople do.

#195 Devil's Advocate on 11.11.10 at 10:16 pm

#188 Real Estate Realist

What you fail to tell all of the “unwashed slobs” that read these comments is that you’re being misleading.
My Sellers may counter your Buyer and they may even give them the 24 hours they requested. That does not however, “tie their hands”. If we get a better offer or just feel like waiting for someone else (because you and your Buyer are a-holes) in that 24 hour period, all we have to do is give you notice in writing that we are revoking our counter.
Bang! Now you and your savy Buyers are sitting there wondering what just happened and if you’re as good an agent as you brag to be? As long as your Buyers don’t accept the counter before we revoke it we’re free to do as we please, so take your phony negotiating prowess and pump it somewhere else.

If you read my post again you will see that I did advise of this… it is a moot point though for two reasons… As I said #1 the strategy is to block out that competitive offer by being substantially first to the table. Few buyers will “compete” with competitive bids right now. Which brings me to my second point #2 Ya like that’s gonna happen in these market conditions.

You are wrong.

And why is it you are not selling real estate anymore?

#196 Devil's Advocate on 11.11.10 at 10:18 pm

#188 Real Estate Realist

What you fail to tell all of the “unwashed slobs” that read these comments is that you’re being misleading.
My Sellers may counter your Buyer and they may even give them the 24 hours they requested. That does not however, “tie their hands”. If we get a better offer or just feel like waiting for someone else (because you and your Buyer are a-holes) in that 24 hour period, all we have to do is give you notice in writing that we are revoking our counter.
Bang! Now you and your savy Buyers are sitting there wondering what just happened and if you’re as good an agent as you brag to be? As long as your Buyers don’t accept the counter before we revoke it we’re free to do as we please, so take your phony negotiating prowess and pump it somewhere else.

If you read my post again you will see that I did advise of this… it is a moot point though for two reasons… As I said #1 the strategy is to block out that competitive offer by being substantially first to the table. Few buyers will “compete” with competitive bids right now. Which brings me to my second point #2 Ya like that’s gonna happen in these market conditions.

You are wrong.

And why is it you are not selling real estate anymore?

Ooh. Chick brawl. — Garth

#197 Devil's Advocate on 11.11.10 at 10:30 pm

#189 Real Estate Realist

I am very well aware what is going on in our market. As a buyers agent my clients are exclusively first to the table or we walk. There’s just too much of a buyers market out there to do otherwise. If and when we do walk Mr. Real Estate Realist good luck trying to get us back to participate in that bidding activity on your listing you are trying to BS us into.

Depends what hat we’re wearing don’t it Mr. Real Estate Realist? But as a listing agent I know where your head is at. Oh and I’ve been around the real estate block a time or two myself but don’t have to call myself a “Top Producer”. It isn’t about me it’s about my clients.

#198 Ontario Joe on 11.11.10 at 10:42 pm

Real Estate Realist,

If you’ve been lurking here for a long time you realize you’re dealing with whack job don’t you? Devil’s Advocate is not real. He’s a make believe character with knowledge but little wisdom, skill with low ethics. He waffles and meanders and then…if he doesn’t get the desired response he gets really nasty and his true colors come through.

You don’t have to call bullshit, that’s his middle name.

See, if you really call him on all his lying he goes silent. He only replies to challenges where it can be viewed as subjective, and he can drag it into a mud slinging event. Facts are what he has problems with.

#199 Ontario Joe on 11.11.10 at 10:45 pm

Devil’s Advocate,

“I’ve been around the real estate block a time or two myself but don’t have to call myself a “Top Producer”. ”

That’s really the problem, you do this kind of crap all the time, try to pull rank and tell everyone how great you are. Yet, if someone else does, you call them out?!?

#200 Patz on 11.12.10 at 12:20 am

#188 Real Estate Realist, great post. I want you to sell my house—oh wait, I don’t have a house!

#201 Devore on 11.12.10 at 12:28 am

#189 Real Estate Realist

What you fail to tell all of the “unwashed slobs” that read these comments is that you’re being misleading.

What, DA giving out misleading information? Say it ain’t so! Hey, are you sure you’re a long time lurker?

#202 Real Estate Realist on 11.12.10 at 2:09 am

To Devils Advocate,

When did I say I say that I wasn’t selling real estate anymore? Interesting assumption on your part……..

The reason I have been and still am a top producer (top 5% for overall sales in my city for 12 years) has everything to do with a long list of past clients that trust me based on positive past experience. It has very little to do with how great I think I am.

Maybe the top producer label is too old school and isn’t a term they use at the latest Craig Proctor seminar, my apologies.

I’m sure you try hard, we all do when we start fresh in this business and have to establish a brand. It doesn’t make you any better than the rest of the slobs that read this blog with your arrogant and barbed remarks.

Perhaps Devils Advocate is a little humbled ??

It’s not a bad thing try and learn from it.

#203 Cookie Monster on 11.12.10 at 3:00 am

“This is where I think you’re mistaken, the inflated mortgages have already been written, a house price collapse does not reduce the mortgage dollars already paid to sellers over the last decade. So what if the sticker price on the market drops by 50%, everyone feels poorer and spends less, true, but the money never exists until someone takes out a HELOC or moves larger (bigger mortgage). As of now the inflation is already baked in, market sticker prices can drop but that will not reverse the credit expansion we’ve already experienced.”

Cookie – this is incorrect. As soon as a loan default occurs, the asset has to be written down to market value. This is what has been fueling massive credit destruction in the US, far greater deflationary pressure than the fed can print their way out of. We enjoy the benefits of leverage when banks create money on the upside, but the downside is leveraged too.
_________________________________
GenX, you’re right too in that that’s how it’s supposed to work and should be deflationary if we were on a gold standard, but that’s not what happens in our modern FIAT world. In the US the federal reserve bought up all the bad assets with their TARP money, in Canada we will have the CMHC do the same.
But my point wasn’t so much about what happens in the case of an actual default so much as the 10 year credit expansion itself, the creation of new money through credit whereby sellers receive money from buyers due to low interest rate credit expansion. A future market correction will do nothing to reduce the new money/debt previously created, money that went to the seller via the sale of an overpriced house, (remember many sales over the years were made by builders who do not purchase another house) when the market falls the loan just becomes upside down, this realization is not deflationary because it does not reverse the prior credit expansion. That’s why I say the expansion is the easy part, the contraction not so much.

As far as a case of outright default where money should be lost, hence deflationary, there will not be much of a loss to write down by the issuing bank because the CMHC will make them whole, the CMHC will raise NEW MONEY somehow via government to back the banks would be losses, furthering the creation of more money via state debt or monetization. How ever the federal government handles it, it will be inflationary yet again.

#204 Taxpayer like everyone else on 11.12.10 at 10:44 am

Real Estate Realist – cant be the same RER who claimed expertise in the legal structure of collateral mortgages and cant ride a bike uphill or drive a car downhill? Or is this a “be anything you want” blog?

Garth – “chick brawl” too funny

#205 bruce corell on 11.12.10 at 1:53 pm

2 weeks ago i posted that Nov 1st is (Pop the bubble day)
Its happened. Garth does not have an understanding of the real estate market and how we are always 2-3 years behind the U.S. Hes been posting this for years without a target date. Sorry Sir you have the right idea but not even you know how bad this will end. Here we go and you can take this to the BANK.
Nov. sales Prices will be down 3-5% from October.
December 2% from Nov. Jan and Feb. another 2 -3%
March April and May will be down an additional 3-4 %
Balance of year will remain same with a large dip in Summer . This will be norm as most prices will not come up until 2020……..Sorry but its here and please copy this and put it on your fridge…….

#206 Utopia on 11.12.10 at 9:35 pm

#126 Devil’s Advocate said:

“None of the posts in the last 36 hours were me”
—————————————————–

Are you going crazy Devil? Maybe I am nuts but I still think all of them are yours. I have had to join in with those who just skip all your comments despite the fact that I once used to enjoy some of your posts.

Actually, I have gone even further. I ignore every single comment that even mentions your name which might not be fair to some of my favorites here but………

life is just too short to waste on your grand standing.