The sure thing

It rippled through headlines across the country. In the CTV newsroom they just retyped the news release and attributed it to themselves. In Vancouver, of course, it led the Global television newscast. In Edmonton it heralded a real estate renaissance, as it did in Windsor and Regina.

Yes the fabricators at Re/Max struck again, issuing a 2011 forecast based on, well, nothing, and predicting still-higher housing prices. In every single city.

As outrageous as this seems, at a time when the economy is so fragile that we still have emergency interest rates, exports are plunging, unemployment is going structural and families have never owed as much, the media reaction was even more cookie-hurling. After reading 18 versions of the story in as many markets, I could not find a single one that expressed a contrarian sentiment. So Canadians were once again deprived of a balanced view of the world.

At the Re/Max Tower, in response, they’re doing the traditional frenzied Media Manipulator dance, in which their naked writhing is consummated as Michael Polzler, manly and erect in his ermine loincloth, aims his dagger at the wide-eyed goat strapped before him. It symbolizes credibility. He glints, grunts and thrusts.

Or so I heard.

The real estate market will do whatever people force it to. If they choose the Re/Max way, and buy now despite the shoals ahead, it’ll go up. And then the decline will be even more pronounced, requiring far more goats. And what might have been a Garth-forecast correction could turn into a Polzler-imbued crash.

I guess we’ll all find out.

Like Leo did. He wrote me last night.

“Just writing to Thank You for your great blog! Encourage your readers to visit Florida to see first hand what the residual fallout looks like, three years after collapse!

“I own a small business located in the glide path of the Space Shuttle in Merritt Island, Florida. We are just west of Cocoa Beach (I Dream of Jennie) on the intercoastal waterway. Back in the 60’s thousands of NASA types built canal after canal lined with small concrete block homes with docks and easy water access. Up until 2006 life was a “flipping” party! My business sold the supplies (copper, PVC, Irrigation, etc.) to transform these old somewhat rundown homes into stellar “waterfront” property.

“The exact moment the bubble burst was Nov 1, 2006 when the now stratospheric property tax levies were received. As reality set in that cash would be required to pay taxes on these inflated values , the downward spiral began and continues today. To date thousands of space center workers have been laid off and the spiral is picking up speed. The Shuttle program ends in 2011 after 19 years.

“I am now running a 7500 Sq Ft commercial supply house by myself that employed 5 full time employees in 2006. The key for your Canadian readers is how fast it can all fall apart, even in the shadow of the Kennedy Space Center. No place is immune!

“Thanks again for your insight.
Leo Burgunder (President/ Owner, PVC Supply House, Merritt Isl., FL)

Of course, Regina, Winnipeg, Windsor, Richmond, Milton or Edmonton are not Florida, where houses are cheap, mortgage interest is deductible, loan rates last 30 years, taxes are low, the economy can only get better and it never snows.

This is going to be so interesting.

215 comments ↓

#1 HouseBuster on 12.07.10 at 10:37 pm

2003 prices are on the way. Sooner than many people think.

#2 hmm... on 12.07.10 at 10:38 pm

What a picture, I think she looks British…

#3 squidly77 on 12.07.10 at 10:41 pm

Remax Before The Bust What bubble!!

Remax After The Bust Err, oh yeah that one.

#4 foothillsfreedom on 12.07.10 at 10:49 pm

Nice visuals,

“At the Re/Max Tower, in response, they’re doing the traditional frenzied Media Manipulator dance, in which their naked writhing is consummated as Michael Polzler, manly and erect in his ermine loincloth, aims his dagger at the wide-eyed goat strapped before him. It symbolizes credibility. He glints, grunts and thrusts.

Or so I heard.”

I think I just had a flashback to an Eddie Murphy/ Dan Akroyd movie from the 80’s.

Anyway, I just drank the Tang (the Garth Turner alternate version of reality) after drinking the Kool-Aid (buying a condo worth 2x income for 50% less than rental costs) by opening a T.F.S.A. and investing the money saved. Just wondering if anyone on the blog has used Questrade in the past and their experiences. Has anyone had trouble closing or transferring an account?
Are there any other issues/problems anyone has had? Thanks, MAL

#5 crazed and a little confused on 12.07.10 at 10:59 pm

Man…no one wants to be holding the bag when things go seriously wrong…what if the olympic village doesn’t sell next year…what if unemployment is even higher with so much industry…( Insert)…..

HST referendum…I getting my pens ready and planning a carpool to make sure everybody shows up

did i miss anything?

#6 Sand-Piper on 12.07.10 at 11:00 pm

Yes..first one on the blog – sweet! Garth – thank you for providing a “Canadian spin” on the housing market. I have been reading “Ben’s Bubble blog”since 2005 – alot of the comments are identical to the ones posted in 2006-2007 down there when most bloggers kept asking how is the housing market still moving skywards…

Working for a trustee in Bankruptcy – we have been doing double time for December – something unheard of …. its a very intense industry – we’ve been ramping up employment for 2011 – something big is coming – maybe Garth’s stance of a cemented down generator is not so laughable after all !

Cheers Garth – at least I don’t feel like I am the only one wondering why everyone has lost their common sense in digging this debt hole that will consume us all!

#7 JO on 12.07.10 at 11:03 pm

Yes, indeed. With a lot of family in the Garden City, Long Island area which was one of the top RE markets in the US,I heard the “won’t happen here” deal too..boy they wish they sold…The most critical factor of course is market psychology, but that will lead to a slowing of the rate of growth in debt related to housing…we have been on steriods..rate of growth in debt far exceeding GDP / personal disposable income and just about any other metric..can anyone say Debt Based Ponzi scheme ? While I suppose we might experience a miracle (explosion in skilled immigrants, massive productivity gains which increase income, shocking US economic pick up,etc), all signs for now indicate the most likely path is down for at least several years..once the flow of credit dries up (and it will, for lack of demand due to scared buyers or rate surge), you will see stunning declines with increasing speed..i stand by my call that 2011 will be a horrible year for RE in Canada..
JO

#8 kevin on 12.07.10 at 11:05 pm

Like I have said before, it was not the economy that pushed up house prices, it was house prices that pushed the economy. The housing market looks like it may have renewed strength but it can not have endless growth. This boom will end badly. Most do not see it coming.

#9 BoomersEarningCash.com on 12.07.10 at 11:10 pm

It simply amazes me that when it comes to money people go stupid and get greedy.

Do they not realize that any bubble driven commodity – real estate included – turns into a pyramid scheme. Not many people come out ahead.

Most lose their shirts.

Come on people – learn economics 101…

#10 ken on 12.07.10 at 11:18 pm

During the past ten years Greenspan and Bernanke have managed to destroy our economies through their low interest rate policies,incompetence lack of foresight in the future and on and on.I believe the fed and the boc will be on shaky grounds in the future.

#11 squidly77 on 12.07.10 at 11:22 pm

$44,000

#12 BoomersEarningCash.com on 12.07.10 at 11:26 pm

By the way – There are no Icebergs in the North Atlantic either.

#13 RAINBIRD on 12.07.10 at 11:40 pm

Hi,
I wonder why no one commented on my story yesterday; this scenario is equivalent to building on Indian Lease land. Why would anyone want to pay $900/sq ft for a condo which is build on ‘Lease Land’?
This is all spelled out in a disclosure statement and is gaining popularity because no one has complained nor does any one understand what’s happening?

Your comment please on these facts:

“A trend in the CONDO market in the Lower mainland by developers like Bosa Corporation is this:

Because the land is so expensive they have decided via a legal trick to sell the condos, if you read the ‘disclosure statement’, as kind of ‘pre-paid’ rent. The Strata does not own the land upon which the building sits, or the parking garage and after 90 years they ( the Corporation) gets to tear the building down and build a new one on – ‘their land’ – paying the original purchaser a market value which by that time will be ‘zero’.

In other words you’re temporarily buying four walls (the parking garage is assigned to the strata but the strata has a 90 year lease) for about $1,000,000 as ‘pre-paid’ rent.

Either people are not aware of this fact or they’re thinking I’m not going to live that long – so what. But, they don’t realize that their purchase has the same connotations as any purchase of a 99 year lease – a bad one.

This kind of purchase has an immediate diminishing value and gets worse and worse as time progresses – which I guess is OK if you hate your kids.”

#14 harry on 12.07.10 at 11:42 pm

NDP turmoil?
is that the wrong video?

#15 Debt's Dark Embrace on 12.07.10 at 11:45 pm

Yawn. Business as usual. The bubble will not pop quite yet. First Europe has to go into the dumper, then China. When interest rates start to creep up at some time down the road, then we will hit the wall. It will be spectacular.

#16 T.O. Bubble Boy on 12.07.10 at 11:48 pm

So, lemme get this straight:

If I buy this $1M uninspired McMansion with no backyard near the oh so wonderful Centrepoint mall at Yonge & Steeles or this $1M condo in Yorkville with the 1980’s kitchen cabinets, it will be worth $30,000 more (+3%) by next year!!!

Well then, I might as well throw an extra $30,000 on top and buy a nice Corvette from someone looking to get a down payment for a house!
(don’t they know that you can get the downpayment from a bank loan, and keep the Vette?)

#17 Aussie Roy on 12.07.10 at 11:49 pm

Aussie Update

More Queenslanders filing for bankruptcy as credit crunch bites
http://www.couriermail.com.au/money/money-matters/more-queenslanders-filing-for-bankruptcy-as-credit-crunch-bites/story-fn3hskur-1225967271156

But wait demand for debt is growing.
http://www.smh.com.au/business/home-loans-mark-best-gains-since-may-20101208-18ozw.html

Kinda funny at a time when interest rates are up, personal indebtedness is up, bankruptcy is up the “greater fools” in the community continue to leverage up into the most expensive housing market (on a national basis) in the world. Its not easy to say this but some people here have simply lost their minds.

We Aussies love the tag “the lucky country” well my fellow country men we are now pushing our luck, all because the average house speculator (currently 30% of all sales) cant use a calculator. Currently rent to price ratios are sitting at 40:1 (2.5% return) in many cities, how can this possibly be a buy signal unless you are addicted to speculative gains.

Here is a story my grandsons friend told me yesterday, he is 26 and thank goodness can use a calculator. Seeing a small unit for sale close to the CBD he rang the agent to enquire about the price.

Agent. “The property is a 1 bedroom unit and is for sale at the bargain price of 350k, current rental return is 200 per week, the property is returning better than 10% pa”.

(Now I know math isnt a strong point for some but surely 200×52 = 10400pa ROI = 3%).

After some quick mental math he questioned the agent how did he come up with the 10% return when the rental return is clearly only 3%. Answer “well you are not counting the capital grow which will atleast be 7%.

So here we have an agent confusing the known with the unknown. Is there any wonder why we are in such a mess when this kind of false information is being peddled by ones whom we really should be able to trust.

My young friend laughed and told the agent to google the word speculative gains. An enlightened young man, we sure could use a few more of them down here in “mega mortgage land”.

I would be interested if this technique is also being used in Canada. Agents like all other financial information providers need to held accountable for their information. There are currently no laws to protect people from wild claims made by these people just to get a sale.

#18 wetcoaster on 12.07.10 at 11:51 pm

I love it when a biased conglomerate tells us that life is going to be peaches and sugar plums. Not a bad scene in the whole fairy tale. No fears of higher taxes, higher assesments, higher food costs, higher gas costs etc etc. The don’t exist in Remax land. The new Wizard of Oz has emerged in a Remax suit. Disgusting !

#19 OttawaMike on 12.07.10 at 11:54 pm

You will be proven correct – eventually.

I’m afraid Remax probably has it right.

I’ve recently thrown in the towel on any significant correction within the next year or two in any of the major Canadian markets. I’m guessing another 10-20% rise in prices by 2012 and possibly more.

#20 Jimbo on 12.07.10 at 11:55 pm

Of course, Regina, Winnipeg, Windsor, Richmond, Milton or Edmonton are not Florida, where houses are cheap, mortgage interest is deductible, loan rates last 30 years, taxes are low, the economy can only get better and it never snows.
………………………………………………
sorry garth but some pockets in Toronto are good.

South of lake shore 1st street to 42nd st in Toronto will go through the roof. Why prices are low, small bungalos, near water and things….
Just what the boomers want….
Well at the expence of castles in Brampton LOL

#21 Tim on 12.07.10 at 11:56 pm

BC Politics… backwater at the best of times. Continually swinging to either extreme, in this case a right wing nutbar that has done nothing for the people of this province except tear up contracts for hospital workers forcing them into a lower wage and costing taxpayers money to fix the problem he created; giving lucrative contracts to his paving buddies; refusing to collaborate, doing corrupt deals like the BC Rail scam…
Thanks Carole, now we may have a fighting chance to have an opposition. Too bad you were too stupid and stubborn to stay on after losing two elections to one of the most arrogant, reviled Premiers with the lowest popularity rating in the history of BC. Thanks to you he got re elected. You did not increase the number of seats for the NDP based on how you ran the party, rather it was due to the absolute disgust of the #@%@% Premiere. Things can only get better from here…

#22 Leanne on 12.08.10 at 12:00 am

“…the media reaction was even more cookie-hurling.”

Are you saying you didn’t like my squirrel cookies?
Maybe I should send some to the media.

That mental image of Michael Polzler ruined my milk and cookies before bedtime routine.

#23 Jsan on 12.08.10 at 12:04 am

Keep the “Happy Real Estate” stories in the media coming. I mean honestly, all it is going to do is make the implosion more pronounced. The more people that get lured in at these emergency level interest rates the better my housing deal is going to be when this mess all unwinds. Keep in mind what the Canadian Association of Accredited Mortgage Professionals said in their “good news” report that they released a few weeks ago. “Only” 750,000 mortgages will be in trouble if interest rates go up by 1.5% but than that is ridiculous isn’t it? Interest rates and Mortgage rates never go up, they only go down forever right? Sort of the reverse of what housing prices do or so 10/10 Realtors will tell you.

I keep catching news reports of very happy new home buyers in the US sitting in auctions smiling from ear to ear as they bid on houses that went for 400k four years ago but are now going for less than 100K.

Patience is a virtue and good things come to those that wait. Those that couldn’t wait in the US and just had to get in as the bubble expanded have all got burnt, many really bad. Those that waited on the sidelines as the madness unfolded have all been rewarded for their patience.

#24 Junius on 12.08.10 at 12:18 am

No wonder our society is the shape we are in. Our media are a bunch of zombies. Press Releases being passed off as news pieces. What a load of crap.

This is what media consolidation has brought us. Television is next. What is the world coming to?

T

#25 Jsan on 12.08.10 at 12:18 am

#13 RAINBIRD on 12.07.10 at 11:40 pm

Hi,
I wonder why no one commented on my story yesterday; this scenario is equivalent to building on Indian Lease land. Why would anyone want to pay $900/sq ft for a condo which is build on ‘Lease Land’?
This is all spelled out in a disclosure statement and is gaining popularity because no one has complained nor does any one understand what’s happening?

—————————————————–

Anyone who would buy any property that is not outright owned is a fool. Again, the cheaper up front costs are the lure but the problem is good luck selling the property as I would suspect most people would not touch it with a 10 foot pole, I sure wouldn’t. The longer the person owns the property and the closer they get to the end of the lease the harder it would be to sell.

#26 Boombust on 12.08.10 at 12:21 am

That discerning “economist”, Michael Levy, was on CKNW this very morning pitching the lastest Re/max gumbo.

“This is good news!”, he cooed, “Since, we all know that real estate is the driver of the economy!”

#27 garthfan on 12.08.10 at 12:26 am

#11 Squidly’s Condo

If I had the cash, I might offer thirty-seven-fifty for it – depending upon taxes and fees in the neighborhood.

Of course, what do I know?
LOL

#28 Crash Callaway on 12.08.10 at 12:40 am

#13 Rainbird

Could anything be dumber than purchasing on leased land?
How about fractional ownership where a gang of halfwits buy into communal delusion and pay a hundred times the properties value.
Anybody want to go into fractional ownership with me on a box of fries at McDonalds? You must meet strict requirements and anyone with an I.Q. over 12 should not apply. Leasing is probably the best route for you.

#29 Peter Pan on 12.08.10 at 12:47 am

#2 – What a picture, I think she looks British…

——————–
Can’t be… her teeth are too nice…

#30 Tim on 12.08.10 at 12:49 am

Great day for the NDP in BC. Maybe we’ll finally get a competent opposition leader. Who else could lose two elections to Campbell?

#31 Gord In Vancouver on 12.08.10 at 12:52 am

Garth – Thank you for providing a realistic commentary on today’s almost pathetic headline/news story.

#32 Alberta Ed on 12.08.10 at 1:15 am

The pathetic thing is that the MSM bought Re-Max’s BS hook, line and sinker. Guess they don’t teach economics or business ABCs in Jernalizm Skule.

#33 nonplused on 12.08.10 at 1:19 am

ReMax probably does have the price trend right for Q1, heck Vancouver alone can cause a 3% nation wide increase. But what they have wrong is volume, which will continue to decline. It’s econ 101. As the price of something rises, demand falls.

Also, the ReMax missive has to be seen for what it is. An open air broadcast is code language of “the plan”. They are basically telling their realtors, and all the other realtors who have the secret realtor decoder ring, not to bring offers below ask for another year no matter what sales volumes do.

The odd house that does move around here after listing on and off for 2 years (I’ve detailed the odd story before) is sometimes sold for 33% less than the highest listing price. I know of at least 2 McMansions in this category. However, try and get your realtor to write an offer for 67% of list! They won’t do it. You have to wait for a house you are interested in to begin the “price spiral” and then hit before another greater fool does. And the house still sells for nearly twice what it was worth 5 years ago.

It took 20 years for gasoline to go from $0.52 a liter to $0.96 a liter and everyone saw that there was an energy crisis and a bubble in-between. But we are to believe houses can double and triple in value in 5 years and it’s sustainable?

No, what will happen is that sellers and the realtors guiding them will refuse to lower prices, and sales will continue to drop. That may create pent up supply, but I don’t believe the pent up demand story because there are lots of vacant houses out there and lots of landlords, voluntary or otherwise, that are recovering costs by renting it out. That renter is not pent up demand unless a purchase would improve his economic condition. And the more savvy the renter the more long term he is thinking. Like over the course of the whole mortgage with rates closer to norm for much of it. (Put 6-8% in the online mortgage calculator you are using.)

Look, even the electricity bubble in California and the natural gas bubble that resulted both resulted in oversupply. Enron went broke, the natural gas prices forced a discovery of new drilling techniques applied to shale, and now the price of both gas and electricity is reasonable (the gas companies say unsustainably cheap) all over North America.

The best source of info on housing trends is building permits. New home builders know when they are selling houses and when they are not. And not sales, like the recently featured Mattamy Madness, because that can be a strategic decision by a builder to get rid of all their inventory. It’s permits. If permits are rising along with prices, it’s demand (although it can be either real or speculative). If permits are rising in a falling price environment it’s inventory clearing. If permits are falling the builders can’t sell houses at the price they need to make money.

Look at downtown Calgary. We are months away from the last crane coming off the Bow, and it’ll be the last crane on a major project in the whole city. There are a few smaller projects with cranes, but those are the ones that got shut down in 2008. Now, I know the “crane index” has more to do with commercial real estate and high rise condos, but look around! All the cranes left in the city are finishing old projects or building the SW LRT! The crane index is on the way to zero. In Calgary, we know what that means.

Oh and incidentally, the crane index also tells you a lot about hiring intentions. If nobody is renting office space, they don’t foresee needing to house new workers. Although this will be a lagging indicator in next few years, as the Millennium tower and the multiple floors of the 5 buildings Encana/Cenovus will vacate when the Bow is done are all still looking for tenants. Talk is even the parking rates might come down as those empty buildings lease out the few spaces they have.

The end of any boom is denoted by the disappearance of the cranes.

Provincial bird of Alberta: The Building Crane. Status: Endangered. And Protected in the SW LRT corridor.

But on the news front things will go quiet as we head into the holidays. Stories of Christmas cheer will replace the USA/China currency war, the Euro implosion, the bank insolvency/”Show me the note!” crisis, the government funding crisis all around the globe at every level, the wars, gold at $1400, and all the fraud. It’ll e elevator music until Jan 2, 2011.

Merry Christmas everybody! Still reading, but intending to only post occasionally until then.

#34 Nostradamus Le Mad Vlad on 12.08.10 at 1:32 am


The Sure Thing in life is that there are no such animals as sure things.

“He glints, grunts and thrusts their naked writhing into a Polzler-imbued crash.”

Oooohhh, that sounds painfully sweet!
*
Computer geniuses probably already know this, but I didn’t.

Good reason to skip flu shots.

Seized Pensions Wonder if it means the fed. got. can do the same here to RSPs / RIFs / TFSAs?

Snake on the sun. Nice pic.

2014 Prediction Predictions are only accurate the day they happen. 2014 ice age?

South Korean trade deal. Headline says it best.

Inflation and more bubbles in two years. Food Prices are one of them. Time to bail from this planet?

Wrong Planet Better check to know where we are going!

NATO Lies, more and hedge the truth. Sound familiar?

#35 Brynn on 12.08.10 at 1:38 am

you poor souls, dont you get sick of wishing wishing and wishing the bottom will fall out? Dont hold your breath…no, go ahead..hold your breath…

and QUIT comparing Florida to Canada!!! truly it is like comparing an airplane and an peach…we do not and never will have the banking system of the US…

#36 SBB on 12.08.10 at 1:38 am

Before you think of plopping down $2 million on the West side of Vancouver just a comparison:

http://www.youtube.com/user/ceceliagarygreene?feature=pyv&ad=5630011009&kw=real%20estate#p/u/0/pqTLb11cNrQ

List price ~ $1,174,000.00 Gated private estate in Grogan’s Point 1.26 heavily forested and landscaped acres Circle driveway!Sweeping staircase in foye !2nd stairway 20×18 master w/fireplace,updated bath & large walk-in closet!2nd master down designed for senior living!Elevator shaft!Large kitchen w/giant center island Granite counter Upscale appliances Game room up 29×16 extra room can be media 3 suites up!3 fireplaces Phone sys w/intercom!Security cameras!HVAC

#37 Vanman on 12.08.10 at 2:06 am

No significant drop in prices until interest rates rise, and nobody really knows with accuracy when or if that will happen. Could be 2 years, could be 10. Until then Canadians will continue to gorge on cheap rates.

#38 realityguy on 12.08.10 at 2:09 am

Garth, you can’t blame it completely on the real estate pumper. They are into sales and thats what they do.

However, I completely blame it on the finance minister.
Not raising the rates, and allowing easy credit. And allowing 35 year mortgages and low down payments.

China is biting the bullet and raising rates. They have a huge problem, but at least they are addressing it. Unlike our government which appears to be brushing it under the rug and claiming it not so bad.

I read a funny article about the inflationary pressure in Canada was all cause by the HST.
Geez ^&^*^, man open your eyes. The HST was the PST and GST put together. Which we were already paying for anyways. Sure some additional stuff got hit, like going out to eat and etc.

All I can see was gas was at 102 not its at 120 today. Thats about an 18% increase in cost, Energy prices going up, transit is about to go up, and I can’t wait til our taxes go up too. Nice. But I’m sure Crea will not call it inflationary pressure, just the HST causing it.

#39 Patz on 12.08.10 at 2:18 am

What better evidence is there, as if we needed it, that the MSM has traded journalism for shilling, integrity for sleaze and their soul for a pittance, than this non–story from REMax today. In days past this wouldn’t have passed muster in Journalism 101 at a second rate tech school.

Imagine if the reporter actually said something like “according to REMax blah, blah…” and then citing other sources to balance the story or seriously question why they were putting out this story at this time, etc. Heck, they could have interviewed Garth.

Yesterday, comment #64 The American, who lives in Seattle gave some very sobering advice in which he showed the GDP level in Seattle is several multiples greater than Vancouver and yet they had a drop of 25% in prices.

Vancouverites are so deluded as to the great natural wealth and beauty they are surrounded with it’s as Garth says time to play that old Scotch sport of toss the cookies.

The only thing different is ‘when.’ Sorry.

#40 Edmontonian on 12.08.10 at 2:20 am

I don’t understand how Remax can be saying that RE is going up in all markets while sales slump & prices (here in Edmonton anyways) go down to 2006 levels. Mind you last time in 2008 we had a Realtor in Edmonton telling us the market would be going up at least 15%, and it plunged about 15-20% depending what part of Edmonton you were in. I guess if they can even see a “market collapse” coming if they pretended prices were still going to rise they could still get more “greater Fools” to buy!
In the meantime I’m enjoying my gorgeous highrise apartment with stunning rivervalley views, hot tub & amazing workout gym (with all utilities included) for $925 per month. I’ll just save $1000 per month instead of losing $2000-$3000 per month on a condo or bungalow!

#41 TheBestPlaceOnEarth on 12.08.10 at 2:27 am

Even a broken clock is right twice a day. But i digress. The other day a poster mentioned Seatlle had imploded a grand total of 25%. No big deal. So your $400,000 condo is now worth $300 grand after one of the biggest meltdown in housing history. The renter over the past few years for the same condo plunked down arond 72 grand in rent (based on 4 years) and still has no place to live. Meanwhile Seattle has no where to go but up. As well cities like Seattle and San Francisco don’t have the World Class appeal of Vancouver. Asian investors consider Vancouver a safe haven compared to the US. What does this mean?No matter if housing in Vancouver was to drop 10 or 20% the comparison to loss in rent plus having no home plus the fact that long term Asian money is heading like a hurricane to Vancouver and surrounding areas (see Richmond already over 50%!!! Asian) means things have never been better.

#42 Another Opinion on 12.08.10 at 2:35 am

I work seasonally. I just returned to our first week and have been chatting with many co-workers.
I’ve never been more convinced we are closing in on a tipping point in Canadian Real Estate values.
A wonderful girl I work with hasn’t had an offer and only a few showings on her Vernon home in 6 months.
A guy had to lower the price on his house by 18% to make it move in Revelstoke.
The sense of relief from 2 other co-workers who have recently sold was massive, saying they won’t touch real estate again for a long time…too much crap with mortages and lawyers.
When? Any guesses stand a chance in being right!
As a recent seller myself and who one day like to buy…I ain’t touching that train for a while!

#43 kabloona on 12.08.10 at 3:07 am

#4 foothillsfreedom:

If you want to open a new/different TFSA with a different institution, I suggest you withdraw from the current TFSA prior to end-of-this-year. Then the full amount you withdraw *plus* $5000 in new contributions is available for investment on January 1st, 2011.

No need to “close down” the previous TFSA….I still have one with INGDirect….it was only generating 2.5%. Withdrew it all at the end of 2009 giving me $10k+ contribution room for my new TFSA account with a different institution.

Higher yielding assets are now sitting in the new TFSA…. ;-)

#44 Utopia on 12.08.10 at 3:17 am

“At the Re/Max Tower, in response, they’re doing the traditional frenzied Media Manipulator dance, in which their naked writhing is consummated as Michael Polzler, manly and erect in his ermine loincloth, aims his dagger at the wide-eyed goat strapped before him. It symbolizes credibility. He glints, grunts and thrusts.

Or so I heard” —-Garth
———————————————————

Too funny. Only in Canada eh? I almost forgot about the sacrificial real-estate lambs as all my concerns were for the poor goat.

Those Re/Max humpers are a bloodthirsty lot though and I can sure appreciate they are meat eaters but the insanity of their claims suggests a touch of cannibalism with a hint of garlic smothered on a minty bed of desperation.

Or so I heard.

Those must be some boardroom meetings!

#45 Utopia on 12.08.10 at 3:28 am

#23 Leanne

Are you saying you didn’t like my squirrel cookies?
——————————————————-

Hey Leanne, I have questions about any gal who puts meat in cookies. My aunts never did that to me, pretty sure. Quite a few years back though, out there on the farm in Saskatchewan, we decided to try gophers in a pie. You know, just to try it.

I never told anyone this before…but they are delicious.

#46 Get Real on 12.08.10 at 4:09 am

Great posts. Makes a lot of sense to lay-people like me.

“Prices are 22 times disposable income in Beijing, and 18 times in Shenzen, compared to eight in Tokyo. The US bubble peaked at 6.4 and has since dropped 4.7. The price-to-rent ratio in China’s eastern cities has risen by over 200pc since 2004”

What say you?

#47 Utopia on 12.08.10 at 4:32 am

#2 hmm…

What a picture, I think she looks British…
———————————————————

I just noticed that my Virgin Atlantic frequent flyer coupons contain a suicide clause…..Weird hunh.

#48 Judy on 12.08.10 at 4:57 am

I like your blog and am grateful for the financial lessons you offer here, but please go easy on making fun of obviously disadvantaged people. The Walmart class should not be the butt of our our jokes. How about lampooning Bernanke or F instead?

#49 Cookie Monster on 12.08.10 at 5:15 am

Junius and Hell in a hand basket, rather than argue I’ll just say that in a nut shell I do not agree with any practice that thinks it’s ok to take from one person by force or compulsion in order to give to another. It’s wrong, regardless of how wealthy one person may be or how needy the other.

#50 Cookie Monster on 12.08.10 at 5:34 am

And government meddling in business in any way whatsoever is wrong too.

And, free trade should mean free trade, no agreement is necessary to have free trade among nations.

And, government should be separate from economics full stop, like church and state.

And government should not be in the money supply business, the banking business, the deposit insurance business or the mortgage insurance business. They also shouldn’t be involved in healthcare and education and a million other things.

Garth, can we get back to sexy models in lingerie please. How about a sultry house wrecker.

#51 O on 12.08.10 at 5:54 am

My wife called her parents last night that live near Vancouver and they talked a bit about RE prices. My wife is on Garth’s side of thinking, her parents are on the “we are different in this community” side.

They said, we heard on the news RE prices are expected to go up in West Vancouver (but lower all other places), prices have already gone up!

It turns out the BCTV news never mentions the crashing sales numbers as average prices get skewed more and more upward by the odd-ball $1m+ sale.

A few sold wigets do not make an average market price. RE price stats are quickly becoming irrelevant.

#52 Pr on 12.08.10 at 7:41 am

The timing to call for the crash, is, impossible. Because they running the show, they can do what they whant. 150% everage in debt the population in canada, and its not enought. Keep rolling!

#53 BrianT on 12.08.10 at 8:05 am

#11Squidly-low price but condos in destroyed RE markets have real issues with the maintenance fees-the underwater owners often aren’t paying and any bank seized units often aren’t paying, which means more to be paid by the other units including yours, or the place really runs right down. Also, condo fees are sticky in that they don’t fall dramatically as the value collapses, so they end up being a far larger % of the overall cost.

#54 Potato on 12.08.10 at 8:06 am

From the Star/Moneyville’s story on the ReMax forecast, this little tidbit at the bottom: “About one third of the 20,000 condos registered in the last 18 months went back on the resale market according to CMHC research. Those condos sold for prices comparable to pre-construction sales pricing for new condos.”

Always hard to find good numbers on how much rank speculation is out there. A third is a bit lower than I was expecting in pre-construction, but maybe some of the speculators are still holding on… and it’s still plenty of speculation to cause trouble. Especially if they’re already facing the fact that the easy money is gone, and may be looking for the exits…

#55 BrianT on 12.08.10 at 8:09 am

#11Squidly-actually, there are a few buildings in TO with condos almost that cheap, in the Jane/Steeles and Islington/Dixon areas.

#56 David B on 12.08.10 at 8:42 am

Although the first day of winter is not even here yet, many protential buyers are waiting for Spring to Sprung or Sprang?
—————–

Super Obama is about to brorrow $900,000,000,000 and most feel it will ignite their economy …. will it?
——————

Their national debt will jumpie pooh to $15,000,000,000,000 TRILLION! (now at $13.875 T)
———————

Housing has not finished it’s correction yet … millions of homes still awaiting new caretakers.. Yes ladies and gentlemen homeowners are caretakers who pay the bills. What will HFC bring in the Spring, “AN ELECTION” and then what? {Payback time for Canadians}
—————–

Remember is less than a month (Jan 1st 2011) 250 new senior boomers turn age 65 each and every day for ten years.
———————-

Who will pay for them?

#57 JackRussell on 12.08.10 at 8:53 am

The concept of “land leases” is a common one in resort communities in Delaware. I *gather* that the assumption is that after 99 years that the house will be in such rough shape that it really will be a tear-down. Or more to the point, if you were going to build on a land-lease lot, you would slap something up that you wouldn’t expect to last..

I know of a group of people who “owned” a house on a land-lease lot. One of the guys had the job of mailing the rent check every year, but you got it – he forgot. After 2 years they lost the house. Technically I suppose they could have hired house movers to move the house off of the lot.

#58 T.O. Bubble Boy on 12.08.10 at 9:16 am

@ #42 TheBestPlaceOnEarth:

Can you at least *try* to use the proper data when spewing the B.S. every day?

Your example of a $400,000 condo goes down to $300,000 is missing 3 major pieces of data: the mortgage payments, the propery taxes, and the condo fees.

If you assume a 5% downpayment ($20,000), you have a $380,000 mortgage.

On a 35-year amortization @ 4% (which is the 15-yr fixed rate in the US right now), that is 4 years of paying $1675/month for the mortgage. Add in $400/month for taxes and $400/month for condo fees, and you’re at $2475/month.

This is likely above the rent on the same property (your $72,000 over 4 years = $1500/month, so you’re losing almost $1000/month!)

So, let’s look at the actual numbers:

48 months of losing $1000/month = $48,000 in favour of the renter

$100,000 in equity lost = $100,000 in favour of the renter

but — the owner has made all of those mortgage payments, so I’m sure that he/she has that equity built up, right? Oh, wait — in those 4 years, you would have paid off only $21,750 in principal!

So, all-in, the renter is almost $120,000 ahead after 4 years (+140,000 – $21,750)

I guess you’re right though — the renter has “no place to live”… except for the fact that he/she could now buy the same condo and be $120,000 ahead of the owner!
(or keep renting, and save another $1,000 each and every month)

#59 T.O. Bubble Boy on 12.08.10 at 9:17 am

hahah – I just noticed that I screwed up the stats! renter is ahead over $125,000: $148,000 – $21,750.

#60 fancy_pants on 12.08.10 at 9:21 am

Hey, how did you get a hold of the RE poster girl for Vancouver? She is still a popular woman and is a rock star in many-a-folks-world.

Unfortunately, those many-a-folks have been watching the show through thick rose coloured glasses and through them she appears to be a real peach.

Have patience folks. wait until the hammer falls and the glasses break. Then the remorse, fear and panic sets in. It will be a little more than a hangover after this party ends.

#61 foothillsfreedom on 12.08.10 at 9:26 am

#44 kabloona

Thanks for the advice

#62 Aussie Roy on 12.08.10 at 9:27 am

Aussie Update

This is a peach – youtube video – Australia is different.
Its not economics its a religion – LOL classic

http://www.youtube.com/watch?v=CroTAVVcr9k

Hey BPOE you still crack me up. What about the holding costs for the owner, if rent doesnt cover mortgage payments, the owner is down 100k in price plus down the difference between rent and interest and has the ongoing interest payments on a loan now larger than the properties price which the rent still doesnt cover.
Tell me again why he owns it, cant be to make money. Let me guess prices to the moon, to the moon I tell ya.

Go buy a calculator and a math book . BTW does your head whistle when you go out in the wind?

#63 Bill ( Peterborough) on 12.08.10 at 9:35 am

Interesting story about the chap in Florida. A friend of mine in Denver , Colorado owned a natural stone company supplying granite, slate , marble… to clients all over the western seabord. His father set him up with the company, contacts …

For over 7+ years he was consitantly bringing home $60,000.00 plus a month, no mortgage after 2 years in business on home , paying outright for cars… Had a stay at home wife who was raising 2 children.

Last year his father flew out to see him for Christmas. When the father flew back Denver my brother picked him up at airport and asked how our friend was doing. The father informed my brother his son was filing for bankruptcy.

Apperantley his son never put away for a rainy day and was broke. Blew all his earnings living extravigantley, flying friends in for hockey games… Business was going sour for 2 years prior to his final demise. Wasn’t smart enough to get out, being under the delusion that it would never happen to him, thinking things would get better.

WTF. Incredible how people think the good times will never end, in turn never saving for the rainy day. Now our friend is working as a baggage handler at the airport , while his wife has some sort of a secretarial position. Divorce I believe is in the horizon.

His father keeps offering to set him up over here in one of his other companies, under supervision naturally. The son won’t come back. ( Pride is a hard thing to swallow I believe)

How stupid/stubborn can our friend really be. Not many people will get a second chance at having a reasonably good lifestyle this time around when their worlds begin to crumble.

Food for thought:

Alot of talk about ” Capitalism, free markerts , regulated markets…”

How about none of the above , just the illusion of any or all of the above to allow us to sleep better at night in our little insulated bubbles.

A while ago , I still believe it does exist, there was the Sherman Act :

The Sherman Antitrust Act (Sherman Act,[1] July 2, 1890, ch. 647, 26 Stat. 209, 15 U.S.C. § 1–7) requires the United States Federal government to investigate and pursue trusts, companies, and organizations suspected of violating the Act. It was the first Federal statute to limit cartels and monopolies, and today still forms the basis for most antitrust litigation by the United States federal government. However, for the most part, politicians were unwilling to use the law until Theodore Roosevelt’s Presidency (1901–1909).

This protected us from monopolies forming and screwing us over by continually raising prices on commodities.

Sort of allowed other companies to provide the same services, products to the consumer, giving us the choice of buying the best product/ service at a fair price through competition. ( checks and balances were put into play through laws)

Unfortunastley this law was applied to business’ only, allowing the Private Banking Cabals to come in through the back doors acquiring different business’ whether through controlled debt, stock options, sister companies…

Now what we have are a small group of people who control a large amount of wealth/ business’/ governments through out the world in the form of financing. No true checks or balances.

Sleep well tonight , apperantley we are in good hands according to the medias in governments. Pass the kool-aid please.

#64 warptweet on 12.08.10 at 9:45 am

I canceled my last newspaper subscription years ago. I’m a voracious reader but the newspapers were always titillating my BS detector. I threw in the towel a few years ago when the late Izzy Asper fired the Editor of the Ottawa Citizen for badmouthing his friends and benefactors in the Liberal party.
I truly believe no one should own more than one newspaper in Canada. Look at the result of big corporate ownership. Cow-towing to advertisers at the cost of journalistic integrity. Vancouver is in the worst shape. Both our papers are owned by Canwest.
Anyway I am much happier now without the irritation factor along with my morning coffee. No wonder their subscription base is dying.

#65 Love this Blog on 12.08.10 at 9:47 am

For #36 Brynn

http://www.zillow.com/homedetails/1536-SE-24th-Ct-212-Homestead-FL-33035/70781900_zpid/#image=imgId%3DX1-IA1epadyyxmln69_c3g6b

#66 Leanne on 12.08.10 at 9:55 am

#46 Utopia: Quite a few years back though, out there on the farm in Saskatchewan, we decided to try gophers in a pie. You know, just to try it. I never told anyone this before…but they are delicious.

Could you send me the recipe? I’m putting together a Greater Fool Cookbook as a fundraiser to cover counselling costs for readers of this blog.

#67 Love this Blog on 12.08.10 at 9:58 am

Isn’t it odd how Devil’s Advocate used to always end his posts with “going bike ridng now,in THE BEST PLACE ON EARTH”

Now, after some ridicule, etc…..he seems to have left the blog. BUT, oddly enough, a NEW poster joined at the same time, and his handle is THE BEST PLACE ON EARTH.

Strictly a coincidence I’m sure.

#68 HalifaxEd on 12.08.10 at 10:02 am

It’s still a buyer’s market in Halifax. And they are blaming Ontario and Western Canada:

Buyer’s market likely to continue
http://www.thechronicleherald.ca/Business/1216094.html

“A stifling of real estate markets in Ontario and Western Canada during the summer affected the Halifax area, according to the latest report from Re/Max.

Tax changes and economic conditions elsewhere contributed to a flat market in Halifax.

‘Even though these factors were not at play in our market, the publicity about these other jurisdictions created a situation where there was some local trepidation to enter the market,’ said Al Demings, spokesman for Re/Max Nova in Halifax.”

Not at play in our market. Right. Because “it’s different here”. Got nothing to do with our bleak economic outlook; high corporate taxes scaring off potential investors (Fraser Institute recently ranked NS 9th as one of the most unappealing provinces to do business), soaring taxes, crippling household debt as $35-40 K/annum couples rushed to buy into sprawling suburbs of “urban rural” homes, where even the well-water is starting to run dry:

http://www.cbc.ca/canada/nova-scotia/story/2010/09/29/ns-monarch-estates-city-water.html

Nope, once again Nova Scotia’s blues are the fault of Ontario and Western Canada. Sheesh.

#69 Another Albertan on 12.08.10 at 10:08 am

#34/nonplused:

Well said.

Everyone else’s mileage may vary.

#70 Herb on 12.08.10 at 10:16 am

And another carefully-cultivated conservative myth bites the dust:

http://www.independent.co.uk/news/world/americas/hunter-becomes-the-hunted-as-palin-critics-say-she-cant-shoot-2153973.html

But not to worry: some of the people can indeed be fooled all of the time.

#71 Brian1 on 12.08.10 at 10:21 am

I was watching O’Leary and he stated the old comment about how Canada is 80% dependent on America and that we better find new trading partners. The statement made me wonder how does Mexico fare. With all of their illegal immigration they must be 90% dependent which then leads me to China and all the other emerging nations. They are probably 80% dependent as well. If America’s consumer spending stops then we would have to rely on an alien race to pick up the slack because we are already doing the best we can; it would be even more costly to find other trading partners.

#72 tired vulture on 12.08.10 at 10:30 am

this blog fail!!!

#73 Kris on 12.08.10 at 10:42 am

BestShillOnEarthSaid:

As well cities like Seattle and San Francisco don’t have the World Class appeal of Vancouver.

I say:
You’ve got to be kidding. San Francisco is 10X the city that Vancouver will ever be. When I go to Van all I see is ocean, mountains, steel/glass and mediocrity. SF is a world class city, one with life, culture, history etc. It has all the natural beauty of Van (perhaps more?) plus an urban environment that is infinitely superior. When I was there I noticed tourists from all over the world (especially lots of eastern Euros), not so much last time I was in Van.

Also don’t forget that SF actually has a real economy.

#74 Lonely Limey on 12.08.10 at 10:47 am

#2 – What a picture, I think she looks British…

——————–
Can’t be… her teeth are too nice…

——————————-

Also, she doesn’t have a pint in her hand.

#75 Lonely Limey on 12.08.10 at 10:54 am

………..and she’s overdressed for a night out in Blighty

http://www.dailymail.co.uk/femail/article-1334135/As-Britain-shivers-Newcastle-girls-prove-theyre-frightened-snow.html

#76 The American on 12.08.10 at 11:10 am

I have to ask a question here… Are you saying the Canadian media continually launches press releases from Re/Max as “news?” Does the media not do a point/counterpoint? Does the media not do a fact check on the statistical data provided, both past, present, and future? If this is the case, I have the following to say:

First, it is incredibly dangerous for a media outlet to behave in this manner; It undermines the integrity of fair reporting and in many respects is much like lying to the people. Second, reporting information from sources that only gain from gains in real estate is much like having the fox watch the chicken coupe. It simply does not make any sense.

Therefore, I beg the question WHY? Why would any media vehicle operate in this manner? From my understanding, in Canada this is happening from news paper, magazines, television, radio, and social media and is actually all being presented as “news” vs. advertising. If media is allowing it to happen, I would hold the “media” (sorry, but they don’t deserve anything outside of quotations) as responsible for the bubble as I would any banking policies or lemmings that line up to purchase.

If media isn’t providing a fair or balanced view of the stories it is presenting to the public, then the media outlet has much to gain. I would almost have to say media outlets are being paid a handsome sum to allow the propaganda to continue to flow. Otherwise, why else would you continue allowing these realTURDS to spew from their pie holes and present it as “news?”

Follow the money and demand better media and transparency! Start with petition and begin picketing the news stations in mass quantity. That would be sure to get some attention, good or bad. Provide passers literature that outlines what is happening until the media will provide ample, balanced, and fair coverage of counter points of views. If the counter views do not suffice, continue the campaign. It honestly is NOT difficult to get this going. Also, it is highly effective.

#77 VMT on 12.08.10 at 11:14 am

Hi,

it’s great I’ve come across your site – very interesting.

I just want to add that in Germany nobody is excited about the “sure thing”, – partly because they had their real estate bust in 1975 when real estate prices in Germany were approx. 3 times higher than in France (now they are more or less at par).

#78 Utopia on 12.08.10 at 11:19 am

@# 13 Rainbird

Decades ago, a dispute evolved on lease lands at the edge of the University of British Columbia. The land was officially native owned reserve lands of the Musqueam Indian Band. The Musqueam, via the government had given over long leases which were then let out by a third party and a major conflict arose as the payment structure was not properly defined at the outset.

Annual lease payments that had been approx. 400 dollars in the early Eighties were recalculated by the band to be worth tens of thousands of dollars annually.

Most of the Lessors faced eviction as they were unable to pay the new assessed costs and so a very lengthy dispute began that was finally settled by the highest court in 2000.

This is just something I wanted to bring up to point out how complex leases can get when Reserve lands on long leases end up as cases in the Supreme Court and when terms are not spelled out clearly at the outset.

You can read the decision of the Supreme Court below and wade through some other material including the Musqueam veiw on the issue if it is of interest.

http://www.mail-archive.com/[email protected]/msg05280.html

http://scc.lexum.umontreal.ca/en/2000/2000scc52/2000scc52.html

http://www.ratcliff.com/news/first_nations/The%20Impact%20of%20the%20Guerin%20Impact%20of%20the%20Guerin%20Case%20on%20Aboriginal%20and%20Fiduciary%20Law%20.pdf

#79 BrianT on 12.08.10 at 11:22 am

#74Kris-OTOH Vancouver is more visibly a Chinese city, so it would be expected to be somewhat preferable for wealthy Chinese in this regard. Imagine if there was a wealthy enclave city set up in China for anglos-if you had big money you would probably prefer it to a more openly “Chinese” city.

#80 Bullion.Bunny on 12.08.10 at 11:29 am

#35 Nostradamus Le Mad Vlad on 12.08.10 at 1:32 am

Computer geniuses probably already know this, but I didn’t.

Yes, to combat that problem use cyberscrub to start and shutdown your machine…http://eu.cyberscrub.com/download/
Make sure you have “No History” to steal.

#81 Aussie Roy on 12.08.10 at 11:29 am

T.O. Bubble Boy on 12.08.10 at 9:17 am

AH the sweet, sweet sound of logic…….

Funny, coz I reckon if you didnt correct your mistake, he wouldnt have picked it up. LOL

#82 BrianT on 12.08.10 at 11:37 am

#51Cookie-“Free Trade” is total unadulterated B/S. It is just a setup whereby all government funding is taken from employees and consumers and multinationals get a free ride. What is so “free” about income tax in your fantasy world?

#83 BrianT on 12.08.10 at 11:40 am

#81Bull-I wouldn’t call it genius-I clear the history a few times a day-most people do-banking sites even advise you to do so after using their site.

#84 Aussie Roy on 12.08.10 at 11:40 am

77 The American on 12.08.10 at 11:10 am

Are you saying the Canadian media continually launches press releases from Re/Max as “news?” Does the media not do a point/counterpoint? Does the media not do a fact check on the statistical data provided, both past, present, and future? If this is the case, I have the following to say:

First, it is incredibly dangerous for a media outlet to behave in this manner; It undermines the integrity of fair reporting and in many respects is much like lying to the people. Second, reporting information from sources that only gain from gains in real estate is much like having the fox watch the chicken coupe. It simply does not make any sense.

Its the same here in Australia. Its easy to explain just follow the money. The RE industry is over 35% of advertising revenue for the print media. Wouldnt want to upset a big customer by printing anything negative.

#85 BrianT on 12.08.10 at 11:42 am

#81Bull-on explorer, just go to delete browsing history and you take out passwords, cookies, history,etc.

#86 Got A Watch on 12.08.10 at 11:45 am

Shawn, aka ‘the Investor’s Enemy’, talked about “fractional Reserve Banking” as if he knew what he was talking about.

Unfortunately for Shawn, he fails to recognise the simple fact that in Canada we do not have “Fractional Reserve Banking” anymore, unless you think 0 is a fraction. That’s right, a few years back (’06 maybe, I forget the year) our Government, in it’s infinite wisdom, allowed the Banks, in the name of “flexibility” (IIRC the dubious reasoning) to maintain 0 reserves. Thus, the top part of the fraction can be infinity, when the bottom number is a 0.

That’s right, we have no “reserves” as such in our “Fractional Reserves”, except whatever cash position Bank management feels they need to keep on hand just in case you ask to withdraw your “savings”. Our Banks could be levered up 1,000 to 0, or higher, who knows the exact number. Probably still not as high as Banksters in Europe in fact, who are said to have “leveraged up” to 66:1 of liabilities to “core assets” (Deutsche Bank was cited, one of the world’s biggest Banks, and most badly managed too) . Or the ‘Big US Banks’, who are wildly insolvent black holes of debt, if they had to account for all the “toxic paper” they are sitting on, pretending those “assets” are still worth 95%-100% of face value. Pretending and wishing, hoping and praying…

So when you read about how “Canada’s banking system is sound” – it may be, compared to most others, but it is not actually that sound either in truth. Our Banksters have only the Government ‘put’, the knowledge that if any of our Big 6 were to get into serious trouble, politicians would move to bail them out as TBTF (Too Big To Fail), when in fact they may actually be TBTB (Too Big To Bail) – see ABCP for example. And CMHC, instructed by the same stupid and corrupt politicians, to just buy up every garbage mortgage paper, no questions asked.

Not that I feel Canada’s ‘Big Banks’ are in serious trouble of going under, they are still profitable, even though they shelter under the Government skirts. It just makes me laugh when clueless commentators in other countries cite Canada as a model of Banking solidity. But like Garth’s picture, our Banks look pretty good if you look through beer goggles, and compare them to the even uglier models in other regions.

#87 Junius on 12.08.10 at 11:57 am

#42 Crackhead,

You said, “Meanwhile Seattle has no where to go but up. As well cities like Seattle and San Francisco don’t have the World Class appeal of Vancouver.”

First of all, the US market in general is going to take another leg down. They are still riding on historically low interest rates. When they go up prices will do down again.

Secondly, the notion that Vancouver is more “World Class” than Seattle or San Francisco is laughable. The only thing that really matters for Real Estate prices is economic activity. Seattle has Microsoft, Costco, Starbucks and Amazon. San Francisco has Apple, Google, Cisco, Yahoo! and so much more.

As the American so correctly pointed out the economy of Seattle is 2.4x Vancouver with a slightly larger population. San Francisco is 10x larger and hub to the world’s leading technology area for innovation in Silicon Valley.

You are delusional.

#88 Alberta boy on 12.08.10 at 11:59 am

Edmonton prices to go up 10s of thousands!!!!

http://www.metronews.ca/edmonton/life/article/509048–city-a-promised-land-for-homes

Oh wait, this article is 7 months old and prices have actually gone down 10s of thousands since then. What a joke! I’m sure the same realtor is predicting a strong upswing for the new year.

#89 T.O. Bubble Boy on 12.08.10 at 12:04 pm

So, housing starts jumped 11.6% mainly because of a 29,900 new condos in Ontario.

http://www.cmhc-schl.gc.ca/en/corp/nero/nere/2010/2010-12-08-0815.cfm

Is this really a “good” thing? Will 30,000 more condos in Toronto really help the housing market? I’m pretty sure that supply&demand would argue that this will tank the already slowing market.

Oh, and Garth will LOVE this one: Central 1 Credit Union predicts 4.2% price increases for Ontario in 2011!

http://www.financialpost.com/news/Ontario+home+prices+rise+next+year+credit+union/3944951/story.html

#90 Concerned camel on 12.08.10 at 12:06 pm

As a person who has lived all over the world, and now temporarily in Canada for some business, I always wondered why the immigration policy allowed so many Chinese to bump up prices in Vancouver, or other ethnic groups are allowed to settle in Toronto in such vast numbers, displacing the locals. There are times when I pass through neighborhoods that make me feel like I’m in another country, for example Marham, 65% visible ‘miniority’ lol. There would be riots in the streets if this happened where I come from, was there a nation wide vote on multiculturism? As a foreign observer, I try to see the benefits but it seems there are only a few (if any).

I stumbled upon this video, it seemed kinda out there, but it’s pretty factual. I’d like to know what you local Canadians think of it

DELETED. Take your David Duke vid and stuff it sideways. — Garth

#91 Junius on 12.08.10 at 12:09 pm

#77 The American,

There are a number of causes for the decline of journalism in Canada. Most of the reasons here also hold up in the US and most Western countries for that matter.

The Newspaper industry has been in overall decline for decades. This has lead to massive consolidation of publications. For example, the CanWest service that these articles appeared in are a nation wide service. They have been under financial protection for a number of years and currently are being sold off to yet another conglomerate.

The pressure to keep printing “news” with a smaller, uninterested staff has been coupled with financial pressures to appease advertisers. The Re industry is such a large advertiser at both the National and local levels it is particularly coddled by the media. This makes them susceptible to the phenomenon of “News by Press Release” as in the case of Remax. The crafting of the release is done more and more like news as with the one yesterday by putting a localized version out in every city. Very insidious.

If you read the news in these papers it will amaze you that over the course of a few weeks they can publish completely contradictory stories without even picking up on their flaws.

Thankfully we have Blogs like Garth’s and a few others that report the other side. However most of the population lives like a bunch of mushrooms in the mainstream media manure pile.

#92 Devil's Advocate on 12.08.10 at 12:11 pm

#68 Love this Blog on 12.08.10 at 9:58 am

It is indeed, strictly a coincidence.

Don’t say my name three times in a row. You might not favour the consequences.

#93 Tonguestump on 12.08.10 at 12:13 pm

Garth, please don’t put a “butherface” on you posts again. It’s painful enough going to this site. Ouch on the eyes.

#94 bill on 12.08.10 at 12:22 pm

Garth ,you have a vast talent for the descriptive phrase.
the image you conjured up was ,well really funny.
did you by chance read a lot of SJ perelman in your youth?
good on you if you did.

#95 BrianT on 12.08.10 at 12:23 pm

#88Junius-Vancouver is currently overpriced IMO but clearly the place does have long term advantages over most places if China continues to grow their economy and the marijuana business continues to thrive. Your comment about local legitimate “economic activity” being the ONLY thing that matters is simply misinformed.

#96 Bill ( Peterborough) on 12.08.10 at 12:27 pm

Re # 77 American

I have to ask a question here… Are you saying the Canadian media continually launches press releases from Re/Max as “news?” Does the media not do a point/counterpoint? Does the media not do a fact check on the statistical data provided, both past, present, and future? If this is the case, I have the following to say:……
—————————————————-

You have to be kidding, right. Medias throughout the world distort and twist the facts to the advantages of their MASTERS.

Regardless of what we try to say or do, or as you say “follow the money” obstacles will be thrown in our way in the guise of created distractions throughout the world…

If you get too close to the money and try to expose things for what they really are alot of coincedences start to follow. Some even being fatal.

#97 Junius on 12.08.10 at 12:29 pm

#50 and #51 Cookie Monster,

I am just pointing out that your position is naive. I am an ardent capitalist but I believe capitalism has more insidious foes on the right of the political spectrum then it does on the left. At least the left states their position up front.

You also have to take into account that businesses are given a complex and highly sophisticated society in which to operate. Everything from transportation, energy, labour markets, legal environment, security, communications, etc. has been developed as a public good in order to support our economy.

A corporation or person that benefits from this and then turns around and tries to divorce itself from responsibilities is just a “free rider” which is no different than a “free loader” in my books.

The “free the markets” argument is simply naive. It does not take into account the realities of the modern day society.

#98 AG Sage on 12.08.10 at 12:34 pm

>#36 Brynn on 12.08.10 at 1:38 am
>we do not and never will have the banking system of the US…

You know who else didn’t have the banking system of the US? Ireland, Britain, Spain . . .

#99 AG Sage on 12.08.10 at 12:39 pm

> #87 Got A Watch on 12.08.10 at 11:45 am
>Unfortunately for Shawn, he fails to recognise the simple fact that in Canada we do not have “Fractional Reserve Banking” anymore, unless you think 0 is a fraction. That’s right, a few years back (’06 maybe, I forget the year) our Government, in it’s infinite wisdom, allowed the Banks, in the name of “flexibility” (IIRC the dubious reasoning) to maintain 0 reserves. Thus, the top part of the fraction can be infinity, when the bottom number is a 0.

Do you have a link for this?

My partner and I were just discussing this yesterday with regard to the Chinese shadow banking system, which presumably (just a wild guess ;-) has no reserves. I was pondering aloud, “so what is fractional reserve lending called if there is no fractional reserve component” and my partner replied “lending”. Which doesn’t seem to quite imply the depth of the problem . . . Or perhaps it does.

#100 Kaganovich on 12.08.10 at 12:40 pm

Cookie Monster

You said:
Junius and Hell in a hand basket, rather than argue I’ll just say that in a nut shell I do not agree with any practice that thinks it’s ok to take from one person by force or compulsion in order to give to another. It’s wrong, regardless of how wealthy one person may be or how needy the other.

Serious? Where and how do you think all that capital (gold/silver) was acquired during the beginning stages of western capitalism? Round out your reading of Rand and Hayek with Marx and say Ronald Wright or Patel or Judt or some recent writer.

Maybe you really are a puppet.

#101 UBAB on 12.08.10 at 12:44 pm

The reasons prices will continue to rise as the number of house sold decline is simple:

Houses in the lower price range are not being sold -poor/avg people cannot afford houses anymore … so the houses being sold are the mid and high end properties – which is skewing the market upwards

#102 april on 12.08.10 at 12:50 pm

The American #77
I could consider this. Who’s willing to join me?

#103 Cowboy on 12.08.10 at 12:50 pm

Aussie Roy,

I lived in Australia for a year when I was 19,
always wanted to move there because of the weather.
(plus I like the British influence).
It was always too expensive (still is), how much
of a haircut do you think your real estate can take?
I would love to perhaps move there from Canada,
any knowledge on the immigration issue from Commonwealth to Commonwealth?
I will obviously wait a few years to see prices come down…
Are you in Oz right now?

#104 Bill Grable on 12.08.10 at 1:08 pm

“A fiscal flood that threatens to swamp local government budgets across the U.S. overflows from file cabinets in the office of Patty Halm, chair of the Michigan Tax Tribunal.

The backlog of cases from taxpayers seeking to lower property-tax bills of more than $100,000 shot up to 14,236 this year from an annual average of about 6,000 during the past decade.

The backlog of smaller claims was at 28,558 at the end of September, eight times higher than a decade ago, according to records at the tribunal, a Lansing-based administrative court.

>> Coming to a City or Town near you?

Mr. Turner has been warning about declining tax revenue.

Here in Vancouver, it is going to be interesting.

We have enough money to have a City crew working on the Sea Wall at TRIPLE TIME all night last night, and yet they are nearly $800 million into Milly Waters.

Something ugly this way comes.

More here:

http://tinyurl.com/27w2m73

#105 Kevin on 12.08.10 at 1:12 pm

For anybody interested in the spending boom in Saskatoon, the capital budget is out.

The 2010 capital budget was 326 million. So the spending increase to 352 million in 2011 does not disappoint. Just think, in 2006 spending was 165 million.

“Saskatoon’s economic fortunes began to change in late 2006. Since that time, Saskatoon has welcomed approximately 20,000 new residents to our city”

Hmmm. City spending started its lift off then and the housing bubble and the consumer credit bubble also started their lift off as well. Our economic fortunes have not really changed, mostly its our appetite for debt has increased.

Property taxes have increased over 30% since 2004.
City spending has more than doubled since 2005.
Total debt has increased from 23 million in 2003 to over 170 million in 2011.
Water rates are increasing 7%.
Property taxes are increasing 4.65%.
20,000 new residents since 2006.
http://saskatoonhousingbubble.blogspot.com/2010/12/city-of-saskatoon-spending-boom.html

#106 Timing is Everything on 12.08.10 at 1:17 pm

Oh ya, London is different… ;)

http://www.cbc.ca/canada/story/2010/12/08/snow-storm-ontario.html

#107 Bullion.Bunny on 12.08.10 at 1:18 pm

And Now For Something Completely Different…….

Florida Bust -1926 -Frederick Lewis Allen

Frederick Lewis Allen (July 5, 1890 Boston, Massachusetts – February 13, 1954 New York City) was the editor of Harper’s Magazine and also notable as an American historian of the first half of the twentieth century. His specialty was writing about what was at the time recent and popular history

It [Florida real estate] began obviously to collapse in the spring and summer of 1926. People who held binders and had failed to get rid of them were defaulting right and left on their payments. One man who had sold acreage early in 1925 for twelve dollars and acre and had cursed himself for stupidity when it was resold later in the year for seventeen dollars, and then thirty dollars, and then finally sixty dollars an acre, was surprised a year or two afterward to find that the entire series of subsequent purchases was in default, that he could to recover the money still due to him, and that his only redress was to take his land back again. There were cases in which the land not only came back to the original owner, but came back burdened with taxes and assessments which amount to more than the cash he had received for it; and furthermore he found his land blighted with a half-completed development.

The Final phase of the real-estate boom on the nineteen-twenties centered in the cities themselves. The tower-building mania reached its climax in New York-since towers in the metropolis are a potent advertisement- and particularly in the grand central district of New York. Here the building boom attained immense proportions, coming to is peak of intensity in 1928. New pinnacles shot into the air forty stories, fifty stories, and more; between 1918 and 1930 the amount of spare available for office use in large modern buildings in that district was multiplied approximately by ten.

The confidence had been excessive. Skyscrapers had been over-produced. In the spring of 1931 it was reliably stated that some 17 per cent of the space in the big office buildings of the Grand Central district, and some 40 per of that in the big office buildings of the Plaza district farther uptown, was not bringing in a return; owners of new skyscrapers were inveigling business concerns into occupying vacant floors by offering other building; and financiers were shaking their heads over the precarious condition of many realty investments in New York

In every bubble, the financial center is the last to pop. Troubles start on the fringe and work there way back to the center. It’s been this way since the roman empire, why is is different this time?

Real estate in Canada will end bad. From this point forward it’s just a matter of degree.

#108 Mean Gene on 12.08.10 at 1:21 pm

The problem with the gold bugs and the real estate pumpers is they do not have a healthy grasp on reality, or in other words, they have their heads in the sand and their bums sticking out ripe for a kicking.

#109 jess on 12.08.10 at 1:23 pm

The market for bonds issued by governmental, quasi-governmental and not-for-profit entities in the United States (“Municipal Bonds”) is very large with approximately $400 billion in new tax exempt bonds issued each year and a total market value of almost $2.8 trillion in outstanding tax exempt bonds.
=================

Lysine – Prices increased by 70% in the first 6 months; doubled over course of conspiracy; defendants agreed to pay U.S. customers more than $45 million in damages;

Citric Acid – Prices increased by over 30% during duration of conspiracy;

Graphite Electrodes – Prices increased by over 60% during duration of conspiracy;

Vitamins – Defendants agreed to pay U.S. customers more than $1 billion in damages.

Fines Imposed. Of the over $2 billion dollars in criminal fines imposed in Division cases since FY 1997, well over 90 percent were obtained in connection with the prosecution of international cartel activity. The Division has obtained fines of $10 million or more against U.S., Dutch, German, Japanese, Belgian, Swiss, British, Luxembourgian, Norwegian, and Liechtenstein-based companies. In 32 of the 38 instances in which the Division has secured a fine of $10 million or greater, the corporate defendants were foreign-based. These numbers reflect the fact that the typical international cartel likely consists of a U.S. company and three or four of its competitors that are market leaders in Europe, Asia, and throughout the world. (See Attached Chart of Sherman Act Violations Yielding a Fine of $10 Million or More.)

Percentage Of Foreign Corporate Defendants. Since the beginning of FY 1998, roughly 50 percent of corporate defendants in criminal cases brought by the Division were foreign-based. In FY 2001, the percentage of foreign-based firms charged by the Division rose to nearly 70 percent, and then returned to around 50 percent over the last year.
http://www.justice.gov/atr/public/speeches/200686.htm

http://ag.ca.gov/cms_attachments/press/pdfs/n2012_boa_settlement_agreement_12-7-10.pdf

…” Since the 1990s, the Antitrust Division’s leniency program has been a major boon in helping federal investigators uncover criminal cartels, according to antitrust lawyers. Lacking the program’s protection, banks that are found to be part of the conspiracy likely will pay much higher fines, Gavil said.

…”self-report illegal activity and won’t be prosecuted as long as it continues to cooperate with the government, Varney said.

CORPORATE LENIENCY PROGRAM

In August 1993, the Division revised its Corporate Leniency Program to make it easier for and more attractive to companies to come forward and cooperate with the Division.(2) Three major revisions were made to the program: (1) amnesty is automatic if there is no pre-existing investigation; (2) amnesty may still be available even if cooperation begins after the investigation is underway; and (3) all officers, directors, and employees who cooperate are protected from criminal prosecution.(3) As a result of these changes, the Leniency Program is the Division’s most effective generator of international cartel cases, and it is the Department’s most successful leniency program. Moreover, it has served as a model for similar corporate leniency programs that have been adopted by antitrust authorities around the world.

#110 Bobby on 12.08.10 at 1:26 pm

Come on people, do you think Remax or even CMHC would say anything other than prices will go up. There is nothing that scares the sales community, one that relies on commissioned sales, more than the threat of falling sales. Why buy something this week if it will be cheaper next.

Here in Victoria there were 470 sales last month but over 1100 realtors. My guess is that some didn’t take-home a paycheque. A colleague in the industry says sales are really slow but her costs every month are the same. There are a few homes near me that have been on the market forever.

I saw an add in Saturday’s paper about a development downtown here in Victoria. Ad says units are moving but their own ad says the last sale was in September. They can’t be moving that fast.

I listened to a realtor on the radio yesterday on CFAX talking up sales. Quoted that the average was going up. Oooops, didn’t mention that the median is trending down. Not good for sales.

Now I will bet that many on this blog have no idea about the difference between median and average. We are falling in our standing in math and CREA counts on that to facilitate sales.

It’s getting ugly out there.

#111 JohnnyMac on 12.08.10 at 1:28 pm

Canada’s credit bubble…..why Canada’s economic growth prospects are worse than most realize

http://bit.ly/huCEPR

#112 fancy_pants on 12.08.10 at 1:35 pm

NEWS FLASH

…just got word from the horses a$$… er mouth.

the Greater Vancouver RE board is offering free T-shirts again with the purchase of a home. Buy quickly before they are gone and you too can look as good in green as the specimen portrayed above.

#113 jess on 12.08.10 at 1:37 pm

leakage and linkage

Amnesty Plus. Currently, there are roughly 40 sitting grand juries investigating suspected international cartel activity. Nearly half of these investigations were initiated by evidence obtained as a result of an investigation of a completely separate industry. For example, a new investigation results when a company approaches the Division to negotiate a plea agreement in a current investigation and then seeks to obtain more lenient treatment by offering to disclose the existence of a second, unrelated conspiracy. Under these circumstances, companies that chose to self report and cooperate in a second matter can obtain what is referred to as “Amnesty Plus.” In such a case, the company will receive amnesty, pay zero dollars in fines for its participation in the second offense, and none of its officers, directors, and employees who cooperate will be prosecuted criminally in connection with that offense. Plus, the company will receive a substantial additional discount by the Division in calculating an appropriate fine for its participation in the first conspiracy.

Confidentiality Policy. The Division’s policy is to treat as confidential the identity of amnesty applicants and any information obtained from the applicant. The Division will not disclose an amnesty applicant’s identity, absent prior disclosure by or agreement with the applicant, unless authorized by court order. Further, in order to protect the integrity of the Amnesty Program, the Division has adopted a policy of not disclosing to foreign authorities, pursuant to cooperation agreements, information obtained from an amnesty applicant unless the amnesty applicant agrees first to the disclosure. Notwithstanding this policy, the Division frequently obtains waivers to share information with another jurisdiction in cases where the applicant has also sought and obtained leniency from that jurisdiction. Such waivers are helpful in ensuring that the Division is able to coordinate investigative steps with the other jurisdictions involved. In addition, amnesty applicants may issue press releases or, in the case of publicly-traded companies, submit public filings announcing their conditional acceptance into the corporate amnesty program thereby obviating the need to maintain their anonymity.

#114 Mike on 12.08.10 at 1:37 pm

While we would all like lower house prices I am somewhat apprehensive about the thought that it will ever happen. During one of the most devasting financial disasters in history our house prices barely took a dip even in the lest desireable areas. WHY?? ANSWER Mortgage rates… Will those be going up?? If so not by much. People today are not in the least debt phobic. Having over 500K in mortgage and leasing a bimmer is nothing…
I am reluctant to say there will be a correction of any significance.
What is a giant turd is the debt level of the US and the seemingly non chalant attitude of the Europeans to the Euro partners debt levels. Keep in mind the British banks are still nationalized.. Obama is pushed into giving the ultra rich their tax breaks brought forward under the muddled leadership of DOUBLE U Bush. We are no further ahead than we were before . Leadership in our countries will not take the appropriate medicine for us to solve the financial issues. Not under their watch they say… Essentially not under anyone’s watch is what will happen. That stale mate is why I think we will not likely see any major price drops in the GTA… BC maybe but no guarantee

#115 Bullion.Bunny on 12.08.10 at 1:49 pm

Municipal bond market is getting crushed again.

http://www.barchart.com/chart.php?sym=PCK&style=technical&p=DO&d=M&x=33&y=9&sd=&ed=12/08/2010&size=M&log=0&t=CANDLE&v=1&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=100&indicators=&addindicator=&submitted=1&fpage=&txtDate=12/08/2010#jump

http://www.barchart.com/chart.php?sym=MUB&style=technical&p=DO&d=M&x=33&y=9&sd=&ed=12/08/2010&size=M&log=0&t=CANDLE&v=1&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=100&indicators=&addindicator=&submitted=1&fpage=&txtDate=12/08/2010#jump

and the 30 t-bill year is tanking…

http://www.barchart.com/chart.php?sym=HTD.TO&style=technical&p=DO&d=M&x=90&y=6&sd=&ed=&size=M&log=0&t=CANDLE&v=1&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=100&indicators=&addindicator=&submitted=1&fpage=&txtDate=#jump

#116 Sam on 12.08.10 at 1:51 pm

#6 Sand-Piper on 12.07.10 at 11:00 pm

been reading “Ben’s Bubble blog”since 2005 – alot of the comments are identical
________________
I’ve pointed this out often.

And in response the morons show up writing nonsensical cr*p like “housing prices cannot fall because houses don’t trade like stocks”.

yeah … tell it to the Japanese, the Spaniards, the Irish, the Icelanders, the UStaters … their house prices never fell because houses don’t trade like stocks.

the so called “intellect” of some leaves much to be desired.

#117 Mark on 12.08.10 at 1:53 pm

Folks, a real estate crash is like a slow-moving train wreck. It has been 4 years since US housing peaked and it is still getting destroyed.

The effect?

Just look at a chart of US real GDP per capita: http://www.planbeconomics.com/2010/12/08/chart-real-gdp-per-capita-still-below-2007-levels/

America is not the poster child for prosperity anymore.

#118 Aussie Roy on 12.08.10 at 1:53 pm

Cowboy on 12.08.10 at 12:50 pm

Howdy buddy, yeah I’m here.
http://www.barossa.com/default.aspx

It was always too expensive (still is), how much
of a haircut do you think your real estate can take?

Great question, the closest Capital city is Adelaide, I cant say how much they will fall what I can say is based on long term averages for both income to price ratio and rental yields, prices are close to double what they should be (but no bubble here – LOL). The addictive nature of capital gains has your average house speculator here losing 4% of purchase price per year (rents are below interest payments) to capture what they believe will be continuous asset price appreciation. – Fools

If you have a recognised skill at the moment immigration is easy. http://www.immi.gov.au/

For cost of living, fresh local food, low crime, of course the best wine in the world and great peope the place to be is right here, but I might just be a tad biased, of course…

#119 kitchener1 on 12.08.10 at 1:55 pm

#90 T.O bubble boy

Right you are, 30K more condos all in the Toronto area?

I was in the shepherd/bathurst area on the weekend, saw no less then 3 new condo developments coming up with 3km of each other. There will be a ton of bagholders when this all falls apart.

RE: 13 and the land lease condos., buyers do not care its all speculation, they are not purchased to live in but to flip.

#120 GregW, Oakville on 12.08.10 at 2:04 pm

Hi #35 Nostradamus, Thanks for the link to the flu shot!
Have you looked at YouTube ‘in lies we trust’ yet?

Thank for the link on South Korean trade deal.
I feel safer about food and jobs here now, not!
What do you know about ‘Codex’. Stuff can be found on YouTube.

Thanks for the link NATO lies. It is worth the read, and to thinking about!
I think this bit speaks volumes,
“The hypocrisy and lunacy involved here is extremely dangerous”.

#121 Hoof Hearted on 12.08.10 at 2:08 pm

Censorhip in ther media ?

It’s not just MSM
Certain blogs , like VCI, are engaged in censorship.

Only certain types who espouse a certain view are allowed on. If one can dig up mind numbing data and whine about the high RE prices ad nauseum you’re in.

It’s turning into a Darwininan exercise of inbred comments. Coincidentally, the blog has some core advertisers, it ain’t necessarily UNbiased.

#122 Junius on 12.08.10 at 2:10 pm

#95 BrianT,

You said, “Your comment about local legitimate “economic activity” being the ONLY thing that matters is simply misinformed.”

Really? I can certainly agree that illegal activities play a role and Vancouver gets more than its fair share. However, in the long run, legitimate activity is far more important that illegal. You are splitting hairs.

How long before California legalizes marijuana and the BC trade goes up in smoke? How stable is the Chinese economy right now as it rides on a sea of debt?

I would put my money long term on the innovation engines of Silicon Valley and Seattle over black market drug dealers if I was building an ecomony.

Or perhaps that is just me.

#123 Bullion.Bunny on 12.08.10 at 2:10 pm

#108 Mean Gene on 12.08.10 at 1:21 pm

The problem with the gold bugs and the real estate pumpers is they do not have a healthy grasp on reality, or in other words, they have their heads in the sand and their bums sticking out ripe for a kicking.

I love people like you…….you make my heart sing, you are the light of my life. Why do you ask? Instead of applying a heavy dose of critical thinking you condemn others for their actions. The world of investing is a game, the government builds empires on the backs of the people through the mechanism of inflation. When the promises of the past can no longer be meet the default comes. Look at the chart of the U.S. dollar, it’s almost worthless. Mission accomplished, empire built and ready for collapse. China will be in the same position in 100 years.

http://www.adrich.com/OPNArchive/Opn2000/May00opn.htm

In a deflation when credit collapses the real price of gold rises until is reaches nose bleed levels. The system resets and we start over again.

So to wrap it up, during the credit inflation, buy homes, cars and stocks. During the credit deflation buy gold, silver and gold mining companies. So please keep your head in the sand, I need someone on the other side of the trade.

Hey it’s been this way forever, why is it different this time?

P.S. I’ve been a hard core gold bug since 2003, yes I do lick the bullion from time to time.

#124 Patz on 12.08.10 at 2:11 pm

#74 Kris,
I second that commotion. Lordy, lordy it’s like someone from Abbotsford coming to Vancouver and saying, this ain’t much we got better views in Abbotsford!

SFO is unique, there is no city anywhere that has its qualities—not saying it’s the best, just unique in a good way. There’s nothing essentially wrong with Vancouver, er… well yes there is but that aside, it’s just all the “best place on earth” bs that’s hard to stomach.

I choose to live here only because it is the best place for me to live right now. But city for city there are many places I would pick over here.

#125 GregW, Oakville on 12.08.10 at 2:15 pm

Hi Garth, Thanks for the link to the globle news in BC, that is interesting.
I wonder what is actually going on behind the story?

Maybe we should all spend a few bucks and join ‘all’ party and vote in persons that say they will change the ships direction before we all go over the cliff?

#126 RB on 12.08.10 at 2:23 pm

Garth is not alone in his view on the housing prices. Plunge-o-meter even tried to provide a date when the prices will hit bottom. Toronto – by 2027!. See more here:

http://recommendedbroker.ca/blog/?p=86

But the question also is how related is the Canadian Housing market to the US. The chorus of traditional media will tell you that they are VERY different. And so far during the last few challenging years they do behave differently. For how long?

#127 Macrath on 12.08.10 at 2:33 pm

China imported 209.7 metric tons of gold in the first 10 months of the year,
Gold Demand: ‘Huge Buying from China’

http://blogs.wsj.com/marketbeat/2010/12/03/gold-demand-huge-buying-from-china/

Why is China buying so much bullion at all-time high prices ? They must be planning on making a hell of a lot of jewelery. I thought that was India`s shtick .

#128 Utopia on 12.08.10 at 2:43 pm

Mr Dark,

That was some pretty interesting material you posted up yesterday. We will have to keep an eye on Gold versus bond yields indeed. Good work.

#129 Karl Hungus on 12.08.10 at 3:17 pm

#44

I think you’ve made the same mistake as a lot of Canadians. Withdrawing from your TSFA does not affect your contribution room. You get $5000 per year – THATS IT. If you withdraw lets say $2000, you dont suddenly get another $2000 worth of contribution room.

You can however transfer the funds from one institution to another, but from what ive heard is that its a prettty sticky process.

#130 pessimisticprof on 12.08.10 at 3:26 pm

#80 Brian T – Once upon a time there were all-Western enclaves in China – these Treaty Ports were created under the terms of the old Unequal Treaties imposed on China during the Opium Wars in the mid-19th century. Westerners in places like Shanghai were able to create replicas of the world they left behind – Western style buildings, roads, shops, restaurants, etc, all protected by extraterritoriality (exemption from Chinese laws). These outposts of empire were a source of humiliation for the Chinese, and a constant reminder that their way of life was under threat. Now zoom ahead to 2010 and look at places like Richmond BC: these are the new Treaty Ports, only this time it is the Chinese (PRC, HK, and ROC) who are creating replicas of the world they left behind when they moved to Canada. In the 1920s it was the Chinese who resented the pampered and privileged Westerners roaring around Shanghai in expensive cars – now, encouraged by Canada’s generous “buy a passport” program, it is wealthy new Chinese immigrants who roar around Richmond in their Benzs, Beamers, and Porches, while older residents complain that they feel like outsiders in their own city. Perhaps older residents should just accept this as karmic retribution for the imperialist excesses of their forefathers. Or they might want to recognize the demographic trend and cede Richmond to China for a handsome sum while they can still claim ownership – at least BC could balance its budget. Hmmmm…..

#131 realpaul on 12.08.10 at 3:35 pm

Another ‘vested interest’ the media whores shy away from reporting is the huge reliance on the newly created tax base for the outrageous salaries and benefits of all the newly rich civic workers who have been rolling in the trough, recieving raise after raise, since the real estate crack of ’emergency low rates’ hit the streets.

In the US, where the prices have adjusted, the tax base has eroded to a point where the civic service can no longer be justified to be paid, except in pre bubble budget amounts, the cities have been having to adjust to the new reality.

Consider that the only growth area of the Canadian economy is unionized government workers, paid 40% and more than private sector workers, along with outrageous pension liability to the taxpayer, and we’re going to see the same disaster unfolding here. The only thing that has to happen for this horror show to unfold is that the prices go down 15% to 20% and the following years tax assessments cut the city/municipalities budgets off at the knees. It can happen ‘suddenly’ as the poster says…its happening right now in the USA

http://www.bloomberg.com/news/2010-12-08/plunging-home-prices-fuel-property-tax-appeals-swamping-u-s-cities-towns.html

#132 Oasis on 12.08.10 at 3:36 pm

Yes i must clueless-you’ve told me that since day 1-
<<and you still are..

Using 1980-2000 Gold/Bond(Yield) relationship and calling both Bears until 2001

<<again, NOT correct. "Yields" did not BOTTOM until 2008, NOT 2001. strike 1.

Your chart does not correlate to the Gold price at all-it barely registers the Gold breakout in 2001-

<<clearly you are NOT paying attention. my chart is of bond PRICES. NOT a chart of gold:bonds. gold in no way factors into my chart. strike 2.

Yield vs Gold price reacts very closely-or did you not notice??

<<actually, it does not. that's pretty clear from looking at any chart.

Today Yields spiked–Gold fell–

<<no. yields have been spiking for weeks, and gold has been going UP, not down. the fact that gold was down the last 2 days, is simply coincidence. strike 3.

the rest of your post is similar garbage.

#133 GregW, Oakville on 12.08.10 at 3:36 pm

Hi Garth, Do you have any Silver fillings still? You will find this informative. 10min video. Some Canadian research mentioned.
http://naturalnews.tv/v.asp?v=5E03151EA0BE19269E047A0DF96D8296

#134 Bill Grable on 12.08.10 at 3:43 pm

“Even a broken clock is right twice a day”.

Not in TheBestPlaceOnEarth’s wildest dreams.

Put down the bong, get out of Richmond and take a look around the real World.

I might also suggest reading Von Mises, or Kondratieff, or at least read Mr. Turner’s lips.

#135 Bullion.Bunny on 12.08.10 at 3:45 pm

Like the real-restate market the flower of youth has long since left this person. Like homes the opportunity was ten years ago; all that is left is the baggage and inappropriate attire. (i.e. three kids and lots of debt)

#136 Genghis on 12.08.10 at 3:47 pm

The situation in the Canadian residential real estate market is directly tied to the low interest rate policy of the Bank of Canada, which is directly tied the same policy of the US Federal Reserve. We all know that this is being driven by the US.

The assumption has been that the US government has full control of both short and long term interest rates and that this will continue indefinitely. Is this really a valid assumption?

http://finance.fortune.cnn.com/2010/12/08/bond-market-bloodbath-deepens/

#137 Bullion.Bunny on 12.08.10 at 3:51 pm

P.S. You can’t afford her and like housing why would you want to!

#138 Bullion.Bunny on 12.08.10 at 3:55 pm

Flash from our news desk…….Canadians are slumming it. Everyone is feeling the pinch.

http://www.vancouversun.com/business/Canada+largest+dollar+store+operator+profit+jumps+third+quarter/3946732/story.htm

Dollarama Inc. said Wednesday its third-quarter profit had increased to $31.3 million, compared with $1.14 million a year ago when it launched its initial public offering and incurred interest expenses.

#139 Lorne on 12.08.10 at 4:15 pm

Edmonton-area housing construction stalled in November

Starts fell nearly 20 per cent year-over-year

EDMONTON — This year’s rebound in Edmonton-area housing construction stalled in November as total starts fell nearly 20 per cent year-over-year.
Observers cited a well-stocked resale and new home market for the slowdown.

“Activity has moderated in the past two months in response to higher new home inventories and competition from a well-supplied resale market,” said Richard Goatcher, CMHC senior market analyst for Edmonton.

Builders and developers poured foundations for 755 homes last month, down from 938 in November 2009, Canada Mortgage and Housing Corp. said Wednesday.

The November slowdown was particularly seen in single-detached starts, which dropped 25 per cent year-over-year to 453 units.

In the multiple-unit sector, construction started on 302 homes in November — down 9.3 per cent from 333 a year earlier.

One type of housing did see increased starts in November — apartment starts rose sharply to 173 units, compared with 63 in November 2009.

The overall year has been busier than last year. To the end of November there were 9,401 total starts, compared with 5,505 during the same period in 2009.

Builders started 5,753 single-detached homes to the end of November, up two-thirds from January to November 2009.

For the first 11 months, multiple unit starts increased by 77 per cent year-over-year to 3,648.

Provincially, housing starts totalled 17,600 in November, down from 21,300 in October.

ATB Financial economist Dan Sumner said November saw the lowest level of provincial housing starts since July 2009.

“After averaging above 25,000 units-per-month since October 2009, Alberta housing starts have noticeably trended downward this fall,” Sumner said.

“Some of this is due to the slowness in resale housing markets this summer, which has made developers a little more hesitant to flood the market with new inventory.

“However, with fixed-term mortgage rates back near rock bottom, it is hard to imagine that demand for new homes won’t at least show some resilience at current levels moving forward into 2011.”

#140 bill on 12.08.10 at 4:32 pm

the amount of investment of bc bud profit in bc realestate in my opinion greatly overstated.

It sits in piles ,large and small, throughout the country.
waiting to be reinvested in the drug trade.
it is not a driver in the legitmate white market.

#141 Larry on 12.08.10 at 4:44 pm

Hi Garth, love your site.

Totally makes sense that this whole pie-in-the-sky is going to crash land around us soon. Just like in other countries, people like you are saying it’s going to happen, but the governments are just not listening. Then, when it happens they will blame the banks for “reckless lending”. Ireland is in the news right now because of a bankrupt economy, this is exactly why. An economy based on a false property market. Now look at it, just vacant property developments litter the country side. People are stuck with mortgages they can’t pay for property that has decreased in value by 50% or more. Many people have lost their jobs, the government has had to bail out the banks because of mortgage defaults and bad loans. This will happen in Vancouver and across Canada too. People have to know the truth!
Just watch this sad video about what happened in Ireland:
http://www.vancouverpropertynews.com/effects-of-over-building/15/

#142 Jason on 12.08.10 at 4:47 pm

If the number of immigrants to Vancouver continues at this pace e.g, 40,000 (1/2 asian, likely rich), the average cost of a SFH in Vancouver may very well rise 5-10% next year. Calgary saw similar levels of in-migration in 2004-2006 during the run-up in home prices. Question is, how long can this keep up ? The higher prices go up the greater the fall. Incredible.

#143 kitchener1 on 12.08.10 at 5:06 pm

10 year US bonds are spiking hard. I reckon, its nothing serious yet as its only been the last 2 auctions but if it continues, then there will be a huge problem.

TIPS are usually seen as the safest place to put long term capital. Either people are just waiting on the sidelines or possible large traders are covering the margin posistions– who knows.

Interesting eitherway

#144 Northern Dirt on 12.08.10 at 5:14 pm

#129 Karl Hungus …

TFSA’s.. They are cooler then you think..

http://www.milliondollarjourney.com/tfsa-contribution-room.htm

#145 Hell in a Hand Basket on 12.08.10 at 5:28 pm

@Cookie Monster #50 & 51
Here is something to consider, when a billionaire accumulates billions of dollars in wealth they are in essence denying that wealth due to protections conferred on them by private property laws. With the wealth they lay disproportionate claim on production and resources. In a finite system run by capitalism, people starve because it is necessary for them to go without so this wealth can be concentrated. This is just as much force as a government imposing a luxury tax.

You can dislike the concept of anyone applying force to another individual, but with money, force is inevitable.

So I agree we need a value shift in which force plays no part and we are not consumed with accumulation, but rather we should focus on bettering our community’s living standards and by default better our own.

I worry that business unfettered by any regulation would be as much folly as too much regulation. If we examine what a business’s primary motivation is, it is to make a profit. That is the driving force and you can get there many different ways, but most of them are not honest or considerate of the human condition. Our economy only takes our actions into account if we are participants (i.e. producers or consumers), if we are without jobs or if we produce without profit we are not a factored in. Capitalism is not a complete system. There is no mechanism for it to provide something beneficial for the people if no profit can be derived from it. Incumbent institutions defend their markets fiercely and prevent innovations that threaten them.

#146 jess on 12.08.10 at 5:30 pm

====================
The Treasury’s “Hardest Hit Fund” is authorized under the Emergency Economic Stabilization Act of 2008

The assistance will be provided as a zero-interest, deferred loan of up to $24,000 or 24 months of mortgage-related payments. In high unemployment counties, the maximum assistance is $36,000 or 36 months. Homeowners will resume making their own mortgage payments at the end of the loan period. If the owner continues to live in the home for 10 years, the loan will be considered satisfied and no repayment will be due.

The Treasury’s “Hardest Hit Fund” is authorized under the Emergency Economic Stabilization Act of 2008. It is available in 18 states and the District of Columbia, which have experienced high unemployment or a steep decline in property values. North Carolina was selected because of the large percentage of the population living in counties with high unemployment rates in 2009.
http://www.nchfa.com/About/10Press/Dec1.aspx

#147 CTO on 12.08.10 at 5:40 pm

Garth / dawgs

Little tidbit of personal new and observations…

I saw a house in E end T.O sitting and stagnating on market. emails realtor and suggested house was over prices comparing an other nicer house on same street that took 5 months to sell for a lot less.

She calls me back in morn at work and asks if I’m interested. I argued with her that it was prices way too high and I’m not even going to bother making an offer as they would never accept it and i would sit on the sidelines and call her back in spring. End of phonecall.

She emails me about an hr later and asks if I’d be interested and sorry that the call ended so quick.

Seems a little desperate to me. You think?

#148 april on 12.08.10 at 5:45 pm

Some people are saying when % rates rise that will be end of the Canadian housing bubble. Sure but if % rates remain low it sounds like you people think the bubble will continue to expand? I may be wrong but I think Garth has said a few times that low % rates no longer matter. The bubble will burst regardless. He gave the reasons for this.
I was talking to an old friend in Nanaimo who was in the construction business for years and he said Real Estate prices are down in that area and the market is “dead” .Some might say who wants to live there, well many people do but it shows to me that the fringes of a market correction are getting closer and closer to the big cities.

#149 Cookie Monster on 12.08.10 at 5:47 pm

Bill in Peterbourogh,
The Sherman Act anti-trust laws have caused more harm than good by government meddling in markets. These anti-trust laws punish companies who are successful for being successful. A prime example was Alcoa in 1937 who was so so good at producing aluminum that they held basically 100% of the market in the USA so the government went after them in a lengthy law suit because of their apparent monopoly.
http://www.hg.org/article.asp?id=6025

Also see Ayn Rand Institute article regarding anti-trust laws and the case against Microsoft,
http://www.aynrand.org/site/News2?page=NewsArticle&id=5134&news_iv_ctrl=1021

Meanwhile in Canada we have our infamous CRTC constantly wielding their monopoly powers of control and dictatorship over our communications industry, supporting oligarchies, controlling content and limiting competition.

Government meddling in business is always perverse and hypocritical.

#150 jwkimba on 12.08.10 at 5:48 pm

#11 over priced. more than $50/sf in Florida is a rip off.

#17 squidly, lakeshore between 1st and 41st is already overpriced. You think 550k for a 800sf bungalow with no land is a good deal? I’m in that area myself. We love it, but we know we can never afford to move up from our 2/1 condo there into a house…but we’ve got a few years to see what happens.

#151 Cookie Monster on 12.08.10 at 5:57 pm

BrianT #83
#51Cookie-”Free Trade” is total unadulterated B/S. It is just a setup whereby all government funding is taken from employees and consumers and multinationals get a free ride. What is so “free” about income tax in your fantasy world?
——————
What are you ripping on me for? I’m arguing against government involvement in markets and against high taxes. I recognize nothing from government is ‘free’ and anything they do is in fact is destructively expensive and is why I want them to do as little as possible! Sheeesh.

#152 kabloona on 12.08.10 at 5:57 pm

Some more TFSA advice from Jonathan Chevreau in this Q&A:

http://tinyurl.com/28t5zgt

Quote:

“Several readers wanted clarification of the statement that funds withdrawn can be replenished “a year later” without penalty. What I meant was the following calendar year, not necessarily a full 12 months later. So, for example, if you withdrew $3,000 on Dec. 31, 2010, you could replace it the following day, Jan. 1, 2011, plus qualify for the new $5,000 in contribution room, for a total of $8,000.

[email protected]

© Copyright (c) National Post”

#153 Karl Hungus on 12.08.10 at 6:06 pm

#145 Northern Dirt

Wow. That article is wrong on so many levels. That is totally not how a TSFA works. Ive talked to banks, accountants, and even the CRA about this. That article is way outdated as well (2008). I really hope people are not using that advice. Tens of thousands of Canadians were assessed penalties because they were using their TSFA’s like checking accounts.

http://www.theglobeandmail.com/globe-investor/personal-finance/tfsa-confusion-leads-to-costly-penalties-for-70000/article1604046/singlepage/

You cannot contribute more then $5000 a year – no exceptions. The contribution room has absolutely nothing to do with how much you withdraw. You put in $5000, take out $5000, put the $5000 back in – you’ve over contributed by $5000.

#154 Cookie Monster on 12.08.10 at 6:13 pm

Junius #98
I believe capitalism has more insidious foes on the right of the political spectrum then it does on the left.
——————-
As far as I’m concerned which side is irrelevant, business and the population have insidious foes in government period. Until Ron Paul or some other constitutional conservative takes control the Keynesian socialist agenda will expand.
______________________________

A corporation or person that benefits from this and then turns around and tries to divorce itself from responsibilities is just a “free rider” which is no different than a “free loader” in my books.
———————-
I completely disagree with this premise. No company or person is responsible for the environment that exists around them prior to them coming into existence. A business or person can only work to change the conditions they have to deal with going forward, they’re not responsible for the preexisting chaos and suffering. I’m a person for change and the change I want is less government and more liberty. It’s pretty simple and far from naive. It’s based on a simple premise, that individuals will do what’s in their own best interest and people who retain and dispose of their wealth on their own accord in a free market will make choices and support businesses that will benefit society the most greatly. A governments job is to enforce laws, contracts, keep the peace and civility etc… not meddle in the economy, it is not their domain, the economy is the domain of business full stop.

#155 Junius on 12.08.10 at 6:16 pm

#149 April,

You asked,”Some people are saying when % rates rise that will be end of the Canadian housing bubble. Sure but if % rates remain low it sounds like you people think the bubble will continue to expand?”

Not quite. Most of us believe the bubble has burst however it didn’t pop it is just hissing to a slow deflation. Prices peaked in most markets in the April-June period. Then the market slowed and sales became anemic.

The real question is how long it can stay in slow deflation mode. Apart from some misguided sentiment and the Re industry pumping away there is nothing that is going to blow more air into it. The economy is flat with GDP growth around 1% and consumer debt can’t get any higher.

However with another round of quantitative easing in the US promises to keep rates low in the US and Canada for at least the next 3-6 months.

The real question is when will the bond market force rates up regardless of the B of C intervention. This is one possible event that might happen prior to the B of C changing its overnight. As more and more countries in Europe and around the globe experience debt crisises this could push global rates up as credit contracts.

The other interesting place to watch is China. Many people think the Chinese economy is going to go through a major storm sometime soon.

Classically bubbles require a triggering event to change sentiment. This is why the Re pumpers like Remax remain out in full force trying to keep the dream alive. However we are one bump in the road away from seeing the pace quicken dramatically.

#156 Rich Renter on 12.08.10 at 6:22 pm

The blog should be ok today, as the hackers are busy with Mastercard and Visa. I must say i’m intrigued by all the Wikileaks and cyber terror going on nowadays.
Here in Calgary, the house down the street dropped another 5K, thats a total of 55K in 6 months ouch

#157 Junius on 12.08.10 at 6:25 pm

#155 Cookie Monster,

You said, “No company or person is responsible for the environment that exists around them prior to them coming into existence.”

This a fundamental contradiction. A corporation exists BECAUSE of a legal system we created for its benefit starting with limited liability. We created corporate law in order to limit liability so that people take risks. However these benefits come with responsibilities. This strange notion that corporations exist outside of societal responsibility or have the same rights as people is not rational.

You said, “I’m a person for change and the change I want is less government and more liberty. It’s pretty simple and far from naive.”

Clearly we are not going to agree so I will leave it at that. It is not about more or less government. It is about better government.

#158 Bill ( Peterborough) on 12.08.10 at 6:25 pm

re # 150 Cookie Monster

The Sherman Act anti-trust laws have caused more harm than good by government meddling in markets. These anti-trust laws punish companies who are successful for being successful. A prime example was Alcoa in 1937 who was so so good at producing aluminum that they held basically 100% of the market in the USA so the government went after them in a lengthy law suit because of their apparent monopoly.
—————————————————————

Monopolies in the long run eventually hold the end users at gun point , so to speak. The private business sector is to increase profits.

It is a very fine line bordering on how much profits a company makes, factoring labour costs, operating costs… if there are no checks and balances applied
the private sectors would eventually bring its labour force to that of a “fuedal system”. ( only benefitting their side with no regards to the human equation: standard of living and so forth) Just take alook at any 2’nd & 3’rd world countries.

As to your last comment:

Government meddling in business is always perverse and hypocritical.

I totally agree, the reason being the governments always have hidden agendas in most things which they do behind closed doors.

Unfortunatley that is our human nature side showing it’s not so honorable side.

In a perfect world it would work through honesty/ integrity / principles… we would do things for the greater good of society , not for the greater good of ourselves.

#159 Cookie Monster on 12.08.10 at 6:26 pm

Kaganovish #101
Cookie Monster

You said:
Junius and Hell in a hand basket, rather than argue I’ll just say that in a nut shell I do not agree with any practice that thinks it’s ok to take from one person by force or compulsion in order to give to another. It’s wrong, regardless of how wealthy one person may be or how needy the other.

Serious? Where and how do you think all that capital (gold/silver) was acquired during the beginning stages of western capitalism? Round out your reading of Rand and Hayek with Marx and say Ronald Wright or Patel or Judt or some recent writer.

Maybe you really are a puppet.
———————————–
No thanks, I’ve read enough on how economics actually works by Mises, Rothbard, Hayek, Rand, Paul, Schiff and others.
Your logic toward me is flawed like by saying reading, studying and practicing modern science should be tempered by study fallacies and giving credence to the world’s religions and supernatural mysticisms in order to have a balanced view. Crawl back into your cave simpleton.

#160 Junius on 12.08.10 at 6:29 pm

#146 Hell in a Hand Basket,

Well said.

#161 dark sad person on 12.08.10 at 6:33 pm

#132 Oasis on 12.08.10 at 3:36 pm

Yes i must clueless-you’ve told me that since day 1-
<<and you still are..

Using 1980-2000 Gold/Bond(Yield) relationship and calling both Bears until 2001

<<again, NOT correct. "Yields" did not BOTTOM until 2008, NOT 2001. strike 1.

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

You really try hard-I'll give you that-not much else-

Did "both" not bottom until 2008?

I was referring to the POG "breakout-
I showed you on the Yield chart that the "sharp" reversal lower-coincided with the 2001 Gold breakout-can't deny it-it's right there in black and white-

I showed you how they reacted Inversely-all through that period "including the whipsaws in 2008"
I also showed you how they reacted similarly in 1929/1930-
Using that example alone "should have given you a clue to my explanation-of Yields vs Gold correlation-
But you pull up a Bond "Price chart" and start pointing to that-
Why didn't you pick Cotton or Oil?
It would have made as much sense-maybe more-

I'll ignore the rest of your nasty drivel-seems that's what your riding on-

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

Today Yields spiked–Gold fell–

<<no. yields have been spiking for weeks, and gold has been going UP, not down. the fact that gold was down the last 2 days, is simply coincidence. strike 3.

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

It was "yesterday"
You said the Bond Market broke through support levels and was "Completely" breaking down–not "weeks" ago-
I watch the POG vs Yields always-
I "trade" it-
I laid my trade out on this board-

Gold doesn't move up or down by "coincidence"
It's not magical-things happen for a "reason"

No one else here seems to be having a problem understanding what i said–just you-

I think this might be what's upsetting you so much-

http://finviz.com/futures_charts.ashx?t=GC&p=h1

That is "happening" after weeks of you screaming
Hyper-inflation" is here-Now!

Hint–Gold does "not" go down in Hyper-inflation-

As for your Bond Market collapse-

http://finviz.com/futures_charts.ashx?t=ZB&p=w1

I see good support at 120

I see major support at 115-
We were there not long ago-did Bonds collapse?

I see major support at 105-

When 105 gives way-
I'll pay attention-until then- ho hum

#162 Cookie Monster on 12.08.10 at 6:54 pm

Hell in a hand basket #146
@Cookie Monster #50 & 51
Here is something to consider, when a billionaire accumulates billions of dollars in wealth they are in essence denying that wealth due to protections conferred on them by private property laws. With the wealth they lay disproportionate claim on production and resources. In a finite system run by capitalism, people starve because it is necessary for them to go without so this wealth can be concentrated. This is just as much force as a government imposing a luxury tax.
—————
You’re missing a fundamental point, accumulation of wealth means they are doing something good, they’re doing something right, they’re being rewarded by the market, by free individuals who see more value in purchasing what a particular business is selling over purchasing something else. Rich business people are not sinister hoarders of wealth, most of their wealth is invested in the business. They create jobs and raise our standard of living. To think confiscating business men’s money for government use is a better use of funds is insane.

Your view that businessmen are evil and that they are dishonest and untrustworthy and will eventually turn to repression is complete fantasy. I’ve been in business for 17 years and my reputation for honesty and integrity is one of my primary attributes. I receive payments in advance from all over the world because I build rapport and trust through correspondence and reputation. Sure some people in business are crooked but most of the large scale corruption and lying in big business is enabled or caused by government intervention and favoritism.

#163 Slava on 12.08.10 at 7:02 pm

Bought a house Aug 2009. Self-employed, so it was a “stated income mortgage”, 35 years am, 20% down. The last year business had been pretty good, and I was able to save some money. So several month ago I made a lump sum payment towards mortgage, with intention to open a HELOC, borrow the money back and invest in the market, including those preferred shares. Questtrade account already open.

But guess what? Turns out my own mortgage provider would not give me back the money I’d just paid. Turns out the changed the rules, and stated income is no longer in it. And it does not matter now that I have about 30% equity in the house. All that matters is salary and debt. And what do I have? 70K on my 2009 notice of assessment. Not too bad, I think, that being after I liberally expensed a lot of stuff not exactly purchased for business. House’s purchase price? 350K.

I’m stunned, really. Not that I don’t sleep at night over it. Far from it. Oh, well, I guess I’ll have to wait another 6 month before starting investing. And I don’t worry about 4 years from now (renewal time) either. I’ll own at least 60% of the house by then.

But for a lot of people who expense like mad and show little legal income, 2015 will be a nightmare. Because many will be unable to qualify for a mortgage on the house they ‘own’.

#164 jess on 12.08.10 at 7:03 pm

Revenge attack hits MasterCard site

===========

The Sam Adams Award is given annually by the Sam Adams Associates for Integrity in Intelligence, a group of retired CIA officers, to an intelligence professional who has taken a stand for integrity and ethics.[1] It is named after Samuel A. Adams, a CIA whistleblower during the Vietnam War, and takes the physical form of a “corner-brightener candlestick”.[1] Many recipients have been whistleblowers.

Ellsberg: “EVERY attack now made on WikiLeaks and Julian Assange was made against me and the release of the Pentagon Papers at the time.”
by Michael Ellsberg on December 8, 2010
Daniel Ellsberg praises WikiLeaks (SF Chronicle)

Ex-Intelligence Officers, Others See Plusses in WikiLeaks Disclosures
Ellsberg strongly rejects the mantra “Pentagon Papers good; WikiLeaks material bad.” He continues: “That’s just a cover for people who don’t want to admit that they oppose any and all exposure of even the most misguided, secretive foreign policy. The truth is that EVERY attack now made on WikiLeaks and Julian Assange was made against me and the release of the Pentagon Papers at the time.”

Recipients The Sam Adams Award
For 2002 : Coleen Rowley fbi
Rowley retired from the FBI in 2004 after 24 years with the agency. She jointly held the TIME “Person of the Year” award in 2002 with two other women credited as whistleblowers: Sherron Watkins from Enron and Cynthia Cooper of WorldCom. She also received the Sam Adams Award for 2002.
2002 The Whistleblowers Represented by Cynthia Cooper, WorldCom; Coleen Rowley, FBI; and Sherron Watkins, Enron

For 2003 : Katharine Gun british intelligence
Katharine Teresa Gun (born Katharine Teresa Harwood in 1974) is a former translator for Government Communications Headquarters (GCHQ), a British intelligence agency. In 2003, she became publicly known for leaking top-secret information to the press concerning illegal activities by the United States of America in their push for the 2003 invasion of Iraq.

For 2004 : Sibel Edmonds fbi
Sibel Deniz Edmonds (born 1970 in Iran)[1] is a Turkish-American[2] former FBI translator and founder of the National Security Whistleblowers Coalition (NSWBC). Edmonds gained public attention following her firing from her position as a language specialist at the FBI’s Washington Field Office in March, 2002, after she accused a colleague of covering up illicit activity involving foreign nationals, alleging serious acts of security breaches, cover-ups, and intentional blocking of intelligence which, she contended, presented a danger to the United States’ security. Her later claims have gained her awards and fame as a whistleblower.[3]
For 2005 : Craig Murray former uk ambassador to usbekistan
Craig John Murray[1] (born 17 October 1958[2][3]) is a British political activist, former ambassador to Uzbekistan and former Rector of the University of Dundee.
While at the embassy in Tashkent, he accused the Karimov administration of human rights abuses, a step which, he argued, was against the wishes of the British government and the reason for his removal. Murray complained to the Foreign and Commonwealth Office in November 2002, January or early February 2003, and in June 2004 that intelligence linking the Islamic Movement of Uzbekistan to al-Qaeda, suspected of being gained through torture, was unreliable, immoral, and illegal.[4] He described this as “selling our souls for dross”.[5]

Murray was subsequently removed from his ambassadorial post on 14 October 2004.

For 2006 : Samuel Provance sft. us army
Samuel Provance was a U.S. Army military intelligence sergeant who disobeyed an order from his commander in the 302nd Military Intelligence Battalion, by explaining what he experienced at the Abu Ghraib Prison, where he was assigned from September 2003 to February 2004, to the media. After being disciplined for his actions, he eventually brought his case to the United States Government in February 2006, resulting in a Congressional subpoena of the Secretary of Defense Donald Rumsfeld. The main points of his testimony are that military intelligence soldiers and contracted civilian interrogators had abused detainees, that they directed the military police to abuse detainees, the extent of this knowledge at the prison, and the subsequent cover-up of these practices when investigated.

For 2007 : Andrew Wilkie = In 2003 Wilkie resigned from his position in the ONA, an Australian intelligence agency, over concerns that intelligence was being misrepresented for political purposes in making the case for Australia’s contribution to the 2003 invasion of Iraq under the Howard government

For 2008 : Frank Grevil

Frank Søholm Grevil (born in 1960) had the rank of major in Forsvarets Efterretningstjeneste [FE] (Danish military intelligence agency).

On February 22, 2004 he acted as a whistle blower leaking classified information about the FE’s assessment of the possibility of weapons of mass destruction [WMD] in Iraq. The analysis of FE concluded that there was no certain information about operational weapons of mass destruction.[1] This was not aligned with the statement of Danish prime minister Anders Fogh Rasmussen to the Danish parliament that there was evidence that Iraq had weapons of mass destruction.

Frank Grevil was sentenced to four months in jail for leaking these documents.

For 2009 : Larry Wilkerson[2]

Wilkerson claimed in an interview on BBC Newsnight, January 17, 2007, that an Iranian offer to help stabilise Iraq after the American invasion, was positively received at the State Department, yet turned down by Dick Cheney.[6] The offer supposedly consisted of help in stabilizing Iraq, cutting ties with Hezbollah and greater transparency in its nuclear program in return for lifting sanctions and dismantling the Mujahedeen-e Khalq, an organisation working to overthrow the Iranian government. When this supposed offer was made, numerous middle-east experts were warning of the coming shift in power in Iran toward the right-wing Mahmoud Ahmadinejad, who would assume power shortly thereafter.

“ We thought it was a very propitious moment… But as soon as it got to the White House, and as soon as it got to the vice president’s office, the old mantra of ‘We don’t talk to evil’ … reasserted itself. ”
— Lawrence Wilkerson, BBC Newsnight, January 17, 2007

For 2010 : Julian Assange
http://www.ellsberg.net/archive/public-accuracy-press-release

#165 Mr. Plow on 12.08.10 at 7:05 pm

All the comments surrounding the so called money laundering through real estate purchases from these Chinese buyers from the last couple of days, just wondering if any of you have heard of FINTRAC?

http://www.fintrac.gc.ca/

The rules for money from overseas are even stricter.

#166 Cookie Monster on 12.08.10 at 7:06 pm

Ron Paul is on the Peter Schiff show tonight.

This evening, the 2008 free-market campaign duo of Congressman Ron Paul and Peter Schiff are reuniting on The Peter Schiff Show! Although the program is broadcast from Connecticut, listeners around the country can tune in on the Internet tonight between 6:00pm and 8:00pm EST at http://www.schiffradio.com.

There will be no shortage of subject to discuss. Some of the questions they are sure to explore include:

* Will the Fed’s second round of “quantitative easing” send the dollar plunging?
* How did the Obama Administration manage to make tax cuts feel dirty?
* Is anyone buying US bonds right now besides the Fed?
* Is Wikileaks a threat to security or a bastion of liberty?

So be sure to tune in tonight between 6:00 – 8:00 pm on Connecticut’s WSTC 1400AM / WNLK 1350AM or stream the show online for free at http://www.schiffradio.com.

#167 hobbitt on 12.08.10 at 7:34 pm

While most Americans predict they will need a nest egg of $300,000 to live on for 19 years in retirement, the average savings of 50-somethings is only $29,000, which comes out to an income of $190 a month over 20 years assuming a 5% rate of return.

The survey found that 72% of Americans now expect to work through retirement, with 39% saying they will work because they have to and 33% saying they will do it because they want to.

————————————————————

WOW! There’s some sobering realities in the U S . I guess Canada is not much different?

#168 GregW, Oakville on 12.08.10 at 7:48 pm

Hi Garth, fyi Some might like this link to link, see part 2of4 Dec7

Daily Show: The Big Bank Theory
http://www.infowars.com/daily-show-the-big-bank-theory/
“On a recent segment of The Daily Show, host Jon Stewart points out two conflicting interviews with Ben Bernanke. In the most recent interview Bernanke vehemently argues the Fed is not ‘printing’ money; while in the preceding interview he nonchalantly discusses the Fed ‘printing’ money.”

#169 AG Sage on 12.08.10 at 7:59 pm

Cookie,

Yeah, every single person trying to choose between gas stations should first take a rubber dingy out in the gulf of Mexico, drive it up to each oil platform, knock on the door(?), and ask politely to be allowed to inspect the operations so that they can make an informed decision and therefore make this fantasy of yours work out. Oh, and they (each and every one of them) should first get a degree in oil exploration in order to properly do these inspections. Failure of ever single automobile driver to get a degree in engineering and geology and their sheer laziness in not taking a rubber dingy out to ever single platform for a personal inspection means these disasters are not the fault of BP or Exxon or any other company, it’s the consumer’s. Those lazy bastards.

OR, alternatively: Those oil/chemical spills/explosions etc, they’re not real. Companies, absent well-enforced regulations which shift their risk model, would never neglect to spend their massive profits on prevention of large impact but low probability disasters. Never. All those times those disasters happened for exactly that reason. You dreamed them.

#170 The InvestorsFriend (Shawn Allen) on 12.08.10 at 8:03 pm

They say “a little knowledge is a dangerous thing”…

If true, then a number of posters on this page must be extremly dangerous indeed. (Mostly to their own financial health, I might add).

#171 Bill Grable on 12.08.10 at 8:44 pm

Rates are going to stay low forever, right?

WRONG – from FT.com

If you would like to redistribute this article please respect FT.com’s ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited FT content. Email [email protected] to buy additional rights. http://www.ft.com/cms/s/0/aa719fe0-0103-11e0-8894-00144feab49a.html#ixzz17ZNdvEc2

Investors are struggling to cope with surging US Treasury yields, which are supporting the dollar and thereby hobbling the rally in riskier assets, particularly commodities.

The FTSE All-World equity index is down 0.4 per cent, while some of traders’ erstwhile darlings, such as gold, are pulling back from recent records.

http://tinyurl.com/2uaj5ub

#172 dd on 12.08.10 at 8:44 pm

#154 Karl Hungus

…You cannot contribute more then $5000 a year – no exceptions..

Wrong. You can put in more, however, there is a penalty of 1% a month.

#173 john m on 12.08.10 at 8:45 pm

#166 Mr. Plow on 12.08.10 at 7:05 pm……….are you kidding?? There are thousands of people in BC living the millionaire lifestyle with absolutely no legal income…why are they not investigated??Huge money from the drug trade buys a hell of a lot of protection from our justice system and a hell of a lot of blind eyes from our government officials.

#174 dd on 12.08.10 at 8:49 pm

#36 Brynn

…we do not and never will have the banking system of the US…

Wake up buddy. How much did the 4 big bank dip into the US emergency funds? Banks are interconnected world wide. When this thing blows up you don’t know how far it will reach.

#175 dd on 12.08.10 at 8:53 pm

#129 Karl Hungus …TFSA’s.. They are cooler then you think..

Read the tax code. If state very clearly what you can or cannot do.

#176 Alister on 12.08.10 at 9:05 pm

#38 Vanman

Whats happening to interest rates?

http://stockcharts.com/charts/gallery.html?$TNX

#177 td69 on 12.08.10 at 9:17 pm

I’ve beenin vcr for 40 years and grew up in the 80″s and have made a fortune in RE. Still the best place to be is in Western Canada -Vcr for the obvious reasons- 11 degrees now-Alta that’s obvious. The offshore money goes back to Asia it’s down 50% right now. But that won’t happen just yet……………………………

#178 Nostradamus Le Mad Vlad on 12.08.10 at 9:26 pm


bullion.bunny and Greg W. — Thanks for the link and info. / Anytime Greg!

See what the FBI stoops to, to divert peoples’ attention spans away. “FBI sets up another patsy in desperate attempt to distract media from fraudulent mortage buybacks.”

Iceland exists recession “In short, the people of Iceland told the bankers Vaddrassgat and refused to pay for the bankers’ greed. Iceland’s economy is now out of recession.” wrh.com. As compared to this. “The globalists wanted global government and global economy, and to get it, they needed global poverty. But now the plan is understood by the people of the world, and the plotters may just have set the stage for a truly global revolution.” wrh.com.

Obama Oh dear. “Sort of like Hitler, just before he moved into the Berlin Bunker!” wrh.com.

5:50 clip “This is the leak Julian Assange did NOT want you to know about!” wrh.com. 9-11 was an inside job.

2:55 clip Guess who is on the hook for the EU / IMF bailouts?

Scroll to top Now I understand why Bernanke was trembling during the 60 Minutes taping. “You are so close to the real heart of the scandal.” wrh.com.

South Korea Recall that after their exercises with the US, The US then went onto Japan. Naughty!

Interesting “Our solution to the China debt crisis is simple. We will declare war on them and murder the people we owe money to. After all, it worked for Philip IV when he owed all that cash to the Templars!” wrh.com.

More BS “Melting glaciers and ice sheets are releasing cancer-causing pollutants into the air and oceans, scientists say.” In general terms, these pollutants are called farts.

The US — becoming just like Detroit. Pic at top sums it up.

FYI and from wrh.com: “Now that France has joined Venezuela, Uruguay, and Brazil in recognizing the state of Palestine with its 1967 borders, expect Israel to escalate the program to eradicate the Palestinians. Today’s attack was unprovoked,” Bolivia and Argentina have been left out (unintentionally).

#179 [email protected] on 12.08.10 at 9:28 pm

Slava: “Not too bad, I think, that being after I liberally expensed a lot of stuff not exactly purchased for business. … But for a lot of people who expense like mad and show little legal income, 2015 will be a nightmare. Because many will be unable to qualify for a mortgage on the house they ‘own’.”
———–
So let’s get this straight: you steal from everyone on this board by cheating on your taxes — which means we will all end up paying higher taxes because you are not paying your fair share — and you expect us to feel sorry for you and your ilk for your potential mortgage difficulties?

#180 Taxpayer like everyone else on 12.08.10 at 9:42 pm

Dark Sad – Good to see you are still blogging hard. You had asked previously of myself (CUT and PASTED from
your post):

“You need to show me where the savings rate has
always been positive-”

with regards to the graph from this link you supplied

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

Pleased to help someone who puts so much effort into this blog! If you look at the graph you will notice the percent rate is plotted on the Y (vertical) axis and the calender year on the X (horizontal) axis. In this case the bottom of the graph is labelled as “0” (zero). The
squiggly blue line is always above this zero value – it is always positive. It peaks at about 15% in about 1975,
and bottoms near 1% in about 2005, but never goes
below that.

Glad I could clear that up for you.

Oh look, Shawn’s back…..

#181 Devore on 12.08.10 at 9:49 pm

#154 Karl Hungus

I’m surprised Garth has not piped in on this yet.

The TFSA rules are quite clear. ANY amount you withdraw from a TFSA, becomes eligible for contribution the following year, on top of the $5000 you already get. Even the most basic TFSA brochure from the orange guy and the Big 5 spell this out clearly.

Ex from HSBC (http://www.hsbc.ca/1/2/en/personal/chequing-savings/savings-accounts/tax-free-savings-account/how-does-tfsa-work)


# The TFSA contribution room for a year includes:
a. the TFSA dollar limit for the year in question ($5,000 which may be increased for inflation);
b. unused TFSA contribution room from prior years; and
c. withdrawals from TFSAs made in the prior years.

# The amount withdrawn from a Tax Free Savings Account can be put back starting from the beginning of the following year.

#182 Devore on 12.08.10 at 9:52 pm

#154 Karl Hungus

The contribution room has absolutely nothing to do with how much you withdraw. You put in $5000, take out $5000, put the $5000 back in – you’ve over contributed by $5000.

BTW, on this, you are absolutely correct. You cannot put the money back, until the following year. This is probably the confusion you are having.

As the article you linked clearly explains:

Most importantly, you have to wait until the next calendar year to put money back into a TFSA. So if you put in the annual maximum contribution of $5,000 in January, 2009, when TFSAs were introduced, and then withdrew $3,000 a few months later, the earliest you could have replaced that money without incurring a penalty was Jan. 1, 2010. Do it any earlier and you end up with an over-contribution, even if you remain under the $5,000 limit.

Quit spreading misinformation.

#183 Junius on 12.08.10 at 9:54 pm

#163 Cookie monster,

You said, “accumulation of wealth means they are doing something good.”

Can you say that about the Financial Service industry over the past few years? Please, this is just so naive.

You will have to do better here.

#184 jess on 12.08.10 at 9:58 pm

think houses are inflated… check out the price of a hammer $ 436.00
historic cost-pricing system
http://www.truth-out.org/historical-hell-how-pentagon-continues-overpay-everything65772

#185 Cookie Monster on 12.08.10 at 10:03 pm

Junius,
Clearly we are not going to agree so I will leave it at that. It is not about more or less government. It is about better government.
——————
Exactly, and a smaller government is a better government.

#186 Cookie Monster on 12.08.10 at 10:06 pm

In a perfect world it would work through honesty/ integrity / principles… we would do things for the greater good of society , not for the greater good of ourselves.
————————
Individuals acting in their own self interest is the greatest action toward prosperity for society. Success breeds success. The best way to help the poor is to not be one.

#187 Cookie Monster on 12.08.10 at 10:21 pm

AG Sage #170,
I don’t know what that post’s all about. I guess you’ve inferred that my stance against big government means I advocate no government or anarchy?

FYI, I work in the alternative energy sector and understand full well the atrocious behavior of big oil, chemical and other highly polluting industries with complicit government corruption around the world. I’m fighting against it, I’m on your side buddy.

I fully support government regulation of business operations to protect the environment, regulations that must be grounded in fact and science and applied equally and effectively across industry. I also support human rights and individual liberty.

#188 Cookie Monster on 12.08.10 at 10:25 pm

#163 Cookie monster,

You said, “accumulation of wealth means they are doing something good.”

Can you say that about the Financial Service industry over the past few years? Please, this is just so naive.

You will have to do better here.
———————–
God no, 100% agreement. These Wall St. crooks should have gone bankrupt, that’s my point. The GOVERNMENT bailed them out! The government is complicit and corrupt.

Sound banking and investment are necessary for capital formation and business and prosperity. This is exactly why N.A. is crumbling, the capital is fleeing and with it got the jobs. Investing with the hot shot paper pushers today is a losers game for sure. A casino on a sinking riverboat that would have sunk had it not been for the bailouts.

#189 Kaganovich on 12.08.10 at 10:26 pm

Cookie Monster

You said:
No thanks, I’ve read enough on how economics actually works by Mises, Rothbard, Hayek, Rand, Paul, Schiff and others.
Your logic toward me is flawed like by saying reading, studying and practicing modern science should be tempered by study fallacies and giving credence to the world’s religions and supernatural mysticisms in order to have a balanced view. Crawl back into your cave simpleton.

Thanks for the reply. Primitive accumulation was hardly a fallacy…capitalism has a history. The point was that you were contradicting yourself by trumpeting capitalism as a system in which one’s wealth was safe from others’ seizing it by force. In this contention of yours, you neglected to acknowledge the fairly well-established connection between an injection of South American precious metals/along with the significant buildup of peasant surplus labour through rent levied by the nobility during the medieval ages with the jump starting of capitalism as we know it. Both these sources of wealth were forcibly pillaged if more subtle coercion failed. This process gave mercantile capitalism it’s initial fuel. Would we have the system we have today if Atahuallpa hadn’t underestimated Pizarro and his gang and proceeded to kick their asses rather than laugh at them? Who knows, but one should not forget these dirty little secrets when praising capitalism as the essential system of fairness. Which it isn’t, btw. So, your analogy is hardly useful in this context. Why is it that whenever the Mont Pelerin hounds come on the blog, they come off as religious market zealots during their first day or two of commenting? I am not disputing everything Hayek of Rothbard has claimed because much of what they wrote has merit, just like other authors. If one thinks that Marx had some crucial insights into how capitalism functioned in his day and age, does that make them rabid economic determinists or trigger happy wannabe tyrants? I don’t think so.

#190 Cookie Monster on 12.08.10 at 10:36 pm

This whole string of arguments yesterday and today has all stemmed from me stating that capitalism is the only moral political system. Capitalism proper namely ‘owners capitalism’ and secondly ‘managerial capitalism’. Crony capitalism is the culprit, so lets be clear about what we’re mad at.

Everyone constantly blames capitalism for our woes when its not capitalism but cronyism to blame. That’s what I’m arguing and will continue to argue because the only alternative to capitalism, freedom and liberty is socialism and that’s a whole huge basket of hell.

#191 dark sad person on 12.08.10 at 10:50 pm

#181 Taxpayer like everyone else on 12.08.10 at 9:42 pm

Dark Sad – Good to see you are still blogging hard. You had asked previously of myself (CUT and PASTED from
your post):

“You need to show me where the savings rate has
always been positive-”

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

That was in answer to your pipe dream Shawn-
(masquerading as “Taxpayer”)

That there is a balance of savings compared to the Credit supply–

Get this through your head–
I gave you the ratios–
Work with them–

There is 2,000 billion base money–
There is 52,000 billion lending–
The ratio of base money to lending is 3.8%

3.8% of Total “Debt”
There is your “Positive” number that chart shows–

Before the Fed Money ramp–I showed you again–

There was $800 billion base money supporting $52,000 billion in lending-

At that point–the ratio of base money to lending was a measly 1.5%.

wtf–do you not get about this Shawn X 2

#192 bill on 12.08.10 at 11:07 pm

john m

”There are thousands of people in BC living the millionaire lifestyle with absolutely no legal income…”

I agree with the thousands living on illegal income ,they are however not enjoying a millionaire lifestyle.
and while some of them are not doing so bad at their illegal endeavor , have the wit not to attract the attention of the authorities.

#193 Timing is Everything on 12.08.10 at 11:42 pm

#136 Bullion.Bunny

Agreed…. The kids are alright.
Their world will not be our world. And I’m OK with that.

http://www.youtube.com/watch?v=kZNDV4hGUGw&feature=player_embedded

#194 Hell in a Handbasket on 12.08.10 at 11:52 pm

@ #163 Cookie Monster

And you are missing the fundamental point that wealth is doing nothing good if they are just sitting on it or using it in ways that benefits themselves and their rich crony’s. Riddle me this, if the wealthy are so busy creating jobs and raising standards of living, then why are so many jobs being outsourced over seas or cut althogether through technological unemployment?

Rich people, most of them, are not sinister out of habit, they are forced to behave in this fashion because that is what the economy and capitalism demands. Ever increasing profits. You do that through three ways, raise prices, expand markets, or cut costs. Unless you have a monopoly or a cartel raising prices will never fly in a competitve environment. With globalism, many markets are hitting saturation, or simply many potential markets will never be realised because the people are too poor to afford what companies would like to sell, but these markets can be used in a different way, cheap labour pools. Which is a nice seque into cutting costs, labour being the biggest cost to any business. The pressure is to cut cost, so capital will chase the lowest cost of labour, to do otherwise would be suicide in a business environment. So you might argue that you are raising the standards of living for people in India, but at what cost for the people in North America? And can the people of China even afford the products that are manufactured for North American markets? At some point you will have reached a tipping point where human resources become redundant and the rich will just trade amongst themselves.

Too bad Enron, Goldman Sachs, Lehman Brothers, BreX, Arthur Anderson, Xerox, World Com, AIG etc. do not operate by the same standards as you do. Tell me who pushed for the suspension of mark to market? I can guarantee it was not a government initiative, it was pushed by private sector. Tell me who agitated for the bailout? Again this was a plea from private interests and faciliated by ex-employees of these private firms. How do you think favouritism and government intervention gets started? There is a revolving door between private enterprise and governments.

You can have honest business, but more money is made by being dishonest, otherwise firms would not bother with dishonest practices as it would impact their bottom line.

#195 Hell in a Handbasket on 12.09.10 at 12:02 am

@ Cookie Monster

I actually like Peter Schiff and Ron Paul. And I’ve read most opinions issued by Austrian economists. I just think that they do not go far enough on some issues and I don’t believe that a free market or sound money will solve all our problems. But at least it is a start.

#196 Cookie Monster on 12.09.10 at 12:03 am

Kaganovich, that’s some impressive useless information. I think you’re nuts.

#197 Slava on 12.09.10 at 12:29 am

#180 [email protected]

Your answer is not at all to the point. You don’t know how much taxes I paid, how the hell do you have a nerve to make that kind of judgment?

#198 patientbuyer on 12.09.10 at 12:44 am

@198, Slava,

I pay a lot of tax too (how much you paid is beside the point if it is not all you are legally obligated to pay, which is evident by your own admission in your post above).

ALL of my income is declared, just like the vast majority of Canadians who conscientiously pay their fair share while people like you scam the system and keep more than you are entitled to.

You’re the one with a lot of nerve expecting the people on here, whom you are ripping off, to feel sorry for you.

#199 Taxpayer like everyone else on 12.09.10 at 12:59 am

192 Dark Sad

“There is 2,000 billion base money–
There is 52,000 billion lending–
The ratio of base money to lending is 3.8%”

That was me DSP, not Shawn. I heard there was $4000B base money, but the $52000B debt seems to agree with
a few sources. No matter. I wont dispute.

What is your figure for world savings? TIA.

#200 Cookie Monster on 12.09.10 at 1:13 am

Hell in a handbasket, jobs are leaving N.A. because taxes and to cost of living are too high here to fund so many social programs and a bloated public sector, pensions and benefits. Evidence that our current system is broke is simple, look at all the debt we have in government after the greatest 40 year credit expansionary boom in history.

Yes, big business does become corrupt and lobby government for subsidies and favorable laws and regulations and that’s why I say government should not be involved in such matters of money and business. Government has the authority on the use of force and it must not be corrupted like it is. Wars are instigated in the interest of certain corporations. I’m sure we’ll see some juicy emails soon from wikileaks to support this.

Glad to hear you read the Austrians, I think we agree on economics. Have you read Ayn Rand’s “Capitalism The Unkonw Ideal”?

My point is fundamental morality and principled ideals. I’m just echoing Ron Paul and Peter Schiff’s logic. I’m a small business owner and know how expensive it is here to hire and I detest the political elite day after day on the news causing more and more damage at all our expense.

In a sound money economy the natural tendency is falling prices due to improvements in productivity and capacity growth due to capital reinvestment but this natural order has been hijacked by government money printing to maintain their 2% inflation target as per the CPI. This means actual increase in the money supply is likely closer to 4-5% because first the money supply growth has to offset the productivity improvements and then must add even more to achieve rising prices.

Inflation and corruption is created/enabled by government so government is the greatest villain, not business men, not capitalism proper, but cronyism.

#201 Taxpayer like everyone else on 12.09.10 at 1:29 am

[email protected] – DSP was kind enough to give us his
interpretation of the story of the little town where
everybody owed money. May we please have yours? TIA.

#202 The American on 12.09.10 at 1:57 am

At #103: April, I WILL JOIN YOU! Please tell me the event will proceed in Vancouver, and please provide the place, date, and time. As the brash, crude, rude, stupid, over-indulged, arrogant, ignorant, uneducated, and horrible American, I would be quite happy to take the lead and spearhead this initiative of the picket/protest. I really could care less of what others think of me. After all, one’s opinion of me is simply none of my business. Therefore, it would probably be expected that an American would do something like this anyway, so why would I subject innocent Canadians to this role? All others who would want to join me are very-much welcome as we storm the front steps of the CCB or the CBC, or the CBB, or the BCB, or the BBC or?! Hell, I don’t know what you all call it, but that’s really beside the point anyway. The crowd would certainly grow larger and larger until we simply could not be ignored by the media. We all quickly are surrounded by lights and cameras wanting to make us into this evening news’ laughing stock only because we laugh in the face of their “balanced” reporting. Like an unmedicated fat kid eye-f*cking a piece of chocolate cake, I then charge the ‘reporter’ and yank the mic from her quivering hand. I calmly say the following: “Eh hem… First off, I am an American, so I don’t give a flying frog’s fat, freckled, flatulent ass what ya’ll think about what I’m gettin’ ready say. You are being lied to by your media, but probably more than I could have ever witnessed or imagined. The next time you see, hear, or witness any kind of commentary surrounding real estate, just ask the question – If RE is really this hot and fail-proof, then why is our media constantly finding new reasons to pump out why we won’t fail?” If you stop and think about it (no, I mean REALLY, REALLY THINK ABOUT IT), you’ll see some truth in that rhetorical question.

Or, if you prefer, I could say the following after grabbing the mic from the reporter, while staring daggers into her eyes: “You stupid Cant Understand Normal Things, why you keep lying to all of us peeps?!?! I’ll cut you next time you pull that sh*t. Seriously, I’ll cut you deep and often.” This is often an effective method, often used by us Americans, to quickly speak common sense into another individual.

Ohhhh, April, I think we could have a lot of fun with this, you and I. But for the mere fun of it, I think it would be worth the fine. Let me know!!!

#203 northern_dirt on 12.09.10 at 2:21 am

#154 Karl Hungus on

I don’t think you read the article correctly..

#204 LB on 12.09.10 at 4:38 am

Cookie Monster:

See the documentary “The Corporation” which very clearly addresses all your comments.

We are currently witnessing the demise of unbridled Capitalism just as we have recently seen the demise of unbridled Communism. These extremes have proven untenable.

The more viable system from current options is therefore to be found in the middleground -ie Socialism.

We will first have to put aside our emotional response and bias toward the propaganda that has idealized and perpetuated capitalism, imbued in all of us by every aspect of our society throughout our lives, in order to fully realize, accept and make way for this more equitable and evolved alternative.

#205 RE Bear on 12.09.10 at 5:52 am

Don’t feed TheMostSchizophrenicPersonOnEarth or the other little troll Shawn Allen.

Psst, Shawn, you’ve been wrong every single time. TOTAL SAVINGS > TOTAL DEBT!!!!!!!!!!!!!1111111111ELEVENTY

#206 Cookie Monster on 12.09.10 at 8:28 am

From #163, Hell in a handbasket;
Here is something to consider, when a billionaire accumulates billions of dollars in wealth they are in essence denying that wealth due to protections conferred on them by private property laws. With the wealth they lay disproportionate claim on production and resources. In a finite system run by capitalism, people starve because it is necessary for them to go without so this wealth can be concentrated. This is just as much force as a government imposing a luxury tax.
——————-
Economics is not a finite system, for someone to accumulate wealth does not necessarily imply that someone else must go without and starve. Just because China’s and India’s economies are booming and their standard’s of living are rising doesn’t necessarily mean that ours has to fall, even though it looks like that’s exactly what’s going to happen, it didn’t have to be this way.

#207 Cookie Monster on 12.09.10 at 8:36 am

LB, I’ve seen “The Corporation”, its old and superficial. A corporation is a legal entity like a person I know, I own one and file an annual tax return for it. It’s a blast!

#208 Cookie Monster on 12.09.10 at 8:39 am

Hey Roster Cogburn’s on with John Wayne. Great movie. The good ol’ days in the USA that functioned on freedom, guns and gold.

#209 Steven Rowlandson on 12.09.10 at 9:47 am

Hello Garth.
One thing I picked up on was that realtors expect the price to go up based on immigration supplying new home buyers who have money. Oh how they salivate over the prospect of keeping the financial sodomy going, much to the detriment of native born would be home buyers who earn market rates of pay.
One step in the right direction is to stop immigration in order to stop new demand for real estate at higher and higher prices. The real estate market and its price levels is not capitalism ! It is a financial and moral sickness that threatens the viability of the nation and economy.

Steven

#210 The American on 12.09.10 at 10:02 am

Cookie Monster, you should learn a few things before you continue to write:

1. We are not witnessing the end of capitalism by any stretch of the imagination. Period. If anything, through this recession, capitalism is still very much so alive and well. Companies, in fact, have grown larger and larger. It depends which side of the fence you’re one. In the U.S., we survived the Great Depression, so we will survive a Great Recession. We’ll more likely see and witness and end of socialism (ie. Europe, which has far more financial woes than North America), before we will witness and end to capitalism.

2. I agree with you that for one to make money, another has to suffer. However, the undertone of your message seems as if we’ll never recover from this. I must say to you that we will. Chin up!

#211 Slava on 12.09.10 at 11:50 am

#198 patientbuyer

Who said I expected anybody to feel sorry for me?

I don’t cheat anybody. Technically, I steal from my company, so what do you care?

#212 Mr. Plow on 12.09.10 at 12:44 pm

#173 john m

That may be, but just trying to point out to those who think that someone can just come over here with a suitcase full of money and throw it into a house, that it is not that simple.

FINTRAC has been in place for years to stop those sorts of things from happening. Sure some people can certainly get around it. But for those who think it is rampant could probably use this information as food for thought as it is not as easy as they may have thought.

#213 Quietly Observing on 12.09.10 at 2:58 pm

I just ran into an old friend here in Vancouver the other day. He and his wife (and young daughter) have their condo for sale in Yaletown, one of the trendiest areas of Van if you didn’t know already. They want to move out to Port Moody to buy a townhouse.

Anyway, they bought 2 years ago for $355K (One bedroom and den), and were asking $429K (over 2 months ago). They’ve sinced dropped the price to $419K. Still no interest. It appears the so-called invincible Vancouver real estate market is not so invincible after all. There are many other stories just like this one around here. $2 million dollar homes might still be selling, but properties in the lower price ranges are definitely facing some challenges.

#214 Hell in a Hand Basket on 12.09.10 at 4:24 pm

@ Cookie Monster #206

CM said:
Economics is not a finite system, for someone to accumulate wealth does not necessarily imply that someone else must go without and starve. Just because China’s and India’s economies are booming and their standard’s of living are rising doesn’t necessarily mean that ours has to fall, even though it looks like that’s exactly what’s going to happen, it didn’t have to be this way.
—————————————————-
This is why I have a problem with most economic models, they are totally divorced from reality. Economics is not a finite system, but the system that it is bolted onto i.e. the planet, is a finite system. You cannot have perpetual growth in a finite system, it is mathematically impossible. What you can have is a series of booms and busts, which seems to be a poor way to conduct an economy and wasteful.

The reason why it looks eactly like India and China’s standard of living is rising and ours is falling is because that is exactly what is happening. And as long a capital chases teh lowest cost of labour this will continue to happen. As soon as it becomes economically feasible to produce things more cheaply in Africa rather than India and China, that is the moment that companies are going to start moving to Africa.

#215 Cookie Monster on 12.09.10 at 5:04 pm

The American, you’ve got me confused with the people I’m arguing with. I never said capitalism is a dead system and I never said economics is finite where one has to suffer for another to prosper, I’m arguing against.

Economically, no one has to lose for someone else to prosper, farmer A does not have to have a bad crop for farmer B to have a good one. Business A doesn’t have to fail for business B to succeed.

Remember Say’s Law – Goods exchange for goods. Money is a medium of exchange. Production is demand. Producers produce so they can consumer. The more they want to consume the more they will produce.