She’s 73, sold a house in Richmond, and has $728,000 sitting in a three-year GIC at the BeeMo bank downtown, the one with the big butt-ugly train thing running down the middle of the street. Now she lives in a basement suite and yearns for a garden. She also worries about money. And the rent, $1,450 a month.

So why doesn’t she lease a house, or at least the main floor of one?, I asked her son, Encino.

“She thinks it’s too expensive, and can’t afford it,” he replied. “She’s only getting 1.5% on her money. My mother’s living on that, and her CPP – that’s it.”

The total: something like $22,000, which after rent leaves $88 a week for food, utilities and lottery tickets. And that’s why she’s now shopping for a new house – something in the $650,000 range. “I need a garden,” she told me over coffee on the weekend when I slipped west, “and I can’t afford to pay all of this rent. It’s killing me.”

Coming back I thought about her, trying to decide if it was the dementia of old age or the delusion of British Columbia which had her in its grip. Both, I concluded. But before I left I showed Maria how she could invest her stash and, with a modest and achievable 6% return, increase her cash flow by more than $30,000. Suddenly she’d have an income of over $55,000, and enough extra cash to rent a whole house if she wanted.

Of course I gave up trying after I’d heard the same line fourteen times: “But is it guaranteed?”

2010 was the year of steadily declining real estate sales. 2011 will be the year of declining house values. As a result, you can count on a big exodus of capital from housing, hitting the road looking for yield and return – as well as safety. Exacerbating this will be growing Boomer panic at nearing retirement with a tenth of the liquid assets required to stay in adequate supplies of Just For Men, Butt Lifters and Age-Defying Regenerist Microsculpting Wrinkle Cream.

This is one reason I’ve said a few thousand times the age of the house and the GIC is over. A new age of financial assets is just beginning. It will defy the hair-shirted doomers and whiny nihilists who like to coat this blog with a layer of ashes, forecasting a bursting bond bubble, stock mayhem and open season on squirrels.

There`s little doubt Washington will continue to apply more stimulus than a Shakira vid. One reason bond yields spiked last week is because markets are convinced endless rivers of money will flow into the US economy, inflating asset values, eventually igniting inflation, and leaving a residue of more debt. It`s the perfect scenario for investors: a jobless recovery. That means rising corporate profits, more public spending, and continued low interest rates.

That might suck if you’re an unemployed auto worker in Cleveland (or southwestern Ontario), but it sure ain’t gonna hurt stock prices.

So for those who fear risk, fear this.

  • Real estate’s an overvalued asset class about to be brought down by dwindling consumer incomes, too much household debt and an irresponsible industry.
  • GICs and money in the orange guy’s shorts will give a negative return (after inflation and taxes) for years to come.
  • So in a country where most wealth’s in houses and banks, the greatest risk possible is outliving your money. And the disaster we’re most likely to have is not a stock collapse, but a pension crisis.

The best defence against this is to diversify out of real estate, and shift as much as possible into a balanced and highly liquid portfolio. I spelled out how to do this ten months ago when my most recent book, Money Road, was published. I suggested it would make ideal sense to have a portfolio split between fixed-income assets (like various bonds and preferreds) and growth vehicles (like sector ETFs, commodities and REITs). A good mix would be 40-60, and overall a house should not represent more than a third of your net worth.

So far in 2010, with two weeks left, this portfolio’s up 13%. With a broad mix of assets and diversification across geography, economic sectors and company sizes, as well as multiple income sources, it’s also largely insulated from the black swans among us. Best of all, most of the return is in the form of dividends and capital gains, where the maximum tax is 25%. In contrast, GICs are taxed at 100%. Of course, using a TFSA and RRSP, it gets even better.

So, here’s the point. The year to come will surely bring shocks. Like that Day of Reckoning for US states. Like the higher rates Mark Carney is vowing. Like stagnant economic growth, a collapse in exports and structural unemployment. Political and social upheaval in Europe. And, as I beat on about, the start of the real estate melt.

You need to defend. We all must get liquid and build marketable assets. A paid-off house could be illiquid. A garage full of bullion’s pure speculation. And a GIC in the BeeMo on 3 Road is dead money.

As I told Maria, nothing’s guaranteed now.

Save, of course, the consequences of your actions.


#1 vreaa on 12.19.10 at 10:27 pm

“I know quite a few people who sold at peak just before the 2008 correction. Their plan was to buy back in at lower prices. They are all now waiting and losing pace to the market every month.”

What some on the sidelines in Vancouver can learn from Isaac Newton –


#2 JO on 12.19.10 at 10:38 pm

Wise words Garth, but people need to be careful not to over diversify an keep investment costs down..investors need to pay attention to MERs.


Where did I mention mutual funds? — Garth

#3 Kevin on 12.19.10 at 10:48 pm

The false argument that Canada has a conservative banking system compared to the US, Canada never gave out subprime mortgages to NINJA borrowers, our banks did not need a bailout so our market will not fall. etc, etc. How does that explain previous crashes in Canada’s housing market?

Some Western Canadian cities in the early 80’s took about 25 years to recover in real terms when the early 80’s housing bubble popped.
While Eastern Canada did not experience a housing bubble in the early 80’s like Western Canada, Toronto and area had a housing bubble in the late 80’s that burst in 1990. It took well over a decade and a half to recover in real terms.

Previous Canadian housing busts had stricter lending

#4 Dorothy on 12.19.10 at 10:48 pm

I would never advise someone in their 70’s to buy stocks when the economy is as uncertain as it is. I’m surprised you think that’s still a good choice for someone so old, or am I misunderstanding you?

Where did I mention stocks? — Garth

#5 dd on 12.19.10 at 10:49 pm

“She’s only getting 1.5% on her money.”

Wow. Facture in price inflation and taxes … she is losing capital.

#6 dark sad person on 12.19.10 at 10:51 pm

So in a country where most wealth’s in houses and banks, the greatest risk possible is outliving your money. And the disaster we’re most likely to have is not a stock collapse, but a pension crisis.

I think the greatest risk-is in your Money lasting longer then you do-

I agree about the hit to Bonds being driven by risk fading-usually a sign of a top-

Did you tell that nice lady-she should put 5-10% in real Gold?
That might have tipped the scales-because if she had asked you if Gold was guaranteed-
You could have shouted a big YES!

#7 freedom_2008 on 12.19.10 at 11:01 pm

For lots seniors, going to the market is hard. People always say that one should only invest in what you understand. So you cant blame on her because she doesn’t understand.

But someone should tell her that she can at least get 2% or more in high interesting save account wit Ally and Peoples trust (which head office is right in Vancouver), they are liquid and covered by CDIC just like GIC. Also she could build a GIC ladder with first 2 years portion in these saving account. Put everything into a 3 year term in today’s condition was a bad enough, did it without shopping around made it hurt even more (eg peoples trust 3 year GIC is 3% now, that is something she can understand, with 7500/yr more income she could use).

Are you serious? — Garth

#8 T.O. Bubble Boy on 12.19.10 at 11:02 pm

This is a single retired person with $728,000 in the bank… probably 10x better off than the average Canadian retiree in terms of savings, and still struggling to pay rent!

I can definitely see retirees starting to take more risks with their money — seeking out high dividends and even chasing some exotic investments.

As the Canadian Housing Bubble bursts, I think we’ll see a “Dividend Bubble”, where any company paying out at a rate higher than that 3% GIC will be in high demand (which will actually lower dividend yields for new investors, since higher stock prices paying the same dividends = lower yields).

#9 Sue on 12.19.10 at 11:08 pm

woo hoo! first! (I don’t get out much)

| am so happy to be a wealthy renter with a fully diversified portfolio…. squash courts/pool and a gym in my building to boot.. I find myself smiling in the dark like that other dude you spoke of.
Thanks Garth.

#10 Sue on 12.19.10 at 11:08 pm

sheesh…I was going to be first but I took too long to write my stuff…how embarrassing!

#11 Amarillo on 12.19.10 at 11:10 pm

Yup, watched it, couldn’t resist, GT has this demographic nailed.

Canada also has a Day of Reckoning coming for the provinces. Holy jumpin’, did anyone read Saturday’s National Post? Ontario & Quebec are in debt up to their wind turbines and empty cathedrals.

Obvious Question: why am I as an Albertan contributing to free university education for Quebec students (via transfer payments) when my kids are paying top dollar for their post-secondary educations here in Alberta?

Steve, are ya listening? No, I don’t want to separate but I’m afraid there will be growing WestEast resentment over unfairities (they’re sort of like disparities) like this.

#12 Roy Stacey on 12.19.10 at 11:12 pm

All the consequences of stupid financial decisions meet on 2011’s doorstep. Happy Gnu Year!!
We ARE all bound toigether in our respective countries decisions, as well as our own family’s decisions for handling money.
Too bad we are not easy financial literates, or change our profligate ways so easily. Still, we will learn to do well on the same, or less in the face of rising costs, and taxes, which seem inevitable based on the bad decisions of weak elected leaders, especially the US’s crop of weak elected leakers taking office in 2011.
Please excuse me if my liberaL BIAS IS EXPOSED.
Someday, I grow out of it, but please don’t hold your breath.

Good luck to all of us investors, consumers & wage slaves.

#13 dd on 12.19.10 at 11:16 pm

#7 freedom_2008

…she can at least get 2%…

I think my food bill went up 2% last month …

#14 Moneta on 12.19.10 at 11:19 pm

Why doesn’t she go garden for some working couple. Then she’d be making money.

Why do people have to own everything?

#15 Fly Straight on 12.19.10 at 11:20 pm

So let me get this staight – higher rates are coming as Carney warned, but insufficient to warrant keeping anything in GICs?

So basically, there will be no huge crushing spike in interest rates that will decimate the RE market? So, those predictions of crushing interest rates were so 2009 eh?

Its always good to be fluid in one’s predictions right?

Hmm…so that cheerleading RE industry has been right all along…low interest rates to stay for some time. Or as you said, “continued low interest rates.”

Glad I didn’t buy in 2008. By the time interest rates rise, I could have paid off a huge amount of my mortgage.

Rates will certainly rise, but so will inflation. It means people invested in savings vehicles will continue to get no real return. That wasn’t so hard to understand, was it? — Garth

#16 Mean Gene on 12.19.10 at 11:20 pm

Maria should put most of her stuff into storage and move into a coach house, I live in one and like it.


#17 Dave in Victoria on 12.19.10 at 11:26 pm

Reckoning indeed. Coming to a conservative Canadian theatre near you.
This all out assault on the public weal and the phenomenal speed at which it’s occurring is astounding.
Strange to be living in the midst of such a broad based social upheaval.
It’s like an episode of “the feudal lords strike back” or something.

#18 Moneta on 12.19.10 at 11:27 pm

Obvious Question: why am I as an Albertan contributing to free university education for Quebec students (via transfer payments) when my kids are paying top dollar for their post-secondary educations here in Alberta?
You guys didn’t pay taxes for 20 years. And on top ofit , all our engineers, scientists and gelolgists are in Alberta.

#19 freedom_2008 on 12.19.10 at 11:27 pm

“Are you serious? — Garth”

For a senior like her, yes. Also if she do go to the market, she would need an adviser or whoever to manage her money, the management fee could be anywhere between 1-2%, so it wouldn’t be 6%, but 4-5% even if she is willing to go.

You have much to learn. — Garth

#20 Mister Obvious on 12.19.10 at 11:29 pm

I was born in Vancouver and have lived here for 60 years. I doubt there’s one person in two hundred people in this city that can truthfully say that. I can lay claim to some credibility when commenting on my ‘delusional’ city. And believe me it is delusional.

It’s hard to know where to start. Last week a neglected sewer caved in, opening a huge sinkhole in the middle of South West Marine Drive. Authorities originally said it could be repaired in a week. The latest estimates are now maybe sometime in February. Marine drive is one of the very few useable east-west routes across the city, all of which are choked with insane traffic for 18 hours every day, Sundays included. Construction is never ending on these, summer or winter. Now there is one less route for an indefinite period of time. It takes great personal courage and stamina to drive anywhere out of one’s immediate neighbourhood in Vancouver.

But the new 500 million dollar retractable roof on BC place stadium seems to be coming in on budget although, by design, it can’t be operated (i.e. opened or closed) in the rain. But at least it only rains 200 days per year.

Meanwhile Hornby street downtown has been re-factored to accommodate bicycle lanes. There are now so many confusing and ambiguous signal lights for cars, bikes and pedestrian alike the city has given up and hired people in yellow raincoats to direct traffic. In rush hour you can count on one had the number of sweaty, die-hard bikers using these new lanes. In the meantime merchants along the route are seeing a significant drop in business since parking has become next to impossible.

Vancouver is not San Diego. The weather is wicked for bike riding a great deal of the time. Most sane people would rather ride to work a warm and frequently-running bus during the plentiful chilly rains. Vancouver is perpetually short of busses but at least we have a ‘green’ jock mayor who’s a huge fan of showering at work.

We built a second trade and convention center while the excellent existing one (Pan Pacific) is still scrounging for business. The huge Grizzly turd we call the ‘Millennium Water Development’ (Olympic Village) continues to languish empty while thousands of 500-square-foot broom closet concrete condos are under construction all around it. The Olympic ‘glow’, if it ever existed, is now a very distant memory as we passively go the way of post-Olympic Montreal.

And its true, rich Asian investors are buying beautiful 100-year-old heritage homes in the high end Kerrisdale and Dunbar districts, pushing them down to make way for pastel monstrosities with “big face”. Meanwhile, rival gangs are opening fire on each other with automatic weapons even in the nicest neighbourhoods.

Provincially, the Liberal provincial government is in a shambles after the resignation of the unfathomably bad Premiere Campbell. The opposition party in waiting (the NDP) has just self destructed (probably forever) in a frenzy of cat calls and backstabbing. Taxes are rising while services dwindle. The issues surrounding the hated HST are still boiling over on the front burner. The tax will probably be killed and the fallout from the subsequent dismantling will be charitably described as an expensive fiasco whether one supported it or not.

Yep, Vancouver BC. We’re different. This WAS a city of stunning beauty thirty years ago when it was half the size. That is, before we became the big cosmopolitan center we are today, competing on the world stage with the likes of New York and London. Back when the citizenry had their heads on their shoulders, not up their backsides.

#21 ian on 12.19.10 at 11:31 pm

Analyze this!

$172,411.00 present value (purchase price)
Use a 12% interest rate
50 year amortisation (600 payments)
0 future value (loan paid off)
$1687.50 payment
Gross income of $45,000.00
45% TDSR = $20,250.00 divided by 12 months = $1,687.50 payment
Total principal paid is $172,411.00
Total interest paid is $840,088.00
Total P & I = $1,012,499.00

Now check this out!

$796,899.00 present value (purchase price)
Use a 1% interest rate
50 year amortisation (600 payments)
0 future value (loan paid off)
$1687.50 payment
Gross income of $45,000.00
45% TDSR = $20,250.00 divided by 12 months = $1,687.50 payment
Total principal paid is $796,899.00
Total interest paid is $215,600.00
Total P & I = $1,012,499.00

You come to your own conclusions. Take your pick on the above! 45% of our gross income goes to housing and 45% of our gross income goes to taxes and 10% of our gross income goes to CPP. Then we get a few scraps kicked back to do with as we wish. We finish school at 20 and we are dead at 70. Is this what we live for? For what? Who knows! You be the judge. We all spend all what we earn no matter what our current income levels. A stiochiometric relationship?

#22 Debt's Dark Embrace on 12.19.10 at 11:34 pm

#8 T.O. Bubble Boy on 12.19.10 at 11:02 pm
This is a single retired person with $728,000 in the bank… probably 10x better off than the average Canadian retiree in terms of savings, and still struggling to pay rent!

I can definitely see retirees starting to take more risks with their money — seeking out high dividends and even chasing some exotic investments.

As the Canadian Housing Bubble bursts, I think we’ll see a “Dividend Bubble”, where any company paying out at a rate higher than that 3% GIC will be in high demand (which will actually lower dividend yields for new investors, since higher stock prices paying the same dividends = lower yields).

#23 bsallergy on 12.19.10 at 11:39 pm


You as an Albertan pay nothing in transfer payments. Transfer payments represent the difference in what the federal government collects in some province as compared to others. If they collect more money per capita in Alberta than in Quebec they share the wealth.

Please don’t sneer to much at Ontario at one time they paid plenty in transfers, some of which went to Alberta before they found oil there.

Anyway it is time for a selfservative majority in Ottawa. Let them rein when the shit they created hits the fan.

#24 Peter Pan on 12.19.10 at 11:47 pm

I’ve never understood people who are totally comfortable leveraging 8 to 1 when it comes to buying a house, yet constantly reject any investment strategy which is not “guaranteed” for their non-real estate assets. Like real estate is “guaranteed”.

If only homeowners could see the value of their house fluctuate on a daily basis….

Behavioural finance is amazing because it shows how humans are totally bonkers.

#25 TaxHaven on 12.19.10 at 11:53 pm

“One reason bond yields spiked last week is because markets are convinced endless rivers of money will flow into the US economy, inflating asset values, eventually igniting inflation, and leaving a residue of more debt.”

Fine, as long as you realise that this rush out of bonds is not in fear of the “healthy” inflation brought about through growth, growing productivity or jobs being created.

It’s panic about the unhealthy inflation that comes about through money-printing and government deficits.

Mainstream investors are ALWAYS six months behind, though…the U.S. has just witnessed the 32nd straight week of net withdrawals from stock mutual funds…

Getting liquid? Of course. But you must be prepared to gamble and embrace risk, too. That means STOCKS.

For those who don’t have $728,000, 4 or 6% won’t cut it.

#26 M I K E on 12.20.10 at 12:12 am

Some analysts are predicting that the next market meltdown will occur sometime in 2011.

What’s your view Garth?


Do you know what a balanced portfolio is? — Garth

#27 Aussie Roy on 12.20.10 at 12:13 am

#1 vreaa on 12.19.10 at 10:27 pm

LOL Crank up the FEAR. Get in now or be priced out forever.

“What some on the sidelines (not on the sidelines?) in Vancouver can learn from Isaac Newton”

No doubt a very intelligent man.

Even his intelligence didnt stop him from being stung by the “South seas bubble”.

South Sea Bubble

Flashback to the early 1700s. England was in a spot of bother having sent itself broke fighting a war involving the French, Spanish and money. The government approached the South Sea Company to help them out, and put conditions in place to attract investors. People always want to make a quick buck, and the investors enthusiastically invested – in droves.

Speculation became rampant as the share price kept skyrocketing. It was thought that this company “could never fail”.

One of the main money-making ventures of the South Sea Company was trading African slaves for the Americans.

Isaac Newton
Even Isaac Newton got caught up in the South Sea mania and invested a big chunk of his fortune. Interestingly, he pulled out early (after making a respectable 7000 pounds) then went back in after the bubble continued to inflate. The inevitable bust happened and he lost 20,000 pounds – a considerable sum at the time.

As a result of this crisis, he stated “I can calculate the motions of heavenly bodies, but not the madness of people”.

Wonder what he would say today about the madness in Van.


Totally agree, we (including yourself) can learn alot from Isacc Newton.


#28 sam on 12.20.10 at 12:15 am

What are the chances of Flarhety putting restrictions to mortgages?


#29 dark sad person on 12.20.10 at 12:16 am

#269 Guy_in_Regina on 12.19.10 at 10:29 pm

Dark sad. No we don’t have a free market; and we never will! You’re like a die hard communist – “if only vee could implement pure communism, zen you vould see comrade, zen you vould see!”.

I believe that’s German you’re try to portray–lol-
They weren’t Communist-
It was the “other” guys-
You need to crawl out of your cocoon
And you speak of studying “history”?

Beyond that, the principles of natural justice dictate that we take some reasonable measures to ensure citizens have a reasonable chance to succeed through their own merit – not be born into a station as in feudal times. You focus far too much on economics (the dismal science) and not enough on political philosophy, sociology, history, anthropology, international studies, etc. etc.

But I know that knowledge doesn’t fit well with your narrow, entrenched world view.

And I DO get economics – I have an undergrad minor in econ. and I took multiple econ and finance classes at the masters level. I just think it provides useful models as opposed to a panacea.


What Socialist drivel–

(We need to “ensure citizens have a reasonable chance to succeed”?)

Hows that absolute stupid idea working out today for you?

Here’s what people “need”

They need jobs-

They need affordability-

They need a Government that has friggen clue-

They need a Money system that drooling vote buying bribed-duped by Bankers-idiot Politicians can’t Inflate-

They need a Government that doesn’t interfere in the Market and hold prices beyond affordability-so that they don’t have to admit that their failed Keynesian–always Inflate–has hit a wall and Deflation is ripping apart their asshole Economic Model-


And I DO get economics –

No you DONT-


I have an undergrad minor in econ. and I took multiple econ and finance classes at the masters level. I just think it provides useful models as opposed to a panacea.

Bingo–there is your problem Mr Socialist Keynesian


The “Free Market” wants to bring prices down-so those who cannot afford them “can”
Your Governing Lords are propping high prices-
The Market want to set prices much lower-so that People can start buying again-

The “Free Market” wants to bring wages and input costs down so that we can compete on a Global scale for Manufacturing and Industrial jobs-

The “Free Market” wants to downsize Governments to bleed off the excess sickening waste-

The “Free Market” never loses–ever

#30 Jsan on 12.20.10 at 12:17 am

There sure seems to be allot of focus lately on the ballooning debt of Canadians and the risk it poses.

“Financial watchdog tightens oversight of banks ”



#31 Duke on 12.20.10 at 12:34 am

DIVERSIFICATION – A fancy investment term cooked up by wall street brokers and advisors in the 1980s so that their clients wouldn’t sue them. No one makes money diversifying in this world. Everyone that is well diversified and will probably go down with the deflationary ship. Garth you really think that once peoples homes come down in value people will continue to spend and prop up the stock market?

If people truely believed in diversification we wouldn’t see housing bubbles!

What most people do it irrelevant. — Garth

#32 nonplused on 12.20.10 at 12:40 am

On the other hand, a quick little calculation shows that if she expects to live to 100 she could be drawing as much as $2300 per month from savings if she was earning nothing at all! She really needs only keep up with inflation and taxes at this point, and it’s a question of risk preference whether she needs to go for yield. Plus I didn’t include CPP, and I don’t know what it is but I figure it’s got to be $800/month, so her total monthly expenditures could be $3100/month and she’s got enough cash to get to 100. Not living large, no doubt, and inflation will eat this plan alive, but it’s food for thought.

Still, a low risk approach similar to Garth’s plan seems in order. If she put $100,000 in 2 or 3 CDIC insured accounts at different institutions earning 1-2% (for a really rainy day), and then puts the remainder to good use via a Garth plan it would probably increase the amount she can spend per month considerably, maybe to as much as $4,500 to $5,000 including the CPP but minus some taxes. Her tax rate will be pretty low though, since she would still be living mostly on drawing down the funds and CPP.

And she may as well. Having $750,000 in any one spot, even a GIC, leaves one very vulnerable to the Black Swan. Even if it says GIC, it’s not guaranteed if the institution fails beyond $100,000. I have to agree with Garth she may as well have some preferreds if she is going to carry that much institutional exposure anyway. Heck she can buy bank bonds and do better, and be even closer in line if the bank fails than with preferreds.

But I say the order of the day is still to stay liquid and in short term investments until interest rates normalize. Unless you believe 20 years of low rates are possible without inflation aka Japan. But some preferreds and corporate bonds (of good names) yielding 6% and plan to hold to maturity, but keep some powder dry because one day government debt will yield that on a 3 year treasury again, and I don’t think it will be too far away. But of course Japan proved one thing, what is going to happen is very easy to predict but when it is going to happen is quite another. There is an outside risk we might have to wait 10 years or more. I can’t see it but it happened in Japan, so it should be considered.

The other thing she could consider on the rent side is fleeing the greater Vancouver area. Hard to do for most folks who have roots, I realize, but this economic thing we are in is akin to a war and sometimes loading up the wagon and moving away from the front is the best decision.

Most people wish to preserve their capital for the next generation. In this case, that is her goal, rather than eating it. — Garth

#33 BrianT on 12.20.10 at 12:40 am

Things are changing pretty fast-now the word is that Obama will be announcing cuts to Social Security http://dyn.politico.com/printstory.cfm?uuid=EB5E9565-C4A8-7E36-747EADB1F4AAB099

#34 M I K E on 12.20.10 at 12:41 am

Some analysts are predicting that the next market meltdown will occur sometime in 2011.

What’s your view Garth?


Do you know what a balanced portfolio is? — Garth


Yes I do Garth,

I was just asking if you agree/disagree with that prediction.
Would it make sense for someone to wait and try to get in at better/discounted equity prices if the market was to hit another hick-up?

#35 Geoffrey L on 12.20.10 at 12:42 am

I have been working in the investment industry for 13 years now and I can honestly tell people that it is a myth that retired seniors need to avoid all risk and must only purchase guaranteed securities. The only thing laddered GICs guarantee is no liquidity.

#36 Utopia on 12.20.10 at 12:44 am

Lots of good points today Garth. That was a great article.

#37 M I K E on 12.20.10 at 12:45 am

Some analysts are predicting that the next market meltdown will occur sometime in 2011.

What’s your view Garth?



Do you know what a balanced portfolio is? — Garth


Yes I do Garth!

I was just asking if you agree/disagree with that prediction.

Would it make sense to wait and try to pick up the equities at a discounted price if the market was to hit another road block!

#38 Jon B on 12.20.10 at 12:47 am

3 Street? Do you mean No. 3 Road in Richmond? That’s the one with the skytrain running down the middle of it.

Close enough. I glanced. — Garth

#39 ian on 12.20.10 at 12:48 am

There is a prick – about 1/100th the size of a small pin head.

There is the pricked – about the size of a small pin head and the about the size of a period in this sentence.

Then there is us.

This is all a game and a stroke of the pen.

We’ve all been fooled.

We are all fools.


#40 ken s on 12.20.10 at 12:50 am

Kevin: In the Fed’s recent (forced) info dump
3 Canadian banks are listed as receipiants of fed
bailouts.The entire list has been reprinted by several

#41 $froma$ia on 12.20.10 at 12:55 am


For the last 6 months I’ve been trying to get my MOM to sell for $750k and down size to a 2 bdrm apartment/condo to secure the cash.

She won’t do it. I asked here if she has anymore earning years left in her 76 year old body… She says no.

Alas, a lazy mind sleeps on the couch eating bon bon’s, enjoying the home shopping channel.

Poor MOM needs a mental enema, Garth are you any good for that?

#42 $froma$ia on 12.20.10 at 12:56 am

Oh, she lives in Richmond too boot!

#43 throwstone on 12.20.10 at 1:01 am

Canada leads the world in the highest costs for Housing, Cellular rates, Labour Costs, Mutual Fund Fee’s etc…

Understandably we have a certain quality of life and that quality must come at a cost; yet I fail to see how working 60-70 hours a week for 45-55 years can be deemed a higher quality of life.

Of course my opinions are derived from my GenX experience. Unlike the generation before me, I need a university degree to land a job, not just a haircut.

Frankly, I’m getting tired of hearing about the Boomer problems and more so irritated by the backlash of comments and the “when i was your age” speeches; resulting from my lack of empathy to their financial plight in their golden years?

I will remind all you boomers that we young people paid more for an education than you probably paid for your first two houses. Step two finds us young people entering the housing market only to see the only means of affordability is signing 35 year mortgages.

#44 $froma$ia on 12.20.10 at 1:02 am

Mutual funds are for losers that wait ten years to find out that they lost money.

ETF are diversified and if you want to sell then you hit the sell button.

How easy is that?

Personal investing is the only way to go. You are at the helm, do your homework and enjoy self controlled liquidity.

#45 Burnt Norton on 12.20.10 at 1:02 am

#20 Mister Obvious on 12.19.10 at 11:29 pm

Well Mister O, I’ve been a Vancouverite for about 20 years less than you, aside from a few years here and there trying out life elsewhere.

The snow-capped mountains on a sunny December day like yesterday still take my breath away. Drive traffic for work at all hours and it actually ain’t half bad compared with a comparable sized American or European city. U happily bike to work at least once weekly, all year round (try that anywhere east of Hope in the winter). Looking forward to Whitecaps season tix in the new BC Place (“White is the colour, soccer is the game… oogie oogie oogie oi oi oi”). Gave a speech at the beautiful new convention centre a couple of months ago.

The only thing that’s obvious, Mister O, is the cynicism of that post. I can only hope that another 20 years here doesn’t do the same to me.

#46 Burnt Norton on 12.20.10 at 1:04 am

“U happily” should read “I happily”

#47 Big Al on 12.20.10 at 1:08 am

I don’t understand why she doesn’t get outta Dodge there’s lots of communities with 8th of the cost of V. Unfortunately people are dumb sympathetic animals that refuse to change even if it means they will have a better life. Hell she could move out east by a fourplex live in one collect rent and still have money in the bank and voilà a backyard garden again. But that means excepting change as the only constant in life, what’s that saying the definition of insanity is doing the same thing over and over again and expecting a different outcome.

#48 Fool me once... on 12.20.10 at 1:10 am

#20 Mister Obvious
While not 60 myself, I have spent all of my 50 years here in Vancouver as well. And I’m sad to say I agree with most of what you said short of completely blowing Campbell’s reign as “unfathomably bad”. But politics aside, this was a beautiful spot to grow up and raise a family. Was being the operative word. There is no economic engine driving the local economy other than anything related to Real Estate. This includes construction as well. Most of the local activity is supported by this sector. An economist at one of the local business schools said it’s like watching a game of Kerplunk, all the balls are still in play, but there’s only one stick left to hold them up. The stick is going to come out at some point of the game.

#49 Nostradamus Le Mad Vlad on 12.20.10 at 1:12 am

At 73, the lady has roughly 25 years left in the tank and with $725K in liquid assets, should get $36K / yr. ($3K / month) comfortably, 80% or more of which is tax-free.

But here comes The Fear Factor, letting an outside force (money) run her life instead of the other way round. This is where a good CFP (not being paid by a bank to tell her what to invest in) comes in very handy, or a fee-based advisor.

To each their own, I guess. I have learnt more about finance by reading this blog, listening to our CFP’s and others’ advice, and generally keeping up to date with what’s happening on the planet.

BTW, those four hunks — were they the ones that performed their routine before Pope Benny a day or two ago? Notice the evil smile on his face when they appeared?
With the passage of Bills S-510 (US) and C-36 (here) almost simultaneously, the right to grow a veggie garden taken away by Big Brother in the US and also here soon, it should be quite clear to most realistic people that we now live in a fascist dictatorship, and it is not Obama or Harper who are running anything — both are merely pawns paid to read the six o’clock news, which most sheeple regard as gospel truth.

We’re screwed, alright — not so much by govts. or people in power, but by ourselves — we’ve become so damned lazy and complacent, we have simply handed over our lives for someone else to run, and put ourselves on autopilot.

We get what we deserve.
Pensions Nothing like having a scrap between provinces and feds.!

US$16 Trillion to foreign banks. 6:55 clip. Ever wonder why the US is stranger than fiction?

GW leads to mini ice age.

China building new aircraft carrier, as Britain scraps theirs.

Eclipse Info.

HARMonized ‘Net Said WikiLeaks was behind this all along; now the UN is taking it a step further. Big Bruvver is here!

To keep things in perspective — Kissinger One and Kissinger Two.

Zbigniew Kazimierz Brzezinski is a Polish American, and Henry Alfred Kissinger is a German-born American. Both favor depopulation, both are members of the elite (as is Soros), so it is easy to see why the planet is due for major upheavals soon, in more way than one.

#50 MKUltra on 12.20.10 at 1:27 am

Garth, the Day of Reckoning article was excellent. I’ve taken the following bits from the article.

[[[ Whitney made her reputation by warning that the big banks were in big trouble long before the 2008 collapse. Now, she’s warning about a financial meltdown in state and local governments.

Whitney said, “You could see 50 sizeable (municipal bond) defaults. Fifty to 100 sizeable defaults. More. This will amount to hundreds of billions of dollars’ worth of defaults.”

“It’ll be something to worry about within the next 12 months,” ]]]

If US municipal bonds start defaulting in the near future – won’t it take the whole market down as investors panic? Even diversified portfolios would take a hit?

Wouldn’t it make sense to sit in cash over the next 12 months, so you can go on a shopping spree for ETFs, preferreds, etc. after the market drops?

#51 Min in Mission on 12.20.10 at 1:31 am

“Day of Reckoning”

Even thought the article is about the US, still pretty un-nerving. Has the right amount of info. to seem accurate, and, because of the current world situation seems totally believable. Makes me wonder how people can still ignore the situation.

Plus, makes me wonder how far the Provinces and Cities, here in Canada, are along on the same path.

As a 59 yr old RH, (Recovering Hippy), this is a scarey time!!!

#52 M I K E on 12.20.10 at 1:33 am

oops, sorry for the double post, I didn’t think the post went through

#53 Patz on 12.20.10 at 2:05 am

#20 Mister Obvious

Yo mus’ be in the biz
Of tellin’ da truth
Like what it is…

Oh sh*t here comes a Hummer!

Seriously dude, great take on Vancouver. “The West Place in Canada” (if you don’t count Victoria).

#54 Peter Pan on 12.20.10 at 2:39 am

Some well noted American economic/financial bloggers are starting to spread the message that things might not be so different in Canada after all…

“Mish” Shedlock fires another well-argued critique at our vaunted, yet overpaid, Canadian Bank CEOs…


#55 Sasquatch on 12.20.10 at 2:42 am

Does the old bat understand that if she lived another 20 years and just used the money straight that she could spend around 35 K a year or just around 3 grand a month.

I know there are better ways…it’s just very difficult to explain to people like that.

As for her garden, has any one tried to tell her about community gardens? Probably even find a rental place by it.

#56 Tim on 12.20.10 at 2:54 am

what will you write about on this blog when the shit finally does hit the fan and the market tanks?

#57 freedom_2008 on 12.20.10 at 3:32 am

“Most people wish to preserve their capital for the next generation. In this case, that is her goal, rather than eating it. — Garth”

I see. Now I understand the issue here, the 73 years old lady prefers safety of her savings, but the son, Encino, want to preserve the capital for himself.

Let do this, Encino and his mother can sign a contract that he promises his mother all the supports IF the investments fail, then the old lady will follow the investment advice from you and passes any money left to Encino when she is gone.

This way, she has no worry out living her money regardless, and Encino has the hope for a good inheritance. Bingo!

#58 freedom_2008 on 12.20.10 at 3:35 am

#13 dd “#7 freedom_2008 …she can at least get 2%…

I think my food bill went up 2% last month …”

dd, I am not talking about your food bill, but a 73 years old lady’s saving!

#59 jane54 on 12.20.10 at 3:42 am

I also don’t understand why at 73 she doesn’t start to live on her savings. I mean what are retirement savings for if not to live on. She has a pot big enough to see her through.

Plus if she puts the lot back in a house then what is she planning to pay the bills with??

Her son should get power of attorney yesterday.

#60 BDG-YYC - A Letter to "Stop Complaining" on 12.20.10 at 4:10 am

#7 freedom_2008 on 12.19.10 at 11:01 pm
” one should only invest in what you understand”
“Are you serious? — Garth”

Garth … of course your response is practicle … but not really appropriate. There is a big problem associated with the fact that people simply don’t understand “spit”
around the markets and investing. While you may be entirely correct in your analysis of the present circumstance, and you may be very well informed and honourable in your intentions … let’s face it … There is not much difference between the person who follows “someone they perciece as trustworthy” but knows squat about what that person is talking about and loses thier ass and someone who percieves “someone as trustworthy” and does OK. They are both really sheep following advice from their most recent good shepherd. 5% or 10% volatility is something unimanigably tortuous for someone looking for guaranteed riskless returns in a nominal world. Anyone who is so risk averse as to be 100% in GIC`s and getting a % or two … is not likely to fare well in any downside environment … and would be very likely to “bale“ on the first correction-consolidation in any component of thier portfolio. Their is no meaningful difference between a lucky but ignorant sheep and an unlucky ignorant sheep. Its just a matter of which of them gets served first. In time they will both be “dinner“.


#61 vreaa on 12.20.10 at 4:11 am

#27 Aussie Roy on 12.20.10 at 12:13 am –

I think you misunderstand my position.
I’m suggesting that folks learn from Newton by NOT doing what he did. I’m suggesting that they are wisest to stay on the sidelines.
You seem to have assumed the reverse.

Did you read the link?

#62 Seasonally adjusted on 12.20.10 at 4:19 am

“Of course I gave up trying after I’d heard the same line fourteen times: “But is it guaranteed?” (Garth)

This is because people today are risk-adverse. This IMO is a good thing because we will see the slow return of “normalicy” where RE speculation, massive leveraging and getting yourself into a massive amount of debt was a BAD thing. Saving was normal, fixing, repairing and reusing items where common and having the newest latest gadget wasn’t that important.

The age old advice “Only put in the stock market what you can afford to lose” is still as wise today as it was in the 1930’s.

At 70ish, the girl should not be putting money into the market. It’s not what you make that is important, but how you save and spend it.

I like the idea of moving out of Vancouver into another BC town that is lower cost but still within travel distance. There are lots of little towns around Hope, and old Hwy 1 for example.

#63 TheBestPlaceOnEarth on 12.20.10 at 4:21 am

Another disasterous decision to sell. Richmond is on friggin fire folks. Over 50% Asian investors and growing. House after house after house, we’re talking in the 100’s maybe 1000’s being bought bulldozed with a monster home put on top. No joke here Lamborghini’s with the N (New driver) sticker on them. So she sold now what to do with that money? GIC? Bonds? Stocks? Way way too complicated. Keep the house make a suite , you have shelter, a garden and income from your suite. She should get back in there and Buy. Junius please come down to Richmond for a site visit you won’t believe it. Make no mistake about it these are cash deals NO MORTGAGE. God I love this place just plain unstoppable. The creme de la crem GOD ITS GREAT. Goin higher too! Love IT

#64 TheBestPlaceOnEarth on 12.20.10 at 4:25 am

13% if what??? If you talking a home in Richmond. Let’s see 800k * 13% = OVER 100 GRAND TAX FREE!!!
If your talking you took your 50 grand downpayment on that potential winner house in Richmond and bought a portfolio at a one time hit of 13% your looking at 6500 bucks. FOLKS DO THE MATH. Richmond house make you over 12 times the amount. WAKE UP NOW. STOP IT. Grow up and BUY. Do the math.For God’s Sake

#65 VanLarry on 12.20.10 at 5:53 am

All $730,000 piled in one 3yr GIC? Yikes. I don’t know what is worst, having it all your assets in GICs or all on real estate. Probably equal risk.

nonplused: “The other thing she could consider on the rent side is fleeing the greater Vancouver area. Hard to do for most folks who have roots, I realize, but this economic thing we are in is akin to a war and sometimes loading up the wagon and moving away from the front is the best decision.”

She’s also 73. It might not be a great idea to move away from an area you’re familiar with at that age. Plus family and friends, a good social network nearby to look out on. On the other hand, I’ve known some +70s that are quite active.

#66 palebird on 12.20.10 at 7:31 am

#23 bsallergy

The incremental amounts that ontario paid the prairie provinces back in the beginning amount to next to nothing compared to the amounts that are now flowing west to east.. it is the old school sense of entitlement that still flows freely in the east that really irks us westerners..and hey I still own a house in Quebec and did most of my schooling in old TO :) but I live in the west, was born in the west and love poking fun at colonial easteners who take themselves too seriously :)

#67 Tkid on 12.20.10 at 7:44 am

The old bat isn’t thinking clearly. Why doesn’t she break out some of her capital? The most she has to live is another 30 years. 728 / 30 + interest + cpp gets her over $45000 for the next 3 years . She gets a liveable income, keeps the vast majority of her money in GICs.

Instead she will put her money down on a very risky investment? This is insanity!

#68 bigrider on 12.20.10 at 8:51 am

#24 Peter Pan- Very well said.

I have always thought that if we put a neon sign in the front lawn or door of every home owner that showed the second by second flucuations in price of said home, much like a financial security is valued, it might make them act just like they do with financial securities

#69 bigrider on 12.20.10 at 8:56 am

Actually, I think the single best financial decision someone can make is not to have children.

You can’t afford to make any financial mistakes when you have them.

Kudos to you on that Garth.

Registered or non-registered? — Garth

#70 Herb on 12.20.10 at 8:57 am

#29 DSP,

I get your point: why bother with a calm, factual discussion when you think that “[Conservative] Drivel” will do.

Pity your solid grounding in economics did not include the use of quotation marks. They do make rants easier to follow.

#71 bigrider on 12.20.10 at 9:02 am

#44 $fr0ma$ia.

Yes what a loser you would have been having your money invested with Sprott, Dynamic and Frontstreet for the past ten years..

A real loser…LOL

#72 T.O. Bubble Boy on 12.20.10 at 9:12 am

TheBubbliestPlaceOnEarth has finally lost his/her marbles.

Starting to sound like an ad for one of those “crazy” discount stores where the owner claims to be losing his mind with the deals he’s offering.

#73 housedoc on 12.20.10 at 9:32 am

Maybe junior should pony up and take care of mama if he thinks he’s entitled to her money.

#74 In the Maritimes on 12.20.10 at 9:32 am

Re: GIC’s
Make sure you ladder them so that one comes due every year. Better yet, have one coming due every six months. A ladder is having a GIC coming due every year. You start buy purchasing a 1yr, a 2yr, a 3yr, a 4yr and a 5yr.
Make sure the institution is CDIC insured.
Do not exceed $100,000 with any institution.
Do not exceed a 5 year term.
Ally and HSBC offer monthly pay interest on GIC’s.
Always ask for the best “third party” rate from your bank. 5 yr rate is around 3.2% today.
Branch offered me 2.6% on a 2yr last week.
Ally is still offering 2% in a savings account.
Even in these times you should still be averaging a little over 3% with no risk. Once the ladder is set up you renew at the highest rate each time.
Expect an exodus from dividend stocks when interest rates revert to the mean. Don’t lose your capital – it is hard to get back.

I don’t think that the woman profiled would pay much income tax (if any) because her income is low.

That is among the worst pieces of advice you could give. Inflation today is above 2% and GIC returns are 100% taxable. Not only are GICs totally illiquid, but the return is negative after inflation and taxes. I ask this question again: If you trust the Royal Bank with your deposit, then why not trust it with Royal Bank bonds or preferreds? It’s always a shame when fear takes over logic. — Garth

#75 Randman on 12.20.10 at 9:39 am

Dark Sad Person Post #29

You are my hero…. (great Keynesian comment!)

Also…thanks for trying to set Prairie girl straight in previous blog…..her rant for more big government to
protect us …was hurting my brain


#76 Sand Piper on 12.20.10 at 9:41 am

G-Man – your views on most subjects, I share – but your stance on “diversified Investment” just hits a negative cord –

I believe this bubble (or a overextended balloon that will eventually burst) has multiple after effects. When one’s main source of “wealth” which many have concluded is tied to their property – why on earth would just the housing market get slammed – everything will take a hit.

Shopping at Lowe’s on Saturday afternoon – quiet – how come – cause people are sensing dark clouds gathering – am I gonna drop some coin – nope – anything non-discreationary and I’ll take a pass –

Our economy is multi-layered, housing begins to fade, people begin to worry about their future (and the mass number of boomers who are nearing retirement). Are we gonna shop like ususal – NOT –

So how is it that the markets – from retailers, services, commerical properties, commodities (which much has been written of China’s commodity bust – and your preaching diversified investing?? When the masses run scared – everything is gonna take a hit –

Garth, very few make the coin you make to be able to make investments in a number of vehicles. Most struggle to put food on the table and a roof over their heads – a 73 year old woman – be real – she has been brought up a specific way but you mock her investment style – it may be weak – it may be counter-productive – but she did something right to amass those savings?

IF goes the housing – so does the economy – I know way to many people who’s income is derived from the direct health of the housing market – pop that bubble and the shockwaves are felt everywhere.

I sense that when China’s housing market implodes – so will the domino effect around the world – I even have a hard time believing in holding any type of currency – thoughts of Pre-World War 2 Germany where kids placed with stacks of useless currency –

How’s that for diversified – its a tricky slope and no one can convince me that certain investment vehicles are best suited – cause like everything else – once a good thing is known, everyone wants a part of it and that suddenly become a hot potato on one wants to touch eventually.

G-Man – again great job – but this is one subject I don’t share your wisdom in – Yeah – I may be call many things by many people – but I always go with my gut feeling and this one tells me to hunker down – a Massive Storm is brewing and many are gonna get a kicking of a lifetime!

Tell your head to talk to your gut. The best defence is balance and diversification. — Garth

#77 Kaganovich on 12.20.10 at 9:54 am

An interesting interview with ha-joon Chang, author of ’23 Things They Don’t Tell You About Capitalism’:


Worth listening to even if you worship the market gods three times a day.

#78 Kaganovich on 12.20.10 at 9:59 am

The free market…imaginary friend or unicorn?

#79 CTO on 12.20.10 at 10:25 am

#72 T.O. Bubble Boy on 12.20.10 at 9:12

“TheBubbliestPlaceOnEarth has finally lost his/her marbles”.

That guy (BPOE) lost his marbles the first time he got on here. I am commenting and i havn’t even read his/her comment because it’s a waste of my time.

I have been passing over this guy now for months as it’s a waste of print.

he may be a trole because the words are such tripe…just comes on to use any crazy excuse to pump Vancouver and dis other cities…truely ridiculas and pokes fun at fundemental reasoning.


#80 Grrr on 12.20.10 at 10:25 am

“It`s the perfect scenario for investors: a jobless recovery. That means rising corporate profits, more public spending, and continued low interest rates.”

Garth, how much of your overall economic picture is based on the assumption of more public spending? While the bond vigilantees seem to be really enjoying their European tour, there might be a few provinces worthy of a visit.

#81 Aussie Roy on 12.20.10 at 10:30 am

vreaa on 12.20.10 at 4:11 am

Yes it does read that way – sorry.

Must be my sarcastic Aussie way……

Certainly didnt mean to offend a fellow logical blogger.

Great work, by the way…. It certainly shows intelligence is no defence against the power of the crowd.

I would do an Aussie update but its all very quite here (re RE) as attention has turned to Xmas, the lack of consumer spending (retailers are having their after xmas sales – NOW). Our Fed govt has committed $50B over the next 10 years to our NBN (national fibre optic broadband system to every Aussie home). The poor average Aussie mega mortgage mug is tapped out nice to see our govt stepping up to fill the void (not).

Its the same old story the Labour party gets elected and eventually they run out of other peoples money to spend. Dont get me wrong social spending is important I just wish they didnt always create some new govt run monopoly with little regard to its commercial merit.

Oh well a faster internet connect might be nice but I can feel the govt already in my wallet.

Not sure if I will get much time over the next few days to blog as the extended family continues to arrive home (I became a great grand father 2 months ago, plenty of photos but can wait to hold the little fella).

So merry Xmas and a happy new year to all, I will certainly miss Garth and my fellow logical bloggers.

See ya in 2011. I’ll make sure I have a glass of wine or 2 for ya.

#82 Sam on 12.20.10 at 10:33 am

Garth, she should have kept her house and rented out her basement for 1500$ a month!

#83 bigrider on 12.20.10 at 10:39 am

#69 Garths response “registered or non registered”

An eloquent writer and a studbull to boot.

This blog rocks !

#84 TS on 12.20.10 at 10:45 am

Hmm, could be a day of reckoning coming to Ontario.
Recommend Squirrel melts.

#85 Got A Watch on 12.20.10 at 10:53 am

You can’t do much for the sheeple. They’ll just carry on watching ‘Dancing With The Stars’, until they get sheared.

Lord knows I’ve tried. Telling people the truth about our economic situation just gets you called “doomer” and not invited back. People ask for advice, but then recoil from it, when I give it.

Too many have their ego fully invested in the status quo, and by the time they realize the tide is now flowing in the opposite direction, it will be too late.

Their delusion is fully subscribed, the MSM kool-aid strong.

But the iron wheel of history is turning, and it will not be denied. The Kondratieff Wave is coming ashore, in this cold Winter of our discontent. The world still faces the same abyss from 3 1/2 years ago, and very little has been done to alter course. All we have done is extend and pretend, which only makes this crisis deeper and longer lasting.

I am talking about the many Trillions of “toxic paper” and “bad debt”, still carried on the (un)”balanced sheets” of Banksters, Pension Plans, Funds (the bagholders) around the world. In many cases, private Banksters have off-loaded the toxic waste to Central Bankster cronies, for taxpayers to eventually cover. If this dark matter of unresolved and over-valued waste paper were dragged into the light, almost every major Bank on the planet would have to be closed, and many nations would be completely insolvent. Instead, we just all conspire in the mass delusion that “recovery” is almost at hand, without taking any of the action that is actually required to make a real recovery happen.

Take the USA for example – major Banksters there are still sitting on some $400 Billion “worth” of “2nd mortgages and HELOCs” carried at 95% of face value on the “books” – whose true market value is about 10% of that, on a good day, to a distressed asset vulture Fund, maybe. That alone puts every major American Bankster so far underwater they may never see the sun again – but the doors are still open, the lights still on, the sign still lit up. Zombification, it’s been on in Japan for 20 years, and they are still up to their necks in debt that can’t possibly be repaid.

The US Government is currently “spending” about 10% of “GDP” in wasted “stimulus” over what can be afforded long term, via massive deficits. If you subtract the Government cheese from GDP, the US economy is actually contracting severely. Politicians and idiotic enabler economists may wish to maintain the total delusion that “deficit spending” is actually a “good thing” (paging Dr Krugman to the cluephone, Dr Krugman) and “the right thing to do” – but the yet unborn children and grand-children who will be tasked with repaying the colossal debt of previous generations of cretins would beg to disagree.

The same story world wide. The rubber meets the road when the ability of Central Banksters (and taxpayers) to support the groaning inverted pyramids of toxic waste by ‘bailouts4eva” comes to an end. And that brick wall looms directly ahead. Then the losses will have to be recognized and dealt with (written down), one way or another. Central Banksters have thrown some $15 Trillion at the problem just in the West, and all they managed to do was stop the deflation for a while, an intermission purchased at such a massive cost it can’t be repeated.

It will be severe stagflation for consumers, as the economy and GDP shrink, for a host of reasons (deflation) while food and a few other necessities continue to rise in price (inflation) from the fallout of idiotic Central Bankster policies (thank you Zimbabwe Ben) that has driven speculators into commodity and emerging market trades.

The overall effect will be severe deflation for the economy as a whole, which always occurs when a huge credit bubble bursts, just like 1929 and 1873… we have just finished blowing the biggest credit bubble in history, it’s not hard to see the endgame. No lessons from history have been learned, as usual. This means at least 5 more bad years, until we reach the bottom of this cycle, likely around 2015, give or take, after 2 more major periods of deleveraging (major market declines), by my estimation. By the end of this decade, the global economy should be actually in that elusive recovery, but it won’t feel like it to stressed out survivors. That will be a real bottom time, to make that vulture swoop, in many asset classes – the moment of maximum pessimism, right before the dawn. The problem is getting from here to there with some capital left, so that you can buy those distressed assets at 10 cents on the dollar. Great fortunes were made coming out of the last Depression, this time will be no different.

I don’t waste time any more trying to save the sheeple, it is a waste of effort. Far better to concentrate on personal and family survival, to make sure it can be achieved. If you try to save everyone, you probably won’t save anyone. There are not enough hours in the day to drag stubborn horses to water.

#86 Macrath on 12.20.10 at 11:22 am

Trying to convince the depression era savers to invest ,is an impossible task. They are terrified by anything thats not GIC or CSB.
To see their account balance fluctuate to the downside would instill panic. Its not rational but just a lifetime of conditioning. Had they started young as astute investors this might have alleviated their fears.

My dad says, “During the 2008 meltdown I lost NOTHING”. I reply that my diversified 80/20 bond/equity
portfolio is up 10% and paying 6% with some dividend income for tax relief. I like 80/20 because its my sleep at night comfort level.
His comfort level is the nice lady at the Bank, he has been with all his life and nothing is going to change that, not even his number one son.

#87 bigrider on 12.20.10 at 11:27 am

Garth “G-Man” and 50 cent “G-Unit”

Striking similarities between the two, don’t you think?

#88 Calgary_rip Off on 12.20.10 at 11:30 am

The nice thing about the baby boomer generation and all their screw ups is that most of them will be DEAD in 30 years and I dont have to listen to their screwups anymore(Go generation X).

1943-1963 loser generation.

Some days I hate this blog. — Garth

#89 $froma$ia on 12.20.10 at 11:39 am

#71 bigrider on 12.20.10 at 9:02 am#44 $fr0ma$ia.

Yes what a loser you would have been having your money invested with Sprott, Dynamic and Frontstreet for the past ten years..

A real loser…LOL

Still not quite the liquidity I am talking about.
2% front end or back end.
I’ve had some Mackenzie that have been real losers!

LOL Stocks are where it’s at.

Eric Sprott rules!

#90 BrianT on 12.20.10 at 11:41 am

Re this dumb old lady-life is too short not to do what you want-she should buy a $650000 place with a garden, get the biggest reverse mortgage through CMHC she can (maybe she could swing a higher appraisal) and just garden away till she passes. Let Encino get out there and hustle.

#91 The American on 12.20.10 at 11:49 am

BestPlaceOnEarth, yes, you are as delusional as the buyers in your city. But, let’s be honest here, your city is and has been dropping prices as a whole for a bit now Otherwise, I wouldn’t continue to see property after property remain on market, all the while with developers of large complexes dropping prices (ie. Millenium Water, Fairmont Pacific Rim, Georgian Hotel, etc.)

As for Vancouver being “the best place on Earth,” most would disagree. I’ll use Seattle for example in this case. It is similarly located, yet it has better weather, Seattle is larger and growing faster than Vancouver (meaning more people chose to live there), Seattle has more infrastructure for logistics (ie. roads, freeways, viaducts, ferry system, buses, light rail, monorail, Sounder transit, air travel, etc.), better shopping and more of it in and throughout Seattle, significantly more people have a higher education in Seattle than Vancouver, GDP in Seattle is 2.4 times that of what it is Vancouver, Seattle has done a better job of preserving historical buildings than Vancouver, Seattle has done a better job of pushing for diversified architecture than Vancouver, more parks in Seattle, Seattle has a considerably larger and more respected arts scene compared to Vancouver’s virtually non-existent one, Seattle has significantly better night life and clubs, Seattle has better restaurants and more of them, Seattle is a greener city (both eco friendly and more trees), Seattle has better universities than Vancouver, Seattle has significantly more real industry (including technology, biotech, charitable foundations, not-for-profits, aerospace, education, media, tourism, etc.), Seattle has a better cost of living than Vancouver, Seattle has real professional sports teams, Seattle is more accessible to all outdoor activities, Seattle is more beautiful to look upon BY FAR than Vancouver (ie, lake Union, Lake Washington, Casades to the East, Olympic Mountains to the West, Puget Sound, floating bridges, volcanos of Mt. Ranier to the South, Mt. Everett to the North, West Seattle/Alki, Discovery Park, Volunteer Park, The Arboretum, and so on). I could go on, but I guess I’m really taking the long way around on this one. My point is there are MUCH BETTER PLACES ON EARTH THAN VANCOUVER. You’ll realize that when your market soon collapses. There is no justification for the prices and immigration is a joke compared to that of Seattle, San Francisco or LA.

#92 bullion.bunny on 12.20.10 at 11:51 am

#269 Guy_in_Regina on 12.19.10 at 10:29 pm

and I DO get economics – I have an undergrad minor in econ. and I took multiple econ and finance classes at the masters level. I just think it provides useful models as opposed to a panacea.

Wow, that was a waste of time instead of economics maybe you should have spent time in the garden. I won’t waste too much time on Behavioral Finance, you can read about it here.


It’s simple, factional reserve banking is used to expand the money supply which encourages speculation in a multitude of assets. This expansion of the money supply not only encourages speculation but leads to a business cycle expansion. Businesses now start to chase the money expansion which leads to mal-investments. In the end the entire system comes crashing down, governments being what they are bail everything out. Here are the historical examples.

South Sea Bubble 1720

In 1720, the world experienced its first financial bubble called the South Sea Bubble
in London, England.
• The South Sea company, established in 1711 by the Lord Treasurer, Robert Harley,
was granted exclusive trading rights in Spanish South America. The company barely
ever made a voyage across the Atlantic.
• In return for its exclusive trading rights, the company convinced the holders of
around £10 million of short-term government debt to exchange it with a new issue of
stock in the company.
• In 1719 the company proposed a scheme by which it would buy more than half the
national debt of Britain (£30,981,712), again with new shares, and a promise to the
government that the debt would be converted to a lower interest rate, 5% until 1727
and 4% per year thereafter.
• The company then set to talking up its stock with the most extravagant rumors of the
value of its potential trade in the New World which was followed by a wave of
speculating frenzy. The share price had risen from the time the scheme was
proposed: from £128 in January 1720, to £175 in February, £330 in March and,
following the scheme’s acceptance, to £550 at the end of May and finally reached
£1,000 in early August. This price was reached by issuing credit to potential
• At the height of the mania in 1720 gold was the most hated asset, the public sold its
gold to purchase shares. As shares of the South Sea Company advanced to £1,000
pounds sterling, some members of the public sensed a bubble. It was noted that
some members of the aristocracy had been seen exchanging their South Sea
Company shares for wagon loads of gold.
• The credit expansion fueled the stock price by expanding and extending credit to
speculators. In the beginning bank leverage was low; typically 10% bank credit per
share. As the price advanced to £1,000 pounds sterling; bank leverage was 90%
bank credit per share! Nothing could go wrong, it’s a “New Era” as the papers of the
time reported.
• After August, the level of selling was such that the price started to fall, dropping back
to one hundred pounds per share before the year was out, triggering bankruptcies
amongst those who had bought on credit, mostly aristocracy.
• The French also had a similar situation, it was called the Mississippi Company. John
Law, a Scotsman, convinced the king of France to move to paper money while
promoting his new world exploration company. As in England, a massive speculation
in France bankrupted the country. Gold of course once again became money and
exploded in value.

The 1772 Bubble.

• Neal, James, Fordyce and Down was a London banking house which collapsed in
June 1772, precipitating a major banking crisis which included the collapse of almost
every private bank in Scotland, and a liquidity crisis in the two major banking centers
of the world, London and Amsterdam. The bank had been speculating by shorting
East India Company stock on a massive scale, and apparently using customer
deposits to cover losses.
• he crisis has also been seen as worsening relations between Britain and the Thirteen
Colonies in America. Among other stresses, the East India Company, already in
financial difficulties, was further weakened by the crisis, and in 1773 managed to
persuade Parliament to pass the Tea Act, exempting it from the duty all other
importers in the colonies had to pay. The unpopularity of this led to the Boston Tea
Party at the end of the year.
• During the speculation gold was sold to finance the party, before the crash it was the
most hated asset. Shortly after the crash it was the most sought after asset. Once
again gold was the only safe haven for investors.

The 1825 Crash.

• The Panic of 1825 was a stock market crash that started in the Bank of England
arising in part out of speculative investments in Latin America, including in the fabled
imaginary country of Poyais. The crisis was felt most acutely in England where it
precipitated the closing of six London banks. Including Henry Thornton’s bank and
sixty country banks in England, but was also manifest in the markets of Europe, Latin
America, and the United States. An infusion of gold reserves from Banque de France
saved the Bank of England from complete collapse. It rebalanced the discrepancy
between credit levels and gold.

The 1873 Crash.

• The panic of 1873 marked a severe international economic depression in Europe and
United States.
• In the US there was a boom in railroad construction. Fifty-six thousand miles of new
track was laid across the country between 1866 and 1873. Much of the craze in
railroad investment was driven by government land grants and subsidies to the
railroads and credit expansion in Europe. A large infusion of cash from Europe
caused abnormal growth in the industry as well as overbuilding of docks, factories
and ancillary facilities.
• In Europe, the easy money fueled a very large housing bubble, much like today’s
• Once credit dried up in Europe, the world went through what is know as the Long
Depression lasting until 1879.
• During this period the price of gold advanced as credit tightened.
The 1929 Crash.

• In the 1920s, credit expansion was rampant. Once again this credit expansion had
disastrous consequences. Debt levels of the 1920’s reached an unsustainable peaks
and the world slipped into one of the worst economic periods ever recorded in our
modern times.
• Gold had a set price of $20.67 by government decree to facilitate the use of the Gold
standard at that time. On March 5, 1933 Roosevelt confiscated the gold of the
American citizens. In 1934, he also, in an effort to fight the debt liquidation or
deflation, revalued gold at $35, essentially devaluing all the American dollars around
the world.
• Since gold had a set price at the time, the Homestake Mining Company was one of
the largest gold mining businesses in the United States and acted as an excellent
proxy to the gold price.

In conclusion, Credit Market lead the stock market leads the economy. This is way it has worked since the days of Rome. Why would it be different this time?

You guys think governments are going to reduce spending?! With ‘n’ million wheezing geezers making their way to the social safety trough, then the hospital, before croaking 30 years later???!!! Ha ha ha, ha ha ha, ha ha ha!
Any politician who puts the gun to the head of that sacred cow will themselves be flailed on the alter of the boomer ballot!


Governments spend until they can spend no more, or until the market shuts them down. At this point in the game markets are starting to cut credit off to the dead beat states and soon to dead beat provinces like Quebec and Ontario. Here are some municipal bond funds that are having a tough time of it.





Here is a 60 minutes interview that is very interesting…..


California and Ontario Canada would be another fine example of financial disaster. Let’s take a look at the facts.

Ontario…..Total debt 220 billion, plus a 21 billion dollar short fall.
California.. Total debt 80 billion, plus a 20 billion dollar short fall.


Do you think long term anyone would buy crappy California or Ontario bonds. Here is another little know fact, Ontario hospitals and universities have huge off book debt! Under GAAP all off-book debt must appear on the balance sheet. In Ontario this is a work in progress, Quebec is hiding even more debt at 94% of GDP…..NICE! Governments spend until they can spend no more, then they start cutting and cutting hard. Just take a look at Europe……. Austerity all around! Just wait the fun is about to start!

There will be no Canadian provincial bond defaults. Get a grip. — Garth

#93 farmer on 12.20.10 at 12:04 pm

There has been much talk today regarding LIQUIDITY. Well, I have to tell you much of it is misleading to say the least. The degree of liquidity is related to the risk and return (desirability) of the asset. Everything has liquidity, and nothing has liquidity, depending on the value you or others place on it. Your house is just as liquid as a gold bar, if what your are valuing it at is below the market value. GICs are entirely liquid, in fact one of the better ones; the risk is small and the loss is known. Oh! financial investments are very liquid, if you can find a buyer, at a value you can accept. And don’t forget the commish. The question is; how much risk are you willing to take?

I understand 73 year olds, with good reason. If you really look at the options, in a years ago perspective, there are not many that meet the concepts of the life we have lived. We were indeed lucky to have been born when we were. Would not want it to have been any earlier, or any later. Just enough poverty, jobs, stability, and aspirations to give us a good grounding; formal education came up a little short, although we did not need as much as today. So, we worked and saved, and bought a house when we got into our mid years. The system worked, for the work we put in.

How do we put that in today’s terms? In our eyes very few people “produce” anything; it is a world of the taxpayer’s employee or the smart mover who sells advice or a service you probably do not need, except they sometime use the denigrating language of an insulter to try and make you feel silly, or worse an ignoramous. So I am here to tell you we are not stupid; what we have to say comes with great experience. We have found out by reading and working the internet what is needed to get by in today’s world, and it ain’t too pretty. We have learned that money has velocity, but how many know it also has viscosity and directionality; think about it…

#94 Denisa on 12.20.10 at 12:12 pm

Too bad Encino’s Mom can’t take the wheel and ride!

#95 bullion.bunny on 12.20.10 at 12:13 pm

There will be no Canadian provincial bond defaults. Get a grip. — Garth

I did not say that…..you did. But rates could move up significantly and this would put pressure on the entire system.

#96 Rich Renter on 12.20.10 at 12:25 pm

If anyone needs further clarification that GIC are not the best option, take note when your dping your income taxes. GIC 2% return = 100% tax = No brainer decision

#97 Devil's Advocate on 12.20.10 at 12:38 pm

You probably saw the predecessor to this video not long ago and think you saw this one. That’s just how fast it’s changing…


#98 garthfan on 12.20.10 at 12:39 pm

Re: Diversification

I love the photograph. Amish women are some of the most talented seamstresses in America; yet, they make plain dress for themselves. They work meticulously hard yet strive to keep pride, vanity and complexity from altering their culture which is based largely upon strict adherence to such principles as:

Personality: reserved, modest, calm, quiet
Values: submission, obedience, humility, simplicity
Symbols: dress, horse, carriage, lantern
Structure: small, informal, local, decentralized
Ritual: baptism, confession, ordination, foot-washing

** Excerpted from Kraybill, Donald. The Riddle of Amish Culture. Baltimore: Johns Hopkins UP, 1989, p.26.

Many Amish creations have been designated as National Treasures.

As to the woman in your post, she is 73 years old and has enough money to probably weather the coming storm. The idea of Generational Wealth, which is apparently the real issue, is questionable. It is a luxury of the privileged and perpetuates hegemony.

Mothers have always wanted to provide their children with as many advantages as possible and they usually do that by making sacrifices. This involves carefully balancing their priorities. She should examine what her needs are and then worry about whatever is left over for wants. So what if she can’t leave her children a windfall, it’s not as tragic as eating kibbles and pushing shopping carts.

Those are not Amish women. — Garth

#99 bigrider on 12.20.10 at 12:48 pm

BTW- Sounds like Maria in Garth’s piece today might be Italian. The need for guarantees among the Italian community extremely high. Bank accounts with big balances are all the older folks tend to do, GIC’s are even a stretch.

Oh and of course they buy Real estate because it is gauranteed too.

#100 bigrider on 12.20.10 at 12:54 pm

#89- $fromA$ia

You can buy all these funds on a zero front -end no DSC basis.

If you use an advisor, you can negotiate him down to just receiving the trailer fee, especially if you have a substantial portfolio.

Advisors don’t take trailer fees. Just salesguys. — Garth

#101 AG Sage on 12.20.10 at 12:58 pm

>#81 Aussie Roy on 12.20.10 at 10:30 am

Are they actually going to unmeter it? Because that would make it worthwhile.

My visits to Downunder are plagued by horrifically expensive crappy internet. My hotel last time charged $30 for 200MB. When I open my laptop after that flight that takes about 4 and a half minutes. And then the message pops up saying give us more money.

It’s amazing. The providers are charging insane amounts per megabyte, but are they building out more capacity with those profits? Hardly. They are sitting on a goldmine dribbling out connections a byte at a time. Given how isolated Australia is geographically, being isolated digitally as well seems a very poor idea.

Contrarily here in the States where they charge the same (by and large) for all you can eat, they constantly build out higher capacity.

#102 Nemesis on 12.20.10 at 1:04 pm

Garth Redacted: “It`s the perfect scenario for investors: a jobless recovery… stagnant economic growth, a collapse in exports and structural unemployment. Political and social upheaval”…

Perhaps, Mr. Turner – but only if you’re ‘investing’ in GeneralAtomics/Raytheon/Xe…

It would be funny if it weren’t so sad.

#103 Mouldy Basement Renter on 12.20.10 at 1:11 pm

#11 Amarillo
…Obvious Question: why am I as an Albertan contributing to free university education for Quebec students (via transfer payments) when my kids are paying top dollar for their post-secondary educations here in Alberta?…
Good observation, but all Quebecers will deny this obvious fact till the day they die(or seperate)
Lets just keep subsidising them right up til the day they leave and after the door to the Rest of Canada slams shut FOREVER and they realize their separatiste poloticians were LYING to them all along.
It’ll be too late.
Quebec 2115 : “Cajun french spoken only in rural areas outside the half empty city of Montreal. Franglais spoken every where else.
Vive la Quebec Lie !

What a stupid, racist, xenophobic, provincial, greedy and ill-informed comment. You are no longer welcome here. — Garth

#104 Burnt Norton on 12.20.10 at 1:14 pm

Life is like a game of snakes and ladders. Garth is a ladder. TheBestPlaceOnEarth is a snake.

Vancouver bashers: we get it, ok? A $1.5M 33 ft lot here is overpriced. Please stop trying to convince us that there are better places around the world in which to live.

#105 BrianT on 12.20.10 at 1:23 pm

#93Farmer-anyone can invent their own definitions, but liquidity isn’t what you think it to be. It is defined as how quickly can you be expected to sell at the current market value. Many homes are very illiquid-if the seller committed to selling the property in 30 days at whatever the market would bear, and lowering the price in stages based on that objective, many Cdn homes would sell at prices far below expected “market” value (what a seller could expect to realize with more patience).

#106 Leanne on 12.20.10 at 1:30 pm

Registered or non-registered? — Garth

Talk about a diversified portfolio.

#107 BrianT on 12.20.10 at 1:30 pm

#92Bullion-You forgot to mention that McGuinty ran up this debt in the midst of a RE bull market, which is almost impossible to do. The headwinds facing Ontario and Ontario RE are incredible.

#108 Leanne on 12.20.10 at 1:39 pm

#69 bigrider on 12.20.10 at 8:56 am
Actually, I think the single best financial decision someone can make is not to have children. You can’t afford to make any financial mistakes when you have them. Kudos to you on that Garth.

Registered or non-registered? — Garth

Talk about a diversified portfolio.

#109 freedom_2008 on 12.20.10 at 1:51 pm

Hi Everyone,

Garth has great points on his investment advice in general. But the example he chose here is much more than just investment. It is about estate planning.

Most parents would like to leave some money for next negeration, but they MUST take care themselves first, and only leave money if there is leftover. The children should think the same way. Otherwise, there is a conflict of interest here, and childen (the son in this case) have no right to push parents (the old lady in this case) to do any investment decision which they do NOT understand, period.

#110 bigrider on 12.20.10 at 1:57 pm

#100 Garth response ” Advisors don’t take trailer fees just salesguys”

Thats True.

Anyhow back on the Hip Hop theme for a minute.

“50-Cent- P.I.M.P

“Garth-T -Dollar MP”

“I don’t know what you heard about me…but you can’t get a dollar out a me. No cadillacs no perms you can see.. cause I’m an ousted.. MP.”

Keep up the good work Garth. My friends are tuning in to your site and I know they will get a laugh out of this post if you allow.

#111 Aussie Roy on 12.20.10 at 2:02 pm

AG Sage on 12.20.10 at 12:58 pm

Unmetered, no, I wish.

Projected cost (I stress projected) for the average family is around a 10% increase in price (based on the present ADSL2 delivered via the copper wire network). Its even speed limited not just content limited. In other words the faster you want and the more content you want, the more expensive it becomes.

Its crazy the prices here, I’m lucky (I’m an old radio guy – Ham) and helped set up a local wireless network. Being a part owner the ongoing cost is reasonable and speed is quite good (by Austrailan standards). The network is directly connect to our local exchange which is part of the current NBN backbone. In the city its nothing for a family to be spending $100 pm for internet access.



#112 wes_coast on 12.20.10 at 2:09 pm

Garth Said: So, here’s the point. The year to come will surely bring shocks. Like that Day of Reckoning for US states. Like the higher rates Mark Carney is vowing. Like stagnant economic growth, a collapse in exports and structural unemployment. Political and social upheaval in Europe. And, as I beat on about, the start of the real estate melt.


Now I am not one to disagree with Garth, but, I am a little confused. Garth speaks of some sound investing principles in general terms but not as much about market timing. The quote above spells out some bad things to come – which I interpret to mean significant downside risk for investments. Does this mean that short term, we can expect portfolio growth with the caveat of knowing when to pull out before the next big reckoning? It seems that the returns we’re getting today are thanks to the ‘extend and pretend’ created by printing money at the Federal Reserve versus tangible economic progress and returns that come from sound business practices.

Garth – any thoughts?

#113 dark sad person on 12.20.10 at 2:09 pm

#70 Herb on 12.20.10 at 8:57 am

#29 DSP,

I get your point: why bother with a calm, factual discussion when you think that “[Conservative] Drivel” will do.

Pity your solid grounding in economics did not include the use of quotation marks. They do make rants easier to follow.

Hey Herb-

Are you looking to debate something to do with economics or are you just cluttering the board with your mindless shit drivel?

If you care to go a “bit” deeper into that subject-just knock on the door a little harder-instead of trying to code out your message so as to not have to engage in something you obviously know little about-

#114 wes_coast on 12.20.10 at 2:14 pm

#63 – Obviously a realtor that used to be a car salesman and possibly has done voice overs for monster truck rally commercials.

#115 jimsum on 12.20.10 at 2:14 pm

This case illustrates the risk of selling your house and renting. In this case, guaranteed investments won’t cover rent, and non-guaranteed investments may not cover rent every year. If I own a house, it always provides the value of rent to me, no matter what happens to the cost of rent, the price of houses, or the performance of any financial investments.

This woman’s real problem is that she is spending too much on housing. If her rent was 1/3 her income or her house was 1/3 of her portfolio, she would be in a much better position.

Maybe she can earn more than 1.5% with low risk using Garth’s portfolio, but I am curious about where the 13% return comes from. This woman doesn’t want to spend her capital; how much of the 13% is income that she can spend and how much is capital gain (or loss) that she will pass on to her heirs?

#116 Sanchan on 12.20.10 at 2:14 pm

Hi Gart I always enjoy your frank posts/comments.

I would like an opinion on what an investor told me is doing himself and suggested me to do as well:

1) Buy a property you want to live in (whatever you can afford as long as you can pay more than 50% of the price)
2) Save the money you would be wasting in rent
3) Pay your mortgage (if any) as quickly as possible
4) Do not worry if the market goes down, as your next purchase will be at a discounted price as well (for example, if I buy a 1 BR @ 220k and I sell it 5 years down the road at 30% less the value I would also buy a better property that too has decreased in value of 30%)

I would be losing some money for commission fees but…is renting really better than buying in the long term?

I would appreciate your input.


#117 bullion.bunny on 12.20.10 at 2:16 pm

Here is the U.S. debt levels…..


How will this be paid back? Answer it won’t! It’s called default.

#118 Daniel on 12.20.10 at 2:18 pm

Wow – Calgary to have 5 – 7% Price Growth in 2011.


I wonder if they’ve taken into account that we’re already down 5% from November – December … meaning we’ll need to be up 10% – 12% by next November … Good Luck


#119 bullion.bunny on 12.20.10 at 2:21 pm

Oh look, “F” is thinking the same thing….


Maybe a default is in the cards after all.

#120 Aussie Roy on 12.20.10 at 2:23 pm

Just to add, with Australias history for solving problems with RF data transmission (802.11 protocol was invented by CSIRO Australia). We didnt consider keeping costs down by providing a fast wireless network for areas with small populations. With the old vhf TV network being switched off there is now considerable frequency bandwidth which could be easily used in some of the more sparsely populated areas.

At an estimated $8k per house to have fibre fitted, it seems to me in such a big country with a small population (by world standards) running fibre 100s of miles to service in some cases just a few familys is a complete waste of money.

#121 realpaul on 12.20.10 at 2:23 pm

Could Spain be Canada’s future. It looks eerily familiar….dependance on RE…fiddling banks and wonky government loans….massive over investment in RE…importing millions of workers dependant on RE…and then……BOOM !!


#122 Mark on 12.20.10 at 2:26 pm

I hope all these people with ‘guarantees’ are wiped out. Because nothing should be guaranteed by the government. Government itself is bankrupt, why would anyone accept a guarantee from a government guarantor?

#123 Bottoms_Up on 12.20.10 at 2:42 pm

Garth, if you seasonally adjust her current investment strategy then she’ll be fine and doesn’t need your help.

#124 a prairie dawg on 12.20.10 at 2:52 pm

@74 In the Maritimes

2.6% isn’t nearly enough of a return

Try a laddered bond fund etf instead. I did some research for a relative this past month, and found Claymore offered both a laddered Corporate bond etf, and a laddered Government bond etf. Annual fee’s were 1/4 of a percent (0.25%) each, or lower. Both average around 4.5% return per year. They are also both eligible for RSP’s and TFSA’s. And you can sell both with a mouse click.

The fees are low because they are just mirroring the DAX index, rather than actively managing each fund.

Still diversified and very liquid though.

NO, I don’t own any myself. Just came across them to recommend to said relative.

DYODD though.

#125 jess on 12.20.10 at 3:03 pm

Didn’t they lose some pension to pay for those OUT flows?

Irish thinking

Social Protection Department 17 December 2010

The Minister for Social Protection, Éamon Ó Cuív T.D. said this morning (17 December 2010) that Ireland is unusual in the EU in that Irish pension funds have a large amount of assets under management, but hold relatively small amounts in Irish Government Bonds. “In other words,” said the Minister, “where they do invest in bonds, Irish pension funds tend to invest in non-Irish bonds. This means that there is money flowing from the State which would be better invested in our country.”

The Minister made his comments when launching a new initiative for Irish pension schemes which involves new bonds which will provide greater opportunities for Irish pension schemes to invest, not just in Irish bonds but in Ireland.

Speaking at the launch of the initiative, Minister Ó Cuív said: “There are two major advantages to this new proposal, firstly, it allows for the retention of Irish funds for investment in Ireland and secondly it allows pension schemes to benefit from higher yields than are available to them at present. This will be particularly attractive for defined benefit schemes that are currently struggling with pension deficits and unable to meet the funding standard.”

The Minister said: “The Irish Association of Pension Funds and the Society of Actuaries in Ireland, representing the pensions industry, made proposals to Government which would allow Irish pension funds to invest in Irish bonds through a vehicle referred to as ‘sovereign annuities.’
“The Government has given these proposals very detailed consideration over a number of months and as I outlined in my speech on the Social Welfare Bill this week in the Dáil and Seanad, the Government has agreed to introduce this new initiative based on these proposals whereby new bonds – which will facilitate a sovereign annuity – will be available for pension schemes from January 2011. The legislation to facilitate this will be passed by the Houses of the Oireachtas today.”

The National Treasury Management Agency will issue the bonds and will decide what interest rate should apply in the light of prevailing market conditions. The Minister added: “Any investor, including pension funds, may buy the bonds. In doing so, they would benefit from higher yields than are currently available from the French or German markets.”

The Minister said that the new initiative will provide greater opportunities for Irish pension schemes to invest, not just in Irish bonds but in Ireland – and benefit from this investment. “This is something that we should all be doing anyway – now more than ever. We want people to buy Irish goods and to use Irish services. Investing in Irish bonds is no different. This type of investment in ourselves is vital to our national recovery,” he said.

The Minister also added that: “It is important to ensure that the widest range of options is available to pension scheme trustees.” He gave assurances that this initiative is voluntary and it is up to pension scheme trustees to decide whether or not to avail of the options available for their schemes.

#126 Jeff Smith on 12.20.10 at 3:28 pm

Looks like another tax$ grab


#127 Edmontonian Guy Here on 12.20.10 at 3:31 pm

City of Edmonton Tax Assessments coming in over the next week or so. Assessments for 2010 DOWN 10% on average this year! That’s during the year with HISTORICALLY LOW interest on mortgages. If interest rates rise 2 points in the next year-which is a given as commodities surge, we will see another 10-15% decrease in 2011 al least!
Developers have over built soooo much in the city! Do other people find in there city there are still many new units for sale by the original developer in buildings that did presales 5 years ago?

#128 BrianT on 12.20.10 at 3:49 pm

Wow-just like the old days-accounting fraud actually being looked at by somebody http://www.zerohedge.com/article/andrew-cuomo-file-fraud-charges-against-ernst-young-lehman-repo-105-involvement

#129 dark sad person on 12.20.10 at 4:09 pm

#119 bullion.bunny on 12.20.10 at 2:21 pm

Oh look, “F” is thinking the same thing….

Maybe a default is in the cards after all.

Default is the only solution there is-
We simply cannot print our way out of this-without blowing up the Currencies-
The reason we haven’t Defaulted already is because the Bankers still have their vacuums out-
Still a few Trillion to scoop up-
Just bet that the Defaults will be International only-
The Debt Slaves-will stay Debt slaves-there will be no Default on the Money promised to Bankers-that will come from our kids-

#130 TD69 on 12.20.10 at 4:26 pm

Really enjoyed #20 Mr Obvious and #91 American. Both are right and wrong. It’s all about demographics. Baby boomers will bust wide open when no one wants or has the money to buy their unloading goods. #20 knows why Vcr is it-has he left? And 91 come on it’s Seattle afterall-people pack there for a reason. #85’s stagflation paragraph sums it all up perfectly folks, it’s where we are heading-capital goods and fixed assets tanking, everyday survival goods rising. Blame it all on the bankers or better yet privately controlled money “changers” that hide under the disguise of being “Federal”.
Ron Paul will hopefully keep educating people that these private owners of the Fed are in it for themselves. They already own Ireland and the 13th arm of the Fed is called the Bank of Canada.
Even American idol runner up Sarah Palin is mixing it up with the Fed’s corruption. There is no middle class left-why?? At least Sarah is telling them. Why won’t the fed do an audit? Try finding them under the Gov’t directory-you won’t. They are not owned ny the government. As the founding US father Andrew Jackson said” you are a den of vipers and thieves….” Read what all the dead presidents said about the Fed and US govt not issuing it’s own money supply…from the beginning and leading up to Lincoln, Wilson(who after allowing the Fed realized he has ruined the the US) Kennedy and executive order 11110——-still believe the mob assasinated him? Always follow the money. Power to the people.

#131 GregW, Oakville on 12.20.10 at 4:36 pm

Ho-ho-ho Garth, Still looking for the prefect Xmas gifts? Garth’s books come to mind 1st. You may already have them, maybe thinking of ‘diversification’ of your gifts, giving money or booze to ‘drink’?

Here some gifts ideas that you’ll gain knowledge from and help spread the science, all at the same time. Lots of good free info can be found at this site!
FAN’s 2010 Annual Fund-raiser.

#132 Edmonton renter now... on 12.20.10 at 4:39 pm

According to an article in our local newspaper the last time Edmonton had two consecutive decreasements in assesstments for housing properties was in the late 80s after the price of oil collapsed from $70 to $10 in one day in 1987!

Looks like we in Edmonton are in for a HUGE housing correction. I knew if I could rent a condo or house that sold for $500,000 in 2007 for $1400 today something was going down with the market. More people should wake up and listen to Garth’s level headed thinking!

#133 Bottoms_Up on 12.20.10 at 4:42 pm

#116 Sanchan on 12.20.10 at 2:14 pm
Buying is better long-term (you end up owning an asset and do not have to pay rent throughout retirement). The longer you live, the more the equation is in favour of buying.

For example, someone with 30 years to pay off a mortgage of $250,000 may actually pay $600,000 over that time to pay it off. They would also pay taxes and maintenance, which could be $200,000. Thus a total bill of $800,000, of which some money could be recuperated by selling (let’s say the house could be sold for $500,000–thus, it cost them $300,000 for shelter for those 30 years).

To rent that same house over 30 years could be $600,000. NO money can be recuperated because you do not own the house. Renting was therefore twice as expensive in this scenario.

#134 RE Bear on 12.20.10 at 4:53 pm

I think that TheBestPlaceOnEarth was just completely annihilated by The American, hahaha.

Oh wait, I hear anti-psychotic pill jars tumbling around, I think that’s TheBestPlaceOnEarth getting ready to type up another Schizophrenic rant.

#135 Grrr on 12.20.10 at 4:53 pm

“There will be no Canadian provincial bond defaults. Get a grip. — Garth”

Why not? Record high debts and deficits. Struggling economies, and thus tax base. Growing caution amongst lenders. Iceland defaulted and several European nations are on the verge. You also mentioned above you expected increased government spending. Is that not the sort of thing that scares debt investors?

Why are the provinces so special that their overspending can’t lead to default?

#136 Mouldy Basement Renter on 12.20.10 at 5:02 pm

Sorry Garth , Time will prove me right

#137 Opportunity on 12.20.10 at 5:18 pm

Reading this blog amplifies why the conservatives are still the minority government.

#138 GregW, Oakville on 12.20.10 at 5:35 pm

Hello #199 Darryl, re: in ‘prison’ for what?

I believe you will find your own name is on the same list as mine. If they come for me, It won’t be long until they come for you too, and ‘they’ won’t be ‘aliens’.
The present PM doesn’t make me feel safe or confident in what the future might bring. The book ‘1984’ come to mind.

Monitoring America: The Government’s Development Of A Vast Panopticon Spy Network.

“The justification is, as always, the war on terror, but the targets of the information gathering are everyday Americans.

As the Washington Post report also notes, Homeland Security and its state and local partners have routinely targeted peaceful and lawful groups and individuals as part of its surveillance reporting….”

Assange responds to ‘high-tech terrorist’ charge
(1st comment from this links comment section is worth reading and thinking about. I’ve shorted it, “EXPOSING WAR…”)

#139 Herb on 12.20.10 at 5:44 pm

#113 DSP

I’m impressed.

Some commenters you can’t debate. You can only expose them to the ridicule they so richly deserve.

(Sorry, Garth. Back to being good.)

#140 GregW, Oakville on 12.20.10 at 5:45 pm

Hi Garth, fyi the PM’s nose just got longer again!
(I might even say what the F, but it was H.)

CTV.ca News Staff
Prime Minister Stephen Harper, who has long championed a plan to make the Senate an elected body, named two new senators Monday.

#141 realpaul on 12.20.10 at 5:45 pm

Soveriegn governments, in desperate denial up till now, have been trying to misdirect the facts away from reality. It seems like the debt rating services are doing it for them. Downgrades will cost them all ( and canada) dearly in higher servicing fee’s. All countries have idiots like F trying to run massive deficits by buying back their own bonds as low intrest stop gaps….but with Debt/GDP at 100+++% the game is dead in the water.


Rate hikes could be explosive instead of gradual. Tax hikes will also be explosive if F decided to keep spending like a drunken sailor and failing to reign in costs.

#142 DM in Calgary on 12.20.10 at 6:16 pm

#118 Daniel

Interesting site — notice that the MTD SOLD numbers as reported by Mike are at 490 yet the CREA stats have single family SOLD’s at 794. CREA manipulation? Or reporting error? Or is it they report last 30 days and include Nov EOM sales bulge? Quite a discrepancy there.

#143 Bullion.Bunny on 12.20.10 at 6:51 pm

#129 dark sad person on 12.20.10 at 4:09 pm

Just bet that the Defaults will be International only-
The Debt Slaves-will stay Debt slaves-there will be no Default

Just like 1933, when all countries went into bankruptcy and “the people” became the collateral for national debts.

#144 Dan in Victoria on 12.20.10 at 7:05 pm

Sanchan @ 116
Here Sanchan, read this fellow. Read the right hand side of his page, its long but through.
Understand it.
Then read what we talk about here daily.
You can then make an informed choice of your own with the proper info.

#145 Roial1 on 12.20.10 at 7:24 pm

#29 dark sad person on 12.20.10 at 12:16 am

Just what part of “free market” is such a “Holy Grail” that you can’t get Listeriosis????

Get YOUR head out of your ass!

“Free market” is what brought down our whole financial system. Though “Uncontroled GREED”!

I guess you realy do want to carry a sword and defend yourself at all times. That is the direction that we seem to be heading with the “Free Market”.

Dog eat dog and to hell with the hind most.


#146 The InvestorsFriend (Shawn Allen) on 12.20.10 at 7:41 pm

Number 135 GRR asks:

“Why are the provinces so special that their overspending can’t lead to default?”

It’s because they have the ability to tax their residents and if that is not enough to go to the Canadian Federal Government for help.

A provincial default is not within the realm of a reasonable possibility. The consequences are too great and the ability to avoid it is too great.

#147 Nostradamus Le Mad Vlad on 12.20.10 at 7:51 pm

#129 dark sad person — #119 bullion.bunny — “Oh look, “F” is thinking the same thing….”

F thinking? The Eighth Wonder Of The World! Now I know what that sonic boom was!

DSP — correct, of course. Question is when (the timing), not if.

With commercial RE sliding in 2011, the next wave of foreclosures (not incl. Canada), the re-setting of mtgs. with higher rates leads to one conclusion.

Not too hard to figure that out. Another question, ‘tho is will the Libs. / NDP kill the budget bringing on another election? Costs an average of $300-$400 mln.; we’re just as broke as the States, so whoodya like for PM?

#130 TD69 — “. . . the 13th arm of the Fed is called the Bank of Canada.”

We’re f*^%$d one way or the other. The Deep Purple’s song “Speed King” from 1970’s Deep Purple In Rock; one line — “Die young, live much longer” comes to mind!

#141 realpaul — “Rate hikes could be explosive instead of gradual. Tax hikes will also be explosive . . .”

See #130 TD69’s post. If the elite choose to take us down next, we’re gonzo with or without the US. Happy Landings!
WKRP In Cincinnatti But no police force — the entire dept. may be outsourced. To Bangladesh?

#148 S.B. on 12.20.10 at 7:57 pm

At seniors lodges across the country, tongues are
a-wag over the young whippersnapper Turner’s plan to put them into preferreds.

Many still remember the horrors wrought by the collapse of Consolidated Acme Washboards Inc. – the stock that was supposed to smite the Kaiser.

When pressed further, the more reverent ones will simply hiss ‘The Devil’s Market’ as they shuffle away :P

#149 westcanguy on 12.20.10 at 8:01 pm

Calgary rip off wrote-

“The nice thing about the baby boomer generation and all their screw ups is that most of them will be DEAD in 30 years and I dont have to listen to their screwups anymore(Go generation X).

1943-1963 loser generation.”

Yeah, why would you want to learn from their mistakes. I mean, you already have all the answers, right?
Consider changing your name to “Tard”

Garth, I’m still going to read you blog posts but I’m done with the comments section. It’s turning into more and more of a circle jerk everyday.

#150 jess on 12.20.10 at 8:10 pm

Brian T


But the Repo 105 discussion is a distraction. So is the “Sarbanes-Oxley failed us” whine. Repo 105 is not off-balance sheet accounting but good old-fashioned “round-trip” transaction shenanigans. This was garden variety accounting manipulation by the highest levels of the corporation, accomplished with the acquiescence of the impotent auditors. I described these techniques three weeks ago, “…Can Anyone Catch Lehman Stealing?” But finance bloggers often shine these turds to make them worthy of their dazzling quanty brains…”


The unsaid
Both borrowers and investors lack of real-time data on loan delinquencies and a lack of transparency in the world of mortgage-backed securities. A 35-year-old law dictates the home-mortgage data that lenders must report, but it has fallen far behind today’s mortgage reality. The Home Mortgage Disclosure Act [4] (HMDA), passed in 1975,

But those metrics cover only about 65 percent of first mortgages. And loan-level data is not available to the public, not even with names and identifying information stripped out. Treasury doesn’t plan to make it public, citing concerns over privacy and banks’ proprietary information.

Not reported:
key loan characteristics, such as teaser rates, balloon payments, fees and penalties, or borrower attributes, such as first-time homebuyers, age and their debt level. HMDA also leaves out major players — smaller banks and mortgage brokers have no obligation to report. ”
Loan servicers — mostly big banks — must report 108 different pieces of information on millions of loans to the department, including interest types and rates, credit scores and foreclosure data.
OCC and OTS Release Mortgage Metrics Report for Second Quarter of 2010

#151 VICTORIA TEA PARTY on 12.20.10 at 8:18 pm


Life is a complicated weave of contradictions which we mortals intend to mold into a useable, predictable way of life. Some succeed, others don’t.

As this year winds down, and some folks assess their finances of the year, just about to pass, I join them in looking ahead to 2011. It’s like peering into a fog bank, not knowing what lies within. Until I find out, my feelings of economic unease continue. In order to give further support to my views, I “borrowed” a few words from J.H. Kunstler’s latest rant on his blog of this day. Read on:

“…As I have averred more than once before, this period of US history resembles the 1850s, when the established political parties could not wrap their minds around the salient issue of the day, slavery, and so went out of business. Anyway, when Abraham Lincoln came along rather late in the day, nobody knew, fer gawdsake, that he was going to turn into Abraham Lincoln. We kind of forget that the Civil War, which began almost the instant he took office, was a prolonged fiasco that looked fatal for the nation until very near the end – at which point Lincoln, who had been mocked more harshly than any president to that time, was transformed into a monument by 240 grains of lead.
In this previous historic convulsion the issue was slavery; today the issue is the rule of law – the absence of which from banking is destroying the USA as effectively as a foreign invasion. Poor President Obama looks more like Millard Fillmore reincarnated every day, an empty figurehead servling of less-than-benevolent interests hiding in plain sight. What will become of this Republic when he puts his Santa suit away for the year, nobody knows (and many people dread)….”

Whatever happens to our American Empirical Masters in the New Year, we must never forget our colonial “status”. We’ve been, and continue to be, the best damn hewers of wood, water, gold, iron ore, oil, natty gas, feldspar, uranium, and whatever else we can dig up or grow up, or dish up, and flog it to the US first, then to China, and then to the Rest Of Them.

While we have political independence, we do not have “complete”, or strictly homegrown, economic independence. This puts us in a position of needing others to buy our stuff so that we can survive and prosper. Ah yes, economic independence.

It is actually economic interdependence. And therein lies the conundrum. Thanks to globalization we are at the mercy of market vagaries both as individuals, corporations and country.

A future as a trading nation should be a piece of cake if only there was a little less interdependence and a little more one-on-one trade deals with other sovereign states; in other words more control over our destiny. But that is not in the cards. And because of that we live risky lives indeed, don’t we?

So, in 2011, we will be subjected to the full panoply of market forces many of which will impinge on our lives, like it or not. It’s how we respond to these forces that results in us either prospering or being invited over to Garth’s bunker for a serving of steaming squirrel stew.

My predictions are not of the squirrely-stew kind (BTW, do carrots and peas come with that, Garth? And what kind of sauce?) and never were. They’re more of the “let’s clear up the financial mess” kind so we can all re-establish some fiscal and monetary sanity and order. Too much gunk, including greed, clogs up the works!

I still believe there will be a stock and bond market correction, or collapse, not necessarily simultaneously.
Why? I think stock markets are too pricey and bond markets too loaded down with supply and not enough demand (there’s been a bond bull market for the last 30 years, for cryin’ out loud!).

If our betters (economists, central bankers, politicians) had NOT spent the last four years trying to protect the rest of the world from sovereign and individual self-indulgences and greed we’d be largely over this economic angst by now. Countries and people would be paying down SOME of their debts and being more economically viable. I would hope.

And just maybe this blog would not have been created! How about that!

Now THIS is a conundrum. I need this blog!

It’s the best one on the block. But I just hope that by the time this economic crock of you-know-what gets sobered up and running properly Garth will still have reason to write, because I know the rest of us sure as heck will!

Bring on the corrections! Bring on the recovery!

Love live this blog!

#152 cellar dweller on 12.20.10 at 8:36 pm

#63 bestPlaceonEarth
Was that you I saw parading up and down Granville st last Friday night. Musta been 10 Ferrari’s, Lambo’s,Etc. with ‘N’ stickers (new drivers)on their bumpers.
Dont get caught speeding with the “N” or 6 months jail for your car and then you get your red “L” sticker for another year…
But i”m sure you already know this….

#153 cellar dweller on 12.20.10 at 8:46 pm

…..am I having an alzheimers flashback ?
What happened to the Dhukabor ‘hotties” that were on the Blog page earlier today ? Looked like they were in front of the Vancouver Art Gallery.
Now POOF ! Gonzo !
Vas ist losen?

Nobody got it. You all failed. I have recalled the frisky babes. — Garth

#154 TD69 on 12.20.10 at 8:48 pm

Hey #148 of course and it’s called eugenics. I’m a 80’s guy and have done it all and alive and well at 41. Was a corporate guy working for last 15 years, real big shot. Do not count the Yanks out, they will still win this one, just at what cost to the people and the world. But we are only one 9/11 away from strategic stuff. But we are very lucky to be on this side of the fence. And most know it, the average Yank a lot more than us Canucks. Over half of the world lives in poverty. They are coming up and with nukes.
500 million is the world population goal of the super above Bilderberger group elites. North America is the last place to figure it out. Ever notice the same bankers that forced us to keep up with the Jones by flooding post 911 free money at us are now scolding us?
#116 Sanchan I’ll answer your question. If you can afford traditional means of buying-25% min down and qualify payments without eating cat food-do it. I just sold another rental property and gave 3 tenants their notice. The reaction although expected is always brutal. Now they are forced into a market where rents are getting astronomical.
I think JFK was the last true noble president-google his take on “secret societies”. Then you’ll get it all.

Garth a great blog, keep educating with humour. Thanks.

#155 Bullion.Bunny on 12.20.10 at 8:52 pm

#146 Roial1 on 12.20.10 at 7:24 pm

“Free market” is what brought down our whole financial system. Though “Uncontroled GREED”!



Dude are you for real? What’s the alternative, the old USSR? You are so wrong on so many levels.

Here is an example of the free market.


Our current system is NOT “Free Market”, it’s more like Keynesian fraud market. You need to do some reading before you come here and mouth off.


#156 noplused on 12.20.10 at 8:52 pm

Mish has a must read on the Canadian Housing Bubble and the prisoner’s dilemma Canadian banks find themselves in because of F’s f-ing rules:


#157 Nostradamus Le Mad Vlad on 12.20.10 at 9:02 pm

VikkiBeets “All those whose critical faculties are still intact, and who care about real truth and real knowledge, should stand up and loudly blaspheme against the new secular religion of Assange and his apostles.” The elite (through govts.) are looking to control the net, to prevent freedom of speech. Assange is just a muppet. Plus — LickyWeaks Names not in the news.

7:56 clip Lady telling congress off after her home was foreclosed.

5:48 clip This may be the reason for the above lady’s outburst.

Inflation on yearly rising food prices.

QE2 Worked for a few, not the many. Plus — JPM Whistleblower!

Panic and Fear Like burgers and fries. Plus — Oz Snow in summer.

ClimateGate “The Dalton Minimum was a period of low solar activity, named after the English meteorologist John Dalton, lasting from about 1790 to 1830.”

15:01 clip Manufactured Fear. This is what the elite use to turn us into obedient sheeple. Works so far.

Gold Heist on 9-11. US$300 bln. in gold bars in the South tower basement.

1:41 clip Abolish the Fed by M. Friedman.

Six min. clip If the ‘net is shut down, use a short-wave radio to keep in touch.

Germany “Translation: “Come on, Germany; starve your people to fatten the bankers like every other nation has agreed to do.” wrh.com. — This happened.

Controling DNA One way is through the body scanners at airports, harbors and train stations. The elite don’t want us traveling!

#158 TD69 on 12.20.10 at 9:04 pm

#143 B Bunny-perfect summary correct-we are “debt slaves” to the “money changers” forever.
Ever notice we are given “birth certicates?” As in ownership certificates?

#159 prairie gal on 12.20.10 at 9:07 pm

randman, where did I say we need more big government to save us? Nice straw man there. So easy to knock down. Now try addressing the points I raised… or can you?

#160 jess on 12.20.10 at 9:11 pm

Turning your home into a profit center!

A respected accountant who turned his home into a brothel was caught in the act when police swooped and found him naked in bed with his Chinese mistress, surrounded by money.

A respected accountant who turned his home into a brothel was caught in the act when police swooped and found him naked in bed with his Chinese mistress, surrounded by money.

Leslie Baleham, 64, was jailed for a year after admitting keeping a brothel at his property in Radford, Nottingham.

Read more: http://www.dailymail.co.uk/news/article-1340182/Arrested-bed-madame-called-Ping-Ping-respected-accountant-turned-home-brothel.html#ixzz18hfT7Wwr
Read more: http://www.dailymail.co.uk/news/article-1340182/Arrested-bed-madame-called-Ping-Ping-respected-accountant-turned-home-brothel.html#ixzz18hegHn6Q

#161 dark sad person on 12.20.10 at 9:23 pm

146 Roial1 on 12.20.10 at 7:24 pm

#29 dark sad person on 12.20.10 at 12:16 am

Just what part of “free market” is such a “Holy Grail” that you can’t get Listeriosis????

Get YOUR head out of your ass!

“Free market” is what brought down our whole financial system. Though “Uncontroled GREED”!

I guess you realy do want to carry a sword and defend yourself at all times. That is the direction that we seem to be heading with the “Free Market”.


Prove where the free market brought the system down-

I know you can’t-because it’s obvious to anyone with half a clue that isn’t a Pinko Socialist like you-that it was our Government/BOC in cahoots with our world envy Banks-that blew this Credit bubble-

Ask G-he speaks of it all the time-

Where in that Mr. Socialist dumb ass-do you find the “Free Market”at work ??

Let’s here it–

#162 Freedom 55r on 12.20.10 at 9:26 pm

Thought I’d skim through a few more comments and am surprised to find yet another good photo. I love it – all those managers and supervisors!
You’ve got a great sense of humour, Garth.
Also laughed at all the adjectives you strung out for #103 Mouldy Basement Renter.

#163 S.B. on 12.20.10 at 9:35 pm

Speaking of inflation, Tim Horton’s is selling a ‘limited edition’ mug for…$7.95!
You know, the type of mug that retails in a dollar store for oh I don’t know, $1?
Rip-off. Wanna bet it’s NOT made in Canada? :?

#164 Dale in TO on 12.20.10 at 10:02 pm

#20 Mister Obvious

…. Priceless Post ….

Hope to hear more!

#165 Agio on 12.20.10 at 10:16 pm

This person is 73 , sitting on 728k, scared to invest and she’s worried about money? Sure it isn’t the kid worried about his inheritance?
If she lives another 20 yrs without earning squat she can piss away 47k a year on a garden and still have a couple bucks left over for the funeral. Not saying she should do this but “Maria” was an over the top example.
As always, made great fodder for unrelated crap.

#166 Devore on 12.20.10 at 10:21 pm

#162 dark sad person

I see this done all the time, sadly. People think in such simple partisan terms. Left vs right. Liberal vs conservative. Socialist vs capitalist. Good vs evil. Black vs white. Not the least of which, “free market” seems to mean completely opposite things to different people, to suit their argument I guess.

A “free market” is not anarchy. Just like “smaller government” does not imply anarchy, and neither do libertarians. This is not a binary state, an on/off switch.

A free market actually has (would have, if we had one) a great number of controls and checks and balances, that actually work. It is only when you arbitrarily remove them, and substitute corruption, favouritism and cronyism, is when you get chaos. But that is no longer a free market, it is a broken, manipulated one. Then you need to ask, manipulated how, by whom, and to what ends. You will find partisan lines are meaningless here, and just provide talking points to keep the peons busy and fighting each other.

Look past the religious fervor for your political team of choice, because they’re all playing the same game by the same rules. Maybe then you’ll find people agree on far more than they disagree, and will be able to expend all that energy on something productive.

#167 hobbygirl on 12.20.10 at 10:23 pm

How many of us feel like Jose and how many of us are managers I wonder…

#168 dark sad person on 12.20.10 at 10:26 pm

#161 jess on 12.20.10 at 9:11 pm

Turning your home into a profit center!

A respected accountant who turned his home into a brothel was caught in the act when police swooped and found him naked in bed with his Chinese mistress, surrounded by money.


Sounds like the prime example of a success story to me-

#169 stellamonkey on 12.20.10 at 10:35 pm


You, sadly, neglected to mention that the entire delta of Richmond is about 6 feet below sea level. The greater Van area, is a major earthquake zone that has not had a major earthquake in about 100 years…. we are very much overdo for a very big occurance, after which, Richmond will be under… um… about 6 FEET OF OCEAN/FRASER RIVER.

Anyone buying property in Richmond is out of their freakin minds… unless of course, they are expecting the government (also know as my tax dollars) to bail them out……

#170 Bob on 12.20.10 at 10:55 pm

Garth, if real estate is so evil, why are you pushing mortgage rates on your blog? What an oxymoron. Your preach how evil and stupid we are for buying a home and then you blatantly have a click through ad on blog.

Oh…wait, your gimps pushing your site won’t even post this. Wimp.

What a hero. — Garth

#171 Macrath on 12.20.10 at 11:16 pm

Nobody got it. You all failed. I have recalled the frisky babes. — Garth

What is Bountiful British Columbia?

#172 a prairie dawg on 12.20.10 at 11:18 pm

“Nobody got it. You all failed. I have recalled the frisky babes. — Garth”

Did it have anything to do with Bountiful? ;)

#173 Bubble 'n Fizzle on 12.20.10 at 11:24 pm

This tale of woe from an over-70 old lady with over $700K in the bank and no debt, worrying about money, is about as useful as the National Post’s regular personal finance columns, in which they disect the precarious situations of dual-income boomers with $150K+ combined salaries. both with generous defined benifit pensions, and $500K+ equity in a house and a cottage. How will they possibly be able to continue to spend $40K per year travelling in retirement? The horror!

#174 dark sad person on 12.20.10 at 11:39 pm

#148 Nostradamus Le Mad Vlad on 12.20.10 at 7:51 pm

DSP — correct, of course. Question is when (the timing), not if.


As to how long from now-i have no idea but my guess is it will be triggered when we experience a Currency upheaval in one of the Majors-
Likely the Yen-imo-not that it matters which one-any Major would do it-at that point they must shed Debt or they’ll get lined up by Traders for Grade Ratings-like what’s happening in the Bond Markets and should a flight from Paper Currencies begin-Katie bar the door with Gold-cuz-Central Banks will be forced into the Open Market buying Gold at any price to stabilize their critically wounded Currency-
Whichever Country blinks first and buys-will cause a rush to Mother Gold-

I know-i know G–it will never happen


#175 dark sad person on 12.21.10 at 12:00 am

#167 Devore on 12.20.10 at 10:21 pm

#162 dark sad person

I see this done all the time, sadly. People think in such simple partisan terms. Left vs right. Liberal vs conservative. Socialist vs capitalist. Good vs evil. Black vs white. Not the least of which, “free market” seems to mean completely opposite things to different people, to suit their argument I guess.

A “free market” is not anarchy. Just like “smaller government” does not imply anarchy, and neither do libertarians. This is not a binary state, an on/off switch.

Good explanation-
Nothing but manipulation on a scale so large-it’s almost unbelievable-
No Government can fix this and i totally agree with-

New boss same as the old boss-Political Cronyism that runs deep in this Country-

The good thing is-there is a Free Market and it’s well aware of what People need and when it makes its move-be ready because it will blow away all who stand in its way and that means Governments and Bankers-
It will ferret out a way to destroy them all-

#176 Herb on 12.21.10 at 12:11 am

Re your comment on #154, Garth, I got it. However the modesty of a family blog forbade the obvious explanation: What diversification with those Bountiful sex objects?

#177 Herb on 12.21.10 at 12:16 am

#167 Devore:

You will find partisan lines are meaningless here, and just provide talking points to keep the peons busy and fighting each other.


#178 Bullion.Bunny on 12.21.10 at 7:17 am

#159 TD69 on 12.20.10 at 9:04 pm

Ever notice we are given “birth certicates?” As in ownership certificates?

Yes, I know all about it. I’ve studied common law and admiralty law for about seven years now. I use it and apply it in the courts along with a group of friends. The rabbit hole goes much deeper than most people can ever understand. Read a blacks legal dictionary some time, it’s a whole different world they are using to pull the wool over your eyes. I don’t think most people could handle it on this blog, best not to talk about it. The matrix and Neo are for real.

#179 Steven Rowlandson on 12.21.10 at 12:00 pm

Hello Garth.
The other day I was going to post but was interupted by the police AKA my brother Bruce. So I didn’t quite press the submit button properly.

What to do with $728 grand as an alternative to GICs?
Buy 10 kilogams of gold bullion in Kilo bars and a safe or strong box that is well hidden.
10 kilos is around 20 pounds and would fit in a small tool box quite easily.
Also buy mutual funds that yield 10% or better for short term income. Since Politicians have a chronic tendency to overspend the real value of fiat currency is limited to non existant. At some point the currency and the debt associated with it will be repudiated and or defaulted on. That means that life savings in currency are wiped out either by default or hyperinflation. With shares in businesses alot depends on the business having no debt or very little debt and the ability to produce something that can be sold at a profit. Any company that isn’t like that is at risk of going under… Remember there is no honor in a thief or a liar.

$728 grand in unbacked fiat money is worth nothing so the trick is to transfer it into some thing that is worth something and is internationally respectable. Currencies last only as long as the trust in the system lasts. How long will the world trust desparate debtors who won’t cut spending and pay down debt?
Trust in gods money AKA precious metals lasts forever.
If in doubt just ask the gold bugs Garth.

A tool box full of gold. Thanks for the chuckles. — Garth

#180 TD69 on 12.21.10 at 12:49 pm

#179 B Bunny I”ll stick with open dialogue and non secrets, the more people are exposed to the more they can think for themselves and one day have things kick in-like the mortgage mess we’re about to experience. And not be patted on the head and told what to think or what not to talk about. It’s why the US try as they might can’t touch Assange. If people expose. Plead natural law before any judge and walk away.

#181 DAVID on 12.21.10 at 3:52 pm