Prudence

As I mentioned in my last post, on Friday afternoon I shared a stage with a senior bank economist in front of hundreds of accountants. (Why do people become economists? Because they don’t have the personality to be accountants.)

I forecast housing pandemonium and big wealth loss, followed by a slow and grinding recovery. She, the economist, forecast intermittent clouds with a 5% chance of locusts and satisfactory bank loan loss provisions. Central to my view was a Canadian population marinated in debt. Central to hers was a financial system that totally avoided the excesses of the wicked American one.

This, as you know, is the central Canadian myth. Why did we not implode at exactly the same time the US did? “The most basic answer,” says a report by another major bank, “is that Canadian banks pursued more prudent and more disciplined risk management practices.”

But are the banks here so cautious, always looking out for us, snatching back the cookie jar at just the right moment, even when it pains them to say no? And given what’s happened with the amount of credit already extended to Canadian families, what’s likely to happen next?

Well, we do have a stable and small number of banks. We’ve not suffered bank or credit union failures. Bank profits and share values have rebounded. And I have absolutely no hesitation recommending people buy common shares, preferred shares or corporate bonds issued by any of the Big Six. In fact, I think these companies, largely insulated as they are by the government from potentially bad housing loans, will continue to be cash cows. You should own them. But not necessarily believe ‘em.

There are many reasons. Some are so obvious. Our banks merrily court first-time homebuyers who have no money, for example, not only with 5/35 offerings, but packages designed just for them, ultra-low rates and cash-back offers. That means if you don’t have a downpayment, they will give you one. So much for prudence.

As I have told you before, some banks also promote liar loans, by allowing self-employed people to state their income instead of verifying it. And all the banks have dropped their five-year posted rates dramatically, allowing them to get around the tighter mortgage rules Ottawa brought in last April. In other words – just like US banks five years ago – if you can fog a mirror, you can get money to buy real estate.

Of course, also like the American pre-crash housing scenario, we have teaser interest rates which allow borrowers to amass huge debts which they would not be able to service if rates were at non-emergency levels. Of course, this won’t last. Rates will rise over the next few years, meaning a massive resetting of loan payments, and financial evisceration for thousands of young couples.

But this is just the stuff you readily see. In the back rooms and nether regions of the mortgage biz the banks are willing partners to some players who are comfortably untroubled by ethics.

Mortgage brokerages have expanded rapidly in recent years, and cater mainly to those less credit-worthy souls who the banks will not let in the front doors. But brokers are just pimps. They don’t deliver the actual warm embrace. So you might be surprised who comes up with the funding climax. Yep. The banks.

Just about all of our major lenders have divisions which work with, or maintain, brokerages. They provide money to borrowers their own branches often turn away. And, as you can see from the web site of outfits like Your Mortgage Source, their participation is unabashedly displayed.

Now, there is nothing wrong, illegal or improper about this. It just makes a lie of the “more disciplined risk management” crapola which we have been forced to wade through, and has masked our own brewing housing issues. It’s also disappointing when they align so closely with companies who get people without wealth into houses they cannot afford, and when they promote tax evasion.

Consider how Your Mortgage Source sells its services:

  • $0 Down Mortgages on Owner Occupied Properties

Are you tired of paying someone else’s mortgage? You don’t want to deal with landlords any more however, you have no money to buy a place of your own. We have the solution for you in the form of a $0 down mortgage. This means that almost anyone can own their own home. We have lenders who will finance 95% of the purchase price and give you 5% cash back for your down payment so you can own your own home.

  • Stated Income financing for Self employed clients

Are you self employed and don’t show the required income on paper to qualify for the mortgage you need? Then call and ask us about our stated income mortgages. You can borrow up to 95% of the value of a home based on income that you state you make and not what you declare on paper. This means that self employed people can save taxes by declaring minimal income and still qualify for the mortgage they need.

Buy a house even if “you have no money” because lenders will “give you 5% cash” for the down payment. And this, of course, will be insured by CMHC and backed by the taxpayers, although it’s not a permitted form of financing.

Save taxes by “declaring minimal income” even when your “stated income” is higher. This means you either lie on your tax return, or on your mortgage application. Tax evasion, or fraud.

If there was a willingness to live up to their speeches, reports, press releases and stated ethics, the banks would not support such practices with their funding. If there is any doubt we’ve aped the Americans and are destined to follow them, well, get over it.

***

Remember Jennifer?

How could you forget? The Calgary modelling agency president with a propensity of promotion and bikini tops from her little kid sister has turned into a condo-flogging real estate superstar. As I told you a week or two ago, Jennifer turned up for a few days reincarnated as ‘sales manager’ for a new condo project catering to (this is perfect) hormone-drenched university students.

Partially as a result of her irrestibility and marketing allure, University City sold out two entire towers of 432 units even before a shovel has hit the dirt. In fact, moving units of about 300 square feet for almost $160,000 in a city where real estate values and sales are collapsing is testimony to what endorphins are actually capable of doing.

Won’t it be interesting to see what happens when the first units are ready for occupancy more than two years from now? Or never?

Well done, MissyBunny.

184 comments ↓

#1 jess on 11.14.10 at 6:21 pm

http://www.pbs.org/wnet/need-to-know/economy/the-new-poor-baby-boomers-in-the-jobless-crisis/4172/

The new poor: Baby boomers in the jobless crisis
October 8, 2010
This week, Need to Know features a special focus on jobs. We report from across the country to put faces on those stubborn jobless statistics. The Great Recession might have officially ended in June 2009, but high unemployment continues to vex the economy and flummox our politicians. New statistics paint a grim picture. Forty-one million people are now on food stamps, up 45 percent since 2008. And one in seven Americans is living in poverty — the highest in decades.

Most Americans will get back on their feet. But older unemployed Americans might not get that chance. The unemployment rate for baby boomers has doubled since the beginning of the recession. We bring you an intimate portrait of a husband and wife in Portland, Ore., in who built a life and a business, only to see their world quickly fall apart.

#2 Devore on 11.14.10 at 6:46 pm

There are many reasons. Some are so obvious. Our banks merrily court first-time homebuyers who have no money, for example, not only with 5/35 offerings, but packages designed just for them, ultra-low rates and cash-back offers. That means if you don’t have a downpayment, they will give you one. So much for prudence.

Garth, did you raise this point at your accountants talk? What was the response?

#3 mid-Ontario on 11.14.10 at 6:47 pm

Why did we not implode at exactly the same time the US did? “The most basic answer,” says a report by another major bank, “is that Canadian banks pursued more prudent and more disciplined risk management practices.” Garth

Bankster are banksters no matter what the shade of grey the suit is. The US took it another step with their 30:1 leverage on sub-prime loans. The greed factor clicked in big time. The too big to fail thinking is back in the US and is expected to lead to round two in high risk bets for the banksters.

Just pray that the G20 do not come up with a too big to fail class for any bank in Canada or heaven help our children and our children’s children.

This indeed will not end well.

#4 jess on 11.14.10 at 6:51 pm

More uses for the bra?
Japan’s new “welcome tourist ” bra
http://www.reuters.com/article/idUSTRE6AA0K120101111
or the bra “stuffing” wallets.
FBI agents said they recorded the husband telling his wife to flush a $100,000 check from a real estate developer down the toilet and to stuff almost $80,000 in cash in her underwear.
http://www.huffingtonpost.com/2010/11/13/jack-johnson-hid-cash-in-_n_783113.html

#5 Laura on 11.14.10 at 7:05 pm

President Barack Obama failed to obtain a consensus to demand that China allow its currency, the renminbi (also known as the yuan), to appreciate more rapidly.

Prudence? Canadians are passed the $1 trillion mark in mortgages!

#6 mark on 11.14.10 at 7:05 pm

I’m guessing when the first bunch of fools walk away from their deposit, Jen will be out in the bikini to entice a new group to step up to the plate.

#7 realpaul on 11.14.10 at 7:09 pm

Financial planner for the Globe says that the best retirement plan for Canadians is to get a government job and parasite off the taxpayer for life…..nice plan…so Canadian

http://www.theglobeandmail.com/globe-investor/personal-finance/financial-facelift/sowing-the-seeds-for-early-retirement/article1797508/

#8 prairie gal on 11.14.10 at 7:11 pm

So typical, DA, its clear when you are confused and threatened you resort to ad hominem attacks. Nobody cares what you own, who is happy etc. The fact remains that the real estate industry is on the cusp of change and neither the CREA nor ReMax can do anything about it. Public opinion is firmly set against the status quo. There is a HUGE pent up demand for quality real estate agency service at a reasonable price not set by the cartel – this is what the public wants and if the establishment resists it will be taken down by the Competition Bureau.

I know lawyers that have entered into the RE listing business in the Okanagan – already upsetting the applecart for lesser educated agents. Its not about hair extensions and acrylic nails but research and shrewd negotiations… would a smart buyer rather have the former or the latter representing them in a prospective purchase? Your average RE agent is clearly outclassed in this scenario.

#9 45north on 11.14.10 at 7:12 pm

talking about the banks: If there was a willingness to live up to their speeches, reports, press releases and stated ethics, the banks would not support such practices with their funding.

they would not

nor would they if my ideas had any weight, first CMHC would only write a cheque if it were convinced that the bank had exercised sound judgement such as making sure there had been a real down payment. Second everyone defaulting on his mortgage would get $1000 a month for 12 months.

What we see in the US is the entire legal system undermined by rising foreclosures – moratorium after moratorium, legal challenge after legal challenge. Banks talk the talk but do not walk the walk. Ordinary people driven to despair.

We are not going to get out of this mess scot-free or even cheaply.

For the politically correct scot-free doesn’t refer to Scotts.
http://en.wikipedia.org/wiki/Scott_Free

or yeah I see Tony did post yesterday. Hi Tony we used to play soccer together over at Birchmount Park in Scarborough.

#10 $froma$ia on 11.14.10 at 7:38 pm

“Partially as a result of her irrestibility and marketing allure, University City sold out two entire towers of 432 units even before a shovel has hit the dirt”

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Thanks Garth, I just climaxed a wicked orgasm!

Way too much information. — Garth

#11 Ben on 11.14.10 at 7:43 pm

“Our banks merrily court first-time homebuyers who have no money”

Bingo!! … and they sell to new immigrants that have been in TO a whole 8 months and have their first job where I work. My Chinese employer only hires new immigrants so they can keep their payroll down as new immigrants make dick. BUT NEW IMMIGRANTS THAT MAKE DICK STILL BUY REAL ESTATE !!!!!!!!!!!!

#12 Another Albertan on 11.14.10 at 8:09 pm

I’ll have the record reflect that I was the one who ferreted out the original link to Jennifer’s website! ;-)

People walked into the University City sales office and asked Jennifer for a double entendre. She gave it to them.

Everyone else’s mileage may vary.

#13 TheBestPlaceonEarth on 11.14.10 at 8:20 pm

Well it looks like China will be taking more of its winnings to Vancouver. Remember folks Vancouver is not Canada.
Check out this news makes any home owner in Vancouver drool. Up Up and Away. Next step is getting over mortgaged Canadians out of their homes with higher interest rates, it’s called mopping up the bids so the elite of the World can buy the best
***
Home prices in Hong Kong have surged 51 percent since the beginning of 2009 on record low mortgage rates

#14 Get Real on 11.14.10 at 8:22 pm

Thanks. Makes a lot of sense

Excellent article for someone like me who does well as a professional but does not have much idea about investment or economics. I am starting to get the feel though.

Was actively looking looking for a house in the lower mainland up until a few weeks ago but have decided to wait as there are so many unknown variables that can affect the course of RE in the next 1-2 years. I can say from my personal experience that prices in the communities surrounding the lower mainland incl. Surrey and Abby have gone down 10-12 percent in the last 6-8 months

I grew up in India and have lived in Europe, US and now Canada in the last 20 years. I was always taught to spend money wisely (and only when you are able to afford it), minimize debt and value quality in life.

I have owned homes elsewhere and will probably never buy a home in Vancouver unless there is a realistic correction in the home prices. All the the talk about “best places on earth”, mountains and oceans is quite immature and become meaningless if your financial, personal and family life gets destroyed by the overwhelming debt.

Moreover, I would never, on general principles, spend my hard earned money on a poorly built, poorly maintained piece of crap because of someones rapaciousness and a collective sense of delusion.

BTW, my RE agent recently send me a newsletter by one, Cameron Muir, “Chief Economist” for the Vancouver Real Estate. He sounds persuasive, but so does a used car salesman. There is no doubt that herd-mentality is a very persuasive force

Garth, have you written books exclusively on personal finance and investment ? If not, do you have any recommendations. Something basic and simple.

Regards

#15 iEngineer on 11.14.10 at 8:25 pm

Our banks may be fine for few years.
Meanwhile a currency war has already started in the world:

http://www.youtube.com/watch?v=8P1fihT5B7o

#16 Mean Gene on 11.14.10 at 8:45 pm

Jennifer still has a contrived smile.

#17 Cowboy_aka_My_View on 11.14.10 at 8:49 pm

So basically Canada has NINJA loans.

#18 Got A Watch on 11.14.10 at 8:50 pm

Meanwhile, as realtors fiddle, the global economy is burning. la la la “never a better time to buy” la la la

There are at least 3 hot global fires threatening to blaze out of control right now, this week:

-PIIGS meltdown: Ireland, Portugal, Italy and Spain, are all stumbling on the cliff edge, don’t look down, this one could blow tomorrow. Contagion has been contained at the limits of the known universe, whew.

-China over-heating and raising interest rates, Bank reserve requirements, cutting credit and limiting foreign capital inflows – all headlines over the weekend. The Chinese are boiling mad over QE2, and they aren’t going to take it any more.

-US muni Bond market meltdown. Led by some blonde surfers in California, dudes, the US municipal Bonds are not able to get back up on the board anymore, prices started plunging last week, and it’s look out below now. Harrisburg, PA hired bankruptcy attorneys last week, not wanting to be outdone by the Californicators. LA is laying off police, firemen, teachers, dogcatchers and street gangs are happy about that.

Zero Hedge Summarizing The Recent Muni-Mauling, And A Look At The Challenges Ahead

“The main reason why in a recent Zero Hedge poll the bulk of respondents believed that the next asset class to be purchased by the Fed are municipals, is that the market appears to have finally relented to what pretty much everyone with half a working brain has realized for over almost two years: the very soon, only the Fed’s endless bid will be able to withstand the state and city default onslaught. Two main catalysts over the past week, as Zero Hedge highlighted last week, were the now imminent bankruptcy of Harrisburg, and the dramatic deterioration in California’s fiscal situation. However, there are other far more important considerations that suddenly have led to a massive blow out in the muni curve, that made even the highly volatile action in the UST curve seem tame in comparison. Citigroup’s George Friedlander summarizes the biggest risks to the muni space, of which the number one is the least surprising: what happens when the government removes its crutches… With the entire economy now expressly reliant on constant and endless support of every branch of the US government, as more and more austerity is priced in, assorted asset classes will start feeling the wrath of this long-forgotten concept known as risk. Munis are just the beginning…..”

Long analysis there at ZH, quite good, many “expect” the Fed to bail out munis and States. TD (ZH) says no, the FED will have to bail out the US Bankster mafias (yet again) as their next scheduled collapse could destroy the FED system. So munis and States will be left to the unkind forces of the market. I think he is right. And that will lead to Austerity with a capital ‘A’ in States and Cities, part of the next leg down in this crisis. Risk, who knew it existed still. Not the muni Bonds, till last Wednesday.

———————————————————-

The sell offs in ‘risk trades’ of late last week are threatening to blow up into another Fall ’08 like rout.

The happy hour is over, everyone got hammered on risk. Now time to pay the tab, and stagger off into the night.

OTOH Cramer, that market bell-weather contrarian indicator is saying you should buy some POT, apparently the arbritragers who bought some $40 Billion worth of POT thinking the buyout would go through are now naked (story now on Zero Hedge), and the tide just went out. They should have bought some plain pot instead, at least they could feel good. When Cramer recommends buying anything, sell it, or short it, he is infallible.

———————————————————

prairie gal – never try to have an intellectual conflict with a real estate agent, they come to the fight disarmed.

If you told DA the sky was blue, he would have to post a long winded reply about how it really looks green, but only if you look at it in Kelowna. Damn, that BC bud is really strong. Of course, I wouldn’t know. Cough.

#19 Get Real on 11.14.10 at 8:52 pm

#13

What is so good about Vancouver as opposed to Seattle or even Hong Kong? Prices in Mumbai have gone up 20 percent in the last three years, with an interest rate of around 8 percent!!

Poor growth fundamentals, rising taxes, poor infrastructure including poor quality housing and collective delusion. I am a health care professional and have first hand knowledge of the pitiful state of affairs of health care infrastructure due to lack of funds. The system is broke and be prepared for many new taxes.

I will give you “mountains and oceans”, but that by itself does not make the city unique. Let me also say that people of Vancouver is not a positive selling point. I have seen my share of charlatans and swindlers and it seems every body is trying pull a fast one in order to stay afloat.

As far as foreign investors/Chinese lining up to continue to buy RE in Vancouver given the present scenario, you seem to be insulting the general intelligence of many people. Dream On!

(Also, never trust the advice from a man who stands to profit from you. )

#20 Cashman on 11.14.10 at 8:53 pm

Hey Garth, does Jennifer come bundled with the condo? Or do I have to pay extra for her?

#11 Ben, Your are right on the money my friend, after all, new immigrants don’t know anything about our laws, etc. The name of the game in business is to lower your costs and max profit.

#5 Laura, of course Barack Obama (aka Barry Soreto) failed, or did he? Obama is just a puppet for the Bilderberg Group and their band of merry bankers. Don’t forget, its a race to see who can devalue their currency the most. That is why gold and silver are going through the roof.

#21 robert in london on 11.14.10 at 8:55 pm

So how is “not believing them” different than not trusting them? A growing lack of trust in banks and politicians in the US is literally sinking their economic ship. And why bother criticizing Canadian bank lending practices and noting their similarities with US “mistakes” and then saying it’s probably ok to invest in them? I’m passing. Yeah, I know I’ll never make any money by being ethical.

http://www.zerohedge.com/article/economy-will-not-recover-until-economic-criminals-are-prosecuted-and-there-are-real-investig

#22 GeeBee on 11.14.10 at 9:06 pm

That big monitor certainly does justice to those towers. If this is all that was needed to sell, aside from Jennifer, I pity the fool.

Anyway, if you have not already have a look at this:
http://www.economist.com/content/global_debt_clock

Toggle good old Canada to everyone else on this sphere. Hmmm, not so good per person.

Remind me again, how does this movie end?

#23 Contrarian Canuck on 11.14.10 at 9:23 pm

Deflation coming to Canada. Good video explaining the dynamics behind our coming deflation

http://www.youtube.com/watch?v=ViBhdpTS4SY&feature=player_embedded

#24 theletterM on 11.14.10 at 9:28 pm

Once again, thanks for the education Garth.

#25 Devil's Advocate on 11.14.10 at 9:28 pm

#8 prairie gal on 11.14.10 at 7:11 pm

No prairie gal I think it is you who is confused and threatened. Let me help you through those toxic ill feelings.

Now you have said time and time again that you have options. That is good don’t you think? You have said that organized real estate services are a dying industry? Regardless of whether that is true or not that you believe it seems to bring you solace. That too is good, no? You relish in the proposition that I and my colleagues will surely, in your mind, meet financial ruin. Clearly that must be good for you that you would be so eager to see it right?

Well it seems to me prairie gal that your world truly is in the perfect harmony you want it. You should be happy. Why is it so disturbing to you than mine is for me? Doesn’t that appear to you an unwarranted unhealthy hostility toward another human being who has personally done you no harm? Would you rather I told you how miserable my life is and how bleak the future is and how real estate is tanking. Were I to do that it would be a lie. You wouldn’t want me to lie would you?

I am happy for you prairie gal that we live in a country that affords you choices as you have clearly demonstrated you do have. Imagine if I and those like me were not here that you had no choice but to deal with them. Were that the case they you choose, due to lack of competition, might charge you a lot more than the services they provide are worth.

Feel better now?

#26 Basil Fawlty on 11.14.10 at 9:35 pm

Jen Carter, solid gold. Sorry, I couldn’t resist.

Have you been licking your bullion again? — Garth

#27 Nostradamus Le Mad Vlad on 11.14.10 at 9:51 pm


10:20 clip Song starts about 3:55 into clip. SRV at his finest, with plenty of other great musicians!
*
#182 Xnilo on 11.14.10 at 10:38 am — “The Game is always simple: socialize debt but privatize wealth!”

Nicely said and simply put!
*
“Central to my view was a Canadian population marinated in debt. Central to hers was a financial system that totally avoided the excesses of the wicked American one.”

Guess the vast majority of the populace is now ready to be b-b-q’d. Add some Worcester Sauce combined with HP Fruity and a vat of liquid Rolaids, it will make for a magnificent feast!

“. . . what’s likely to happen next?. . . the banks are willing partners to some players who are comfortably untroubled by ethics.” — Xmas, New Years and takedown is next, in very short order.

Yes, the banks are complicit. However, they’re rich and we’re not. So much for power to the people!
*
3:14 clip Silver On Fire! Plus BoA sinking / bailout and banks falling.

Obama and Harper are hellbent on taking down both countries together (Mexico’s permanently high on dope and money).

For reference see #182 Xnilo’s line above — Socialize debt and privatize wealth. “The Fed just declared war on America, and in this war there is little difference between red ink and blood.” wrh.com.

6:41 clip If the US weren’t declaring war on everybody, the WH’s balance sheets wouldn’t look so bad.

Bank run Ireland. Where else? Iceland, Spain, Latvia — we all understand what’s going on. Our turn soon. Plus this — Youth.

Big pharma Sell worthless drugs, make lotsa profits.

China – US There is a better chance of meeting Alice In Wonderland than this, but it gives a good timeline as when things will be speeding merrily along.

More Nuke BS “Although the culprit in this report is North Korea, it is an indirect bash at China, conveniently published right after the G-20, during which China and the rest of the world told the US what to do with its “quantitative easing” policy. And a logical question comes to mind: how did China block the release of this report, if it in fact had been finished in May?” wrh.com.

#28 Tim on 11.14.10 at 9:53 pm

Nice shot to economists Garth! Lower on the food chain than a accountant? Well, still higher than a Realtor…
Though the banks and mortgage companies have made high risk loans, I’d be surprised if the percentage of high risk mortgages is remotely close to that of the US. It would be interesting if you could come up with, or choose to post stats on that. The other huge difference is that the US has gutted their middle class by offshoring much of the manufacturing and now increasingly some of the white collar work. Though it is happening here, I don’t think it has happened anywhere near to the degree that it has in the States. Because of these differences, I don’t see how it can correct to the same degree it has in the US. Besides, everyone wants our resources, which keeps many fold employed…

#29 Herb on 11.14.10 at 9:59 pm

Another Albertan @ #12,

we indeed are grateful to you for providing the original link to Bunny Jen’s agency. And Garth, of course, for the link to her facebook. Very informative and entertaining.

And now I’ll shut up because my daughter reads this blog and has already called me a pervert because of an innocent comment I made about a muddy Venus.

My mileage certainly does vary.

#30 Jake on 11.14.10 at 10:08 pm

Pop…….what was that?

Jennifer Carter……Hey, lay off. The only thing that separates me from a professional realtor is two weeks of light reading and a multiple choice test.

Chris Davies…….dammit! There goes another box of kleenex.

#31 realpaul on 11.14.10 at 10:09 pm

Food Banks now have ‘snack attack’ program for hungry suburban kids who are now showing up in greater numbers without breakfast or lunches. Looks like the myth of ‘home ownership’ as being the end all be all of financial well being is coming apart eh? The fuck ups that put the mortgage payment and the car lease ahead of feeding the children should be whipped with chains.

Langley , Cloverdale , Delta etc Food Banks are struggling to renew stocks of specialized food stuffs that are divied out at school when a child complains of hunger….the ones that swallow their pride and last vestige of self esteem that is. East side schools in Vanc already have food programs for the kids whose parents live in inflated real estate and lord along the ‘Drive’ on the weekends in new cars and haunt the coffee bars to talk about how successful they are. Parasites !!!!!

Its likely that the fuck ups we see commuting to work at 6am have foregone their responsibility of being parents and both parties are rushing out the door and leaving the children to find their own way to school.

While they have the cash to stop at ‘Tims’ for a coffee and a fresh donut sugar rush they have convieniantly ‘forgotten’ that there’s fuck all to eat for the kids at home or for their breakfast and lunches…..quite simply the kids are going hungry so that pretty mom and busy dad can drive their rental cars to work in style….from thier successful holdings in the ‘burbs’.

I heard a shitty councillour saying that the homeless were just being ‘creative’ when they found that hundreds were finding their way to the emergency wards every night…….”Let them eat cake” says the decadant parasite civic worker.!!!!

Poverty in Canada is far and away more pronounced than any one in officialdom is prepared to admit…that would upset the applecart wouldn’t it? It would be unseemly to be a civil servant with a fat salary and pension driving through areas where the elderly and children are starving….don’t want our civic service parasites feeling guilty do we?

#32 BrianT on 11.14.10 at 10:10 pm

#18Got-but the bond bulls told me that everybody (including California) will be bailed out forever from the limitless pool of taxpayer capital. It isn’t fair that bond investors should be penalized just because the bonds default.

#33 Jeff Smith on 11.14.10 at 10:11 pm

>#17 Cowboy_aka_My_View on 11.14.10 at 8:49 pm
>So basically Canada has NINJA loans.

Yup! and probably samurai loans too.

#34 Junius on 11.14.10 at 10:15 pm

#13 BPOE,

I am intrigued to here Vancouver is not part of Canada. I guess this makes sense because you apparently live in another dimension.

You do realize don’t you that China is putting the breaks on its housing market? They have an enormous bubble in their housing and constructions sector.

Jim Chanos was interviewed in this recently. The US and the West have had a real estate boom with 15-20% of our economy devoted to real estate. Dubai had over 30% which is why it imploded so badly. China is now over 60% says Chanos. Now watch what happens when the Chinese gov’t reigns it in.

#35 T.O. Bubble Boy on 11.14.10 at 10:19 pm

CIBC seems to be the worst of the Big 6… not only do they openly advertise the “just tell us what your income is” mortgage, they also openly advertise the 7% cashback mortgage.

#36 Junius on 11.14.10 at 10:32 pm

Garth,

I had my own personal experience with a mortgage broker for the first time last November. It was eye opening.

I hadn’t even begun discussing a new mortgage with my bank. A good friend of mine told me not waste my time and he would introduce me to his “people”. The goal, of course, was too be financed for as much as possible because “real estate never goes down.”

I have a good, six figure salary and a medium term employment contract. I filled in the application and sent it to the broker. I expected that they would offer in the range of 4-5 times my salary. When they called the next day they said more like 7 times. However they offered plenty of ways to push up my salary. Essentially I could easily get to 8-9 times salary.

I was stunned. When I spoke to my friend he was excited for me. Great! Think of what you can get for that. Wow. I walked away. Shortly after I found this blog.

Like so many people my friend is part of the future groups of homeowners who will be in negative equity and devastated by the bubble burst. With a salary of just over $100K he was able to boost it for the purposes of obtaining a mortgage because he is self employed. He was able to secure financing for more than $1 million dollar for the purchase of a new home. He spent most of last year bragging about his home increase and calling anyone not following him (including me) an idiot.

Speaking to him about it last week he showed the first signs of concern. He can barely make his mortgage payments now as his business has slowed. He now recognizes the other side of the issue and is worried. Wait till next year.

This will not end well.

#37 BrianT on 11.14.10 at 10:38 pm

Obama discussing China http://www.youtube.com/watch?v=AovW5gI93gQ

#38 Timing is Everything on 11.14.10 at 10:53 pm

Is it just me, or are those ‘condo projects’ lopsided?

#39 T.O. Bubble Boy on 11.14.10 at 11:10 pm

Apparently you can still find deals in Toronto.

Like, $2 for this place:

http://www.realtor.ca/propertyDetails.aspx?propertyId=10064156&PidKey=427232870

#40 Timing is Everything on 11.14.10 at 11:26 pm

‘Regina ‘housing crisis’ spurs rent control call’…
Back to the future?

http://www.cbc.ca/canada/saskatchewan/story/2010/11/14/sask-rental-group-rent-controls.html

#41 Patz on 11.14.10 at 11:28 pm

Followed Garth’s link to Jen Carter’s website & facebook page advertising her “modelling agency.” I put it in quotes because if you look closely you’ll see it’s one of the sleazy type agencies that sends girls out to trade shows in skimpy outfits to hustle the rubes. One of her credits is hosting at the Playboy mansion, hmmm, that’s good wholesome fun. But hey, I don’t have a problem with that and judging by some of the comments neither do some of the redblooded boys here.

But I do have a serious problem with the ethics of sticking a sales manager brand on Jen’s butt and hustling the stainless steel and granite licking rubes. Oh well caveat emptor and sayonara suckers

#42 NFN on 11.14.10 at 11:28 pm

Is this even real? This seems too blatant to be legit!

http://www.yourmortgagesource.org/product-information.shtml#OwnerOccupied

• Stated Income financing for Self employed clients

“You can borrow up to 95% of the value of a home based on income that you state you make and not what you declare on paper. This means that self employed people can save taxes by declaring minimal income and still qualify for the mortgage they need. “

#43 goldenfox on 11.14.10 at 11:31 pm

why QE to infinity must occur

http://www.youtube.com/watch?v=wpmlHTeVG9A&feature=player_embedded

#44 ralph on 11.14.10 at 11:31 pm

CHINA TO THE US: STOP WITH THE MONOPOLY MONEY

http://www.ericmargolis.com/political_commentaries/china-to-the-us-stop-with-the-monopoly-money.aspx

#45 Get Real on 11.14.10 at 11:41 pm

My take

House prices in Canada

Plateau, Cliff and Plateau again over the next 3 years

Vancouver (-25 to -35 percent)

GTA (-20 to -25 percent)

Rest of Canada (-15 to -20 percent)

#46 Patz on 11.14.10 at 11:46 pm

Nos posted a couple of links to the financial frolic, the latest jig in Ireland and here’s an excerpt from one of them:
“For a decade, Ireland was the EU’s superstar. A skilled work force, high productivity and low corporate taxes drew foreign investment. The Irish, once the poor of Europe, became richer than everyone but the Luxemburgers. Fatefully, they put their newfound wealth in property.” Wow, good thing we haven’t done anything stoopid like that! Oh, what’s that sucking sound.

And once again Irish youth are headed for faraway places. Got potatoes?

#47 Utopia on 11.14.10 at 11:51 pm

@ #28 Tim on 11.14.10

Nice shot to economists Garth! Lower on the food chain than a accountant? Well, still higher than a Realtor…
————————————————

I felt hurt by that little joke,….but then I saw Jennifer posing with that lovely Apple flatscreen and forgot the whole incident as I was reminded again that good things really do come in pairs.

#48 An Cat Dubh on 11.14.10 at 11:57 pm

Besides being a fake sales manager, Jenn also has alot of silicone, and what’s with the chin job? Most of these university students are going to be stuck with a student loan when they graduate and their parents more than likely will be stuck with a depreciating asset.

#49 TaxHaven on 11.14.10 at 11:57 pm

Oh, you ARE stepping on toes now!

What’s the difference between a Canadian “mortgage broker” and an American “securitized housing loan”?

Not much, I’d say, since the money all originated from the same banks.

The REAL culprits here are not even the banks, but the governments ~ which are busily engaged in backstopping irresponsible lending and sticking the taxpayers of their respective countries with the (forthcoming) losses…

#50 dark sad person on 11.15.10 at 12:00 am

#237 Utopia on 11.14.10 at 8:10 pm

#146 dark sad person on 11.13.10 at 9:21 pm

“The bloom come off the rose-”
———————————————–

You do realize that you misquoted me Dark. My exact quote per above was “….the bloom COULD come off the rose…”. This is a materially significant difference and one you should take note of because it changes the meaning of what was written quite significantly

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

You are correct-i did misquote–apologies-

I’m sure the new buyers of PM’s and Miners would be rattled by a sharp drop and it’s very possible PM’s will take a knee jerk hit if the market swoons-the weak hands sell-so on that point i agree with you
This is typical bull market action though-all bulls like to shake out before moving higher-
The weak hands have a cross hair on them-as the massive commercial shorts are being squeezed at this point and if they can get the weak longs on the run-it could gain big downside momentum-

My point barring the misquote was about the 5% drop you said was stunning- so far it’s minuscule in light of the huge upsurge in PM’s recently-
Silver has risen by 56% in 10 months-
Gold has gained 30% this year-
Gold has gained 400% over the past 10 years-
And if you’ve been watching it-you know about all the gut slamming plunges its made during those 10 years-but the gains tell the big picture-the dips are for buying-but always take some profit when its offered and hedge into uncertainty-

#51 ExExpat on 11.15.10 at 12:39 am

I think your arguement about vulnerability of Candaian housing loans is sound, but maybe, just maybe, the banks can pull it off here- unlike the US, UK, Ireland, Dubai, Spain, etc? No big shocks like $150 oil in 2008 – which maybe didn’t bring our bubble down because we export oil – and the house of cards stays up in Canada?

Man, will you have a lot of PO’d renters and house hormone drenched spouses to answer to! You might wind up feeling like the Y2K survivalist guy selling ARs and bunkers in Arizona did on January 2, 2000, no collapse of society and lots of customers asking for refunds. I guess you can easily refund these folks exactly what they paid for the advice though.

#52 randman on 11.15.10 at 12:41 am

Everyone needs to see this humourous but
educational video on QE……

http://www.youtube.com/watch?v=PTUY16CkS-k&feature=player_embedded

Take 6 minutes to understand the problem…

I promise no gold or silver hype!

#53 OnlyTheBankersLaugh on 11.15.10 at 12:42 am

“If something is about to fall off a cliff, it deserves to be pushed.” – Friedrich Nietzsche

For cripes sake, let the pushing begin. DA, while you’re out there on the precipice wearing the rubber boots and velcro mitts, push the darn thing into Lake Okanagan. At some point, the sheeple will realize that real estate investment is not our only salvation.

#54 Utopia on 11.15.10 at 1:08 am

#186 dark sad person on 11.14.10

The bloom come off the rose-

**************
That is correct.

I have seen the charts too by the way. Nice charts.
Never forget though that the higher it (gold) goes the harder it falls. It is just forming another bubble that will inevitably end in tears for the unwary and unprepared.

You need a little diversification and balance.

Didn’t you people learn anything from the subprime crisis, Dot-com bubble, US real estate implosion, Enron or even the last gold bubble??

Well, I was there and you can trust me on this, it came as a hell of a shock when the ride was over and almost none of the gold-bulls at the time could see it coming.

And they never do.

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

“Almost none of the “Gold bulls” saw it coming?
There was “no” Gold bulls during the IT boom-
Gold was still in the last stages of a 20 year bear market-
It wasn’t until after IT’s crashed that Gold signaled a positive buy-
It’s obvious almost none of the people on this board recognized it”-

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

OK Mr Dark,

I have had time to take a look at your response to me and what has become clear is that you are not carefully reading what you are responding to. That, and you are making quite a few assumptions.

Try to pay attention. You do not even need to read between the lines with my comments. When I wrote that “I was there” it was clearly a reference to the last line of the previous paragraph (see above). That is the line where the final mention was the last Gold bubble.

So I was there during the last Gold bubble. Get it?

How on earth did you read IT into that? I never said anything about IT anyway.

If you want to respond to my posts, please read them first. Second, copy the quotes exactly otherwise you are wasting everyones time.

#55 Nostradamus Le Mad Vlad on 11.15.10 at 1:23 am


This is how the US (and possibly Canada) bypasses paying SS to those retired.

Oz’s imploding housing bubble.

A new day, another war for the US. Have they nothing better to do, other than wreck other places?

Eggheads Economic collapse 101. m$m is designed to have lousy lead-in stories, so they can glamorize them. Doublespeak trash.

NAFTA failed here, so implement a bigger and better version for Pacific Rim countries! Bigger is bound to be a better failure!

The Exorcist More needed, because the Roman Catholic Church is running out!

List of Bilderberg members for those interested.

US ships Apparently, these 34 war boats will be landing somewhere in the Gulf of Aden soon which, surprisingly, is where nine quakes have hit recently. Does Iran have something to do with this? Recall Haiti.

Links in. Editorial from the NYT calling for the re-introduction of a gold standard (because the dollar is being devalued to nachos).

Link in. Congress is going to save the Bankers’ Butts by passing legislation or something, which it cannot do. Hmmm.

Mike the Engineer — Mayan Calendar and The Tipping Point (lots of them).

US didn’t do all that well at G-20.

#56 Jeff Smith on 11.15.10 at 1:26 am

This dudette (dude?) is plagiarizing Garth’s every sentence. Where is the copyrights police???

http://money.cnn.com/2010/11/12/real_estate/canada_housing_bust.fortune/index.htm?source=patrick.net#storyLogo

#57 Crash Callaway on 11.15.10 at 1:51 am

So after dissecting the words of the banks, economists and realtors and a good oggle at the photo of Jen,
I come to the conclusion that:
“size doesn’t matter”

You can have just as much fun & misery with zero down as the shmuck with 25% down.
House Porn! What a great country.

#58 BCR on 11.15.10 at 2:07 am

A slightly inconvenient story from the weekend’s Financial Times for those who insist that Chinese money is not a +ve factor in the real estate market. Of course Vancouver may not be their prefered destination (lack of corporate headquarters and other economic factors, not to mention sh1t weather etc) but there may be more crumbs from the captain’s table than many of the amen corner on this site would care to acknowledge:

http://www.ft.com/cms/s/2/4cf60cf2-ed17-11df-8cc9-00144feab49a.html#axzz15KaILVmO

#59 Behind the Numbers on 11.15.10 at 3:24 am

MissBunny’s works for YEN agency… don’t cha love this poster they did?

I think they can change it to:

F**K ME, I JUST GOT SUCKERED INTO BUYING A CONDO (from a model)

http://www.facebook.com/photo.php?fbid=256970945155&set=o.16688821035#!/photo.php?fbid=256970945155&set=o.16688821035&pid=8436175&id=683245155

#60 CJ on 11.15.10 at 3:48 am

Garth, on the previous post, you forgot the caption under the picture of the polar bears and the igloo. It’s supposed to read:

Oh, I just love these things! Crunchy on the outside and chewy on the inside!

#61 Thetruth on 11.15.10 at 4:25 am

Last 15 years or so can be summed up this way…lots of money ( created money in hands of a few) chasing limited assets…

Bubble #1 : Nasdaq et al.

Bubble #2 : Global real estate

Bubble #3 : Commodities (happening now)

Bubble #4 : Capital inflows into emerging economies (now)

Bubble #5 : Developing Nations’ currencies (starting very soon)

Bubble #6 : QE in developing nations (about a year from now) to lower their currencies.

Result? Massive Inflation. Huge Inequality (Growing Gap) in the Standard of Living of Citizens WITHIN Canada/USA

Did I miss any bubbles just forming ?????

#62 Thetruth on 11.15.10 at 4:32 am

Identifying and Investing in Bubbles has probably made more people rich than any other way in the last 15 years. It’ll probably be like that into the future as well.

To do so would entail throwing out rational thought OR maybe understanding how the paper money system works.

#63 Common sense on 11.15.10 at 5:01 am

I would say dopamine rather than endorphine is responsible in that particular case (impulse driven, “agressive” and short-lived pleasure). Endorphine will be enjoyed by those who did not buy when the bubble collapse (long lasting “calm” pleasure).

#64 David B on 11.15.10 at 7:01 am

News from Wall Street is CEO’s pay and bonuses up!

Why because they are in part tied to the stock market, cool eh, and why is the stock market up? Could it be all that fresh new printed money that has flowed in, or yet another spike with QE2 , cheap money thrown at forecloseurs, “OR” a smaller work force working for less money and longer hours!

If the last thought is even close to being true how many CEO’s are about to rush out and hire back the work force they had before paying out more money in time, wages and benifits?

#65 Moneta on 11.15.10 at 8:13 am

The REAL culprits here are not even the banks, but the governments ~ which are busily engaged in backstopping irresponsible lending and sticking the taxpayers of their respective countries with the (forthcoming) losses…
—-
I’m still trying to understand why I get quasi same rates as the ones who have quasi 0 net worth.

Risk has been totally mispriced for a while. That is another sign of a bubble… Mispricing of risk implies misallocation of capital.

#66 pbrasseur on 11.15.10 at 8:14 am

We didn’t implode like the US because our easy credit machine is still operational.

For some this is good news as it prevents short term meltdown.

In the long run though it prevents ou economy from fixing its unbalances, later there will be a heavy price to pay for that.

#67 JC on 11.15.10 at 8:16 am

The Canadian Masked Housing Centre ( CMHC ) being sold as projects, as income innovators , interest rate prizes , and most of all a 300 sq/ft property condo sold for $160K explains everything.

Who do you blame ?, of course the usual suspects, MP’s, City governments, bankers/mortgage & realty brokers , buyers and sellers.
But the real blame goes to :
” Cheap Money “

#68 Ret on 11.15.10 at 8:19 am

#11 Immigrants buying houses.

Have a look around TO. Immigrants who barely grasp English living in $450-500000 houses, often new ones at that. Taxi cab invariably parked in the driveway.

Here in West Hamilton, more and more homes are being bought by primarily, but not exclusively, Chinese, to be rented to Chinese students. The landlords use the tax free rents, to justify more loans to buy more houses to make more undeclared income. The landlords have finally found jobs in Canada, as slumlords!

A neighbour on the street makes $45-50000 max. His wife makes soon to run out EI. When she found out that her job was going out of the country, they ran out to the bank and got yet another mortgage to buy another rental home, their second, while she could still lie about her financial circumstances and get financing. That same month, they also started a $135000 addition on their existing home.

When the SHTF, I have no interest in hearing the sad stories in the MSM or in seeing my tax dollars going to bailing out anyone’s RE disaster be they Canadian, Immigrant or ___________ (fill in the blank.)

They will all have been masters of their own disasters.

#69 David B on 11.15.10 at 8:32 am

Trouble from across the pond, Ireland is saying “NO” to the EU’s plan to top up their bank accounts, and Portugal/Greece is saying stand by because things are not good here also. AND, troubble State Side with mnay new and old members of congress saying “Stop” QE2 .

Has the time come for Obama to call American’s bluff and say “It is time to fish or cut bait” Spending cuts across the board effective Jan 1st or America goes broke.

I do not think America has the the overall will …. the ode line ” I am all for justice but give me my share first” still applies.

#70 bigrider on 11.15.10 at 8:33 am

Here you go everyone. Advice in today’s Toronto Star from an actor nonetheless. Don’t rent ,buy real estate and stay away from the stock market.

http://www.moneyville.ca/article/889211–a-team-actor-s-money-tip-buy-don-t-rent

The mantra goes on and on…..

#71 john m on 11.15.10 at 8:38 am

Great post Garth…..i certainly hope CMHC is not guaranteeing these loans …if so it is fraud plain and simple and we the taxpayers should not be on the hook..they should be prosecuted.

#72 Herb on 11.15.10 at 8:48 am

What is there left to say when the inflation/deflation issue is featured on a holistic health site?

http://articles.mercola.com/sites/articles/archive/2010/11/15/get-ready-for-higher-food-prices-due-to-falling-economy.aspx

#73 S.B. on 11.15.10 at 8:50 am

Thank you for alerting us to the many types of inflated assets in Calgary. :P

p.s. I hope your Toronto Blog Dog gathering becomes a regular event (every 5-6 months)? Garthstock, Garthfest, Garthapalooza, Garthlympics, etc.

#74 brunt on 11.15.10 at 8:56 am

We, as human beings, seem to be obsessed with finding single, simple causes to big problems.

Thus, upon examining the US housing implosion, scores of people nod their heads in agreement that the banks lent too dangerously there and thus caused the problem. And soon thereafter, will note that no such implosion will happen in Canada because our banks were more prudent.

As Garth has repeatedly pointed out, our banks have been far from different in this matter.

But I tend to have a slightly different view of the US housing meltdown than most. I believe that it was not ultimately the banking actions that caused the problem. It was instead the fact that millions of people took out loans that was far beyond their reasonable capacity to service to pay far too much for a roof over their heads. Therefore, the fault ultimately lies in people taking the loans, not in the banks offering them.

My grandmother, who had a grade 6 education, knew not to borrow too much money. Why is it that our current crop of supposedly bright homeowners not figured this out?

In this respect, can one really say that Canada will be immune from housing problems? Are Canadians taking out mortgages in excess of 2.5 or 3 times their annual salary? Are Canadians paying $600,000 for what would (at best) cost $200,000 to make? Are Canadians paying in excess of $500 per square foot for tiny apartment condos?

We are, of course. And we are doing it in spades.

It’s not different here. The same laws of economics hold in Canada. Leverage is great on the way up, but extremely painful on the way down. Excessive debt will never lead to good things in the long term. An average house should cost between 2.5 and 3 times an average wage.

And as Garth is so correct in pointing out, no asset class (and that includes real estate) should comprise more than 40% of one’s net worth. Given that many, if not most Canadian homeowners have close or over 100% of their net worth in their house, they are in for a world of hurt.

And more affordable housing is a good thing for Canada.

#75 Devil's Advocate on 11.15.10 at 9:09 am

#59 Behind the Numbers on 11.15.10 at 3:24 amMissBunny’s works for YEN agency… don’t cha love this poster they did?

“Full Bottle Services Available” I don’t think there is anything subliminal behind that poster or her Playboy gigs. In any event she is selling herself a whole lot more than anything short of prostitute.

Damned… guess I’d better step it up a notch and figure out somethin’ better than Timmy’s Donuts and Coffee at my next open house. Wonder what Sherry Cooper’s up to on Sunday?

#76 Torquemada on 11.15.10 at 9:29 am

Hey Garth, does Jennifer come bundled with the condo? Or do I have to pay extra for her?

Are you kidding? Do you really think a girl like that would be caught dead in a 300 square foot condo?

#77 TheBestPlaceOnEarth on 11.15.10 at 9:45 am

Vancouverites flush with cash hit the stores. Bulletproof Vancouver home owners hit the stores in an orgy of binge buying as the good times keep on rolling
http://www.vancouversun.com/business/Consumer+spending+upswing+holiday+season+approaches/3828441/story.html

#78 refinow on 11.15.10 at 10:10 am

Garth, I feel you are finally discovering the actual root of the housing crisis both in the US and in Canada, and it all started with the Banks decision to deviate from long standing lending practices.
As a Mortgage Broker of 20 years, I have seen firsthand the changes in lending policies.
The #1 change that had the most drastic effect on mortgage lending was the introduction of the “STATED INCOME” program.
For the first time, the Bank’s could turn a blind eye to the simplest philosophy of lending; make sure the person can afford to make the monthly payments before they are given the loan/mortgage.
“You can borrow up to 95% of the value of a home based on income that you state you make and not what you declare on paper. This means that self employed people can save taxes by declaring minimal income and still qualify for the mortgage they need. “
Old policy!!
This policy was amended in May of this year to 90% of the value of a home for purchases only…
Is it true?? Yes, the Bank’s and CMHC have been allowing for quite some time for clients to STATE their income.
CMHC has attempted to pull back to limit the applicants who are self employed by introducing the following:
Only people who have been self employed for more than 2 years but less then3 years can now state their income. Any applicant with more than 3 years history of being self employed must use their actual declared income, plus a 15% gross up.
This would be great step forward, however the private version of CMHC, GENWORTH chose not to amend the policy and continue to let anyone with a minimum of 2 years self employment, with a good credit rating and proof that no income taxes are owed for the most recent filed income tax return.
So the ability to get a mortgage that require more income then what you actual show is still available today.
But to maybe put some of your minds at ease, there is a significant pull back by the lenders this year with the stated income programs, for the first time there is a “Feasibility” look at the amount of income. There is not an actual equation or guide being used, but if the amount of stated income needed to qualify for this mortgage and all of the other debts the applicant is approaching the 6 digit income, then the lenders may not be willing to approve…
The Bank’s and CMHC are having a hard time approving large purchase prices under stated income… but some are still getting done.

#79 garthfan on 11.15.10 at 10:11 am

Wow… really sad.

If you beg banksters to screw you, you can safely bet they will. But at least you can point to the bouncing boobies ( I mean bunnies) and say, “They told me it was different here.”

I’m going now to gather my girls around me and have a nice little talk about Women, Poverty & Economics.

#80 refinow on 11.15.10 at 10:15 am

#71 John M

Are you kidding me??

Of course CMHC has insured those mortgages, each and evey one of them.

Did you know that CMHC has also insured all of the conventional mortgages with the big banks as well.

#81 AxeHead on 11.15.10 at 10:21 am

#75 DA.

The point is, the whole real estate industry pimps it’s products (overpriced houses) at the harm of it’s customers (property virgins and fools). The other point made is that it takes very little to be a ‘real estate professional’, as near naked Jennifer shows. You are part of this deceptive industry and have lost all trust. Get a real job.

#82 Taxpayer like everyone else on 11.15.10 at 10:34 am

31 Realpaul – I take it you are donating a good portion of the thousands of dollars a day you are making in the PM market to local charities and food banks for the impoverished?

#83 nelson in ktown on 11.15.10 at 10:42 am

Watching the news this morning all commercials are for Remax and the big banks enjoy your morning coffee….

#84 Moneta on 11.15.10 at 10:49 am

They will all have been masters of their own disasters.
——-

If government didn’t keep on cleaning up the messes, bankers would not be making these loans.

I still think the problem lies with banksters and government more than the individuals. When the top cheats and keeps on changing the rules along ther way, everyone is forced to cheat and loses trust in the system. It’s called survival.

If you want to nip this greed in the bud, you have to start at the top of the pyramid, not the bottom.

Humiliating a cheater will only work if the system was fair and the player knows this. When a game is rigged and unfair, a cheating player will never find fault with his/her actions. If humiliated, he/she will only seek revenge.

Blaming the individual is destructive and futile. The bankers and leaders get the bread and everyone else is left fighting for the crumbs.

#85 Apsalar on 11.15.10 at 11:11 am

Wow, the self-delusion continues….

http://www.theglobeandmail.com/report-on-business/top-business-stories/why-housing-market-may-be-having-goldilocks-moment/article1799193/

#86 Got A Watch on 11.15.10 at 11:14 am

They’re tripping over a 4 leaf clover in Ireland. How deep the rabbit hole goes:

Bailing Out Ireland, Bailing Out Banksters

” under the Government’s alternative plan, emergency funds would be funnelled into Irish banks — and not state coffers — allowing the Government to save face while maintaining control of the economy.

No doubt Irish ministers will deny this along with all the other whispers of bailout talks. Nevertheless, a bank-centric bailout would be quite an irony.

Frankly it’s a fiction of accounting whether the Irish banking sector or the Irish sovereign actually gets the bailout. Firstly given the nexus of funding guarantees that have bound the two together since the crisis, and which remain open to possible burden-sharing by bank bondholders.

But secondly — and here’s the irony — because the recent capitulation in Irish government bonds also appears to have keelhauled the banks.

To appreciate that irony, you have to understand that Irish banks were initially prescribed government bonds as a big push for systemic health…..”

Long post there, great links, charts.

Ireland’s Resistance to EU Bailout May Rest on Crumbling Banksters

“Ireland’s sovereignty depends on the nation’s biggest banks as the European Union presses the government to accept a bailout.

While the government says it won’t need to raise money in the bond market until the middle of 2011, Irish lenders are depleting the collateral they need to get the emergency funding from the European Central Bank on which they depend. Corporate clients have pulled deposits from lenders including the country’s biggest, Bank of Ireland Plc.

With its lenders frozen out of Europe’s money markets and with their deposits shrinking, the Irish government may be forced to seek the bailout ministers have so far resisted. European Central Bank Vice President Vitor Constancio said today Ireland could use the European Financial Stability Facility to help prop up its banking system to restore investor confidence.

“It’s totally clear that they absolutely must accept external support sooner or later,” said Christoph Weil, an economist at Commerzbank AG in Frankfurt. Confidence in “the banking system is collapsing, and they can’t stop it by themselves.””

The only surprise is that CONfidence lasted this long.

Is anyone really surprised that bankrupt Irish Banks, given money in bailouts by the Government, would then turn around and use the bailout “money” to buy Government Bonds, thus completing the circle (jerk).

I am sure the exact same thing has gone on, as the FT post mentions, in Greece, Spain, Italy, Portugal….and the UK….and the USA….and Japan….and __________ (insert bailee nation here).

I would call it fraud. Banksters call it “sound business practice”.

I am shocked, shocked, I tell you, to find corruption here.

Help save the world. Kill a Bankster today.

#87 Al on 11.15.10 at 11:24 am

The parking lot at the Vaughan Mills Mega Mall was full of cars – no spaces left this Sunday – not a sign of people reining in their spending.

#88 Devil's Advocate on 11.15.10 at 11:28 am

#81 AxeHead on 11.15.10 at 10:21 am#75 DA.

The point is, the whole real estate industry pimps it’s products (overpriced houses) at the harm of it’s customers (property virgins and fools). The other point made is that it takes very little to be a ‘real estate professional’, as near naked Jennifer shows. You are part of this deceptive industry and have lost all trust. Get a real job.

Tell it to the 90% of Canadians who turn to my industry when they want to buy or sell a property. As long as they are there we will fullfill the demand.

Are you suggesting Jennifer is a real estate “professional”?

Fact is it does indeed take disturbingly too little to become a real estate agent. It does on the other hand take very much indeed to become a real estate “professional”. Jennifer is probably not either of them but she may indeed be a “professional”.

Real job? Hey buddy I don’t get paid unless I get the job done to the complete satisfaction of my boss (client)… where I come from that is doing a real job. And I’m looking for a new one every day. You oughta try it sometime. There is no better paying hard work in the world like sales… there is also no worse paying easy work in the world than sales.

“Waste no more time arguing about what a good man should be. Be one.” – Marcus Aurelius

#89 Junius on 11.15.10 at 11:31 am

#74 brunt,

You said, “I believe that it was not ultimately the banking actions that caused the problem. It was instead the fact that millions of people took out loans that was far beyond their reasonable capacity to service to pay far too much for a roof over their heads. Therefore, the fault ultimately lies in people taking the loans, not in the banks offering them.”

Technically you are correct. This is the reason a correction in Canada is inevitable. We simply have too much debt.

However I think you are letting the banks, Re industry, the MSM and our gov’ts off easy. How can people – particularly young people – make rational economic choices when they are bombarded daily with a constant stream of “it goes up forever” and “it is different here” articles, ads and stories.

We have understood for centuries from the days of the snake oil salesman that people are easily persuaded and influenced against their best interests. We have banking regulations and consumer protection laws as a result. However in this case our entire society conspired against our collective best interests in favour of home ownership through excessive debt accumulation.

If you just chalk this up to consumers getting in over your heads you missed the real story here. If we as a society miss this story we will ensure that in one form or another it will happen again.

#90 Junius on 11.15.10 at 11:35 am

#78 refinow,

You said, “The #1 change that had the most drastic effect on mortgage lending was the introduction of the “STATED INCOME” program.
For the first time, the Bank’s could turn a blind eye to the simplest philosophy of lending; make sure the person can afford to make the monthly payments before they are given the loan/mortgage.”

I absolutely agree. It was my experience as well. I know many people who obtained mortgages and helocs on over stated incomes.

Over the next few years we will see just how bad it is. To paraphrase Warren Buffet, “Now that the tide is going out we get to see how many homeowners are naked.” We know it is many.

#91 Patz on 11.15.10 at 11:52 am

It’s not like the debt pushers are getting religion anytime soon and their customers are just as apostatically inclined. There are car dealers in ‘couver screaming that they will give you a loan even if “your mama won’t!”

Maple Ridge Chrysler says they can put anyone in a car plus 10 grand in their pocket. The loans are stretching out to 7 and eight years by now.

If you wonder what it feels like to be underwater on a loan, look no further than car loans. Unless you pay cash, the minute you drive off the lot, your car is worth less than what you owe.

But don’t worry it’s all gonna work out because, well because… I forget exactly.

#92 rory on 11.15.10 at 11:55 am

Our orgy of debt …right up there with the best of the rest

http://globaleconomicanalysis.blogspot.com/2010/11/interactive-map-of-global-debt.html

#93 jess on 11.15.10 at 11:56 am

Do businesses really create jobs? Do tax cuts to businesses create jobs?

…”Businesses have more incentives to eliminate jobs than to create them. Businesses in our economy exist to create profits, not jobs. This means the incentive is for a business to create as few jobs as possible at the lowest possible cost. They also constantly strive to reduce the number of people they employ by bringing in machines, outsourcing or finding other ways to reduce the payroll. This is called “cutting costs” which leads to higher profits. The same incentive also pushes the business to pay as little as possible when they do hire. (It also pushes businesses to cut worker safety protections, cut product quality, cut customer service, “externalize” costs by polluting, etc.)”

read further

Businesses Do Not Create Jobs
By Dave Johnson
November 11, 2010 – 1:08pm ET

#94 Herb on 11.15.10 at 12:00 pm

A word to the wise …

Jenny, should you read Garth’s blog to-day to account for the sudden increase in your hits, here are some comments you might consider should you want to take your agency up a couple of notches –

The backdrops for many of the pictures are poor. There are ways to overcome backdrop problems even in snapshots, but this might take more than a digital one-shot camera.

The lighting in many pictures is atrocious. Combined with below-the-belt costuming and dumb posing, this makes even attractive girls look cheap.

Unless you are indeed running a cheap escort service, get a real photographer who knows how to emphasize positive features and downplay flaws.

If you can’t do better than the pictures on your website and facebook page take up real estate as a profession.

#95 dark sad person on 11.15.10 at 12:09 pm

#54 Utopia on 11.15.10 at 1:08 am

*************
So I was there during the last Gold bubble. Get it?

How on earth did you read IT into that? I never said anything about IT anyway.

If you want to respond to my posts, please read them first. Second, copy the quotes exactly otherwise you are wasting everyones time.

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

I did copy the quote “exactly”
I missed the word “COULD”
Pardon me all to hell-

You were raging a about a “STUNNING” 5% drop intraday !!
And then went on to compare it to the internet bubble and sub-prime bubbles-

I countered with how stupid looking at “anything” long term on such a microscopic level is-

The rest is really not relevant and hardly worth the rant-speaking of a waste of time-

#96 GregW, Oakville on 11.15.10 at 12:29 pm

Hi Garth, still flying? FYI

Saturday November 13, 2010
Quirks & Quarks 35th Anniversary Special
http://www.cbc.ca/quirks/
Listen to Part 2, (1st 3min of)

Genetics: Dr. Marla Sokolowski, Professor of Biology and Canada Research Chair in Genetics at the University of Toronto at Mississauga.

Paraphrasing what she said: so-called junk DNA is actually useful. (In the 1st 3 min. of part 2.)

Why are naked body scanners being used at all when they can unzip your DNA!

How Terahertz Waves Tear Apart DNA
http://www.technologyreview.com/blog/arxiv/24331/

“Many are deciding that they’d rather pass through the naked body scanner than suffer the humiliation of having their genitals manually probed. In other words, they’re being coerced .”
http://www.infowars.com/does-tsa-behavior-fall-under-definition-of-terrorism/

#97 jess on 11.15.10 at 12:46 pm

This guy makes gekko look like a choir boy

http://o.seattletimes.nwsource.com/html/localnews/2013427831_hardmoney14.html

Saturday, November 13, 2010 – Page updated at 08:40 p.m.

How a hard-money lender took a man’s home

Huey said it wouldn’t surprise him if lenders were taking advantage of a loophole by writing some loans as commercial to avoid disclosures and the interest-rate cap. “You can paint stripes on a horse and call it a zebra, but it’s still a horse,” he said

#98 Devil's Advocate on 11.15.10 at 12:48 pm

#81 AxeHead on 11.15.10 at 10:21 am#75 DA.

The point is, the whole real estate industry pimps it’s products (overpriced houses) at the harm of it’s customers (property virgins and fools). The other point made is that it takes very little to be a ‘real estate professional’, as near naked Jennifer shows. You are part of this deceptive industry and have lost all trust. Get a real job.

Tell it to the 90% of Canadians who turn to my industry when they want to buy or sell a property. As long as there is such a demand we will meet it.

Are you suggesting Jennifer is a real estate “professional”?

Fact is, I agree, it does indeed take disturbingly too little to become a real estate agent. It does on the other hand take very much indeed to become a real estate “professional”. Jennifer is probably neither but she may well indeed be a “professional”. ;-)

Real job? Hey buddy I don’t get paid unless I get the job done to the complete satisfaction of my boss (client)… where I come from that is doing a real job. And I’m looking for a new one every day. You oughta try it sometime. There is no better paying hard work in the world than sales… there is also no worse paying easy work in the world than sales.

“Waste no more time arguing about what a good man should be. Be one.” – Marcus Aurelius

#99 BrianT on 11.15.10 at 12:57 pm

#84Mon and #86Got-at the top levels, the guv sector and the banking sector is the same thing. There wasn’t even any surprise registered when an “environment minister” gets automatically dropped in right near the top at CIBC. All this left wing/right wing nonsense is for the sheep-the guv knows who butters their bread and vice versa.

#100 BrianT on 11.15.10 at 1:09 pm

#95Greg-this is entirely about how far the public can be pushed without response. If it was actually about security and working with the public, there wouldn’t be any males employed at the checkpoint-99% of men and the majority of women would prefer a female do the intimate groping and fondling (which is why 99% of the groping and fondling is being done by male employees)-how much abuse will the sheep tolerate?

#101 davelims on 11.15.10 at 1:16 pm

First timer here- like what you do Garth. Much repsect to anyone trying to find the truth or tell it.

———————–
An actual quote from a good friend here in Saskatchewan:
“Houses always go up in prices if you look at the graphs. It’s not like I’m ever going to lose money. Prices might level off but they’ll always go higher.”
————————————————

Food prices are on the rise in Saskatchewan. Unemployment jumped 1% last month over last year.
Government expense on health care has risen…albeit on wages, driving inflation.
We’re nearing pretty maxed out in middle class resource economy. SIAST is offering wage hikes of 0-0-0% over the next three years.

….sure, we’ll always boom… your house will always go up in price…go buy that new nissan titan fully loaded….
maybe a place in Phoenix….;)

#102 jen on 11.15.10 at 1:27 pm

The US media are starting to catch on as well. See link:

http://money.cnn.com/2010/11/12/real_estate/canada_housing_bust.fortune/index.htm

#103 Ian from Burlington on 11.15.10 at 1:28 pm

“liar loan” – yep, thats how I got my Scotialoan…couldn’t believe it…I could have said anything and still have got t he money since most of my banking was thru another bank

#104 jasonturbo on 11.15.10 at 1:35 pm

Is it just me?

Seems like there is never any realtors on here anymore? You know, the ones that were always trying to defend the stable and strong Canadian housing market…

#105 Hiteclowtec on 11.15.10 at 1:40 pm

The secret of Oz — Two hour documentary on the fractional reserve banking system and the true symbolism in The Wizard of QZ.

http://www.youtube.com/watch?v=U71-KsDArFM&feature=player_embedded

#106 realpaul on 11.15.10 at 1:53 pm

#82 Tax…now now…don’t hate cause I’m more (much) successful than you seem to be….matter of fact I donate my time as a volunteer..its a family tradition…how about you?

Personal planning is all it takes……and of course not focusing your failures on someone else. I’m doing well because I work at it…….hope to see you at the next ‘occasion’.

BTW…did you all know that over 1 million people ( mostly seniors and young familieas are ‘officially’ clients at the food banks? If its official then you know the real number is triple plus plus. Poverty has grown dramatically in Canada with the ZIRP and the incredible inflation that leaves working families unable to feed themselves.

#107 brunt on 11.15.10 at 2:13 pm

#88 Junius,

You said

“Technically you are correct. This is the reason a correction in Canada is inevitable. We simply have too much debt.

However I think you are letting the banks, Re industry, the MSM and our gov’ts off easy. How can people – particularly young people – make rational economic choices when they are bombarded daily with a constant stream of “it goes up forever” and “it is different here” articles, ads and stories.

We have understood for centuries from the days of the snake oil salesman that people are easily persuaded and influenced against their best interests. We have banking regulations and consumer protection laws as a result. However in this case our entire society conspired against our collective best interests in favour of home ownership through excessive debt accumulation.

If you just chalk this up to consumers getting in over your heads you missed the real story here. If we as a society miss this story we will ensure that in one form or another it will happen again.”

——————————–

I have no love for the banks or MSM. But I believe that one has the duty to do their own due diligence before making major financial commitments.

There exists in our society today a shocking lack of any remnants of personal responsibility. Every bad thing that happens is the fault of somebody else.

There are places where independent advice can be obtained for a reasonable fee. We are taught to read not just to read advertisements, but to find sources of information to help us toward independent thought.

I knew at age 17 precisely the amount of debt that a person could take on at a given wage. It is not that difficult to multiply by three.

By the same token, a small amount of time spent actually looking for independent information would show that real estate regularly does decline. I knew this well before the Internet was available. Again, reading and independent thought are powerful tools.

I did not mention my grandmother lightly. She is actually my personal gauge of real life smarts. If she knew something was so, then someone with a university education, or at least having completed high school should have known the same thing.

Unfortunately, I frequently see that this bar has been set far too high.

In short, while I do not in any way shape or form believe that the MSM, banks or real estate organizations are blameless, none of them forced buyers to totally ignore independent advice that has been developed over generations.

I view the phrase “caveat emptor” to be far less of a warning that there are legions of evil people who are trying to take your money as it is a warning that nobody will take care of your money more than you will.

I believe the real story is that consumers were too greedy and stupid to realize that they were being fed a line. Fix THAT, and you avoid the problem in future.

#108 C on 11.15.10 at 2:19 pm

November 2010 mid-month sales numbers should be out any day. Looking forward to seeing them! As for the Canadian Real estate market the music keeps playing, just like it did on the Titanic while it was sinking. I guess the fact that the $#@! is about to hit the fan in Ireland and Portugal don’t mean didly and that it’s all good here in Canada. Truely mindboggling the mentality of the average person today. It really is true when people spend more time reading about Jessica Simpson getting engaged versus what’s going on with the world. Keep that music playing…..

#109 BrianT on 11.15.10 at 2:55 pm

Mish sums up the Gold story in a nutshell http://globaleconomicanalysis.blogspot.com/2010/11/midas-crush-marketwatch-attempts-to.html

#110 UrbanCowboy on 11.15.10 at 3:07 pm

Gotta love this talk of the gold bubble. Its down only 4% from its all time high and people start soiling their pants. I don’t have to say it, but put simply gold is been running due to global economic instability, and unless those fundamentals have completely reversed in the last couple days then we will be going higher. Remember, only inflation adjusted from its high in the 70’s gold has to reach $2253, so we are nowhere near that.

#111 Devore on 11.15.10 at 3:09 pm

#107 brunt

I see how you’re being viciously attacked today by those who would absolve the person from the responsibility and consequences of their decisions. See, you’re just blaming the victim. Apparently, they had no choice. Those people who are being so rudely screwed by The Banks cannot take their business else where, because then those banks would cease to exist. Those who are “pressured” to buy far beyond their means cannot give everyone the finger and rent instead, because that would be responsible and adult.

Blaming and punishing others for your bad decisions just makes sense. Whocouldaknowed?

Did banks mismanage their risks and portfolios? No, their loans are just fine, fully backstopped by the government. Record bonuses all around. Did the government make bad decisions against the wishes of their citizens? No, we (they royal we) got exactly what we deserve, we got exactly what we WANTED. This is the end result of decades of voting and governance under our seal of approval.

Why should we be so surprised?

Stop blaming The Man. Big Banks, Goldman Sachs, central banks, finance ministers, mass media, have legitimacy only because we give it to them. If people realized Goldman Sachs was filled with scum and stopped doing business with them, Goldman Sachs would cease to exist. If people realized politicians are scum who will pander to them then make them pay for it 10 times over and stopped voting for them, we would have a government that works for us. If people realized mainstream media works for the owners and advertisers who sell us things and turned off, we would get real reporting again.

Blaming society, blaming banks, blaming government, blaming the media, blaming your neighbors, is just a cop out. It all starts with us (the royal us), it starts, and ends, with you.

People who bought houses they can barely afford to service that they will be paying for for the next 35 years knew what they were doing. People who leveraged and tool out equity to go on vacations and buy new cars knew what they were doing. People who overstated their incomes to buy mansions with zero down knew what they were doing.

I mean, really?

I know it’s all cool to rage against the “unbridled capitalists” or “socialist corporatists” (whatever floats your boat), but at the end of the day they can only do the things they can get away with in broad daylight, and we do nothing about it. Even worse, we flail about like helpless victims.

#112 jess on 11.15.10 at 3:10 pm

=======================
By Jeff Nagel – North Shore Outlook
Published: October 01, 2010 10:00 AM
Updated: October 01, 2010 10:26 AM
Cities alarmed about rising RCMP costs are pressing Ottawa to take on more of the burden and rein in spending by the Mounties.

Policing devours close to half the total budget of many municipalities.Cities larger than 15,000 residents pay 90 per cent of RCMP costs and their mayors want that cut to 70 per cent – a proposal the federal government rejected this summer. Ottawa also refused to move to a 50-50 split in costs for most smaller communities, which now pay 70 per cent.

Civic leaders now plan to press federal cabinet ministers and B.C. Conservative MPs to rework the formula and provide more RCMP accountability.

http://www.bclocalnews.com/greater_vancouver/northshoreoutlook/news/104161644.html

#113 UrbanCowboy on 11.15.10 at 3:13 pm

109 BrianT on 11.15.10 at 2:55 pmMish sums up the Gold story in a nutshell http://globaleconomicanalysis.blogspot.com/2010/11/midas-crush-marketwatch-attempts-to.html
———————————————————
“Gold is going up because people are buying it”.
Stupid comment, gold is going up because its rare, it can’t be print/inflated/diluted, and stands the corosion of time. This is what gives it a store of VALUE, as opposed to many of the other things available to choose from. Thats why people are buying it….dude!

Actually, Brian is right. There is no fundamental difference from real estate or a barrel of oil. — Garth

#114 GregW, Oakville on 11.15.10 at 3:18 pm

Hi Garth, fyi

Felt this worth passing along. With Christmas coming up, Ican see where this could Be a real problem. The newest virus circulating is the UPS/Fed Ex DeliveryFailure. You will receive an Email from UPS/Fed Ex Service along with a packet number. Itwill say that they were unable to deliver a package sent toyou on such-and-such a date. It then asks you to print outthe invoice copy attached. DO NOT TRY TO PRINT THIS. ITLAUNCHES THE VIRUS! Pass this warning on to all your PCoperators at work and home.

#115 Junius on 11.15.10 at 3:20 pm

#107 brunt,

I would say that my disagreement with you is not fundamental or one of principle but one of emphasis.

You said, “I view the phrase “caveat emptor” to be far less of a warning that there are legions of evil people who are trying to take your money as it is a warning that nobody will take care of your money more than you will.”

Clearly I agree that people need to be careful and learn more before making important decisions. However there are 2 major problems with “caveat emptor” beyond that. The first is the complexity of our society. Who has the time or ability to test the brakes on their new car, test the new pharma product or know what is going into their food.

Who would have known that the banks had created a securitized market for mortages and were selling them like hotcakes around the planet pumping up the industry to unsustainable levels? When your gov’t is securing a loan through the CMHC do you not have the right to think the gov’t probably believes the loan will not go bad?

I just think things are more complex than that. At a certain point people need to be able to rely on institutions and corporations being credible or the entire system will grind to a halt.

You also said, “I believe the real story is that consumers were too greedy and stupid to realize that they were being fed a line. Fix THAT, and you avoid the problem in future.”

But how? You have people like Garth here, Steve Keen in Australia acting as our Robert Schillers and Peter Schiffs and they can’t get through the clutter. Our media and our politicians are mostly bought and paid for.

Sorry but the real story is the mass manipulation of the many for the benefit of the few. The confusion of the masses is a side show for distraction.

#116 GregW, Oakville on 11.15.10 at 3:23 pm

Hi Garth, fyi

Canadian Club of Toronto
‘Please join us on January 13, 2011 when Margaret Franklin, CFA, chair of the Board of Governors of CFA Institute and President and CEO of Kinsale Private Wealth, will discuss what steps investors, regulators, government and industry participants should be taking to enhance investor protections. Ultimately, Ms. Franklin will make the case that Canada’s track record of holding rogue advisors accountable is detrimental not only to investors but Canada’s capital markets as a whole.’
http://www.canadianclub.org/Events/EventDetails.aspx?id=3139

#117 Moneta on 11.15.10 at 3:37 pm

Therefore, the fault ultimately lies in people taking the loans, not in the banks offering them.

My grandmother, who had a grade 6 education, knew not to borrow too much money. Why is it that our current crop of supposedly bright homeowners not figured this out?

—-
It’s AMAZING how the bottom 99% prefers to blame the individuals over the bankers and government.

Instead of attacking those at the top who are taking everything away adn rigging the game, they prefer to attack the losers and fight for the crumbs.

You grandmother was frugal most probably because she’s a product of the Great Depression, not because she’s some perfect specimen. Put her in today’s cohort and she’d probably reverse mortgage her house in a time of need… unless she’s an outlier.

Populations always follow a normal distribution. The savers in today’s younger groups are the outliers. We are a product of our time and normally distributed accordingly.

#118 Coho on 11.15.10 at 3:39 pm

Garth, todays pic is a real dandy!

Quite the high tech safety harness! At least the fellow holding the rope should be watching the window installer, if nothing else than to let him know his mind is on the job. Instead he’s looking down probably thinking of how good the first cold beer beer of the day served in a frosty mug will taste!

Let us hope he doesn’t decide to reach into his pockets for cash to determine how many brews he’ll be able to buy on the way home. That would really make his buddy out on the ledge nervous!

And so appears to be the direction of the social safety net. What people need and what is available are worlds apart.

#119 dark sad person on 11.15.10 at 3:44 pm

#110 UrbanCowboy on 11.15.10 at 3:07 pm

Gotta love this talk of the gold bubble. Its down only 4% from its all time high and people start soiling their pants. I don’t have to say it, but put simply gold is been running due to global economic instability, and unless those fundamentals have completely reversed in the last couple days then we will be going higher. Remember, only inflation adjusted from its high in the 70′s gold has to reach $2253, so we are nowhere near that.

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

Yes and not only that-but all the pro bubble callers miss the number 1 ingredient-
“Public involvement”
Never was a bubble formed without it–
This board goes to show we aren’t anywhere close to that-
A handful of the much maligned goldbugs here-do not constitute bubble characteristics-

#120 Moneta on 11.15.10 at 3:44 pm

Devore on 11.15.10 at 3:09 pm
—–
Anser honestly Devore. Who has committed a greater sin?

The homeowner who overeached thinking that he’d make it over the long term or the banker, lowering lending standards who wrote millions of loans knowing FULL well that thousands of homweonwers would lose their shirts and governement would pick up the tab?

In my book there are degrees of mischief and if I had to condem someone, I would start with the banker.

#121 Moneta on 11.15.10 at 3:46 pm

Devore on 11.15.10 at 3:09 pm
—–
Answer honestly Devore. Who has committed a greater sin?

The homeowner who overreached thinking that he’d make it over the long term or the banker who lowered lending standards and wrote millions of loans knowing FULLLY well that thousands of homeowners would lose their shirts and that government would pick up the tab?

In my book there are degrees of mischief and if I had to condem someone, I would start with the banker… unless of course I was in the top 1%.

#122 Behind the Numbers on 11.15.10 at 3:47 pm

#113 UrbanCowboy “Stupid comment, gold is going up because its rare, it can’t be print/inflated/diluted, and stands the corosion of time. This is what gives it a store of VALUE, as opposed to many of the other things available to choose from. Thats why people are buying it….dude!” …”Actually, Brian is right. There is no fundamental difference from real estate or a barrel of oil. — Garth”

OMG. Garth is completely right UrbanCowboy. I get it now, you should too UrbanCowboy and any gold bug out there who is wise.

Gold isn’t rare, gold isn’t any more a store of value than anything else. In fact, there are a lot more thing more valueable and more rare than gold.

I don’t need gold at all. Nor do you UrbanCowboy.

The real store of value is what you can’t buy, even with all the fiat money or gold in the world.

You, UrbanCowboy, and the gold bugs know what those things are too.

Well done Garth, you have opened my eyes.

#123 Moneta on 11.15.10 at 3:52 pm

If people realized Goldman Sachs was filled with scum and stopped doing business with them, Goldman Sachs would cease to exist
—–
Give me a freakin break! Government pensions use Goldman Sachs funds.

We actually have an ex-GS leading our BoC!

That’s not the little man it’s BIG GOVERNMENT.

Morality is gone because the rules are changing. Most people can not get ahead using the old rules.

I know people who have always been outstanding law abiding citizens who are thinking of cheating in many ways because they don’t trust our leaders.

You can blame the people all you want, all it’s going to do is create even more anger.

#124 BrianT on 11.15.10 at 3:54 pm

#111Devore-your Goldman comment is misinformed. The people dealing with Goldman couldn’t care less if they are, as you put it “scum”. It simply isn’t their concern as it isn’t their money at risk. Most of Goldman’s money is coming from the taxpayer, one way or another, and the taxpayer has absolutely no say in the matter.

#125 Behind the Numbers on 11.15.10 at 3:59 pm

MONSTER MOVES IN US BOND MARKET TODAY. Up 10% in 1 day. Expect Canadian low mortgage rates to go up shortly.

Chart: http://market-ticker.org/akcs-www?get_gallerynr=630

That’s a monster move in the five-year bond yield, nearly 10% today and almost 50% higher on yield since Ben started QE2.

Then there’s this:

Chart: http://market-ticker.org/akcs-www?get_gallerynr=631

That’s the 10 year. Yield up almost 5% today and roughly 16% since Ben started QE2.

Source: http://market-ticker.org/akcs-www?post=172303

#126 Mark on 11.15.10 at 4:09 pm

I read a great book recently called “Predictably Irrational” that does highlight some interesting things about how we tend to make decisions that don’t make rational economic sense. So I think supply and demand is too simplistic for our humanistic nature. For example:

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

#127 Junius on 11.15.10 at 4:10 pm

#107 brunt,

My second point was that we are always dealing with asymetrical information in these cases. The classic “caveat emptor” is based on the idea that each party as the ability to inform themselves of the facts and make a decision. Sounds great in principle but in reality is never the case as matters become more complex.

Our banks are highly regulated financial monopolies. We have a right to expect more from them than selling teaser loans and inflated mortgages.

#128 Debtfree on 11.15.10 at 4:16 pm

@jess #112 been watch them for decades now in my little northern city . It’s funny how they live in the best places on big acreages with new everything including tens of thousands of dollars in horse flesh and their kids getting the best of everything . Must be nice but then you have to pay big time to get 4 of them to stand up to a guy with a loaded stapler .

#129 Junius on 11.15.10 at 4:17 pm

#117 Moneta,

You said, “It’s AMAZING how the bottom 99% prefers to blame the individuals over the bankers and government.”

It is so depressing because it is true. Everyone should read at least one of the great books on the banking crisis from Johnson’s “13 Bankers” to Lewis’ “the Big Short” to a dozen others.

Another new book worth reading is Bogle’s “The Soul of Capitalism”. Here is someone who is a legend in the financial services industry who is writing about all that is wrong in our financial system today. He started the Vanguard Fund and invented index funds. No liberal for sure. Yet he is able to spell out with precision how our current financial leaders and the politicians they control are destroying the fabric of our economy through market and consumer manipulation.

#130 dark sad person on 11.15.10 at 4:21 pm

#123 Moneta on 11.15.10 at 3:52 pm

We actually have an ex-GS leading our BoC!

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

No such thing as an “X-GS Banker”

“Once a Goldman-Always a Goldman”

#131 Junius on 11.15.10 at 4:23 pm

#126 Mark,

“Predictable Irrationality” is a great book. Another is Cialdini’s book, “Influence”.

The field of behavioural economics has exploded over the past decade. There are dozens of very inciteful books that will give you a better understanding of human behaviour and human nature.

The important thing you take away from all of this literature is that we are much more easily led astray than we think. As our world becomes more complex it will be even harder for us to make informed decisions on our own. Companies, the media, politicians all have a host of consultants at their backs working with the latest science on human behaviour. We are being naive if we think we are not being manipulated constantly.

#132 april on 11.15.10 at 4:32 pm

#85 Apsalar

The Globe and Mail is owned by CTVGlobal.
Does that tell us anything?

#133 Moneta on 11.15.10 at 4:42 pm

Junius on 11.15.10 at 4:10 pm
—–
Good points.

For the last decade, I have been warning friends and family about the risks in real estate and most of the time they’d shrug and ask me why the bank would lend them money if they thought they weren’t a good risk.

That’s how Canadians have been conditioned and to expect anything different is unrealistc.

#134 GregW., Oakville on 11.15.10 at 4:59 pm

Hi Garth, fyi, still want the flu shot? With it’s not insignificant quality of mercury (a known Nero-toxin) and other added risks.
http://vactruth.com

And don’t let the masses know that Vitami- D, up to 5,000 units a day is actually good for you to take. The big pharm. corporations would have a reduced profit. Since they can’t patient D. And people might not need to buy as many drugs from the corporations.

#135 jess on 11.15.10 at 5:14 pm

Hard-hit homeowners may ‘park’ part of loan
http://www.independent.ie/business/personal-finance/property-mortgages/hardhit-homeowners-may-park-part-of-loan-2412561.html
=================
http://uk.virginmoney.com/virgin/.

Billionaire investor says now is right time to give home loans
http://www.irishtimes.com/newspaper/finance/2010/1115/1224283324127.html

#136 john m on 11.15.10 at 5:16 pm

Its time for a change in our political system we have the most incompetent self serving system possible………time for all MP’s to be independents and a leader voted in…IMO is the only way we will have a government working for the people and get rid of all the corruption.

#137 Timing is Everything on 11.15.10 at 5:18 pm

#93 jess – Here is the link you refer to…

http://www.huffingtonpost.com/dave-johnson/businesses-do-not-create_b_782675.html

#138 Gold Licker on 11.15.10 at 5:33 pm

Not all real estate values are down in the US, as farmland values are on the rise.

http://www.bloomberg.com/news/2010-11-15/farm-economy-heading-for-record-u-s-profits-pushes-cropland-values-up-10-.html

#139 UrbanCowboy on 11.15.10 at 5:45 pm

122 Behind the Numbers

Gold isn’t rare, gold isn’t any more a store of value than anything else. In fact, there are a lot more thing more valueable and more rare than gold.

———————————————————-
Bottom line is people are trading fiat crap for something that won’t lose value due to QE. Don’t just think of the small man with the average income, but the wealthy who need to protect millions if not billions of dollars. Obviously you’re not going to eat gold like food, or use it for fuel like oil – but converting it to bullion will prevent erosion of its worth.

#140 Sail1 on 11.15.10 at 5:48 pm

And, prices are up just slightly from a year ago, while the inventory of unsold homes is close to typical. In other words, there’s not much here for either the wild-eyed optimists or the ranting pessimists, which is probably a good thing.”

http://www.theglobeandmail.com/report-on-business/top-business-stories/why-it-may-be-a-goldilocks-moment-for-housing-market/article1799718/

The sky is falling, the sky is falling, maybe.

#141 Business Unusual aka the BUN on 11.15.10 at 5:57 pm

Vancouver Insider Update

A close realtor friend of mine says the Asian market is standing down and stopped buying at the moment.

In case you don’t know, aside from drug money the offshore Asian money is the biggest driving force behind our never ending housing price rally.

What’s up? Is this a signal? Do they know something? Are they pausing to take a breather?

Your thoughts?

#142 Timing is Everything on 11.15.10 at 5:58 pm

#113 Actually, Brian is right. There is no fundamental difference from real estate or a barrel of oil. — Garth

Agreed. However, there is a fundamental difference from ‘my home’ and a barrel of oil….or real estate for that matter.

#143 Ben on 11.15.10 at 6:32 pm

#118

Garth, todays pic is a real dandy!

Quite the high tech safety harness!

————————————————–

Immigrants that work for dick spend dick on safety gear.

………. but our banks will still loan them half a mil with dick down to keep the real estate ponzi going.

#144 Mister Obvious on 11.15.10 at 6:38 pm

All is well! The Vancouver Sun never fails to give me a nice warm glow when the November rains start getting me down:

http://tinyurl.com/2a5wt8n

#145 Moneta on 11.15.10 at 6:43 pm

Mark on 11.15.10 at 4:09 pm

On Wiki:

In psychology, heuristics are simple, efficient rules, hard-coded by evolutionary processes or learned, which have been proposed to explain how people make decisions, come to judgments, and solve problems, typically when facing complex problems or incomplete information. These rules work well under most circumstances, but in certain cases lead to systematic errors or cognitive biases.

#146 Nostradamus Le Mad Vlad on 11.15.10 at 6:46 pm


#106 realpaul — “. . . over 1 million people ( mostly seniors and young familieas are ‘officially’ clients at the food banks?”

Great ad campaign for the CPC next election:

“In the short time we’ve been at the helm, look at what we’ve accomplished; lied about I.T.’s, ballooned the fed. debt and deficit to abnormally high levels, inflated the housing bubble across the country, waved bye-bye to untold thousands of mfg. / industrial jobs to Chindia, thus forcing millions into despair, food banks, broken up families — VOTE FOR THE CPC SO WE CAN CONTINUE!”

Harper’s statement — “You won’t even recognize this country by the time I’m finished with it” — is right on the money.

He has known all along what he had to do, and Garth’s blogging was a thorn in his side, because the CPC’s ultra hard right-wing agenda was being exposed and Harper wouldn’t tolerate it.

The elite and bankers are thoroughly enjoying it, esp. when people get angry and fight among themselves. Simply means no attention is being paid to the real culprits.

#123 Moneta — “. . . all it’s going to do is create even more anger.”

Noted. See response to #106 realpaul. People must see that it is easier (in the long run) to drop back ten and punt. Then begin working out differences in a better manner.
*
France “In France they are not wasting time. They are organising themselves to withdraw their money from the banks on the 7th of December!!” With #125 Behind the Numbers’ post about the Bond moves today, chances are good that plenty of unseen events are unfolding as they should.

Not too long ago, there was a link which foretold of an ‘incident’ happening around the same time (first week of Dec.), but I can’t recall it now. Mercy, iz I gittin’old or whut?!

Europe “There are growing signs of a renewed debt crisis in a number of European nations, as bond yields soar to record highs and the continent’s economic growth stagnates.”

3:53 clip “Cash-hungry US war machine stays armed as schools & clinics close.”

One Hundred abandoned houses (pix).

Obama + Monsanto Could anyone have expected any less?

2:36 clip Royal Cdn. Air Farce — US / Cdn. order Security. Damn funny!

Greek violence “The GREEKS DO NOT F**K AROUND. THEY GET SERIOUS.”

1:59 clip Bullion bunnies — remember tungsten filled bars! Not good for one’s mental or physical state.

4ClosureGate “You wanted concrete proof of widespread lost mortgage documentation? Feast your eyes upon this this little gem…”

Vets are the next target. “After the revolution, let’s let the veterans and their families move into the bankers’ homes!” wrh.com.

ClimateGate See how easy it is to fool sheeple?

Economy One and Economy Two.

#147 Crash Callaway on 11.15.10 at 6:59 pm

I saw this TV commercial on a recent visit to B.C.
It creeped me out.

http://www.youtube.com/watch?v=q5ZM77-i3mY

It’s about a new “You’re The Boss” mortgage.

It shows an easily led & excited man jumping up on the bankers desk and shouting I’m the boss as he barks out orders to 3 employees.

On the surface it’s funny but is there a subtext hidden in this commercial?
Between the lines:
– Mr. Weenie gets his jungle dominance back when he shouts at a woman “Hold My Calls!”

– Mr. Weenie shouts “Stop lollygagging” to prissy man.

– Mr. Weenie shouts at Asian guy “Do a Jig”
And as a woman plays the fiddle the asian man promptly dances.

To me the part with the asian dude dancing smacks of Mr. Weenie illustrating that even though asians own Vancouver they’ll be dancing to his tune now!

Ya I know it’s a stretch and it’s just a commercial,
But when you see the depths money institutions will sink in order to keep their neutered customers believing they are in charge, anything is believable.

Or maybe I’ve just eaten a batch of bad squirrel.

#148 Junius on 11.15.10 at 7:06 pm

#141 The Bun,

I think that Asian investors aren’t stupid. They can see the differences in price between Vancouver and Seattle never mind Palm Springs.

Methinks they stop for awhile.

#149 Junius on 11.15.10 at 7:27 pm

#144 Mister Obvious,

Yes, the MSM is pump, pump, pumping along with the business reports. All too predictable.

Do you think they will print a retraction when the market tanks?

Me either.

#150 dd on 11.15.10 at 7:34 pm

#109 BrianT

Oh look, Ireland in sinking. Over there … Greece again. No Portug.. Spain I meant. No California. It is definitely California that is going under.

QE to infinity.

#151 Vancouver_Bear on 11.15.10 at 7:37 pm

#31 realpaul on 11.14.10 at 10:09 pm

This real screw up is that the “Best myth on earth” has the poorest children in all of CANADA. 1 out of five children live in poverty.

http://www.youtube.com/watch?v=HALzrqE7l4k

I can’t wrap around my head why the realtor from BC is so important, loss of human life is a tragedy, why the accent is that he was a REALTOR and the rest of the deceased were not important? BCREA hidden ad campaign? Take a look a today’s Province newspaper first page

http://www2.canada.com/theprovince/news/story.html?id=db63d2e8-548f-4fb3-bc47-1c399c8d083c

#152 dd on 11.15.10 at 7:39 pm

#122 Behind the Numbers

…OMG. Garth is completely right UrbanCowboy. I get it now, you should too UrbanCowboy and any gold bug out there who is wise….

Funny. Tell that to the central bankers. They are now net buyers; especially China, India, and Russia.

#153 dd on 11.15.10 at 7:41 pm

Deflation?

Try Walmart prices:

http://www.cnbc.com/id/40135092

#154 jess on 11.15.10 at 7:48 pm

Are auditors too big too fail?

Didn’t Enron’s failure also resulted in the collapse of its auditor, Arthur Andersen.

#155 sue on 11.15.10 at 7:50 pm

Greg from Oakville,
Loved your vitamin D post. I take 20,000 IU a day and feel fantastic! Everyone needs to triple their level to say 75 u/L and then the pharm corporations would go out of business. Vitamin D is much more effective than neurotoxic vaccines. (Vitamin D Solution Dr. Hollick M.D. Phd, Dr. Russell Blaylock Neurosurgeon, nutritional researcher)
Sorry…back to real estate now….

#156 sue on 11.15.10 at 7:52 pm

Can anyone tell me if I can get at my LIRA to purchase a home without a mortgage?

#157 dark sad person on 11.15.10 at 8:14 pm

#146 Nostradamus Le Mad Vlad on 11.15.10 at 6:46 pm

Related to your link-

Bundesbank chief Axel Weber might fairly conclude that it is impossible at this stage to reconcile the needs of Germany and the big debtors. If the ECB prints money on the scale required to underpin the South, it would set off German inflation, destroy German faith in monetary union, and perhaps run afoul of Germany’s constitutional court. If EMU must split in two, it might as well be done on Teutonic terms.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8132689/Europe-stumbles-blindly-towards-its-1931-moment.html

********************
Good explanation of the troubles ahead for the EMU-
There’s no other logical choice for Europe then to let the PIIGS fall-

The responsible German people have had enough of bailing out some irresponsible/baby boomer/late 50’s/ pension entitled/retired Greek as he sits on the Mediterranean beach with a hot chick and a pot belly sipping Ouzo-

But the interesting part is how well Angie can dance-
I think she’s playing it perfectly-
The EUR being sold down while her and Zarcozy Tango to the “Twilight of the Gods”
Hammer the EUR down now and generate some trade-
After all-it’s always and only about currency Devaluation-
I notice the USD bears and Inflationistas are a bit perplexed since QE 2-
Ben cannot be happy-

#158 45north on 11.15.10 at 8:26 pm

Junius: talking about his friend that paid $1 million for a house: Speaking to him about it last week he showed the first signs of concern. He can barely make his mortgage payments now as his business has slowed.

keep us posted Junius, sales have fallen but prices haven’t so reality has not hit him yet

refiNow: the actual root of the housing crisis both in the US and in Canada, started with the Banks decision to deviate from long standing lending practices.

I see an experienced lending officer with ten years experience who makes a slow-motion discovery – that his experience and knowledge has been silently discarded.

Is that you refiNow?

#159 dd on 11.15.10 at 8:36 pm

Interest rates should be exploding in this environment and gold, silver, and most commodities should be falling. But they are not. Why?

#160 Taxpayer like everyone else on 11.15.10 at 8:38 pm

106 RealPaul – no I don’t hate you – why would you think that, and why would you think you are much more successful than me? By what metric?I did recall your
posts from a few days ago, and after your comment
today regarding poverty, I was curious to know if
you “gave back” some of your good fortune. Volunteering
is admirable, and I could definitely see myself doing much
in early retirement (a few years off still) if not sooner.

#161 BrianT on 11.15.10 at 8:46 pm

#157Dark-Jim Willie has predicted the breakup of the Euro into two parts for a while now. He feels the Northern Euro (which would include Germany and France) would be a very strong currency.

#162 WINNIPEGER on 11.15.10 at 8:49 pm

Winnipeg ROCKS!

http://www.winnipegfreepress.com/breakingnews/Winnipeg-new-homes-market-back-on-pace-108194309.html

#163 HouseBuster on 11.15.10 at 8:50 pm

#94 Herb
“Unless you are indeed running a cheap escort service…”
———————————————————–
That was the first thing that crossed my mind when I saw the pics!

#164 Nostradamus Le Mad Vlad on 11.15.10 at 8:53 pm

#157 dark sad person — “If EMU must split in two, it might as well be done on Teutonic terms. Good explanation of the troubles ahead for the EMU-There’s no other logical choice for Europe then to let the PIIGS fall-”

Once PIIGS crumble, the rest follow then the Euro is scrapped with original currencies returning.

Meanwhile, CANAMEX becomes one country via the NAU and SPP and thus can move to a gold / silver backed currency. The UK keeps its pound, as it’s not worth anything anyway.

Curious to see if the Ruble / Yuan / Renmibi / Yen, or a combination of them, replace the US$ as the world’s reserve currency.
*
Alan Greenspan circa 1966. Gold and Economic Freedom.

Hmmm. Not just France or Greece, it’s closer to home.

Harper and Obama are leading us good little sheeple on the road to fascism. Plus — 9:52 clip Govt. enjoys crushing and intimidating us. Those are the only good things they do well!

Three min. clip “The national sales tax, referred to as value-added tax (VAT), which governments across Europe use widely, will help cut the U.S deficit, Krugman argues.” — Also, kill off the sick and dying; that will save a bundle!

Mongolia may become a hot spot sooner or later.

Only a few months ago, Obamawanted out of NAFTA. The elite has since persuaded him otherwise.

Lettuce Spray! We should start a massive new food and food processing business, sans Monsanto.

As in Europe, so here. The west has fondled our bums long enough!

Dark Side Of the Moon comes to mind!

Revolution? Possibly, yes. Afternoon tea and crumpets at four is slightly misplaced!

#165 Utopia on 11.15.10 at 9:07 pm

#32 BrianT on 11.14.10 at 10:10 pm

“….but the bond bulls told me that everybody (including California) will be bailed out forever from the limitless pool of taxpayer capital. It isn’t fair that bond investors should be penalized just because the bonds default”.
——————————————————

The bond bulls you know are in for a surprise Brian.

There are just too many Soveriegn competing interests for capital now. US Treasuries first amongst them. The muni market in particular is going to twist and swing in the wind while the harshest consequences will be felt as serious service reductions become manifold at the civic and state levels.

There will be no bailout for states or municipalities.

#166 BrianT on 11.15.10 at 9:14 pm

China poking a few holes in their RE bubble http://www.bloomberg.com/news/2010-11-15/icbc-china-s-state-banks-to-halt-property-loans-till-year-end-paper-says.html

#167 kabloona on 11.15.10 at 9:17 pm

#156 sue:

No, by definition it is “locked-in”…if it were a regular RRSP you would have more options – as Garth discussed in his books – but not with the LIRA.

Personally, I think they should change the rules on the LIRA but I wouldn’t hold my breath if I were you….

:-(

#168 S.B. on 11.15.10 at 9:22 pm

Will Ms. Bunny host at Garth’s Calgary event?

When in Rome…

In other news, ‘drunk dialing’ is up 12% this month in Calgary…

#169 dark sad person on 11.15.10 at 9:26 pm

161 BrianT on 11.15.10 at 8:46 pm

#157Dark-Jim Willie has predicted the breakup of the Euro into two parts for a while now. He feels the Northern Euro (which would include Germany and France) would be a very strong currency.

********************
Sure it would be strong-besides both Countries have good sized Gold reserves-
German and French banks have a lot to lose {everything) if the likes of Greece/Ireland et al default as they were the idiots that loaned the money to them-
So i think Angie will keep the game going for as long as possible-
Germany’s problem is that around 80% of their trade goes into eastern Europe and that is critical to their Industrial survival so the question is-do they bail the PIIGS out and risk the Political fall out of the voters-or do they bail out the PIIGS with taxpayer money so the indebted Greeks et al can pay their mortgages and keep the banks from not looking so insolvent for awhile
or-do they eat the losses and directly bail the banks or do they do the right thing and let all of it collapse and then print some money with no Debt looming over them-
Time will tell-but also have to keep in mind–
“The Natives” are getting restless and starting to stir-

Go Iceland–lead the way!

#170 Right All The Time on 11.15.10 at 9:39 pm

141 The Bun,

I think that Asian investors aren’t stupid. They can see the differences in price between Vancouver and Seattle never mind Palm Springs.

Methinks they stop for awhile.
***********

I love how you project intelligence onto whether asians slow down their buying of Vancouver real estate.

Since the majority of $2 million plus homes were bought by asians according to REMAX, they are not exactly looking for economic fundamentals or a real return on their investment. If they bought for reasons beyond this simplistic bear rationale in October there is no reason to suggest that they will simply stop buying in November.

Also, according to everyone on this site, anyone buying in Vancouver now, or in the past 2 years, are greater fools and morons. By extension, all those “smart asian investors” paying 2 million plus for westside teardowns are greaterfools and stupid as well.

They cannot be smart and stupid at the same time (well I am sure would argue they can). Pick one and keep to it, or is it just easier to assume that all asian investors are just smarter than your average Vancouverite because of the steretype of asian economic prowess?

#171 dark sad person on 11.15.10 at 9:39 pm

#159 dd on 11.15.10 at 8:36 pm

Interest rates should be exploding in this environment and gold, silver, and most commodities should be falling. But they are not. Why?

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

That’s simple-
Interest rates are not soaring and Gold is strong-because the climate says “risk”

Commodities are strong because of speculation and the Inflation ongoing in China/Asia-
That will change soon-imo–

#172 BrianT on 11.15.10 at 9:40 pm

#165Ut-I have felt for a while now that interest rates are going to go shockingly high but I don’t know the timing of this. I am at this point quite confident that quite a few of the predicted bailouts will not occur. All of this could make the bond crash bigger than the RE crash. Who was it that had those good squirrel recipes?

#173 Utopia on 11.15.10 at 10:10 pm

#38 Timing is Everything on 11.14.10

Is it just me, or are those ‘condo projects’ lopsided?
—————————————————–

I noticed it too. One is slightly larger than the other.

#174 Utopia on 11.15.10 at 10:25 pm

#50 dark sad person on 11.15.10 at 12:00 am
#237 Utopia on 11.14.10 at 8:10 pm
#146 dark sad person

You do realize that you misquoted me Dark.
****************

You are correct-i did misquote–apologies-
——————————————————

Apology accepted Dark and thank-you. It is water under the bridge from here on in. I prefer to get along and keep to business rather than join in with all the other conflicts and recriminations found here daily.

#175 Buyright on 11.15.10 at 10:26 pm

Re #172

http://www.chow.com/food-news/62148/how-to-cook-a-squirrel/

:)

#176 Utopia on 11.15.10 at 10:37 pm

By the way, what is your take on Gold action Dark.

I see a continuing softening of prices on euro concerns and a rise in the dollar over the next week or two.

Thoughts?

#177 GP girl on 11.15.10 at 10:39 pm

#134 Greg-Oakville
Not about real estate but what the heck, this will make you love(sarcasm) big pharma even more. Novartis AG wants to roll out pills containing microchips. Here’s the link,
http://www.reuters.com/article/idUSTRE6A754720101108
#155 Sue
For optimal absorption and efficacy you need to combine D3 with the correct amounts of calcium and magnesium I believe. I’ve also read some articles that state up to 20,000 IU is safe though you should work your way to that amount and spread the dosage throughout the day with food intake. Backed by studies from McGill university & a couple of others. Lower % of diabetis,MS,cancer,arthritis and supposedly weight loss.

#178 dark sad person on 11.15.10 at 11:09 pm

176 Utopia on 11.15.10 at 10:37 pm

By the way, what is your take on Gold action Dark.

I see a continuing softening of prices on euro concerns and a rise in the dollar over the next week or two.

Thoughts?

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

I like the dollar here and agree that with all the uncertainty in the euro zone-it will be dollar positive-US treasuries as well-
Too much focus on a US Bond bubble and not enough attention being paid to other parts of the World-where troubles are even worse which doesn’t make NA good-just not as bad and that’s all it takes to make the $ fly-

I would like to be able to give a forecast about Gold here-but at this point it’s hard to say-
I’ve been seeing bearish divergences in Gold for the last week or so and it “usually” portends a correction-so i have hedged off some and see how it unfolds-
If Deflation really shows its hand-i think a lot of new money could come out of the Gold market fast-
On the other hand-something ugly coming out of left field could send Gold into orbit-but bottom line i think Gold needs to correct some and consolidate and build some resistance-its moved a long way in a short time-

#179 Outside the Box on 11.16.10 at 6:05 am

#152 dd “Funny. Tell that to the central bankers. They are now net buyers; especially China, India, and Russia.”

And do you know who is SELLING gold off as fast as they can find greater fools?

The IMF. Worlds largest holder of gold.

Humm… I guess the IMF knows something the BRIC’s don’t. But you know which BRIC country is the largest investor of US dollars? And you want to follow their investment advice?

#180 a prairie dawg on 11.16.10 at 7:36 am

@179 Outside the Box

You speak of the IMF like they are some kind of economic geniuses selling the ‘worthless’ dirty yellow metal to unsuspecting countries.

The IMF only sells gold, because the member countries use it as a trading vehicle between themselves.

#181 Outside the Box on 11.16.10 at 11:25 am

#180 a prairie dawg “You speak of the IMF like they are some kind of economic geniuses selling the ‘worthless’ dirty yellow metal to unsuspecting countries.

The IMF only sells gold, because the member countries use it as a trading vehicle between themselves.”

You are assuming quite a lot of assumptions there. All I am saying (and you should take not of) is:

“When the worlds LARGEST HOLDER/OWNER of gold is selling at a peek price to the last greater fools*, maybe, just maybe, it’s not a good idea to buy.”

* A greater fool is not limited by the size of their GDP or annual income.

#182 K-W Realtor on 11.16.10 at 12:54 pm

#138 Much the same thing is happening in southern Ontario. Farm are currently selling for $10,000 per workable acre. Those lucky enough to sell their 100 acre farms are instant millionaires. To their credit, many have farmed for many years and endured low prices.

#183 Vancouver_Bear on 11.16.10 at 2:13 pm

#92 rory on 11.15.10 at 11:55 am

Canadians are deeper in debt then reckless greeks. Ha-ha, so our prudence is another myth.

#184 Elizabeth Blair on 11.16.10 at 3:19 pm

Excellent, I agree that the lending guidelines should be tightened up even more. I wish I earned what MissyBunny earned!