Huh?

Off-duty cops moved traffic with a flourish. If you didn’t look up, you might think it was a glam show opening. But it you did, you saw the Wal-Mart sign. Oh well.

I know the area of north Oakville well. When I was the MP I hosted lots of public, open ‘town hall’ meetings to try and ensure my constituents were heard. But they had nothing to say. Except when it comes to houses and things that might affect property values – like a power plant or a group home. Then, hell hath no fury…

But this past weekend, as an entire country in Europe was being bailed out of debt – partly because its banks bet and lost on the real estate market – Dundas Street was jammed as people tried to inch into a new homes sales centre. Word is several hundred new (unbuilt) houses were released, for which over 9,000 people has registered an interest.

In fact, the latest numbers from GTA homebuilders this week tell us desire is alive. New home sales moved ahead of last October and reversed a 32% decline in September. Seven of ten deals were for condos, and for the first time the average price of a new home in the area passed $500,000. The average new condo now sits at $424,000.

And as I have chronicled here over the last few months, there is no shortage of buyers. Developers’ sales trailers perched on the side of muddy fields full of pink stakes have been assaulted by investors, many of them camping out all night, sucking back Timmys and peeing in the bushes, just to get that coveted red dot on a wall map.

Given that the resale housing market is in its fifth month of decline in most major Canadian cities, with a full-fledged real estate meltdown seizing places like Edmonton and Calgary, what’s up? Why the lines to buy homes which are selling for 5.2 times the average household in the country’s largest city? Where the official jobless rate, at 10%, is higher than in recession-ravaged USA?

One reason. Cheap money. Oh yeah, and house lust.

It’s a heady mix. Banks offering special on-the-spot financing, working with developers to create a seamless homebuying experience so buyers can get granite C tops & s/s apps, extra laundry and media rooms, designer decor and extra-wide 35-foot lots on streets where the nearest litre of milk is a litre of gas away.  Builder-induced competition plus online pre-registration now ensures enough competition that gone are oddities like comparison shopping, a lawyer or sober second thought.

So last month 4,535 new housing units sold in The GTA, worth $2.3 billion. If the average down payment was equal to the national norm (7%), then forty-five hundred families just took on $2.1 billion in mortgage debt. In one market, in one month, at historic rates destined to be reset at about double, in a sputtering economy.

Tell me again how this ends well?

Anyway, back to Europe. The Irish are pretty much screwed (that seems about right), now that the IMF is taking over the economy, the coalition government has fallen apart and there’s shoving in Dublin. Just a week ago politicians were saying everything’s cool.

Now they’re saying it in Lisbon, and nobody believes that, either. Portugal’s a mess and will likely be staggering into the arms of a bailout within a few weeks. Greece, by the way – last Spring’s basket case – is in worse shape now than then. The debt crisis has deepened, and the country may not qualify for another round of financing. Speaking of which, the EU financial stabilization fund backing all of this is unfunded – which means players like Germany will have to float bonds to get the money to hand over.

But the big one is yet to come. Spain. The economy is melting in the wake of reckless bank debts racked up in the real estate market, which has collapsed. (Where have we heard that one before?) Lots of smaller regional banks are virtually bankrupt, and their demise would set in place dominoes that could fall across Europe.

Meanwhile in France and Britain severe austerity budgets (largely the result of a property collapse) have sparked rioting, given pink slips to hundreds of thousands of public workers and made millions worry about their pensions. And did I mention America? The transformational president now quacks when he walks with unemployment at Depression-era levels in some states, a housing freefall, Tea Party wackos in office and a legacy of unrepayable debt.

But yadda, yadda, yadda.

This is Oakville. Fortress GTA. Canada, eh? Let the Irish and Greek and Portuguese and French and British and Spanish and American losers wallow in their own shallow failure. Probably deserved it anyway. Pansies.

We, after all, have Mike Holmes, Debbie Travis and our national rodent,  Justin Beaver.

178 comments ↓

#1 rates will rise on 11.22.10 at 10:01 pm

#47 & #114 from last post
vomitingdog & househunter suggested “BoC WILL NOT raise rates”

Most Canadians do not realize that central banks are more of a follower than leader. The Bank of Canada may soon have little choice in raising variable rates. As the bond market starts to demand higher bond yields (fixed rates), as they already are in less indebted countries like Ireland, US, Spain http://www.economist.com/content/global_debt_clock , then the BoC will have little choice but to follow. One problem is, if they were to stop maintaining a tight spread between the BoC prime rate (variable rates) and bond yields (fixed rates), then our Canadian banks would have little incentive to lend to Canadian consumers and businesses. A simplified example, but if the banks could borrow from the BoC at 1% and achieve safe yields of say 5% (a 4% yield spread) in fixed income markets, they would not need to write many risky consumer and business loans to be highly profitable. And the fewer loans they would write, they would demand much higher rates for the extra risk. So, the scenario of BoC holding steady at 1.0%, while investors push bond yields higher, would not be near as rosy a scenario as if the BoC simply allowed the prime rate to follow.

#2 TaxHaven on 11.22.10 at 10:16 pm

A “seamless homebuying experience”…! Love it. Rather like “finest eating establishment ever established for eating”…but then again they’re RENTING, not “buying”…

If the government/banks/central printers will bend over backwards and puff air up their behinds while wearing pink underwear just to keep interest rates ridiculously low, they WILL.

So rates won’t be allowed to rise anytime soon.

Something must give. But what? My bet is: the economy. The real economy, you know…that one out there where people have jobs, produce wealth and sell it to others?

For this nonsense to stop, we hope to see:

a)higher unemployment, (hopefully) affecting mid-level management, small business owners and government employees;

b)Coupled with price inflation in essentials, food, transport and energy;

c)And effective price deflation in housing as well as paper bonds, stocks, debts, bank term deposits, annuities and securities;

d)We will be either awash in depreciating currency or debtors will be desperately short of a strong Loonie. Not sure which yet.

Get out of debt.

#3 Contrarian Canuck on 11.22.10 at 10:18 pm

The headline number for new home sales is misleading.

http://financialinsights.wordpress.com/2010/11/22/toronto-new-home-sales-tank-condo-sales-soar/

“Yet in a bizarre dichotomy, the actual breakdown of that stat reveals a jaw dropping rise of 27 percent in new condo sales being offset by an equally staggering 32% drop in new lowrise home sales.”

Its not to much different from the US housing market where condo sales remained strong even as new and resale detached market sputtered. Speculators are always the last to get the memo.

#4 iEngineer on 11.22.10 at 10:18 pm

It may be possible to see increase in number of homes sold if builders throw boxing day like sale discounts on homes.
Yearly ratio of ‘# of sold’ over ‘# of for sale’ will probably show where the market is headed.

#5 TheBestPlaceOnEarth on 11.22.10 at 10:27 pm

Interest Rates will never rise significantly in the next 10 to 15 years. No politician in Canada would allow this scenario to unfold. It wouldn’t hurt Vancouver Real Estate but towns that don’t have that World Class appeal like Calgary and Toronto would go down in flames very quickly. Anyone thinking of higher interest rates ie. 5 year mortgage at 8.5% is completely off their rocker. You will not see this kind of offering in the next 100 years

#6 BZ on 11.22.10 at 10:32 pm

How can we embrace globalization for all it’s good for (whatever that is) and sit smugly as if we are isolated from the happenings of the rest of the world? Baffles me.

#7 Mikey the Realtor on 11.22.10 at 10:36 pm

Housing is well and alive folks, better get in asap as we are ready to take off. Housing is going nowhere but up for at least another 2 to 3 years. Rates are cheap and will remain cheap for a while longer, if Mr Carney is reading, please sir keep the rates low as my mistress needs a new chinchilla fur coat this winter.

#8 K on 11.22.10 at 10:40 pm

When do you think the government will begin to raise interest rates? Have they been irresponsible by not raising them, or would raising them be more irresponsible? When they do go up – how much do you think they will go up to? Can anyone even predict that?
K

#9 Prufrock on 11.22.10 at 10:45 pm

“Tell me again how this ends well?”–Garth

Tell me again WHEN it ends? Seems that there is an endless supply of greater fools.

#10 dark sad person on 11.22.10 at 10:47 pm

#1 rates will rise on 11.22.10 at 10:01 pm

A simplified example, but if the banks could borrow from the BoC at 1% and achieve safe yields of say 5% (a 4% yield spread) in fixed income markets, they would not need to write many risky consumer and business loans to be highly profitable.

******************
But that is the plan-
They know that credit demand will dry up soon–

The BOC will print-Banks will borrow at the discount window at zero%-buy Bonds out on the curve and live off the spread differential-
Actually-they will take the yield profit and speculate in the market and “help” Governments hold prices up in order to create the “illusion” of Inflation-
Sweet deal if you can get it–
This is how Banks will recapitalize-courtesy of BOC/taxpayers and this is how they will keep the long end of the curve dampened-

Eventually it has to stop-or the Bond market will stop it and if that happens-we are Ireland–

#11 Soylent Green is People on 11.22.10 at 10:59 pm

re But they had nothing to say. Except when it comes to houses and things that might affect property values – like a power plant or a group home. Then, hell hath no fury…

SORRY HAVE TO LAUGH, SAD BUT TRUE, AND AGAIN>>> SAD

http://www.canadiansdefendingdemocracy.ca

#12 Tim on 11.22.10 at 11:00 pm

How about real estate deals in Spain now? Will real estate in the south of France ever go on sale?

Tim

#13 Jeff Smith on 11.22.10 at 11:04 pm

that is the best photo ever

#14 Behavioral Finance on 11.22.10 at 11:07 pm

I guess people in Oakville need to read this book. It is a classic.

Memoirs of extraordinary popular delusions and the madness of crowds By Charles Mackay

#15 Paolo on 11.22.10 at 11:08 pm

Like I have said before, “It’s like watching a train wreck happen and there is nothing one can do to stop it…”

In all the countries mentioned above the consequences turned out to be worse than the few, who paid attention, imagined.

I work with a woman who came here from Ireland two years ago. Ireland did not have ‘sub-prime’ mortgages however we are now aware of the results. I bet their banks were also conservative, etc…

In speaking with her, she describes a scene where many Irish citizens were wrapped up in the same collective madness we now witness in Canada. Difference is they did this a few years ago.

Our Government took a boom and turned it into a bubble and then crashed interest rates and eased regulations to make it easier for Johnny Lunchbox and Sally Housecoat to sign the next 35 or 40 years of their lives away. All for 7% down.

Like company miners working a West Virginia coal mine in the early part of the 20th Century – – these were people owned by the company and could never get out from under.

I guess Ireland just doesn’t attract enough rich, house hungry immigrants to keep RE values going up, up and up.

Like I overheard someone at work say the other day regarding the high cost of housing, “what can you do and after all, it’s an investment and it always goes up”

And that is what people lining up at developer’s sites around the GTA are thinking. Complete ‘herd mentality’.

Maybe they will remember that ‘herd’ when they get ‘fleeced’ in the coming years.

I agree with Garth: 20% haircut now followed by year after year drops of 5%…

How does this end well? Tell me exactly?

How can it.

#16 Behavioral Finance on 11.22.10 at 11:10 pm

“Housing is going nowhere but up for at least another 2 to 3 years.”

That is what the Japanese said in 1995 or British in 2007 or Americans in 2006.

#17 bigrider on 11.22.10 at 11:13 pm

Hi Garth- Looks like you wrote around my information regarding housing sales bonanza in Oakville.

Look for a condo project next year, builder building in prime area of Yonge st. Starting prices, are you ready ? $650.00 a square foot !
Many affiliates and associates on the pre-list of buyers. This is the VIP list prior to the list the public gets to sign up for(nobody knows about this pre-pre sales list..LOL). Line ups will probably be a waste of time on this one. May be first time a project gets a sold out before the sales office even gets open !!

I guess we will wait in see but I am coming to the conclusion that the insanity needs to run a while longer.

#18 Aussie Roy on 11.22.10 at 11:17 pm

Aussie Update

http://www.moneymorning.com.au/20101120/aussie-banks%E2%80%99-%E2%80%9Cunique-system-to-keep-dwelling-prices-high%E2%80%9D.html

http://www.smh.com.au/money/why-the-best-is-behind-the-banks-20101122-183hi.html

http://realestatenavigator.wordpress.com/2010/11/22/the-calm-before-the-panic-huge-stockpile-of-unsold-homes-grows-daily/

The average value of a house in the Local Government Area of Melbourne increased from $284,600 in 2005 to $697,500 last year. BUT NO BUBBLE HERE.
http://www.heraldsun.com.au/news/victoria/house-prices-booming-in-melbourne/story-e6frf7kx-1225958852474

http://smh.domain.com.au/home-investor-centre/blogs/domain-investor-centre-blog/investors-cop-flak-as-parasites/20101123-184uy.html

To the Vancouver “we are different here” bloggers all markets share one thing in common. Values are driven by wages (rental return), prices are driven by the availability of credit and peoples willingness to go into debt. Different hey, not really just the same delusion in a different place.

#19 RE Bear on 11.22.10 at 11:29 pm

#5 TheBestPlaceOnEarth on 11.22.10 at 10:27 pm

LOL, Vancouver a world class city?

Puh-Leeze. The only city with world-class appeal is perhaps Montreal, all other cities are ugly as hell, boring and have no culture. World Class Cities = Paris, London, Barcelona, Tokyo, Moscow, New York, etc, NOT Vancouver, LOL.

Interest rates not going up? LOL, Are you on crack? They ARE going to go up, and VERY soon, LOL. Even Carney himself has been saying OVER and OVER and OVER that “The Canadian consumer has to realize that these temporarily low interest rates are not here to stay”, lmfao. He’s already jacked prime 3 times in quick succession, you do realize that?

Haha, I bet you’ll be one of those that will lock themselves in the closet once prime goes to 4%+ and Vancouver condos lose 50% and keeps chanting “No! No! It never happened! No!” as the Bailiff and the Police show up to evict yer arse…

#20 Williston Geo on 11.22.10 at 11:31 pm

#9 PRUFROCK
“Tell me again WHEN it ends? Seems that there is an endless supply of greater fools.”

It ends in 11 months. My lease is up in 10 months and my wife is demanding her house urges be satisfied. Guaranteed prices will start falling after I sign my life away.

#21 RE Bear on 11.22.10 at 11:35 pm

Also, I’ve lived in the Pacific North West, and I can say that the climate is one of the most depressing I’ve ever had to live in. Rain and overcast for more than half the year.

I’ll go buy a whole cul-de-sac of California 2000+ sq ft homes for the price that a little 600 sq ft leaky tomb costs in a suicide-inducing Little China in ‘Couver– World Class to the max.

#22 This is Wonderland on 11.22.10 at 11:37 pm

The new development that Garth is talking about is located on Dundas and Neyagawa in the lovely sleepy town of Oakville. I passed by it tonight while sitting bumper to bumper in traffic and mused at how many cars were in the parking lot. No doubt the prices have probably already increased from Saturday.
Yup, I was one of the 9000 people who sign up for a personal viewing but decided that life is far too short to be sitting under a tent on a Saturday while some slick sales person tries to trick me into tying my shoe. Anyway I’m sure this development will be lovely and it’s situated right across from the new 200 000 square foot quad pad arena and sports complex, and just a stone throw away from the new hospital that will be built next year. Yes upward and onward this town is definitely different, just not the kind of different I’m looking for.
Oh crap!! I’m really gonna catch hell from the family when they find out I passed on this one. SOMEONE QUIK SOME REASURING WORDS!!!

Woodland Trails, Oakville
COMING VERY SOON IS WOODLAND TRAILS IN OAKVILLE.

But you must still register on line as this community will open by appointment only. Please visit http://www.liveinoakville.ca to register for this community along with other important information that is only available through the Woodland Trails web site known as http://www.liveinoakville.ca.

Rosehaven will be offering detached homes on 50, 45, 41, 35 & 30 foot lots, plus semi detached homes and freehold townhomes.

The starting prices listed here include HST,

21′ Courtyard Lane Freehold townes from the $410’s
25′ Parkview Lane Freehold Townes from the $440’s
25′ Courtyard Lane Freehold townes from the $450’s
24′ Courtyard Lane Semi- Detached Homes from the $440’s
30′ Courtyard Lane Detached Homes $510’s
30′ Detached Homes from the $510’s
35′ Detached Homes from the $570’s
41′ Detached Homes from the $620’s
45′ Detached Homes from the $680’s
50′ Detached Homes from the $740’s

So if this is where you want to live – Register now!
Please note these prices are subject to change.
Location: Oakville
Model Types: Townhome Freehold

#23 Crash Callaway on 11.22.10 at 11:43 pm

“seamless homebuying experience”
A debt collar custom fitted for every neck.

I can’t fathom in this uncertain economic climate anyone paying 424,000 plus new home tax.
And those condo fees!

Now that’s a real estate pat down if ever I saw one.

#24 Wealthy Renter on 11.22.10 at 11:45 pm

We, after all, have Mike Holmes, Debbie Travis and our national rodent, Justin Beaver.

And assuming there is no accounting trickery, we have also a projected 20 billion dollar deficit in Ontario this year.

Staggering. It appears to be of no great concern to the chattering classes.

#25 The Apocalyptic One formerly Old is Gold on 11.22.10 at 11:49 pm

Depression-era levels in some states, a housing freefall, Tea Party wackos in office and a legacy of unrepayable debt. – Garth
_______________________________________________
I do not know anything about the Tea Party nor do I care to know anything about the Tea Party (all political parties are the same with only superficial differences). But why do you term them ‘WACKOS’? Are the Republicans and Democrats, Liberals and Conservatives any less ‘WACKOS’ given the mess they have created? Like I said I know nothing about the Tea Party nor do I support any political party but maybe ‘Wackos’ are exactly what is needed to clean up the mess created by the non – wackos.

#26 Patz on 11.22.10 at 11:52 pm

Reading this blog is liking walking over a stone beach in bare feet to get to the water. It hurts. To deconstruct the simile further, the stones, especially those with sharp edges are the annoying posters here. Another comparison Gresham’s Law says that “bad money drives out good.” (This phenomenon has been known since the time of Copernicus.) Patz Law says bad posters drive out the good ones. You know who you are!

Oh yeah and why do we want to get to the water? Garth’s out there walking on it :)

#27 The Apocalyptic One formerly Old is Gold on 11.22.10 at 11:57 pm

The level of RE insanity has reached such epic proportions that Canada may end up becoming the ultimate text book case of how not to invest taught in schools across the world in the coming decade. 50 years from now the 30 somethings will be telling their grandchildren horror stories of the greatest crash of ’12 or ’13. I believe we may yet squeak through ’11 unless there is major publicly announced downturn Stateside before then, which is a very distinct possibility. How long before the IMF comes knocking on our door? Last time they did we got the GST, what wonderful presents will they bring this time?

#28 mr mike on 11.22.10 at 11:58 pm

I could really give a shit about anyone’s balanced portfolio or how much gold\silver\palladium\platinum, real estate, etf’s, bonds, even any cash money you may have in the bunker.

Fact is the world is in very serious trouble, you can paint as much lipstick on this pig as you wish…ignorance is bliss after all.

People in the US are pissed…perhaps you guys can help this jp morgan banker find his brains:
http://market-ticker.org/akcs-www?post=173002

I wouldnt waste any time…karma.

#29 Tre on 11.23.10 at 12:05 am

Remember people it (Real Estate) will always go up longer then we can anticipate. But when the greater fools are all out of ammo, look out. When people firmly believe that “this time it’s different”, don’t buy it, it’s never different especially this time.

#30 Mr. McMansion on 11.23.10 at 12:12 am

Please leave the Biebs out of this! Justin Bieber’s stock IS actually only going to go higher and higher…unlike real estate.

If you go on MLS and check out Oakville, it looks like there are a billion resale homes for sale (even with the double listings).

I cannot understand why people would want to wait a year or two to buy in a new sub-division with no trees or character and small lots away from the lake when they could buy better existing Oakville housing. Hell, why you would want to live in Oakville suburbia and commute 1.5 hours each way to Toronto everyday? I guess there are benefits to living in GTA’s whitest neighbourhood but it isn’t for me…..

#31 Taxpayer like everyone else on 11.23.10 at 12:22 am

2 Taxhaven:

“For this nonsense to stop, we hope to see”…..

Hope? You actually “hope” for high unemployment? And what do you have against small business owners? Why
are they lumped in with government employees? In my experience they are about as opposite as you can get.

Wouldnt you rather see low unemployment in a “real economy” regardless of the interest rates?

I do not understand your comment.

#32 Nostradamus Le Mad Vlad on 11.23.10 at 12:36 am


“Huh? One reason. Cheap money. Oh yeah, and house lust. It’s a heady mix.”

Guess Cdn. RE can be put on the backburner for the time being; main action is taking place in Europe, because cheap money all over the west is being handed out carte blanche to sheeple who think nothing of it than Monopoly money.

Then again, the engine needs some more fuel to keep it chugging along for a few more months.

“. . . destined to be reset at about double, in a sputtering economy. Tell me again how this ends well?”

It doesn’t really end, just decays over a few decades (by which time we’ll all be gone anyway), our children will then be grandparents and everything will still be fun and games!
*
Help is on the way for Ireland! Bailouts may not be necessary!

Soros – Paulson Stocking up on gold.

Soros and Obama’s VAT. It’s the communist way!

Cash glut in China.

Great reasons to switch to Linux / Ubuntu and use startpage.com, or any of these.

8:01 clip Agenda 21 explained well.

Health Tyrants Rockefellers are involved with this. They lost out on CC at Copenhagen.

Population Growth in the US. Some figures.

Bill S-510 Food as a weapon. Being attacked by a banana?!

Fast Food — fatter profits. Obesity? It’s all in yer mind!

Overtime Cancelled Cheapskates.

Chaos — Where are you? Time traveling? Take me with you; just get me the hell outta here!

#33 ulsterman on 11.23.10 at 12:36 am

I get it – house prices are driven by wages. Fundamentals make no sense – check. They’ve made no sense for years – check. The rest of the world has far, far cheaper real estate – check. OK Canada, can you just get f*** on with the correction? Pretty please? 40 is creeping up on me and i wouldn’t mind having a place paid off by the time i retire – you know, like regular folks do in just about any other developed nation.

#34 Jeff on 11.23.10 at 12:44 am

MIKEY THE REALTOR is hurting for sales. With sales crashing OVER 20% in Oct , Sept , Aug , July ,and June you know realtors are hurting. If you a realtor in Brampton then sales are more then twice as bad the the average in the GTA. Realtors can spin all they like but cheap credit and people gambling on RE will come to an end much like the US and everywhere else in the world. Realtors are simply putting out propaganda in the media and blogs. They are painting a lie when the reality is something more of a nightmare then sunny days. Realtors are hurting , they don’t want you to know that. Anyone buying now will suffer great hardship. If you know people in the RE biz you know how bad it is and what is to come.

#35 virginhomebuyer on 11.23.10 at 12:54 am

Garth, I thought you were our national rodent!

#36 Jeff on 11.23.10 at 12:54 am

One more thing. Toronto is the next miami when it comes to condos. The condo market is going to crash so hard and soon.This people on the inside telling me this. Also from my observations at work where few co-workers are trying to sell(for a small loss)/and or rent for a loss with hopes of selling at a better time. Anyone buying condos are clueless of the many who are in trouble and looking to sell their flip. You hear them talking to people trying to rent or sell and they look worried. People don’t like to tell others of their problems in RE or their losses. Remember you only hear about peoples winnings. Price/rent ratio is not even funny. Condos are by far the worst RE investment.

#37 Timing is Everything on 11.23.10 at 12:57 am

One reason. Cheap money. – Garth

Let’s keep the party goin’. Wow, the hang-over is gonna be long and painful. Pass the Tylenol….3

http://www.winnipegfreepress.com/business/cheap-borrowing-expected-to-stay-109453304.html

http://www.bivinteractive.com/index.php?option=com_content&task=view&id=3399&Itemid=46

#38 Timing is Everything on 11.23.10 at 1:05 am

“Economists say he [Carney] wants to keep hiking rates because he fears Canadians will borrow beyond their means, particularly to buy homes.
However, they say events beyond his control mean it could be a year before Carney will regain the freedom to touch interest rates again.”

http://thechronicleherald.ca/Business/1212860.html

#39 Bill Grable on 11.23.10 at 1:10 am

#5 – Wins the Darwin award…..I just about fell over. PLEASE!!!!

“Interest Rates will never rise significantly in the next 10 to 15 years. No politician in Canada would allow this scenario to unfold.

Hahahahahahaha….

Economics 101 sure turns out some winners. Incredible.

#40 andrewS on 11.23.10 at 1:21 am

Ah, hidden in the new housing starts data is a simple, yet shocking point. In the GTA condos are outselling houses almost 2:1. Suburban condos are up, proportionally, way more than 416 condos.

What does this mean? Quite simply, that despite record cheap debt and the banks giving away nearly free money, nobody can actually afford houses anymore, and even urban condos are pushing it these days. The only thing that’s really selling like hotcakes these days is condos deep in 905 country.

Seriously, the concrete shoebox downtown is at least downtown. But the same in Markham? Yeah, I doubt anybody actually wants those, except they can’t afford either a plot of land or a concrete shoebox that isn’t 45 minutes from anything interesting – on a good day, that is.

The consumer is simply tapped out.

#41 45north on 11.23.10 at 1:22 am

forty-five hundred families just took on $2.1 billion in mortgage debt.

4500! This is done with the full knowledge of the banks and CMHC. When the mortgages reset the banks will lobby the government for “relief” since obviously no one could have foreseen a problem.

The relief I would provide would be to give each family $1000 a month after the bank had foreclosed.

#42 EJ on 11.23.10 at 1:24 am

#14 Behavioral Finance on 11.22.10 at 11:07 pm

Thanks for the reference, it looks to be an interesting read. It was also originally published in 1841, which means it’s out of copyright and can be downloaded for free (legally). Project Gutenberg has a nice copy, with index, images, and typesetting intact.

While being over 150 years old, it’s still as relevant as it was the day it was written. The big economists with all the fancy degrees the media likes to haul out to bestow credibility to the party line have proven themselves to be complete failures and frauds, time and time again. They may be proficient with microeconomics, but when it comes to the macro picture, how can they succeed when everything they’ve learned is wrong? The aberrations in the big picture are driven more by psychology than textbook formulae. Therefore, a more accurate prediction is likely to be achieved by a psychologist with a base understanding of the economy than an full-fledged economist.

The average person tends to believe good news without thought and has greater tendency to question or outright reject bad news. People as a whole so desperately want to believe “it’s different this time” that they will conjure up any reason they think sounds believable to reassure that position, even if it’s been proven wrong before. For in their mind, it wasn’t proven wrong, because it was “different” and therefore doesn’t apply.

#43 hobbitt on 11.23.10 at 1:27 am

It’s not always easy to just sell and rent for a while.
In Regina the vacancy rate is 0.6%. Rental rates are 15-1900 for a 3 bed SFH. Equal to a million dollar VANCOUVER crack shack!
sell your house in Regina and you will be commuting from Moose Jaw!

#44 expand your means on 11.23.10 at 1:29 am

How does this end well?

That’s the point – it’s not ending.

See what I did there?

#45 Northern_dirt on 11.23.10 at 1:31 am

#5 TheBestPlaceOnEarth on 11.22.10 at 10:27 pm

Interest Rates will never rise significantly in the next 10 to 15 years. No politician in Canada would allow this scenario to unfold. It wouldn’t hurt Vancouver Real Estate but towns that don’t have that World Class appeal like Calgary and Toronto would go down in flames very quickly. Anyone thinking of higher interest rates ie. 5 year mortgage at 8.5% is completely off their rocker. You will not see this kind of offering in the next 100 years

……………………………………………………………………………

Being 25 is not an excuse for having such little knowledge of history, geography or basic economics..

Pretty much killed any reason in your argument by stating a belief in maintained low level interest rate lasting 100 years.

#46 hobbygirl on 11.23.10 at 1:51 am

I am veering off here a bit, I want to buy government bonds and ETF’s as you suggested Garth, but what is the best way to go about it? I talked to my acct mgr at RBC and he dissuades me by saying I have to buy through Action Direct (fees of course) and I will have to monitor it much more closely. Not sure how closely I can monitor something that expires in ten years, kind of like watching grass grow.

If you have any suggestions on a better course of action, please advise. I feel like the big banks want to keep me cornered on mutuals with the high fees but I am also bent over on Action Direct as well.

#47 dd on 11.23.10 at 1:51 am

…Dublin, Portugal, Greece, Spain, France, Britain, America… financial stabilization fund backing all of this is unfunded….

The unfunded means quantitative easy to infinity (money printing). More and more paper. The only way out for now is inflation until the western world hits the wall.

#48 BDG-YYC on 11.23.10 at 1:53 am

Wheel
Oil
Beef
Hooked
!!!!!

#49 vomitingdog on 11.23.10 at 1:55 am

“Johnny Lunchbox and Sally Housecoat”.

I have lived all my life without ever hearing that expression. It really tickled me. Thank you.

#50 Nick on 11.23.10 at 1:57 am

Well put.

#51 Vancouver_Bear on 11.23.10 at 2:08 am

#5 TheBestPlaceOnEarth on 11.22.10 at 10:27 pm

Nostri stop making predictions, nobody knows the future. The future you see after smoking pot is not reality…but smoke and mirrors.

#52 Vancouver_Bear on 11.23.10 at 2:11 am

#7 Mikey the Realtor on 11.22.10 at 10:36 pm

Do yourself a favor, do a called calling for a listing. Ok?
You will not get new clients here no matter how hard you try.

#53 The Original Dave on 11.23.10 at 2:21 am

A 20% correction in Vancouver is the start, not the end. I fully expect a further melt in prices over several years following, rendering residential real estate a very poor investment. — Garth
—————————————————

Well G man, if your prediction comes true, then it will be the first ridiculously priced bubble I’m aware of that has a calm reduction in price. I think we can all agree that there has been manic buying in Vancouver. Lets say there was a 20% decline in Vancouver, don’t you think panic starts to set in? When the BOC crashed rates, they did just before severe panic set in. Some have said Vancouver prices were down 15% at the time. That is when all the action starts! It’s percentage declines similar to those that cause the people that were certain they were going to make money question their decision. At 15-20% declines, we’re dealing with primal emotions. Principles that people thought were sound are thrown out the window…..especially if there isn’t a rebound.

At 20% declines, the masses aren’t calm. There’s absolutely no way. A 20% haircut in gold puts it at $1080 instead of $1350….almost a $300 loss. Surely people would be questioning what they bought if that happened in the gold market. Then the price stays there and moves down more and if it doesn’t picking up again, you will see panic selling.

A 20% haircut on the tsx puts it at just over 10,000. A 20% haircut on the dow puts it at 8942. People are talking depression again if that happens.

A tumble of that percentage in real estate is accompanied by buying exhaustion. With no rebound happening people begin to say “Oh sh*t” and then the big declines happen.

The proof is in other assets that got into bubble territory. All were insulated from everything else according to the buyers of the frenzy. Natural gas, oil, u.s real estate, tech stocks, tulips, all had the same thing. They were all kings of their day. Their declines were more shocking than their rise.

That predicted decline suggests that Vancouver is only mildly over priced because it would behave nothing like speculative bubbles that we can all identify. If Vancouver is only mildly over priced, then why are cities that had better housing affordability ratios getting clobbered more than that prediction?

#54 wally on 11.23.10 at 3:25 am

TS Elliot might be wrong,

This housing boom may go down with a boom and not a whimper.

Its feels like someone is carefully orchestrating this event. First get the whole world to go nuts and go into huge debt at a record rates.

Also warning the fools that the rates are low because the economy is sick.

The bang, goes down the US, Next Greece, Ice land, Ireland, …..

Still waiting for china to go down, (not in flames) but in molten lava. Then the rest will go down easy like a Vancouver East End (working girl) .

Are people really that dumb. US is the biggest spenders/consumers, China’s, Canada and basically the rest of the world’s engine in trade. If it shuts down unemployment would be wide spread.

In house , china’s biggest economy is Housing. Once building stops, same with about 20 to 40 percent of the workforces. Same with Canada.

If the government are in huge unpayable debt. The means cutback in government staff and project.

Its a Domino affect. Once the pieces start falling it may take the entire world down with it.

#55 SafetyBear on 11.23.10 at 3:44 am

Have been watching the slow train wreck through the eyes of your very entertaining blog for a few months Garth. And the parallels with the Australian dream…I mean delusion are shocking. As someone who moved from the UK to Australian at the start of last year I’ve seen it before but you try telling that to the fairy dust addicts here. Please take time out to write up an article on Australia and do drop in at Bubblepedia http://www.bubblepedia.net

Keep it up man you’re the Canadian Schiff.

#56 Kiss me I'm Irish on 11.23.10 at 3:52 am

Hows the craic?

Well, me lads, pull up a chair and have a proper pint of Guinness…

Over the pond here the on the tele the Irish bailout has gone from “We need €60 Billion euros to €80 Billion and now, €100 Billion” in just a week. At €60 Billion each Irishman, woman and child would OWE €34,000 each to the gov’t.

Also on the news was the Irish gov’t is breaking up over the matter. The Green Party has left the building, leaving 9 votes short to pass the bailout bill and 2 independent MPs are saying no as well.

Last night EuroNews had a feature interviewing each PIIGS PM and it was funny to watch as each PM would say “We are not X, we are different, we have no housing bubble here, our banks are stable and our economy sound”. When Euronews interviewed Portugal, they were better than Ireland and didn’t have their problems, Spain was better than Portual and didn’t have Portugals problems, France was better than…. and so on.

It’s all gonna go. It’s just who is fighting over the crumbs now.

The Irish on the tele were angry and upset, some tried to storm their gov’t building, others just talked and said “what can we do about it”?

But if Ireland passes the bailout, it’s most assuredly the end of their independance.

#57 SV on 11.23.10 at 4:06 am

I don’t quite understand – why does the cheap credit (as of today) only seem to affect the sales of new properties?
Wouldn’t you expect the home lust to include existing houses, where at least you can see what you get?

#58 Thetruth on 11.23.10 at 5:07 am

FYI

Ireland had the best quality of life of any country as rated by the economis in 2005

http://en.wikipedia.org/wiki/Quality-of-life_index

Now what? What happened?

#59 Ben on 11.23.10 at 5:25 am

Given that the resale housing market is in its fifth month of decline in most major Canadian cities, with a full-fledged real estate meltdown seizing places like Edmonton and Calgary, what’s up? Why the lines to buy homes which are selling for 5.2 times the average household in the country’s largest city?

——————————————————-

Because there’s an endless supply of immigrants with 20 k ready to dive for 35, at work they surf real estate endlessly.
It’s also +15 in GTA and -26 in Edmonhole, I was born and raised in that frozen wasteland but where am I now? In GTA because there’s work here for me!

#60 Get Real on 11.23.10 at 5:29 am

This seems quite relevant to the overall scheme of things

http://ca.news.finance.yahoo.com/s/23112010/2/biz-finance-oil-falls-near-81-investors-look-falling-stocks.html

#61 Taipan on 11.23.10 at 6:25 am

Bubbles all around the world Aussie Roy. Im happy to see another 1% on our interest rates. That would sort a few out. Chance we will see that in 2011.

The housing bubble mania world wide is frankly stunning in its stupidity. People will do anything and take on any amount of debt to get what they think the deserve.
Around the world there is real pain. Australia is starting to feel the pain.

But in Canada and in particular Vancouver “its different here, its different this time”. Its like your talking to insane people!

#62 Oasis on 11.23.10 at 7:13 am

I love U of T. Sent my wife there for a basic financial course (she’s a new immigrant). I’d been pressured the last few months to go buy a house… “renting was a waste of money”. Last night was the section on mortgages. … The prof managed to dissuade the wife from buying a house. Told the class that this was the wrong time to buy a place as housing was seriously overvalued. That renting wasn’t a waste of time… i love that school. lol

#63 jman on 11.23.10 at 7:26 am

#12 Tim. I agree about the south of France. My wife and I have been watching it for the last 5 years and there has been little if any downward movement on prices.

#64 Mikey the Realtor on 11.23.10 at 7:38 am

Jeff

I’m not hurting for sales, I’ve got rich asians and italians lined up and ready to spend. Like I said, another 2-3 years of this to go on. Out with the old (Garth) and in with the new (Mikey), Garth is wrong on this and will be for a long time, and as for the person who mentiond Japan, well this is Canada the last time I checked, we probably will have a RE problem but it wont be for years, thats all.

#65 goldenfox on 11.23.10 at 7:39 am

Think you’ve read the worst about foreclosures? Read this.

http://www.sacbee.com/2010/11/21/3201940/think-youve-read-the-worst-about.html

#66 Mikey the Realtor on 11.23.10 at 7:43 am

Vancouver_Bear

You best change your name and attitude if you want to prosper in the RE game, I will still represent you even after your tone with me. No harsh feelings.

Canuck,

I work hard and play hard, that’s it that all. My wife got one last year, its only fair I get my mistress one as well.

#67 Moneta on 11.23.10 at 7:52 am

Sinn Fein is coming out of hibernation and in a couple of years we’ll see Quebec’s separatists wake up.

If they lose money, it will be Canada’s fault!

#68 Moneta on 11.23.10 at 7:54 am

#5 TheBestPlaceOnEarth on 11.22.10 at 10:27 pm
Interest Rates will never rise significantly in the next 10 to 15 years. No politician in Canada would allow this scenario to unfold.
———-
Do you really think the BoC wanted to raise rates to 18% in the early 80s?

#69 Moneta on 11.23.10 at 8:02 am

Tell me again WHEN it ends? Seems that there is an endless supply of greater fools.
————————-
Real estate peaked in 2005 in the US but people were still lining up for condos at the end of 2004 and beginning of 2005:

“Getting Into Trouble: Succumbing to temptation paid off initially for Altman—and the success of Symphony encouraged him to jump into additional Florida projects: Harborage in Stuart, a 129-unit building that opened in December 2004; Astor, a mixed-use development with 90 units and a retail component in downtown Delray Beach that opened in April 2005; and, lastly, Sapphire, a 172-unit project in Ft. Lauderdale that opened its sales office in August 2005.

At first, the interest and buzz in those three towers were as vibrant as with the first project. Consider Harborage, which sold out in December 2004. “We had 2,400 people stand in line to buy 129 units, and they were mad at us because there weren’t enough units to go around,” Altman says.

#70 Moneta on 11.23.10 at 8:12 am

And assuming there is no accounting trickery, we have also a projected 20 billion dollar deficit in Ontario this year.

Staggering. It appears to be of no great concern to the chattering classes
——
Most people think there is a deficit because some politician is stuffing his pockets. Nothing is their fault.

#71 Moneta on 11.23.10 at 8:15 am

Patz Law says bad posters drive out the good ones. You know who you are!
——
But now you know what your neighbors are really thinking when they just reply: “How lovely!”

#72 Brian1 on 11.23.10 at 8:19 am

I would like to know if the last housing downturn in the 80’s was a crash or a melt. I’m not sure what that was but it may help to know and why it occured the way it did. Furthermore, I am getting confused on this blog on whether sales are up or down last month.

#73 Kiss me I'm Irish on 11.23.10 at 8:35 am

#46 hobbygirl ” I want to buy government bonds and ETF’s as you suggested Garth, but what is the best way to go about it? ”

I personally find this site very helpful:
http://canadiancouchpotato.com

It is owned by the fellow who writes about ETF’s in Money Sense.

I do not recommend that strategy for anyone. — Garth

#74 BrianT on 11.23.10 at 8:48 am

#58Truth-most people are unaware of how debt and credit influence economic metrics and thus “quality of life”. Canada has had an incredible growth in devt and credit, which has helped to fuel this RE market. If the country was growing richer at the median (increasing wages) the situation would be very different from right now (that was the 1970s). Bernie Madoff’s clients had a very high “quality of life” index also as they would read their monthly investment statements.

#75 tony w on 11.23.10 at 8:51 am

Oakville – 2 builders offered 200 lots for sale where none have been available. This new area of 20,000 lots is opening up and there is pent up demand because of the lack of supply. Oakville is desirable…

Caledon East – 1 builder sold out 30+ single family lots on the weekend at very high prices – go figure. They won’t move in ’til 2012.

Toronto new home sales (low rise) constrained by lack of supply due to delays in municipal servicing, water allocation, greenbelt legislation and provincial government desires for intensification.

Hi rise suites in 416 is almost all bought by Asian brokers and is a world unto its own – not a housing market, but a “financial futures” market. Pork bellies, anyone?

#76 Got A Watch on 11.23.10 at 8:53 am

Mikey the Realtor sure sounds like someone who wants to satirize the real estate industry. His comments sound like a guy with an odd sense of humor. So get a good laugh out of them. Thanks for the laugh, Mikey.

Tax Haven lives in Taiwan (hence his name) and has not been to Canada for many years. So I wouldn’t worry too much about what he predicts for Canada. It’s like me telling you how the Australian real estate market will do, without ever having been there. It may, or may not, happen, I can predict this or that, but who really knows. A guy who wishes for his laundry list of bad news to happen, so the “madness” can stop, is probably a bit mad himself. Misery loves company, Tax. Maybe you should move to South Korea, I hear they are having some good times there today, or not. I think he hopes the Canadian economy will implode, so when he moves back here, he can buy a house cheap. If Canadians all end up on welfare, living in cardboard boxes, he’d probably be happy. A really wonderful, caring, Canadian citizen/passport holder who loves his country so much, he hopes it collapses, and who moved to Taiwan to pay less taxes. Just the kind of citizen we need here, or maybe not.

Many people probably think real estate is over-priced, but wishing bad things on the whole population, so the price of homes will correct, is a bit crazy, if you ask me. “My neighbor goes bankrupt, now I can buy his house cheap, great news!” It would be like me hoping China invades Taiwan and destroys the place, because my PC video card had problems. Bad karma, Tax. Get a grip. And I know him from other Blogs, I’m trying to be kind here.

And of course we have Nostro the Mad, aka ‘BPOE’, who must be smoking so much BC bud his house looks like it’s on fire. A guy who hopes the rest of Canada crashes, but thinks Vancouver can escape any and all wider economic events without any difficulty. Smoke another one, you aren’t high enough yet.

It’s the tragedy of the commons on the internet here, you get the ones you laugh at, and the ones you laugh with.

Lets face it, in a country of what, 35 million now, how many read this Blog, or Garth’s books, and take it to heart. Probably 10,000 times as many are watching ‘Dancing With The Stars’. 200 comments a day, and a few thousand regular readers, even 100,000, can’t counter-balance that.

The herd dimly senses something may be wrong in real estate, some of them, but there are always the Greater Fools in massive numbers. They are the ones still rushing to buy condos today in Toronto, live in action. They read the ‘Real Estate’ section in the Toronto Star avidly, watch HGTV to see what their house should look like. The idea that real estate prices could drop 30%+ has not entered their heads in any meaningful way. Propaganda from realtors, easy credit from Banksters, it all adds to their mindset, and it takes a few years of price declines to finally overcome that. We are still about 2-3 years behind the US experience here, as usual. Patience. They will find out the hard way the error of their ways.

Like I said before, you have to worry about yourself and your family first in these times, you won’t be able to save the Greater Fools, even if they are friends. Don’t waste valuable time and energy trying, they will just hate you for it anyway. An addict never likes a friend who tries to intervene until maybe after they stop being an addict.

#77 BrianT on 11.23.10 at 8:53 am

Re Ireland, that country is like someone with a $100000 house they owe $900000 on. All the MSM “economists” say the proper thing to do is to renegotiate the mortgage, extend the term, maybe get a quarter point off the rate or even increase the loan to fund living expenses. Any six yr old kid explained the situation knows IF YOU DON’T GET RID OF THE DEBT YOU ARE SUNK.

#78 TaxHaven on 11.23.10 at 8:57 am

@#31 Taxpayer…yes, I think we will need higher unemployment if housing is ever to become affordable for we prospective housebuyers again.

Isn’t this whole economy – not just the homeselling racket – a lie?

Would many people even HAVE jobs were it not for artificially cheap money, courtesy of central banking?

How many frilly, frothy and unjustifiable small businesses would close (and put capital to more productive uses) if borrowing started at market-set rates – say 10 or 12%?

Ask yourself why we Canadians have so many poodle groomers, car sound system installers, pool cleaners, party basket makers, and indeed real estate agents…and so few exporters, miners, farmers, factories and mills.

I have nothing aginst genuine small businesses started to meet REAL demand.

And I have nothing against high house prices – IF sales are cash only. I think unemployment so far has predominantly affected the youth, industrial workers and the low-skilled…isn’t it high time all these reams of mid-level managers and government employees saw income cuts to match?

We should be REWARDING savers, investors and entrepreneurs with genuine, demand-meeting good ideas instead of punishing them with obscene debt-fueled housing costs, artificially-low interest rates and punitive taxes. If you haven’t SAVED a very significant amount for a house you don’t deserve free money courtesy of the rest of us!

#79 Jamaican_Gal on 11.23.10 at 9:03 am

“So how did Ireland get into this mess?

Ireland recorded stunning economic growth during what is known as the “Celtic Tiger” era from around 1993 to 2007 when the global financial crisis hit. Irish banks, like others around the world, loaned money to people who in some cases couldn’t pay it back. Cheap loans created extra demand for housing and as prices surged the construction industry raced to build more. House prices multiplied during the period, making many homeowners impressive profits and generating fat tax receipts for the government. However, when the housing bubble burst, consumer spending slowed sharply. Unemployment tripled from around four percent in 2005 to 11.8 percent in 2009. The most recent figure, for September, puts it even higher at 13.7 percent. ”

http://www.cnn.com/2010/BUSINESS/11/22/ireland.bailout.explainer/index.html?iref=obnetwork

#80 HouseBuster on 11.23.10 at 9:06 am

#40 andrewS The consumer is simply tapped out.
—————————————————
Really? Go to Costco on the weekend and let me know what you see.

#81 HouseBuster on 11.23.10 at 9:16 am

#22 This is Wonderland
————————
LMAO! So which builder do you work for? Are you looking for free advertising here?

It is not in a good location especially if you have children.

#82 nelson in ktown on 11.23.10 at 9:23 am

http://www.castanet.net/edition/news-story-58293-906-.htm#58293 More smoke and mirrors

#83 Aussie Roy on 11.23.10 at 9:32 am

66 Got A Watch on 11.23.10 at 8:53 am

I wouldn’t worry too much about what he predicts for Canada. It’s like me telling you how the Australian real estate market will do, without ever having been there.

Personally I dont make predicts just comment on what I observe. Its actually not that hard to spot the same human emotions, growth in private debt levels, lower rental yields, abnormal price growth, mortgages many times annual household income. Its Global, the only places that are different are those that haven’t displayed the above charateristics. For those markets that have been driven to silly prices based on theses emotions/beliefs its only a matter of time. The crunch will come some day, at the latest it will be when higher interest rates meets high annual multiple of income mortgage. Why dont people get, that paying 18% on 3 times your annual income has the same drain on your income as a mortgage of 6 times income at 9%.

Govt wont let interest rates get high. LOL
Yeah right tell that to our govt the RBA put rates up by .25 banks put them up by .43. So, who controls our rates, those that lend us their money.

#84 TorontoBull on 11.23.10 at 9:37 am

@30
“Hell, why you would want to live in Oakville suburbia and commute 1.5 hours each way to Toronto everyday?”
That’s a great question. According to my anecdotal knowledge, people buy in Oakville because of 2 main reasons:
1. Oakville has branded itself as the place where the rich live. Hence the city/RE industry caters to those who would show off their place of residence.
2. It is also perceived as the last bastion for whites (which is changing rapidly). Don’t be fooled people there are a lot of racial tensions in this country.
All of the families I know bought in Oakville in the past 2 years because of the reasons above.

#85 Blitzkrieg on 11.23.10 at 9:40 am

#46 Hobbygirl,

why dont you just open a direct trading account with any of the banks and trade away??
Itrade, Waterhouse, etc..

#86 Nick of Winnipeg on 11.23.10 at 9:46 am

Garth,

Every morning I hunker down in front of your previous night’s blog with a peanut butter and honey sandwich, a banana, and a cup of coffee. It’s my favorite part of the day. Incidentally, I’m usually grumpy all day every Sunday. Yup, life doesn’t get much better than this. Not when you’re living in Winnipeg and it’s minus 28 with the windchill outside.

You know, they say nature abhors a vacuum. Maybe when the Jets left, something else had to soar sky high… like Winnipeg real estate prices! Let’s bring back the Jets so everything returns to normal, eh?

#87 MikeT on 11.23.10 at 9:51 am

For every fool who buys an existing house, there is a wise person selling it. The greater fools are the ones who buy new developments, but that’s a small percentage of the total sales numbers. So, the situation is not that bad.

#88 GregW, Oakville on 11.23.10 at 10:01 am

Hi Garth, Still flying? What are Canadian’s Rights when going to the USA? An article fyi, But what a long hassle!
I wonder what would happen without an audio recorder on? It sounds like some police can still protect you from the TSA if they are informed enough, for now?

Do not allow history to repeat it’s self. It is not in anyone best interests!

Man Proves TSA Policies Are Unconstitutional
http://www.infowars.com/man-proves-tsa-policies-are-unconstitutional/

‘By simply remaining calm and polite while citing his constitutional rights, Kernan proved that, despite the best efforts of the TSA to intimidate people into submission by threatening $11,000 fines, it is not illegal to refuse to be put through a radiation scanner or be groped by TSA workers.

Kernan proved that the whole procedure is unconstitutional and a violation of rights, and after acknowledging this fact, TSA officials and the airport police had no other choice but to let him go free.’

#89 Taxpayer like everyone else on 11.23.10 at 10:13 am

79 Taxhaven – thank you for clarifying your viewpoint.
Many of the jobs and businesses you mention will
disappear as they do in any economic downturn.
Strangely enough though, financing for small business
can be extremely difficult to get. The last loan I had was
at 11% (private deal – banks weren’t interested) while
mortgages were about 6%. Now I have neither, and my
quickly building savings earn virtually nothing while I
construct a plan for them. (I do have some gems
though!)

#90 mousey on 11.23.10 at 10:15 am

#54 Walley
Re: the housing market will “go down easy like a Van East End working girl”. Oh, the irony of this comment coming from a person called Walley. Have you been to Whalley? Made my eyebrows twist up before I finished my coffee.

#91 GregW, Oakville on 11.23.10 at 10:16 am

Hi Garth, fyi artical and video

Irish Clash with Cops as IMF Readies Austerity Plan
http://www.infowars.com/irish-clash-with-cops-as-imf-readies-austerity-plan/

‘In Dublin, Ireland, people are not taking the IMF invasion sitting down. On Monday, November 22, around 50 Irish demonstrators attempted to stage a sit-down at a government building and protest the sell-out of the country to the international bankers.’

#92 TheBestPlaceOnEarth on 11.23.10 at 10:16 am

And here comes the INFLATION. Like I have been posting for awhile, Inflation NOT Deflation is where we are going. This time it’s different because we are going to have higher inflation and low interest rates. 5 years at 8.5% you will never see again. Interest rates to remain low for a long long time (at least while the babyboomers are still in control!!). Anyone find items from milk, bread, gas, lower these days??? That’s what I thought
***Canada’s annual inflation rate rose to 2.4 per cent last month from 1.9 per cent in September.****

#93 Macrath on 11.23.10 at 10:17 am

RE; fee for service advisor`s

How can one be assured that you don`t end up with a Bernie Madoff or an Earl Jones ? The securities laws seem quite weak in this regard for those who get burned.

This is probably why there is such a demand for Houses, GIC`s, and expensive Big Bank mutual funds.

#94 taxpayer on 11.23.10 at 12:22 pm

I dont think RE will crash. YOu wont get rich with your property, prices wont keep going up for ever but prices will be kept. Those who recently bought RE because wanted to make a quick buck, they are screw. Immigration did not save USA, however immigration will save RE from big crash. There are not that many cities to choose in Canada. There are probably 5 cities with some industry, some decent jobs and some very precarious jobs. People in Canada will do what ever it takes to keep their houses…even eating from can food. MARK MY WORDS!

#95 HouseBuster on 11.23.10 at 12:23 pm

#30 Mr. McMansion
Hell, why you would want to live in Oakville suburbia and commute 1.5 hours each way to Toronto everyday? I guess there are benefits to living in GTA’s whitest neighbourhood but it isn’t for me…..
———————————————————
Umm… 1.5 hours each way? I can hop on the GO train and get there in 30 mins.

#96 R on 11.23.10 at 12:30 pm

The proof is in the puddin’, or just around the corner. The homes for sale in my Mississauga ‘hood, where I rent a room, followed Garth’s predictions as though it were prophecy. Pre HST, the house two doors down sold in about a week. Post HST, pretty much everything on the street is still sitting, especially that lonely house on the corner.

Is it wrong to get pleasure from imagining the smugness of realtors turn to horror and desperation? Nah, I’ve been looking at their stupid billboards long enough. Suck it up boys, things are tough all over.

#97 dark sad person on 11.23.10 at 12:32 pm

#27 The Apocalyptic One formerly Old is Gold on 11.22.10

How long before the IMF comes knocking on our door? Last time they did we got the GST, what wonderful presents will they bring this time?

**********************
And just shortly before the GST-they got our Gold Reserves basically “given” to them by the fool Mulrooney-aka-
“Mr Airbus”

Ooooops-i “forgot” to claim GST on the kickback money–

#98 BAD on 11.23.10 at 12:48 pm


#57 SV on 11.23.10 at 4:06 am wrote:

I don’t quite understand – why does the cheap credit (as of today) only seem to affect the sales of new properties?
Wouldn’t you expect the home lust to include existing houses, where at least you can see what you get?

It actually makes perfect sense. The new home buyers are counting on the property price appreciation to either get a “free” property “upgrade” i.e. a bigger house with granite and stainless or to make money on a quick flip. Notice that the new properties are sold before they are built.

The speculation is:
In the time it takes to build these condos/townhouses/houses the prices will go up enough so either one’s existing property sale will pay for the “upgrade” or one will sell the new property for a quick profit without ever living in it.

It’s the belief that RE prices will go up and desire to make easy profit that drives these sales. Existing homes do not present the opportunity for a “free” upgrade and there’s no quick profit for the re-sellers as the home would have to be actually bought and maintained for that period of time (and it’s not a brand new property).

#99 dark sad person on 11.23.10 at 12:54 pm

#95 taxpayer on 11.23.10 at 12:22 pm

People in Canada will do what ever it takes to keep their houses…even eating from can food. MARK MY WORDS!

****************
You’re likely correct about people doing everything to hold onto the deflating piece of garbage-but-
There’s nothing they can do about house prices falling and then comes a margin call on the reset-which they can’t do anything about either and don’t forget it’s in the Banks best interest to foreclose and force the default-in order to collect the “payment in full” from CMHC–

#100 Kiss me I'm Irish on 11.23.10 at 1:22 pm

#74 Kiss me I’m Irish “It is owned by the fellow who writes about ETF’s in Money Sense.” “I do not recommend that strategy for anyone. — Garth”

Garth, I’m all ears as to why. I was going to do this strategy myself (self-investing in ETFs they suggest with low fees). From my understanding of reading Money Road, ETF’s are one of your suggested ways to go…no?

Please fill me in on what I don’t understand yet.

Just buying broad indexes is a losing strategy in range-bound markets. And having a portfolio with asset allocation balance is fraught with risk. — Garth

#101 Kiss me I'm Irish on 11.23.10 at 1:26 pm

Update on the Irish situation…

For get the 60 billion, or the revised 80 billion or even this mornings 100 billion asking… now they need…

“Ireland Is Said to Need About $114 Billion to Rescue Its Banks, Government”

Where are the fighting Irish now? I thought they would like to fight* for their country rather than just talk about it in the pubs.

*(meaning, non-violent, democratic action)

#102 taxpayer on 11.23.10 at 1:30 pm

#100 dark sad person on 11.23.10 at 12:54 pm

I think there will be decline in prices…probably down to 10-15%. However this will be decline in market prices. There are a lot of people who bought their houses more than 5 years ago. There houses have increased in value so much, that they really don’t care even a 20% decline (been very pessimistic). They will still be in positive number. Personally I know people who bought 5 year ago for 400k….today’s value 530k…..even if goes down 20% value will be close to initial price. You place into consideration all the problems related to selling (Realtor fee, moving cost, time cost, etc) and you probably will stay in your house. So how I said, no a good idea to go into RE these days, but CRASH OF RE USA STYLE…..UNLIKELY.

#103 Devil's Advocate on 11.23.10 at 1:37 pm

Garth when are you going to give up and admit neither you nor I or anyone else can predict how and when this madness will end. There are simply no ground rules as our governments continue to shift the floor beneath us to better suit their interpretation of the whim and fancy of the economy. I’m not saying it is right – not by a long shot.

Since 2002 I have thought things were too bullish in the real estate markets and correction was near at hand. I couldn’t have been further from the truth. They will not be going up as they have and are likely headed for some degree of claw-back but I don’t think nearly so much as the bulk of your followers believe.

Aren’t you simply continually confounded at the absurdity of it all? Like the Energizer Bunny it just keeps going and going and going while the Blog Dogs pine away in anticipation of real estate Armageddon. Isn’t it time you all just threw in the towel as I have and accept it for what it is – unpredictable madness. This is not unique to the real estate markets though.

Sara Palin may very well become the next president of the United States – due in large part to her new “reality” TV show and daughter’s single handedly destroying the credibility of “Dances with the Stars” (I don’t watch it my wife told me). The whole North American culture (Canada included) has moved to “all show and no go” short term pleasure over long term satisfaction. Think about it Garth – it’s not the world you and I grew up in.

Were still going to follow typical economic cyclical patterns but not nearly so much with adherence to the mathematical models of yesteryear. Economics is the backstory of all history and demographics is the backstory of all economics. Demographics liberally peppered with sociology and psychology and that is where you are making your mistakes.

No this will not end well but the end YOU seek is the end in a sane world… there is no sanity in THIS world Garth. You, the pups and they poodles best realize that their sanity is out of place in this insane world and THAT by definition might well mean they insane by constantly adhering to the belief that something might prove different even if you do implement the same fixes without success time after time.

It is no conspired construct it is simply a world gone insane with too much lust of the drug of easy credit. Do you honestly believe the pushers are going to curtail the supply any time soon if left up to them alone?

Give up and accept it.

#104 Devil's Advocate on 11.23.10 at 1:53 pm

#52 Vancouver_Bear on 11.23.10 at 2:11 am
#7 Mikey the Realtor on 11.22.10 at 10:36 pm

Do yourself a favor, do a called calling for a listing. Ok?
You will not get new clients here no matter how hard you try.

Do you honestly believe Mikey is a REALTOR? Come on VB you can’t possibly be that gullible?

BTW Sales people can’t “sell” anything. They can only lead you to that decision which makes the best sense to you by asking you questions of what it is you seek to achieve and leading you there. There-by it is YOU who makes the decision to buy not they the decision to sell.

#105 Jeff on 11.23.10 at 1:53 pm

Andrew #40

Ah, hidden in the new housing starts data is a simple, yet shocking point. In the GTA condos are outselling houses almost 2:1. Suburban condos are up, proportionally, way more than 416 condos.

“What does this mean? Quite simply, that despite record cheap debt and the banks giving away nearly free money, nobody can actually afford houses anymore, and even urban condos are pushing it these days. The only thing that’s really selling like hotcakes these days is condos deep in 905 country.”

It’s only new developments that are selling to greaterfools. A co-worker has been trying to sell his 905 condo for over 6 months and even at a loss and still no buyers. Now he is also trying to rent it for a loss and can’t even do that. RE is going to ruin many people. Condos are by far the worst investment right now. People are gambling with condos like they did during the .com bubble. Remeber that? Very similar? EVERYONE was talking about .com and NT and now? Condos is in a bubble beyond a bubble and those in it will suffer great losses.

#106 CTO on 11.23.10 at 2:03 pm

Jim F has hinted that the next budget will have NO new spending.
This means that all dept in the service sector will require hiring freeze and/ or restraint, hell, i bet the memo is already out!
This also means, no new construction infrastructure projects. Good-bye temp construction jobs.
This was a very large sector keeping things afloat. Without this boost, the economy, even if improving will still be sputtering running on 3 cylinders.
If one has got themselves into a big mortgage, payable over 25-35 yrs, good luck with the future because you are NOT going to b able to pay off enough to stave off financial stress when the interest rates start increasing, even if it is 2 years away.

Will cash be precious? Definitely!!!

If you look for the signs, it is quite clear that an interest rate storm is on the horizon.

As fewer and fewer are holding cash investments and more and more are holding credit, the need will be for those who have cash to invest and the need will be great!

Am I right Garth?

#107 BrianT on 11.23.10 at 2:04 pm

#85Tor-gotta laugh at that B/S racism call-Italians group together in Woodbridge, Chinese in Markham and North York-nobody screams Racism.

#108 GOFISH on 11.23.10 at 2:13 pm

Mikey the Realtor
Housing is well and alive folks, better get in asap as we are ready to take off. Housing is going nowhere but up for at least another 2 to 3 years. Rates are cheap and will remain cheap for a while longer

How can prices go higher? I’m lucky I bought 10 years ago when new home buyers had a chance. I feel sorry for people buying their 1st home. $400,000 for a starter home thats 2x’s what I paid for mine. $1000 more a month in payments for my house. How can we advance doing that. Enjoy the commission now and save some for the next few years.

#109 Live within your means on 11.23.10 at 2:19 pm

Inflation at highest rate in two years – http://www.thestar.com/business/article/895226–inflation-at-highest-rate-in-two-years
…………….

A bro callled me this am as I & my husband are the only ones in the family who have invested in the market – tho not very wisely I know – MF’s. He sold some of his silver and made a 25% profit. But, he has no knowledge of RRSP’s etc. He thought if he bought them at a bank, they would be guaranteed by the govt. and also thought that income splitting applied to all married couples. Corrected him on both. Suggested he do some research on the net and offered to loan him Garth’s latest book.

Bro finallly married his long time mate last summer. He’s 57 & she’s 59. They both have non-indexed retirement plans. (They both work for the same college) He owns 1 home – really a cottage (paid off) beside the ocean but with lots of land, and she owns 1 small home in the city and a large old one overlooking the ocean (5 klics from him). Bro kows it’s a ridiculous situation, but his wife doesn’t want to get rid of it. IIRC, her father gave her the down payment years ago. Her intention was to rent it out during the summer months, but that never really happened. :-)

#110 wetcoaster on 11.23.10 at 2:37 pm

F says there’s no bubble ? He has officially declared he is another liar like Learah, Greenspan, Muir and the rest of the scum in major denial. Just like Gordon Campbell and his lying ways, they will end their careers in disgrace.

http://www.financialpost.com/sign+Canadian+housing+bubble+Flaherty/3872308/story.html

#111 dark sad person on 11.23.10 at 2:37 pm

How many times have we heard on this board that the USD will collapse-especially since the QE-2 announcement?
Also that Gold is the anti USD play-
Both are BS and I’ve said so-to much grinding and gnashing of teeth-

Today Deflation is showing its teeth and lo and behold-what do we see?

http://www.barchart.com/chart.php?sym=DXZ10&style=technical&p=I&d=X&x=39&y=11&im=15&sd=&ed=&size=M&log=0&t=CANDLE&v=2&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=100&indicators=&addindicator=&submitted=1&fpage=&txtDate=#jump

http://www.barchart.com/chart.php?sym=GCZ10&style=technical&p=I&d=X&x=41&y=7&im=&sd=&ed=&size=M&log=0&t=CANDLE&v=2&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=100&indicators=&addindicator=&submitted=1&fpage=&txtDate=#jump

Where are all the top callers today?
Doesn’t mean it’s a sustaining trend-only that “both” are a safehaven play-when Deflation comes knocking-

#112 BrianT on 11.23.10 at 2:51 pm

As long as they can parade another Martha Stewart in front of the sheeple, everything will be fine http://finance.yahoo.com/tech-ticker/insider-trading-is-%E2%80%9Ceverywhere%E2%80%9D-matt-taibbi-says-%E2%80%9Cthe-fear-is-there%E2%80%99s-no-end-to-it%E2%80%9D-535645.html?tickers=GS,JPM,XLF,MS,FAZ,MRK,XLV

#113 GregW, Oakville on 11.23.10 at 2:56 pm

Hi Garth, fyi

North Korea Attack Part Of RAND Plan For Total War?
http://www.infowars.com/north-korea-attack-part-of-rand-plan-for-total-war/

Korean War Crisis: Brought To You By Uncle Sam
“Despite the fact that South Korea admits it fired the first shots that prompted the North to retaliate, the vast majority of the establishment press are feverishly blaming North Korea for a new escalation in the crisis, while failing completely to acknowledge the fact…”
http://www.infowars.com/korean-war-crisis-brought-to-you-by-uncle-sam/

TODAY ON THE ALEX JONES SHOW

Ron Paul
Breaking: Is Korean Peninsula provocation a geopolitical smokescreen? Alex covers this important and developing news story. Guests include: Texas Congressman Ron Paul and Judge Andrew Napolitano of Fox News. Investigative journalist Wayne Madsen talks with Alex about the situation in Korea. Alex also covers other important news items and takes your calls.

Listen Now Windows Media
http://www.infowars.com/

#114 Brad Mitchell on 11.23.10 at 2:56 pm

Right or wrong, I love reading Garth’s insights. I have 2 comments that are maybe too simplistic for him, maybe even for his readers too. First of all, Garth consistently says a decline in listings is the first sign of prices about to fall. I just don’t understand that concept at all since it violates a basic principle of economics… i.e. rising demand or falling supply = rising prices. So a decline in listings should increase prices, not decrease them.
Secondly, “cheap money” is not going away any time soon. The consensus is that inflation will rise, which will spike rates. I doubt it. It seems to me the powers that be completely manipulate the reported inflation rate anyways. So there will be no urgency to raise rates. And that will keep money cheap.
Like I said, too simplistic maybe, but that’s a devil’s advocate view anyway.

#115 Kelowna John on 11.23.10 at 3:04 pm

Mikey the Realtor –

I think the market’s going up as well. The cheap rates are terrific for buyers. Some of the people on this blog must have their heads stuck in the sand! I hope you are not the only voice of reason on this blog, we need more people like you.

#116 Little Timmy on 11.23.10 at 3:07 pm

Well put DA…you really know how to bring clarity to a situation.

“You, the pups and they poodles best realize that their sanity is out of place in this insane world and THAT by definition might well mean they insane by constantly adhering to the belief that something might prove different even if you do implement the same fixes without success time after time.”

#117 jess on 11.23.10 at 3:10 pm

Predatory SCUMBAGS

“All I do is work hard, and I get surrounded by thieves.”

A review of court records found evidence of misconduct at nearly every stage of Hall’s experience. Consider:

• Johnson Cuffy, a former mortgage broker now serving an 11-year prison sentence for grand theft, handled Hall’s refinancing in early 2006, using a strategy a state investigator described as “outright mortgage fraud.” He faces up to 30 more years in prison if convicted of 16 other mortgage fraud charges he’s facing.

• The title agent who signed the crucial deed transfers that Hall’s fraud claim rests on operated an unlicensed title company that stole more than $1.5 million from South Florida home buyers during closing proceedings between 2005 and 2007, according to Florida Supreme Court records.

• A man who listed his employer as a nonexistent Blockbuster Video store in New York somehow used Hall’s home as collateral to secure a $230,000 loan from subprime lender Argent Mortgage.

• Hall’s foreclosure was processed by the Florida Default Law Group, one of four Florida law firms being investigated by the state attorney general for using flawed documents to repossess homes from thousands of owners.

http://www.miamiherald.com/2010/11/20/1936137/hellish-home-refinancing-nears.html

Read more: http://www.miamiherald.com/2010/11/20/1936137/hellish-home-refinancing-nears.html#ixzz168J4RW5B

==============
http://www.heraldtribune.com/article/20090723/ARTICLE/907231072

The year-long investigation found that more than 50,000 Florida properties flipped under suspicious circumstances from 2000 through 2008. Those flips artificially drove up housing prices and tax bills and contributed to the crush of foreclosures that has gutted the real estate market.
=======
http://projects.heraldtribune.com/investigateflip/investigateflip.html
================

The Sarasota Herald Tribune’s award-winning series [2] on fraud in the practice of flipping homes — where the paper identified $10 billion in suspect sales in Florida — found that 40 percent of fraudsters were from within the real estate industry, including brokers, attorneys and real estate agents.

#118 dark sad person on 11.23.10 at 3:14 pm

#103 taxpayer on 11.23.10 at 1:30 pm

There are a lot of people who bought their houses more than 5 years ago. There houses have increased in value so much, that they really don’t care even a 20% decline

**********
Yes-i agree with you on that-
But it points out the problem of sustaining prices-
Those people are out of the market and will not factor into declining prices-
It’s the people who have bought since-that will be the drag-
Those people you talk about will not support the market-although “if” they are still highly leveraged and prices do fall to where they are marginal-then who is there left to buy?
This is the danger-once buying is exhausted what is there to support prices”
Unemployment and lack of purchasing power will continue to weaken house prices-with nothing to underpin-
Falling rent prices will further deter buying-
Defaults will leave a massive surplus of houses on the market and until buyers come back-prices will continue to deteriorate-
Those who own outright or have a high equity cushion have nothing to fear-providing they do not want to sell and can continue working or have investments incomes that pay-
I think we do mirror the US housing market-

#119 David B on 11.23.10 at 3:50 pm

There was breaking news south of border that new housing starts were down 2.2% in October … not good news. I just returned from Tim’s some contractors sitting next to me we talking business … One said “Not much money out there” things are slow. Really?

#120 Got A Watch on 11.23.10 at 3:52 pm

Portugal Next

“Portugal next as EMU’s Máquina Infernal keeps ticking. The Portuguese seemed baffled – and pained – that investors should link their country in any way with Greece or Ireland. I am afraid they must come to terms very soon with some unpleasant facts….”

Good roundup by AEP as usual, but also as usual, he says ECB should print “2 Trillion” and buy all Bonds to solve the issue. Absurd. So he asks for other solutions:

Bruce Krasting: My Solution proposes one, long and very complex. Way too many ingredients in the mix there, too many competing interests, chances of getting them all to agree on it would be slim to none.

The real solution is: default. And the only one that will work. A year of economic upheaval, and recovery would start, freed from colossal debt loads. Or 20 years+ trying to pay off the debts, and not succeeding, while the economy stagnates. It’s a simple choice, just not the one the “elites” and Banksters want to hear.

Besides, Spain seems to be making a move on the outside to pass Portugal, and there is no bailout for Spain possible, the numbers are too big.
————————————————————
Aussie Roy – yeah, I know. I’ve actually known Tax Haven for years from other Blogs. It just irks me that he left Canada for his ‘Tax Haven’ years ago, but keeps lecturing us on what we need to do here, with the “we Canadians” talk. I don’t tell people in Taiwan how to fix their economy – when you are on the other side of the planet, it’s a bit hard to know all the local issues. He’s an OK guy, but his perspective is a bit off, to me. Plus he always calls for less Government regulation, and we can all see how well that worked out in the US with lowering regulatory standards – not very well at all.

btw thanks for your posts from Australia. Are you Canadian, or how did you find this Blog? Are there any Blogs in Australia that are similar, besides Steve Keen?

#121 Kiss me I'm Irish on 11.23.10 at 3:53 pm

#101 Kiss me I’m Irish “Just buying broad indexes is a losing strategy in range-bound markets. And having a portfolio with asset allocation balance is fraught with risk. — Garth”

Obviously then I need to read up on investments and talk to the right people even more… would you suggest any direction on that matter?

#122 S on 11.23.10 at 4:07 pm

20% price pullback in Vancouver would not hurt those who bought in mid 2000s. For example, flippers who spent $250,000 on Cooper’s Lookout condo unit in Vancouver’s False creek area are now listing at around $400,000 mark for a one bed box in the sky. A 20 % price pullback from these levels would mean they’d still get around $320,000 minus realtor fees. Not great but hardly a loss. In any case, does anyone know how these are selling? I wonder how the vacant Olympic Village across that stagnant slew (False Creek) is affecting the market around Yaletown.

#123 tony w on 11.23.10 at 4:12 pm

Update on OAKVILLE new home sales at WOODLAND TRAILS – over 300 sales and counting on the weekend. Sorry for being pessimistic!

#124 Moneta on 11.23.10 at 4:23 pm

Live within your means on 11.23.10 at 2:19 pm
——-
I’m always amazed by the sheer number of nonchalant people who’ve made money without really understanding where it all came from.

Sadly, Canada is full fo these types and ripe for the picking.

#125 kitchener1 on 11.23.10 at 4:28 pm

Look at the sales volume declines in the last 5 months on MLS.

This is a huge story and that is why Garth keeps harping about them.

Volumes declines and then prices crash.

For a real good example of this look at automakers in 2008.

Sales volume was dropping hard and fast all the while production remained the same and so did the prices. There came a point where the automakers had to drop their prices to move inventory. Well they all did so at the same time and prices of new cars crashed hard.

in terms of RE, sales volume is dropping of a cliff, prices remain the same. Vendors (like automakers) are waiting for some magical pent up demand that will not materialize. At some point, some vendors will get desperate and start the price drops and at that point it will all go downhill very quick.

here is the deal, people may not want to drop price but if they plan on moving anytime in the next 5 years they will. Same action in equity markets every day.

For a peak at what it will look like, have a look on MLS for homes in Barrie-Brampton and Durham region. Prices are slowly eroding in the bottom end of the market and still no action, high end buyers are skewing the data, which is much easier to skew now that voulmes have dropped.

#126 Mike Turner on 11.23.10 at 4:58 pm

Hey Flaherty says there isn’t a housing bubble: http://www.bnn.ca/News/2010/11/23/No-housing-bubble-in-Canada-Flaherty.aspx

It’s a good thing politicians never lie…

#127 jess on 11.23.10 at 5:09 pm

“Sara Palin may very well become the next president of the United States – ”
That is never going to happen. Where would Alaska be without the federal government?
And how about that climate document she quoted from?

Alaska has received the most stimulus 3,145 per capita as of may Totaled received, 2.16Billion and the jobless rate as of june was 7.9%
=====================
Mr. Gatto, 72 and wiry, smiles and shakes his head: “I’ll give the federal government credit: they sure give us a ton of money. For every $1 we give them in taxes for highways, they give us back $5.76.”

http://www.nytimes.com/2010/08/19/business/19stimulus.html

creative paint
Why’s an incendiary Dutch journalist on the payroll of the ex-Alaska governor’s political action committee? A Mother Jones investigation.

— By Andy Kroll and Daniel Schulman
====================

Turns out climate skeptics’ favorite report might not be as scientific as Congressman Joe Barton claims.

— By Kate Sheppard

…” But in a searing piece in USA Today, reporter Dan Vergano reveals numerous problems with the Wegman report. Studies of the 91-page text “found repeated instances of passages lifted word for word and what appear to be thinly disguised paraphrases,” the piece notes.

Much of the reportedly plagiarized text came from a book written by Bradley, who has asked George Mason University to investigate the matter. Analyses of the text show that some phrases were largely reproduced, and at some points tweaked in order to change the meaning. This was revealed in a lengthy report from retired computer scientist John Mashey of California, who concluded that 35 of the report’s 91 pages “are mostly plagiarized text, but often injected with errors, bias and changes of meaning.”

It kind of undermines the credibility of your work criticizing others’ integrity when you don’t conform to the basic rules of scholarship,” Virginia Tech plagiarism expert Skip Garner says.

#128 Live within your means on 11.23.10 at 5:27 pm

125 Moneta on 11.23.10 at 4:23 pm
Live within your means on 11.23.10 at 2:19 pm
——-
I’m always amazed by the sheer number of nonchalant people who’ve made money without really understanding where it all came from.

Sadly, Canada is full fo these types and ripe for the picking.
……………..

Actually Moneta, I’d have to include myself among those types. My bro is a smart/frugal buyer for everyday items, and feels that banks are only out to rip off people. I suggested some of Garth’s strategies, including buying bank preferred. Anywho, he’ll have to do his own research. He’s not going to take advice from me and that’s good.

#129 Coho on 11.23.10 at 5:33 pm

The PIIGS and us:

Running national debt clocks for a number of western countries. At our present rate of growing national debt, (2K per second) a family of four would need to pay about $680 per month (excluding interest) to halt its progression.

Sure, when or if times get better the rate will slow, stop, or even reverse, but then interest will be higher, so the banking elite (that recognize no national boundaries and have no national allegiances) have us by the wee ones either way.

http://nationaldebtclocks.com/canada.htm

#130 RE Bear on 11.23.10 at 5:37 pm

#93 TheBestPlaceOnEarth on 11.23.10 at 10:16 am

You do really have a low IQ. You do realize that it’s Central Banking 101 to RAISE interest rates when inflation accelerates, right? Like, if it rains, put on a raincoat. If you’re hungry, you eat. If you’re a central banker and inflation creeps up, you raise interest rates.

So based on your own statements, you’ve contradicted yourself.

Anyways, what we have in fact is BIFLATION– there is both inflation on necessary goods, and deflation on goods that we do not need, such as luxury goods. For example, bread, milk, cheese, etc– although grocery stores are hurting and if you go looking for a sale you’ll find it– I usually buy those 907g bars of cheese now for $7 when they’re on sale (not bad!), which by the way is everyday.

Cars have come crashing down in price, I’d say on average cars have come down 30-50% in price in the last 3 years. Clothing has become cheaper as businesses struggle. Electronics are DIRT cheap– you can get a great notebook for about $300 on special if you shop around, when 3 years ago they were $500-600 (50% off almost). And the same exact thing will happen to housing when people can’t afford their homes, which will be rather soon.

You should really double check what you spew before you post, because you have a serious case of pseudologia fantastica. You quite literally just make things up and try to argue that Vancouver home prices will be $15 million by 2020.

#131 RE Bear on 11.23.10 at 5:38 pm

#93 TheBestPlaceOnEarth on 11.23.10 at 10:16 am

PS Vancouver is definitely NOT a World Class city, you do realize that, right?

#132 CTO on 11.23.10 at 5:39 pm

#115 Brad Mitchell

” Garth consistently says a decline in listings is the first sign of prices about to fall. ”

Brad, I think he has always refered to a decline in SALES not listings. No one is listing because no one is buying and the sellers are holding out.
It has been consistant in markets and economics that if sales drop prices follow. That’s pretty simplisic!?

Secondly you put way to much confidence in our central banks ability to control interest rates over the next few years. It may not seem so now, but rates can increase quickly between now and 5 years out. C has no contol over a world trend…

#133 RE Bear on 11.23.10 at 5:40 pm

Oh, the Brampton Real Estate Board hasn’t published statistics since AUGUST. No numbers for September, Oct or Nov.

They don’t reply to e-mails.

I would definitely not want to own a home in Brampton, lol, it’s going to be quite the haircut.

#134 bigrider on 11.23.10 at 5:48 pm

#110 Live within your means-“we are the only ones invested in the market-I know not very wisely MF’s”

Not necessarily. Which MF’s? How have they done verse benchmarks? Have you looked at Alpha, beta and standard deviation of each? Upside verse downside capture?

Lots to look at and know before you paint with a broad brush

#135 Timing is Everything on 11.23.10 at 5:49 pm

#77 Got A Watch – said “…you have to worry about yourself and your family first in these times, you won’t be able to save the Greater Fools, even if they are friends.”

Of course…We (our family) are ready for ‘incidentals’, give or take.

#77 Got A Watch – said “It’s the tragedy of the commons on the internet here, you get the ones you laugh at, and the ones you laugh with.”

You’re still here too, for whatever personal reason(s). Have a sno-cone and enjoy the show…and please, keep commenting…or take a break, whatever turns your crank. It’s a big internet. Plenty of blogs, or start your own….But this blog is still entertaining, informative, useful, (give or take) and FREE. I never have thanked Garth for hosting this blog…so Thanks.

Oh ya, Remember…dispense charity from a safe distance. ;)

http://en.wikipedia.org/wiki/File:The_Commons.ogv

#136 jess on 11.23.10 at 6:14 pm

…”But microfinance in pursuit of profits has led some microcredit companies around the world to extend loans to poor villagers at exorbitant interest rates and without enough regard for their ability to repay. Some companies have more than doubled their revenues annually.

Now some Indian officials fear that microfinance could become India’s version of the United States’ subprime mortgage debacle, in which the seemingly noble idea of extending home ownership to low-income households threatened to collapse the global banking system because of a reckless, grow-at-any-cost strategy. “….

Responding to public anger over abuses in the microcredit industry – and growing reports of suicides among people unable to pay mounting debts – legislators in the state of Andhra Pradesh last month passed a stringent new law restricting how the companies can lend and collect money.

Even as the new legislation was being passed, local leaders urged people to renege on their loans, and repayments on nearly $2 billion in loans in the state have virtually ceased. Lenders say that less than 10 per cent of borrowers have made payments in the past couple of weeks.

http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/finance/India-microcredit-sector-faces-collapse-from-defaults/articleshow/6946275.cms

#137 Get Real on 11.23.10 at 6:30 pm

The Asians are coming

http://ca.news.finance.yahoo.com/s/23112010/6/finance-india-s-jsw-buy-canadian-coal-firm-c-422.html

#138 GregW, Oakville on 11.23.10 at 6:36 pm

Hi Garth, fyi, artical & 3 min video

Ron Paul: Korea Conflict May Be Orchestrated Crisis To Boost Dollar
http://www.infowars.com/ron-paul-korea-conflict-may-be-orchestrated-crisis-to-boost-dollar/

“Congressman Ron Paul speculated on the Alex Jones Show today that the war footing between North and South Korea could be an orchestrated crisis to boost the dollar and reverse the US economy, paralleling the RAND Corporation’s call two years ago for the United States to become embroiled in a major war as a means of preventing a double dip recession.”

#139 RE Bear on 11.23.10 at 7:02 pm

TheBestPlaceOnEarth

Here’s some news:
http://www.cbc.ca/money/story/2010/11/23/canada-inflation-september.html

Canada averaged 0.4% inflation last month (or 4.9% annualized). Ontario alone experienced 0.6% inflation (7.4% annualized). That’s over double to nearly quadrouple the BoC’s target inflation rate. And again, they don’t count LCD Notebooks, Cars or Houses in that– which are all dropping, or will drop very soon, once people have to pay more on ordinary, everyday items such as gas, food, clothing, heating, etc.

Do you know what that means? Move your lips after me… Interest… Rates…. are… going… (I believe you say this quite a lot)… UP, UP AND UP!

LOL!

#140 timbo on 11.23.10 at 7:08 pm

http://www.calculatedriskblog.com/2010/11/lps-over-43-million-loans-90-days-or-in_23.html

• The average number of days delinquent for loans in foreclosure is a record 492 days
• Over 4.3 million loans are 90 days or more delinquent or in foreclosure
• Foreclosure sales plummeted by 35% in October (as a result of the widespread moratoria)
• Nearly 20% of loans that have been delinquent more than two years are still not in foreclosure

recession is over and housing prices are on the way up. What a gong show!!

#141 OttawaMike on 11.23.10 at 7:11 pm

Well my 3 squirrel tenants have been hanging out on my window ledge and watching me watch them with their beady little sad eyes.
Their sinister plot is working as I feel sorry for them have called off the marksman for today. I recovered their entry with non chewable sheet metal.

To put it into perspective, at least I don’t have a rattle snake infestation in my house like this guy in Scottsdale Arizona, YIKES:

http://www.youtube.com/watch?v=Wf5puynSYOI&feature=player_embedded#!

#142 sue on 11.23.10 at 7:18 pm

I am currently emailing RE agents selling homes in Dundas and asking if their clients would consider renting to us (after we sell our house). It’s bold but I’m sure some of them are ready to crumble and become ‘accidental landlords”. I am keeping my fingers crossed. We have to price our house for quick sale and get out of this “all of networth in 1 place” with accompanying debt nasty scenario stat.

#143 OttawaMike on 11.23.10 at 7:20 pm

138 jess on 11.23.10 at 6:14 pm
The heart of the issue in that link is how easily political interference can trash the micro finance industry.

A political opponent out to ruin a micro financier can easily halt payments by telling the borrowers to default and that it is OK to do so.

I’m a big advocate of these small 3rd world loans but like everything else it is not as simple as it sounds.

A simile of the micro finance defaults could be made to the western world’s mortgage crisis. Strategic defaults are taking place and if politicians openly told people it was OK to do so, can you imagine the fall out?

#144 bigrider on 11.23.10 at 7:27 pm

Re-worded.

Should I be paying more to a fee only financial planner, 1% per year ,on a 1million plus account ($10,000) than my neighbor who has a 500k portfolio same 1% ($5000).

I mean ,the planner is not really doing any additional work. is he? Should there not be a fixed fee for all account sizes or services rendered?

Anyone?

Complexity tends to rise with wealth, which is how wealthy people got that way. Seems you don’t know. — Garth

#145 InvestX on 11.23.10 at 7:36 pm

Retail rises for fourth straight month in September

http://www.moneyville.ca/article/895246–retail-rises-for-fourth-straight-month-in-september

#146 doctore on 11.23.10 at 7:47 pm

Actually Ireland has been through far far far worse in its history than this debacle. During the 1840’s they had the potato famine which caused millions of deaths from starvation and emigration of millions more. The population of Ireland went from around 8million to 4million or so where it sits to this very day, 150 years later!

#147 Bailing in BC on 11.23.10 at 8:23 pm

#139 Carioca Canuck

You forgot to add one other important question

6. How many readers of this blog could buy a house in cash but chose not to?

If average Canadians read this, none. I think that’s the point. — Garth

#148 This is Wonderland on 11.23.10 at 8:30 pm

# 82 Housebuster
Nope I’m not a realestate agent; actually I worked in automotive for 15 years and have just gone back to school. What I was trying to say, is that it’s very easy to get caught up in all the hype of new housing development especially when your family has always done well in realestate. At this moment I am liquid and trying to stop my mom from committing hari kari just because I choose to rent instead of buy. I have lived most of my life in Oakville except for the 12 years I spent in Windsor and always loved this town simply because it was home; this is where my family lives. I’m not sure if this will be the area that I will buy in but if it is I think I will be staying south of the QEW maybe a small bungalow with lots of property and a small heating bill. The reason I posted the prices of the homes was to simply see if anyone notices a price increase on these units in the next couple of weeks.
And finally….LMAO? How old are you?

#149 Throwstone on 11.23.10 at 8:31 pm

HOUSE BUSTER!….RE: Costco—-Take a closer look when the customer pays….

Paper or plastic….

You not paying attention?…

#150 dd on 11.23.10 at 8:47 pm

-inflation-september.html

Oh look Garth, inflation. Money printing does that. Like I said money paper dollars = higher commoditys prices WILL translate into higher end prices. Now it is being reported in the G&M. I guess you can believe it now. Too funny.

Price inflation is not asset inflation. Care for a crayon? — Garth

#151 BrianT on 11.23.10 at 8:57 pm

If this broad has her way you won’t be able to ride the subway without first submitting to molestation http://thehill.com/homenews/administration/130549-next-step-for-body-scanners-could-be-trains-boats-and-the-metro-

#152 jess on 11.23.10 at 9:00 pm

health care america non partisan indeed!

Deadly Spin
An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans
By Wendell Potter

Michael Moore Meets Wendell Potter on “Countdown” With Keith Olbermann (Video)
Monday 22 November 2010

by: Michael Moore | MichaelMoore.com | Interview

Michael Moore Meets Wendell Potter on “Countdown” With Keith Olbermann,
http://www.youtube.com/watch?v=V2lYd1LBTSM&feature=

#153 john m on 11.23.10 at 9:10 pm

but..but ..but..things are different here!…..”H” and “F” said we were only in a technical recession………..our banks were so solid they only needed the taxpayers to assume approx. 70 billion in bad mortgages……..ohhhhhhh yes this will not end well…and its getting worse daily…………..

#154 Joe Q. on 11.23.10 at 9:20 pm

#123 S on 11.23.10 at 4:07 pm writes:

“20% price pullback in Vancouver would not hurt those who bought in mid 2000s. For example, flippers who spent $250,000 on Cooper’s Lookout condo unit in Vancouver’s False creek area are now listing at around $400,000 mark for a one bed box in the sky. A 20 % price pullback from these levels would mean they’d still get around $320,000 minus realtor fees. Not great but hardly a loss.”

You don’t have enough info to determine if it’s a loss or not — it depends on the mortgage arrangements.

Say, for example, that someone buys one of these condos in 2005 for $250k with 20% down and a 5% mortgage, 25-yr amortization. After five years they have spent $120k on the house ($50k down-payment and $70k in mortgage payments). The balance owing on their mortgage is $177k.

If they then sell for $320k and use the proceeds to pay off the balance on the mortgage, they’re left with $143k. That’s a gain of $23k.

Re-do the calculation based on 10% down and a 35-yr mortgage and the gain is around $16k, which is about what the realtor fees would be for the sale. They will just break even, even though the nominal sale price is $70k more than the purchase price was.

Calculations of “gains” and “losses” on a house always need to take mortgage interest and transaction fees into account, unless you think that paying interest adds value to your home :)

#155 jess on 11.23.10 at 9:31 pm

ottawa mike

My understanding of the article was that the “high interest rates attached to these loans without any regard to their ability to repay.” Their collection methods are sounding quite nasty.
http://www.indianexpress.com/news/cops-arrest-sks-microfinance-staff/701102/

==================
The Andhra Pradesh Police today said it has arrested three people working with SKS Microfinance and Spandana on a complaint of harassment by a borrower, and might book the companies’ respective promoters Vikram Akula and Padmaja Reddy under a new Ordinance to check coercive methods of loan recovery.

SKS charges a flat rate of 12.5 percent, and 26.7 percent on a declining balance, the lender said in the statement to the Mumbai stock exchanges.
SKS Microfinance is India’s largest and one of the world’s fastest-growing microfinance organizations. Its mission is to empower the poor by providing them collateral-free loans for income generation.

Oct 28th

SKS Microfinance, a publicly traded microfinance institution (MFI) based in India, recently announced that it will lower interest rates to for new borrowers borrowers in the state of Andhra Pradesh from 26.69 percent to 24.55 percent

In full-page advertisements issued in vernacular dailies today, the company said it has reduced interest rate from 26.69 per cent to 24.55 per cent (depreciating) or a flat 12.55 per cent per annum.

#156 Milhous Plumbers on 11.23.10 at 9:43 pm

All I can say about GTA RE is when is 1 Bloor going up?
You know that 2-year flat spot in the heart of the city.

Justin “Beaver,” – Garth’s just jealous cause he don’t have hordes of young women mobbing him.

I took a vow of chastity. — Garth

#157 Oakville Owner on 11.23.10 at 9:58 pm

Hi Garth,

Love the site and agree with most of your predictions. Just wanted to say I drive buy the new Oakville development site on Dundas St twice each day and I am blown away by the # of cars in the lot.

Must say it makes me feel better that we got into this crazy market in 2003 and traded up to our dream/final home during the dark days of 2008. May see that 20% slide plus a few years of 5% melt but we have more then made up for that being in this market for the last 7 years. Have another 20 plus years left to go in this home with my young family so I think we will just sit and wait this one out.

On the investing side, I was just advised that OMERS is going to start allowing its members to do what are called “Additional Voluntariy Contributions” (AVC’s) that will make the same returns as the OMERS fund less a very small MER of 0.4% to 0.6%.

What do you think of this? The MER and historical returns sure are better then what my advisor has done the last five years and OMERS looks to be moving towards alot more private equity plays and away from so much in the public markets.

#158 bruce corell on 11.23.10 at 10:31 pm

Here is The most important video you will ever see and remember. We could make a billion dollars if we can short this….
http://www.youtube.com/watch?v=jYGOsHJwIa0

#159 bcweatherman on 11.23.10 at 10:41 pm

So much lust for houses, shelters basically, when our real house, the earth, is in so much trouble…. Is there something else at work here beyond gullible people and advertising hype?

#160 dd on 11.23.10 at 10:41 pm

Price inflation is not asset inflation. Care for a crayon? — Garth

Oh, so stocks are not assets. Care for a course in finance??

Did they go up today on your planet? — Garth

#161 Leanne on 11.23.10 at 10:44 pm

#160 Milhous Plumbers: “Garth’s just jealous cause he don’t have hordes of young women mobbing him.”

He also don’t have bad grammar.

#162 Mtl RE Observations on 11.23.10 at 10:44 pm

I’ve decided to take my half of the money that I made selling our last property and invest it in a business idea that I have. It will take a while to get off the ground, but I trust my idea. There’s not much else that I trust out there.

#163 Devil's Advocate on 11.23.10 at 11:05 pm

#117 Little Timmy on 11.23.10 at 3:07 pm

Well put DA…you really know how to bring clarity to a situation.

“You, the pups and they poodles best realize that their sanity is out of place in this insane world and THAT by definition might well mean they insane by constantly adhering to the belief that something might prove different even if you do implement the same fixes without success time after time.”

Sarcasm… I get it.

It was a busy day today (yes a busy R/E day believe it or not) and I did not have time to proof read. I think you know what I was getting at.

#128 jess on 11.23.10 at 5:09 pm

“Sara Palin may very well become the next president of the United States – ”

That is never going to happen.

Never say never. Sometimes I wonder if Rosanne Barr ran that she might get elected. It ain’t a pretty compliment of the American people and Canadians are not that far behind.

#133 RE Bear on 11.23.10 at 5:38 pm

#93 TheBestPlaceOnEarth on 11.23.10 at 10:16 am

PS Vancouver is definitely NOT a World Class city, you do realize that, right?

Your opinion… many, many others would disagree with you… What… Toronto is a world class city? Come on?

#164 HouseBuster on 11.23.10 at 11:05 pm

#161 Oakville Owner – You’re in for a shock… 2003 prices are headed our way.

#165 HouseBuster on 11.23.10 at 11:07 pm

#153 Throwstone on 11.23.10 at 8:31 pm
HOUSE BUSTER!….RE: Costco—-Take a closer look when the customer pays….

Paper or plastic….

You not paying attention?…
————————————-

You can only pay with cash or debit at Costco unless you have their Amex card.

So most people pay cash or with their bank debit card.

#166 Taxpayer like everyone else on 11.23.10 at 11:13 pm

101 Kiss/Garth – the couch potato strategy continues to include more complex options – check #6

http://canadiancouchpotato.com/model-portfolios/

It spreads holdings amongst more specialized ETFs – in this case capitalization class (small/mid/large). I dont see why you couldnt apply it to sector ETFs as well.
Regular re-balancing should provide better results in a
range-bound market.

#167 dd on 11.23.10 at 11:14 pm

…Did they go up today on your planet? — Garth..

Oh, now we are down to the daily watch. If you look back to March of 2009 you can see that the trend line is up and the fundamentals still stink. All this fear about country bond defaults and the markets are all still up (read “tend-line). There is a sea of paper supporting these ASSETS.

#168 hobbygirl on 11.23.10 at 11:16 pm

#151 – Bailing in BC

Count me as one. I paid cash for a house when I could have afforded triple the size with upgrades. I chose to live modestly and have laminate countertops and white appliances by choice and practicality. I don’t find even higher property taxes, heating bills and more housecleaning appealing. I know what keeping up with the Jones’ entails.

#169 RE Bear on 11.23.10 at 11:34 pm

TheBestPlaceOnEarth mysteriously has no defense… and remains deathly quiet…

#170 Utopia on 11.24.10 at 12:04 am

@ #14 Behavioral Finance

“To trace the history of the most prominent of these
delusions is the object of the present pages. Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one”.—–

An Excerpt from Memoirs of Extraordinary Popular Delusions and the Madness of crowds by Charles Mackay.
————————————————————-

Too Good! I love this book. It reads like it was written today and might just prove that nothing really changes. Wierd isn’t it. Thanks for the reference.

#171 M I K E on 11.24.10 at 12:45 am

“One reason. Cheap money. Oh yeah, and house lust.”

I do flooring for a builder here in Pickering, he was mentioning how the people that bought the house which we were working on today had financed everything including their $5000 coffee maker. I’m sure he exaggerated the amount on the coffee maker, but he was trying to tell me how nuts it has become.

Cheap money – house lust. You said that bang on Garth.

#172 Utopia on 11.24.10 at 1:11 am

#104 Devil’s Advocate `
—————————–

Interesting post Mr. Devil. What we are primarily dealing with here though is a broad and undeniable trend that has enveloped the largest part of the developed world.

Our turn is coming. It is a matter of time.

We don’t need to be particularly concerned with day to day newsbites or contrary opinions because the larger trend will still remain intact and will eventually be fulfilled.

Niether do we care if homes rise in price one or two months because we also recognize there are periodic anomalies and know old patterns when we see them. It helps to understand the differences between the statistics offered and the make-up of the data being discussed.

Those that have predicted a decline in housing prices in Canada off of it’s current cheap-interest rate fuelled highs will not be dissapointed. They may be wrong on the exact timing but they will certainly be correct in judgment of the eventual outcome.

And when you are right and know you will be vindicated you never back down to those who keep trying to sell a “bill of goods” to those who are newbies or just too ignorant to know better. Nor do you stop warning those who keep buying well past the true speculator’s date of departure from the scene.

If you have knowledge, conviction and real values you stick to your script when you know it is right and do not waffle just because a hundred others with idle opinions tried to convince you it was wrong.

And are those not the kinds of friends you would rather have? Or do you prefer the lilly livers that bend with every whim and foul wind and don’t really know their own A$$ from a hole in the ground?

(Yes, I am asking actual questions Mr Devil)

#173 JC on 11.24.10 at 1:11 am

Canadian’s will get their real estate surprise the longer our BOC keeps this low interest rate policy going.
Aussie Land has moved, China has moved we need to bite the bullet wish the USA farewell and raise rates and stop punishing savers

#174 Utopia on 11.24.10 at 1:24 am

To Patz Re: “Patz Law” who wrote………..

“You know who you are!”
————————————————–

Don’t be so shy Patz. Just name the names you object too. Otherwise you are not making any point. And don’t worry too much about the written repercussions, you are still annonymous.

#175 Utopia on 11.24.10 at 1:38 am

#107 CTO on 11.23.10 wrote:”

“Jim F has hinted that the next budget will have NO new spending”.
—————————————-

I think some of what you guessed at is right CT. This next budget will bite. We should anticipate not just an end to new spending but also reductions in current spending.

The multi-year plan should spell this out and I believe Canadians are on-board with rational belt tightening and prefer it to the trauma that the US will be going through over the next few years.

We all went deep into the red on the backs of a US agenda to stave off the collapse of the financial system instead of just taking our medicine and trying to adjust to the new reality. Now we will do what we should have done all along except we will all have a much bigger debt burden to overcome in the process.

The Public Service might just want to duck and cover before the next budget comes out. There will be some deep cuts and the public has no patience anymore for unions that will try to maintain the status quo.

They are not sympathetic when they are hurting worse.

#176 Joel Toronto on 11.24.10 at 12:07 pm

http://toronto.ctv.ca/servlet/an/local/CTVNews/20100913/oecd-health-100913/20100913/?hub=TorontoNewHome

#177 Sean on 11.24.10 at 12:29 pm

Anyone know good areas to buy a summer home in SPAIN??? :)

#178 steve p on 11.24.10 at 1:07 pm

“Word is several hundred new (unbuilt) houses were released, for which over 9,000 people has registered an interest”

9000 people are interested in buying a call option on this product (new home)