Many dream of a simpler life. Alistair and Sharon among them. They’ve started a little early. He, 62, she 57. Now ensconced in a small town in rural BC, where they’ve been renting for a few years.

‘We believe as you do that real estate will not end well,” he says.

But that hasn’t stopped them from stepping out.

“Last weekend we put in an offer on 1.5 acres of totally beautiful but more importantly, totally usable growing medium.  The land is great but house & outbuildings need ~50K to bring them up to better energy standards.  We close in March.  We will grow all our own veg, chickens, ducks…”

It’s all good, I told them when they asked for an opinion. Real estate works when it puts you in control, stabilizes your shelter costs, does not require financing and pays dividends – whether that’s in the form of rental income, or chickens. Given the uncertainty of our world, there’s logic to this kind of a move.

But then I heard this.

“We have approx. 400K in liquid cash earning 9% annually, paid quarterly, and re-invested in the account.  All our cash is invested with a good friend of my wife’s in private mortgages.  I have always been uncomfortable having all our eggs in one basket, and have threatened to liquidate a number of times, but our greed takes over each dividend time.  We also have ~150K in RRSP’s with same company. We are not financially illiterate but need help with the best move for our future needs. I am 62 and only current income is CPP disability which will turn into CPP at 65.  She is 57 and only income at 65 will be CPP. Are we at risk?”

Big time.

There are serious errors here that need correcting. Like having over 70% of your total liquid net worth in a single investment – no matter what return you are getting. Like collecting a 9% yield, which is 100% taxable, and not seeing any of the money – since it is reinvested in that one asset. That just makes you poorer in terms of cash flow, even though it builds wealth on paper.

And the giant mistake, of course, is putting most of your net worth into somebody else’s second mortgage. With real estate values at their peak, interest rates near the trough and the economy losing ground monthly, this is hardly the time to be financing residential properties. The odds of some deadbeat homeowner walking out if home values head south are huge – since you probably have no idea how to go after them. So you might end up with a trashed house worth far less than the debt, and serious legal bills before you’re even allowed to sell it.

Are you at risk? Immensely. Get. Out. Now.

Hardly a day passes that I don’t talk with someone like this – financially illiterate, led astray by the lure of big returns, the naive recommendation of a friend of relative, or the reassuring tones of a mutual fund salesguy or the nice lady at the bank. The fact most families are mired in debt with scant savings, and yet put what little they have in such bad places proves they have no idea where to gain knowledge.

It’s ignorance and emotion which has built the current housing bubble. It’s greed and inexperience which leads young couples into 95% financing. It’s fear and hearsay which has put billions into bank GICs and high-savings accounts yielding less than inflation. And it’s the fault of the financial industry that so many people will run out of money before they run out of time.

After decades of writing books about financial stuff, lecturing across the country to those who wished to hear, using the media, or the Parliament, or this blog, to change the way things are, I feel like throwing in the towel. There are just too many sleazy fund salesmen collecting commissions while locking people into deferred sales charges. Too many bank employees masquerading as caring friends while they condemn seniors to penury. Too many brokerage account reps who churn their way through clients’ funds. Too many lenders devoid of principles. Too much fear. Too much greed.

But as hopeless as this may be, well, screw it. I’m too cranked to quit.

Oh yeah, merry Christmas.


#1 Ron on 12.24.10 at 12:27 am

Merry Christmas Garth…and toall of the dogs.

Great advice: Get. Out. now.

Best Christmas gift ever..

#2 JB on 12.24.10 at 12:33 am

Merry Christmas to you on yours Garth, even that hummer of yours.

don’t throw in the towel, we’re just getting to the good part

#3 Medic on 12.24.10 at 12:35 am

Merry Christmas, Garth, to you and your family.

#4 april on 12.24.10 at 12:37 am

Don’t blame you for feeling like ‘throwing in the towel” but hope you don’t Garth.
Happy Holidays.

#5 kevin on 12.24.10 at 12:38 am

I’m happy you are too cranked to quit. As are the legions that follow.
This blog has allowed people to become more informed.
If it wasn’t for you, I would have drank the koolaid and found myself neck deep in debt.
Merry Christmas.

#6 Nocte_volens on 12.24.10 at 12:40 am

Merry Christmas Garth. Keep up the good work…can’t quit now, it’s just starting to get interesting. ;)

#7 Tom from Mississauga on 12.24.10 at 12:46 am

Blessed are the persecuted. Congratulations on all your blessings this year. Wish you many more in the New Year. Keep up the honest work.

#8 Nebbio on 12.24.10 at 12:47 am

Merry Christmas Garth. I have enjoyed your comments every morning for the past year. Keep it up in 2011!

#9 Phil on 12.24.10 at 12:47 am

Don’t quit……please!! I am 55 years old, working as a Saskatoon firefighter, and have been financialy asleep for years, letting other people invest what little I could spare. Almost all were crooks, as it seems, and now I have 5 years left to work, “formally”, with little put away. My only real equity is in my house, an ordinary 1200 sq ft bungalo in Saskatoon. I have been reading and watching for months, and now I think of selling and renting untill this bubble bursts. At least that way I’ll be liquid through the recovery. Now I just have to convince “da wife” that it’s a good idea. Good luck. She loves her home, and has lost trust in my decision making powers, although most of my failures financially were at the hands of “professionals”. Any chance you would agree with my thinking, or should I just “forgetaboutit”. Any steering in the right direction would be greatly appreciated. BTW…love your blog….very up front and easy to read. Phil

#10 Bottoms_Up on 12.24.10 at 12:48 am

9% return on private mortgages…sounds too good to be true. Ponzi scheme anyone? They may not be at risk — as in, the problem is likely already here, and they will not be getting some or all of their money back (or I just may be naive).

On another note, crack shack or mansion (Ottawa style):

#11 Basil Fawlty on 12.24.10 at 12:50 am

Diversification reduces risk.
Merry Christmas to all from your ornery pal Basil.

#12 An Cat Dubh on 12.24.10 at 12:50 am

I am taking a college course and one of the students is a former builder, and he thinks real estate in the Okanagan has bottomed out. I explained the high debt rate, interest rates which are going up soon, Mark Carney, but to no avail. My friends sister works for a bailif in KLO, and she said there seem to be more people every year who are in financial dire straits. Not necessarily from real estate, though I know of someone in Westbank who’s house was paid off, but now she uses the equity for trivial things. Key up your violin Nero.

#13 garth turner jr on 12.24.10 at 12:51 am

Bill Still’s 8 minute speech on…

Old ways of Plutocracy and Fractional Reserve…..The Debt Money System… no longer working.

#14 mel on 12.24.10 at 12:55 am

There is a time in history when you should be fearfull. I personally would not, even if you say diversify some of your holdings, to preferred bank stocks.

In the coming years, the last thing that investor should own would be Canadian bank stocks. Hold it if you wish, I would not buy it until I know how they will be impacted by the housing collapse in Canada.

I am not suggesting you should invest in GIC’s, but there are banks that will give you 3.75% for 5 years. Not much in this world, but safe until such time you will need it. For you to knock the GIC’s investors is becoming a bit tiresome.

#15 Angry Bird on 12.24.10 at 12:59 am


No one (including yourself) can predict a bubble and truth be told when people think the bubble is going to burst it usually keeps growing.

Will the housing market crash? eventually but will you be able to predict it? NO

You’re just as bad as the rest of them, they use facts to distort the truth and you’re doing the same. you only use facts & numbers that work with your arguments and if there’s something that doesn’t fit you omit it.

I can’t believe you’re asking us to trust in what you say you were a political figure after all!

THE PEOPLE you attract on are ones who have never amounted to anything, the ones that don’t own property and like paying other peoples mortgages off!

The thing that makes me laugh is they come to this site to feel better about themselves because they will never be winners.

You on the other hand are a winner you found a way to exploit fear for financial gain. A TRUE CAPITALIST. You never succeeded in politics because you couldn’t play the game. Harper on the other hand did the right thing by kicking you to the curb!

#16 Roial1 on 12.24.10 at 1:00 am

Merry Christmas to you and all the blog dogs from here on the “WET” coast.
It is raining.
It has been raining all day and is to rain “Heavily” all night.
The up side. It ain’t about to have to be shoveled.

Green Christmas. Oh ya.

Say G’night Garth.

#17 Min in Mission on 12.24.10 at 1:03 am

You know, when I read some of these examples/emails, I often wish that I could be in such a position. Having gotten started quite late in life, most of the advice and options presented here are not readily available. Wish that I could have the problem of several K’s invested in a bad investment. Just glad to have the “stuff” that I have. Still, it is only “stuff”.

Thanks for all the great info, I really enjoy reading the initial articles and ‘nearly’ all of the responses.

Merry Christmas to all, Min

#18 Don on 12.24.10 at 1:26 am

Never throw in the Towel Garth! You should think about running for PM, some day, maybe as an Independent if possible.

Merry Christmas Garth. Thanks for bringing the truth.

Great blog.

#19 Yank on 12.24.10 at 1:37 am

You are helping people. It’s so important to have the reminder that real estate can be a risky investment, especially when there’s so much pressure to buy houses.

You’ve kept lots of people from throwing themselves into real estate Armageddon. And you remind us about good savings and investment strategies. Just think of all the young marriages you’ve saved by keeping them out of debt penury. Keep up the good work and Merry Christmas!

#20 squidly77 on 12.24.10 at 1:39 am

Commissioned sales-people are a detriment to the Canadian way. Well said.

They only know how to act and give advice in accordance to their own best interests.

#21 hobbygirl on 12.24.10 at 1:40 am

Merry Christmas Garth and all bloggers. This is a season of faith so keep it up Garth, we’re all in this together.

#22 Mister Obvious on 12.24.10 at 1:42 am

I figured out on my own last March that ‘getting out’ was ‘obviously’ prudent (hence the moniker) and I did exactly that. But I believed then that it was only a matter of a year or two and I would be vultching on a banquet of home foreclosures and distress sales at 50 cents on the dollar or less.

That’s about the time I discovered this blog. I now have a well diversified portfolio with many dividend paying stocks managed by fee-based professionals. (Actually, I already did have such a portfolio but its now much larger since Garth cured me of advanced real estate vulture disease)

There is every likelihood of a correction of varying degrees across the country come this spring. This is almost certain to be followed by a slow, depressing multi-year melt. That is a very poor feeding ground for a buzzard like me. I am now a happy renter (with zero debts) who sleeps well at night.

The great gift Garth Turner gave me was to help me understand the danger of grasping for a falling knife. In short, he showed me a better way. All I can say is thanks buddy; I hope you have a great, politically correct festive season. Your message is does not go completely unheeded.

#23 gimme all yer money, NOW on 12.24.10 at 1:45 am

Welcome to a new kind of tension, television dreams of tomorrow:

#24 Nostradamus Le Mad Vlad on 12.24.10 at 1:48 am

Advice. Take it or leave it, but to thine own self be true.

“It’s all good, I told them when they asked for an opinion. But then I heard this. Are we at risk? Big time.” — Ummm, not such a good move. Sell RE investments yesterday, transfer the money into a balanced portfolio then take out a RSP mortgage (if you have to), using the net worth as collateral.

“I feel like throwing in the towel.” — You are not allowed to quit, and death is not an option! Christmas Day — that’s your holidays for the year!

Merry Christmas and a Happy New Year to Dorothy, Bandit and you as well as all the seen and unseen blawg dawgs here!
Nine Predictions, incl.: — “4. The real estate market in Canada will finally begin its collapse suddenly after the new year celebrations are over, mimicking the real estate crash of the U.S. that began in late 2008. Over heated markets like Vancouver will suffer the most as the average house price there is around $1 million Canadian (the Canadian dollar is almost on par with the USD).”

Ghost Towns of China. Impending RE crash?

Austerity is a good failure.

3:33 clip ‘Quakes all over. Plus — 12:17 clip Extreme weather. The earth is preparing to barf us all into our next lifecycles!

The CRA and feds. could learn something from this, but it probably makes too much sense.

Illegal Govts. — Oz, NZ and Canada.

US Fed Screwing small banks to save larger ones.

Forests4Sale “The nations are being strip-mined to feed the bankers’ greed!”

Monsanto Another one bites the dust.

Rare Earth Elements Undermining China.

Gold Rising Bull Market.

Squeeze Not orange juice, either.

Monsanto Enuff said.

#25 Taxpayer like everyone else on 12.24.10 at 1:49 am

Merry Christmas Garth, and thanks again for hosting this blog. Best of the season to all bloggers.

#26 undecided_waiter on 12.24.10 at 1:50 am

You are good your ADVICES are great, but if people get out where should they invest? You never talk about or name those funds/etf/stocks/funds …. will you name them please? I have seen you talk about balanced portfolios but what are exactly those things that make up that portfolio? where can person invest, that is the key, and I have not read a blog from you that talks about that part, would you please start on that in near future… or is it too much to ask for?

#27 Timing is Everything on 12.24.10 at 1:50 am

Garth said – “Too much fear. Too much greed.”

Everything in moderation….including moderation. ;)
Moderation is a survival skill.

Merry Christmas…Keep On Crankin’

#28 Patz on 12.24.10 at 1:53 am

Merry Christmas Garth! You’re an ‘effing hoot. And I mean that in a good way.

#29 the commenter formerly known as... on 12.24.10 at 1:59 am

happy festivus

#30 Peter Pan on 12.24.10 at 2:02 am

Why don’t these people ask… “What kind of person is so desperate, they would pay someone 9% (plus the middle-man’s fee) for a mortgage instead of going to a bank?” Even Bernie Madoff’s rates of returns were lower than 9%…

You’d figure people would read newspapers once in a while…

#31 dark sad person on 12.24.10 at 2:04 am

Merry x-mas G-

There are just too many sleazy fund salesmen collecting commissions while locking people into deferred sales charges. Too many bank employees masquerading as caring friends while they condemn seniors to penury. Too many brokerage account reps who churn their way through clients’ funds. Too many lenders devoid of principles. Too much fear. Too much greed.


You missed a big one-

A PM and FM and a Caucus which-
If even one of them had a friggen clue-they’d probably be all be down on the floor playing with it-

#32 Aussie Roy on 12.24.10 at 2:08 am

Sam on 12.23.10 at 8:45 pm

Hi Sam yes Steves link is the one I posted for I.F. to read, thought it might be too hard, hence my little example.

Merry Xmas…

Ausie Update

#33 tiger_baby on 12.24.10 at 2:13 am

“There are just too many sleazy fund salesmen …”
Well, that’s just …… a side of capitalism at work right? What else can you expect from commission based pay structure? people looking after your best interest?

Why do we expect unbiased reporting from media when we pay little if at all for the contents anyways?? almost all of their income come from advertisers so why should they not support advertiser’s interests?? It’s not like reporters all have financial security like Garth does …

On that thought, do you all think Kevin Page would speak his mind or to toe the party line if he does not have relative job security??

#34 Bill Grable on 12.24.10 at 2:15 am

Mr. Turner – I don’t blame you – ” I feel like throwing in the towel”.

Please – don’t.

You are saving a lot of people a lot of pain….IF they pay attention.

Think of the good karma, if not the Air Miles.

Merry Christmas to the Turner clan.

#35 dd on 12.24.10 at 2:22 am

There might be no implosion in Canada but think about what our neighbour is just starting to go through: Alabama Town’s Failed Pension Is a Warning

#36 nonplused on 12.24.10 at 2:24 am

Merry Christmas to you to Garth (and all the other dogs, heck even the trolls!)

And I for one will be disappointed if you throw in the towel. Even on the few points I disagree with you on (mostly to do with the level of risk out there and the long term viability of paper money), I find your clear and concise writing style and well thought out and informed opinions to be useful challenges that make me think. On the other hand the rest of the commentary and advice has been very useful to me in avoiding some big mistakes (got out of a very long real estate position at a nice profit that is probably totally illiquid now) and has provided a road map for the future (Money Road, which I will implement when I feel the time is right and is partially implemented already).

You can’t save everyone. Heck you probably can’t save anyone. But you probably have helped more than a few people save themselves. Look at how many people come to your presentations and all you are selling is a $20 book, not promises of condo flipping wealth. That must say something. So cheer up! You are making as much difference as one man might be expected to, and for free no less! Worth every penny! And I have bought your books, so that shows willingness on my part to pay even if I don’t have to.

Since you gave us the Merry Christmas, I assume we won’t see you until boxing day or later. If so, enjoy the break.

On the real estate / economy side, just got back from dinner with the inlaws. My brother in law runs a small but big enough so he doesn’t have to work the tools electrical outfit, catering mostly to commercial and high end residential customers. For the first time in years, he is claiming to be having a hard time collecting. Some customers are literally telling him they can’t pay him until next year and even then only if things pick up.

And I am still amazed by the amount of discounts out there still before Christmas. Everywhere I went today, the sales staff were very aggressive and so were the discounts, from The Bay (which is having a fire sale) to Holt Renfrew. There appears to be stratification in the market just like in the US: The Bay was offering discounts ranging from 25 – 30% on everything from shoes and silver, right up to 50% on gold and diamonds, where as HR only had selected clothing on sale. Costco, on the other hand, you can’t get a place to park. The other week I was in a Ford dealer to pick up a part, and the sales guy was hot as could be to put me in a new 2010 F150 4 door 4 wheel drive FX with the high end trailer package (near 12,000 lbs, so the biggest of everything and some parts other trucks don’t get) and most of the options for $40,000! If you go all options list is $55,000. Granted everyone is waiting for the 11’s now but it seemed like the time to buy. Too bad I am already long vehicles that still have years to go.

All anecdotal I am aware. Means nothing but I am confused by it. Good news is the wife is getting a really nice present this year.

#37 cornstars on 12.24.10 at 2:26 am

Hey Garth ! last note of the year , there are a lot of holes in the ground in burnaby BC with condos , duplex and the towers being constructed ? what the [email protected]#$? who’s buying ? not me . and I make over 6 fingers a year . Thanks !
Sheep will die Peep will lie and the conscience will change !

#38 zara on 12.24.10 at 2:33 am

Hi Garth,
Just wanted to say Thank you for the great advice…….this blog has been instrumental in keeping me away from buying realestate and has saved my buttushski. Hope you enjoy your Christmas Holiday. Thanks again for everything. Merry Christmas and a Happy New Year. Z

#39 Fist Full of Dollar$ on 12.24.10 at 2:36 am

Merry Christmas Garth! Thanks for all of the good advice over the last year. All the best to you and your family.

#40 Bullion.Bunny on 12.24.10 at 2:39 am

Merry Christmas….Happy New Year….

#41 Michelle on 12.24.10 at 2:41 am

I think you have “caregiver burnout” Garth. Take some time to relax and rejuvenate over the holidays with your family :)
See you in the New Year!

#42 Signpost in the bushes on 12.24.10 at 2:42 am

Hear! Hear! A truly sincere piece of written work, peppered with more than a hint of despair. Take heart; many appreciate your talent for cutting to the essential core of the matters which concern us all, with your insightful essays, night after night—that’s an impressive body of work. If your efforts help just one person or family to avoid unnecessary financial hardship, I hope that will give you some satisfaction. It would seem that you have heard from many who have appreciated your writing.

May you and your family live in peace without feeling the need of a bunker, fence and other defensive tools. The best of the season to you and yours.

#43 a prairie dawg on 12.24.10 at 2:45 am

A Merry Christmas to all. May we all have at least another year before teotwawki.

#44 Jake the snake on 12.24.10 at 2:53 am

Merry Christmas, Garth. Top of the season to you and thanks for all the advice.

#45 Fritz on 12.24.10 at 3:11 am

Merry Christmas Garth and all you blog devotees! Oh, and also a Happy New Year!

#46 UK lurker on 12.24.10 at 3:17 am

Yeah don’t quit…if for no other reason than the fact we will be able to enjoy the lashings of schadenfreude that you will spewing from your keyboard in two to three years time when most of your predictions come true.

#47 Immigration will save us! on 12.24.10 at 3:29 am

I’ve always thought one of the funniest bull arguments was how immigrants will buy our overpriced homes. So when i came across this census chart showing no increase in population during BC’s boom years (2001 red to 2006 blue), i had to chuckle.

Then again, i’m not so sure an influx of Phillipino assisted-care aides (future boomer butt wipers) could afford all our million $ shacks anyway. Maybe Santa’s elves will save us, if and when they decide to retire to a warmer climate. Merry Christmas everyone. Thanks for sharing your wisdom over the years Garth.

#48 Brian1 on 12.24.10 at 3:30 am

Never quit. You are still doing good things.

#49 UrbanCowboy on 12.24.10 at 3:34 am

Hey speaking of sleazy mutual fund salesman, is there anyone else that bought Stoneset Equities (condo building company) from a broker by the name of Robert Symilski, who was recently charged and fined for selling securities without a licence in Alberta? Just asking causing my investment with them is down 75% with no sign of recovery. Would Stoneset be on the hook for not being diligent in hiring licenced brokers to push their investment onto the public? Any class actions going for this? Thx!

#50 Jay Currie on 12.24.10 at 3:46 am

Merry Christmas!

9% suggests the mortgages are, shall we say, a bit “sub-prime”. Likely seconds and even thirds to people who would not qualify for the free money at the bank. The points are a risk premium. Time to walk back, at a brisk clip, from the edge of the default cliff.

Chickens and veggies are great but will get a bit boring when they are all there is on the menu for months at a time.

#51 Utopia on 12.24.10 at 3:49 am

Merry Christmas to you too Garth.

Most of us here on this “pathetic blog” (your words), think you are terrific. A national treasure even. Keep up the good work and keep getting the word out. It may be too late to stop the dewy-eyed newbies from buying but it is not too late to warn everyone else that real estate is headed for the dumpster in this country.

Few may listen but those who do will be forever indebted and thankful for having seen the message before it was too late.

And their kids will thank you too. Cheers.

#52 Agio on 12.24.10 at 4:01 am

Before you throw yourself off your coffetable, look on the bright side of your tale.

These people admit they don’t know it all-many here and the world over could learn from that. They express misgivings about their exposure and aside of or in spite of greed getting the better of them they’ve sought out your advice. If they listen to you, they can hopefully get the cash out of their rather dangerous situation and have 550k less their land acquisition I imagine and be able to do okay.

Now if that doesn’t cheer you up, you can launch yourself off the table.
You’re welcome. Have a good Holiday Season Turner.

#53 Cooliecat on 12.24.10 at 4:08 am

Merry Christmas to everyone.

#54 Bilbo Bloggins on 12.24.10 at 4:09 am

Keep trying, keep trying, don’t give up.
Don’t let the terrorists win.

#55 A Guy in Oakville on 12.24.10 at 4:09 am

Cheers Garth. All good things to you and yours. Merry Christmas.

#56 Vancouver smart renter on 12.24.10 at 4:10 am

You are a beacon in many lives. Don’t give in, you know you will not and just wanted to see how many really cared! Well I do, I do, I do, I do, I do, I do, I do.

There will always be many who can’t be saved because they don’t want to. They prefer to believe glossy ads, slick salespeople and never read what ingredients are in their food. When they get screwed or sick, they blame someone else and wonder why “they” didn’t have rules to protect them from their own stupidity. Those same people love using the word “they” a lot too…

You can try to save them, but view that as speculation, a nice to have win funded by effort you can afford to lose.

Keep writing mate!

#57 Aussie Roy on 12.24.10 at 4:25 am

Garth can I suggest a future picture…

Merry Xmas, keep up the excellent work, have a great 2011.. Ditto to all the logical dawgs, you know who you are.

#58 Aussie Roy on 12.24.10 at 4:34 am

Forgot to include this lovely graph of house prices from the capital city (Adelaide) of the state I live in.

Wonder how it would compare with Canadian cities.

#59 capt Lou on 12.24.10 at 5:02 am

This guy certainly tells it like it is

#60 Sam on 12.24.10 at 5:07 am

REPOST from yesterday: seems this is a common misunderstanding
#199 Sam on 12.23.10 at 8:26 pm

#74 Deliverator on 12.23.10 at 6:15 am

Stop now. You don’t know what you are talking about
> When you borrow money, around 1% of
> that money is someone else’s savings.
You should have stopped too.

Canada has no reserve requirement.

If a bank has reserves it’s at the bank’s discretion – BoC requires zero fractional reserve.

#61 obert on 12.24.10 at 5:21 am

Merry Christmas!

“..I feel like throwing a towel..”
Never give up! You are doing just fine.
Like in this post: just help one person/one family at a time. Thank you for this blog!!!
Sincerely :)

#62 Thetruth on 12.24.10 at 5:40 am

Australia housing prices up 13% in 2010 while mortgage rates are at 7%.

Can anyone explain?

FYI, Canada and Australia both this year had the highest immigration influx in the last 4 decades. THE PAST 40 YEARS!!! They both have temporary categories as well! And they both have the highest per capita immigration rates in the world. And they both have the strongest housing markets in the world. Hmmmm…

Unbelievable that the pups can’t connect the dots. Instead, they are going to think I’m a real estate agent, Hahahahah! , or worse, a speculator.

I agree that housing should be a place to live in and prices should be lower. But, the pups should also understand what is behind the high prices. Look to Australia where they have had rates 5 times higher than Canada for a year! Garth knows this (which is why we never hear about mortgage rates in Australia on this blog) but admitting wouldn’t end well for some.

#63 Drew on 12.24.10 at 7:03 am

Merry Christmas Garth. Best wishes to you, your family, and the rest of the pack over the holidays and into the new year.

May we all be lesser fools in times to come.

#64 J from Campbellville on 12.24.10 at 7:40 am

Merry Christmas to you Garth and all in the Turner family
As frustrating as some of these situations some find themselves in through there complete lack of financial knowledge if you have a positive impact on even a small percentage you’ve made a difference.
I would suggest this blog has greater impact on helping some than any career in Politics with so many there only concerned with there own completely selfish agenda to serve themselves.
I’m a daily reader of the blog but don’t normally participate however i learn form you and your bloggers view points and can say happily I live in the country now with a generator ,woodstove for heat and grow my own food and drive my financial adviser nuts with questions which has paid greater returns and love my new simpler life and more importantly the control it brings
Keep up the great work
All the best!

#65 bob on 12.24.10 at 7:44 am

Merry Christmas to you on yours Garth

#66 john m on 12.24.10 at 7:48 am

Merry Christmas Garth and your family and to everyone. Love your blog thanks.

#67 Live Within Your Means on 12.24.10 at 8:33 am

Merry Christmas to you Garth, your wife Dorothy and to Bandit and to those who visit your blog. You have made a difference in my life. May 2011 bring health, happiness and prosperity to all as well.

#68 ts harpoon on 12.24.10 at 8:38 am

Garth Turner,

Too cranked to quit? You may add “Too Legit To Quit”.

Thanks for all of your previous postings and look forward to the future. Thanks to all of the contributors. The day starts with this blog and sometimes it serves a desire to forward to friends as a warning, or to complete or further a specific debate. The lead photographs often make it to the printer and are tacked onto the cubicle wall. Makes for interesting small talk.

I have come to appreciate the “free” information.

Keep up the great work.

#69 Aussie Roy on 12.24.10 at 8:41 am

Thetruth on 12.24.10 at 5:40 am

FYI, Canada and Australia both this year had the highest immigration influx in the last 4 decades. THE PAST 40 YEARS!!! – LOL

ABS doesnt support your dribble.

You sure you might not be bending that truth.[email protected]/DetailsPage/3101.0Jun%202010?OpenDocument

Net Overseas Migration Over Previous Year (‘000)
Mar 07 205.0
Jun 07 232.8
Sep 07 238.7
Dec 07 244.1
Mar 08 261.5
Jun 08 277.4
Sep 08 298.7
Dec 08 315.7
Mar 09 320.3
Jun 09 313.3
Sep 09 301.5
Dec 09 277.7
Mar 10 241.4
Jun 10 215.6

Population Change Over Previous Year (%)
Mar 07 1.70
Jun 07 1.81
Sep 07 1.83
Dec 07 1.87
Mar 08 1.95
Jun 08 2.02
Sep 08 2.12
Dec 08 2.20
Mar 09 2.20
Jun 09 2.17
Sep 09 2.12
Dec 09 2.00
Mar 10 1.84
Jun 10 1.72

These figures did not include falling foreign student numbers.

Including the latest natural population increase (birth-death) of 161.5k, the total increase in population over previous year is 377.1k (161.5k+215.6k). 145,038 dwellings will be required to house them, if we based on their usual estimate of 2.6 person per dwellings.

As housing starts has been running at a rate of 160,000 per year, there will be an oversupply situation if current population trend continues.

Any other truths you would like to share with us.?

Perhaps someone can enlighten you with the canada stats.

#70 JO on 12.24.10 at 8:45 am

62-Immigration – Your comment shows narrow perspective. While population growth certainly helps potential, the housing market i much more sensitive to the supply of credit – the massive taxpayer and saver subsidized CMHC “insurance” scheme and the banks ability to issue enormous amounts of counterfeited debt matters a lot more than immigration. As long as the demand for housing and CMHC program exists in its current form,then housing ought to remain somewhat stable.

In the last 8-10 yrs, we have seen the rate of growth of debt far in excess of GDP/personal income. This Ponzi like scheme will inevitably come to an end for the simple matte that no entity can prosper in the long run if debt exceeds income. Expect some sort of credit contraction or at least a dramatic slowing of the rate of growth in housing and other debt.The implications of this should be very weak growth, higher unemployment and lower house values.

Merry XMAS Garth !

Cheers all

#71 Live Within Your Means on 12.24.10 at 8:45 am

Hi Garth – I asked my hubby to put this up on Youtube – – thought you might get a kick out of it.

#72 Love this Blog on 12.24.10 at 8:49 am

Don’t quit yet Garth. Everywhere I turn now, the MSM is starting to spout your message. The newpapers are talking debt, as is the radio. My Reader’s Digest came yesterday, page 23 is an article about NOT getting into a mortgage, how we are burying ourselves in debt.

The wave is coming folks. Sentiment is turning.

#73 Cow Man on 12.24.10 at 8:59 am

Thank you Garth for a year of shared knowledge and humour. You are a gift to our larger community. Be well and happy in the New Year knowing that you shared your gifts, with others. Those gifts being the ability to script your points in an interesting manner. You can only save those who want to be saved. Smile it helps your face value. Seasons greetings from our home to yours.

#74 Mr. & Mrs. Happy on 12.24.10 at 9:13 am

Merry Christmas Garth, you deserve a break for the holidays but don’t give up for good! Don’t let the ignorants get you down because there are plenty others out there (ourselves included) who are benefitting from your advice every day.

Happy Holidays to everyone! :)

#75 unbalanced on 12.24.10 at 9:13 am

Ya can’t quit Garth !! You just got started.

Merry XMAS to all the blog dogs. I have learned alot from this site. Thanks to all.

#76 Moneta on 12.24.10 at 9:14 am


From Vancouver to cheaper Ontario. Money is like water.

#77 Kaganovich on 12.24.10 at 9:15 am

Garth, thanks for your hard work and comical one-liners. I have learned much from you and the dawgs! Merry Christmas!

#78 Aussie Roy on 12.24.10 at 9:17 am

I would just like to correct dwelling starts for period ending 30 June 2010 is 170,153. 160k is the 5 year average, sorry took me a while to find it on the Australian Bureau of Statistics site.

Woof.. Merry Xmas..

#79 Susan from London area on 12.24.10 at 9:23 am

OMG what would I read every morning with my cup of tea?
Be Like John Paul Jones, when his ship was sinking he said ” I HAVE ONLY JUST BEGUN TO FIGHT” He went on to win the battle and took control over his enemies ship.
…YOU CAN DO IT… (stole that line from Tony Little)

We Love You Garth
Merry Chritmas to you and your Family
now go eat some turkey and stop thinking for awhile.

#80 Sand Piper on 12.24.10 at 9:25 am

Have a Very Merry Christmas Garth (G-Man) and to all the other followers of this amazing website..

Garth, your books have been inspirational – I have told countless people (I currently work in the Insolvency Field) about your website – your voice of caution has not gone un-noticed, you have created a ripple effect and I know of a few people who have gained immensly from your word of caution!!

I am a “happy” home owner who is well aware of such risks (thoroughly discussed personal feelings about the housing market with wifee and have looked at all the possible risks) – we bought our home as shelter – never considered what possible “equity” would derive from it – nor do I really care – our mtg payments are that of similar rental costs – we attack our mortgage payments like a beastly fire breathing dragon – extra funds, shoved down the dragons throat – we are committed in slashing the interest costs with any and all available cash – what originally started off as the standard 25 year “sentence” – we took action and just a few additional add-ons and we got her down to under 15 years, add to the fact that we bought in 2002 – that we are looking at 7 more years and then can free ourselves of the Banks death grip! I am very thankful for everything we have – part of the problem in our society today is that we don’t see the little things that have truly made life great!

There are plenty of mis-fortunate people around the world who would give their right arm to live in such a beautiful country as ours… So, Merry Christmas to all – Garth, you have done more then you can even imagine – I believe I speak for most of us when I say you bring a sense of sanity to this insane debt riddled world…


#81 Moneta on 12.24.10 at 9:26 am

No one (including yourself) can predict a bubble and truth be told when people think the bubble is going to burst it usually keeps growing.
When my spidy senses start tingling, it always seems to take about 3 years for the bubble to pop.

In 1997, I thought investors were starting to go Gaga over tech stocks. It burst in 2000.

At the start of 2003, I felt the US RE was beyond frenzy mode. It peaked in 2005 and the drop started in 2006.

In 2008, with foreigners getting CMHC insurance to get 40 year mortgages, I decided we were in bubble mode. That would mean a drop in 2011.

It always seems to take about 3 years for the marginal players to hickup and it is always the marginal ones who ruin the party.

#82 dd on 12.24.10 at 9:36 am

Roseberg today:

“The equity market in gold terms has been plummeting for about a decade and will continue to do so. When measured in Federal Reserve Notes, the Dow has done great. But there has been no market recovery when benchmarked against the most reliable currency in the world. Back in 2000, it took over 40oz of gold to buy the Dow; now it takes a little more than 8oz. This is typical of secular bear markets and this ends when the Dow can be bought with less than 2oz of gold. Even then, an undershoot could very well take the ratio to 1:1.”

#83 Moneta on 12.24.10 at 9:36 am

Canada has no reserve requirement.
Capital requirement are not based on a percentage of deposits anymore but on risk weighted assets where cash is no risk and residential real estate is also considered close to no risk… despite what has been happening to real estate globally! LOL

#84 Macrath on 12.24.10 at 9:39 am

Garth, you post great articles 6 days a week and babysit the blog dogs from dawn till dusk. I can only imagine what your e-mail box looks like. I`m sure no one would request a refund, if you lightened the load you carry and focused your ample energy elsewhere.

Heritage preservation,charity, politics, finance, media, real estate activism, journalism and all your fine books have benefited us all.

Merry Christmas to you, Dorothy and Bandit

#85 Willa on 12.24.10 at 9:40 am

Thanks for a great year of reason, Garth.

Due to your books, online advice, and one visit to your office in January, we have diligently reorganized our finances.

At age 47, with no pensions or medical benefits, we went from $385,000 net worth in January (with tiny mortgage) to $675,000 by December, despite paying heavy withdrawal penalties from our old investments. And we still have less than 20% in real estate.

In one year. No gimmicks.

We now have an investment advisor paid with an annual fee who does work for us, not for transaction fees. What a difference that makes.

We can now withstand a 20% drop in housing prices without blinking.

We also reorganized our income so that we now pay $500/month less in taxes. And all our medical expenses are now covered with before-tax dollars, saving us another bundle.

I still think we can’t retire till we’re 70, and I’m concerned the gov is going to try to claw back some of our nest egg. But for now, we face Christmas feeling vaguely wealthy and secure.

Thanks from someone who’s listening.

And merry Christmas.

#86 CTO on 12.24.10 at 10:00 am

#62 Thetruth

Your eyes are closed to realty!!! Read the like and be informed.

#87 Alister on 12.24.10 at 10:07 am

All the sleasy fund salesman, the nice lady at the bank and the stock brokers are licensed. Noone else can provide advise. In fact its the same with RE brokers and Insurance Brokers. They have a license of self interest.

So who can be trusted with your money?

People need to inform themselves, but how many people actually read a few books on personal finance?

Read up before you talk to a licensed person. There are some good ones in the business, but you need to be knowledgable enough to know who is on the up and up.

#88 MikeT on 12.24.10 at 10:10 am

Merry Christmas and happy intoxicating Garth and the dawgs!
I think it’s a pretty safe bet we all will have a glass of somethin’ these days. ;)

#89 CTO on 12.24.10 at 10:13 am


You have got to love these clowns who a trying to justify high house prices through immigration. They just think that if you open the doors, all this WEALTH will pour in. They don’t realize that the few immgrants that can afford to buy upon entry, have to fiinance as well. To them, they have nothing to loose, but that dosn’t stablize the housing a housing market, it just makes it more vulnerable!
It’s juat a matter of time…
By the way, Scotia Bank has come out with a report about housing. They’re not sure if 2011 is going to sablize or go to the dogs. They are even more uncertain about 2012!

These are the big lenders.

Some words from the report:

“The bigger risk likely awaits 2012 when more significant interest rate increases, combined with record high home prices, will notably strain affordability.”

Globally, Scotiabank expects prospective buyers may move to the sidelines next year despite attractive borrowing costs, as purchase incentives expire in many markets and slow job growth may weigh on confidence.

Lackluster 2011 Canada housing market seen: Scotia

#90 GregW, Oakville on 12.24.10 at 10:21 am

Man you had me going there for a second, “I feel like throwing in the towel.”

Maybe take a break for a day, maybe. But I don’t believe it is in your nature.
I’m pretty sure you’ve saved or reduced financial harm to more that a few of ‘the people’, and can still help a few more, hopefully.

Here’s hoping your whole family as well as the bloggers here have a pleasant Xmas. ;)

#91 Alister on 12.24.10 at 10:27 am

I forgot to say Merry Christmas to you Garth, best of health to you – thats what counts. If you can keep up the pace and cost – please continue with the blog.

#15 – you are a ANGRY Bird aren’t you, and what you posted tells us alot about YOU. This blog is not full of losers. In fact there are many people on this blog who are financially well off, but they come here to listen & learn. If you don’t learn something EVERY DAY then your having a bad day.

You seem to already know everything already, including everything about the people who come to this site. And you don’t seem to like us, so what are you doing here? Also go get some anger management counselling.

Love the site, I hope Garth doesn’t throw in the towel. Attendance at Garths townhalls shows he can draw in a crowd.

#92 bigrider on 12.24.10 at 10:27 am

I’m actually quite thankful to my “mutual fund salesguy”.
He has made me a a lot of money. Would never have heard of companies like Sprott, frontstreet and Dynamic without him.

#93 Aussie Roy on 12.24.10 at 10:28 am


“Garth knows this (which is why we never hear about mortgage rates in Australia on this blog) but admitting wouldn’t end well for some”.

What would you like to know?.

How in Australia higher rates for speculators are subsidised through our taxation laws (lost taxation of $8B 09/10), the higher the differental between returns and rates the higher the deduction against your taxable income (wages). How higher rates will probably show up in falling retail spending for owner occupiers (did you read my link above).

Ever considered how the govt First home owner grant influenced sales in the lower price range for the 18 months it was offered (finished at start of 2010) this could have shewed the median prices (2008/09). How in the last 12 months first time buyers are less than 5% of the market so more expensive homes are being sold pushing the median prices up. Would it not make sense when you have a high number of first time buyers (>12% 2008/09) then these buyers only represent 5% of sales more expensive homes are being sold. So did the average house really go up 13% as you claim or does this figure represent more expensive stock is now being sold.

I’d be happy to debate you, just get off your high horse stop trying to look superior by calling people pups, it doesnt help your credibilty or your arguement, it reminds me of a childish bully.

Not everyone here is a scum renter (as some people put it) that has no idea about housing or investing.
Seriously I’d love to be convinced with logic and facts that current prices are sustainable, unlike you I have an open mind but a sharp eye on the data (facts).

One last thing please dont quote a mortgage site when it comes to data lets stick to the govt numbers. Never have been keen to take anyones word that has a vested interest for anything.

#94 Gord In Vancouver on 12.24.10 at 10:29 am

Happy holidays to you and your family, Garth.

Thanks for being one of the few media sources that isn’t constrained by advertiser preferences.

#95 GregW, Oakville on 12.24.10 at 10:30 am

Hi Garth, fyi article (sorry it’s not merry sounding)

The biggest economic meltdown may be yet to come
“A new 60 Minutes report warns that when it comes to economic meltdowns in the U.S., we ain’t seen nothing yet. This comes as our debt-to-income ratio in Canada is higher than ever…”

#96 Jamie on 12.24.10 at 10:44 am

Merry Christmas Garth,

I am a newbie to your blog within the last few weeks! I have never sat down and researched money markets , financial strategies etc. I’m captivated by your blog and find it interesting and educational . I am nearing 50 and starting to take a keen interest in my financial future. Thank you for allowing us to see the other side of news we won’t read in the papers or hear on the news.

Have a Merry Christmas

#97 PTDBD on 12.24.10 at 10:48 am

A Canadian success story: ;-)

DALSA (TSX:DSA) – This Canadian company was a founding partner of MiQro Innovation Collaborative Centre (MICC) in Bromont, Quebec which just received $14.1 M grant on Dec 8 and $83M from the Canadian government and $95M from Quebec in 2009.

– taken over for $341M by American Teledyne

#98 DCOg on 12.24.10 at 11:01 am

I have a poster hanging on my wall that I look to everyday for inspiration:

Never Give Up, Never, Never, Give Up . . .
– Sir Winston Churchill –

Peace, Love & Financial Freedom To All.

#99 Got A Watch on 12.24.10 at 11:03 am

Garth, it may seem like there is little reward for all your efforts, but there are many people out there reading and taking notice. In our media fragmented attention deficit world, getting anyone to look up from their smart phone today takes something exceptional.

Thanks for all your work, books and Blog and dispensing so much good advice for free. I bet a few years ago you didn’t see this becoming a future career as Canada’s “financial agony aunt”. But obviously the need is great.

Have A Very Merry Christmas and A Happy New Year!

btw ever given thought about starting ‘The Turner Financial Group’, to give people an easy vehicle to put your investing concepts into action, via ETFs or Mutual Funds or advisory services? I think there is a market out there just waiting to be tapped. Or how about a referral network of “independent” advisors across Canada, who adhere to high ethical standards and disclose all commercial relationships?

Thanks. Closer than you think. — Garth

#100 toronto renter on 12.24.10 at 11:08 am

well except for Angry Bird everyone seems to be chillin’ and wishing good things on each other. Tis the season etc etc

Merry Christmas Garth and everyone else on the blog….interesting times just around the corner for sure. Surely not the time to pack it in!

#101 T.O. Bubble Boy on 12.24.10 at 11:08 am

Merry Christmas and Happy Holidays!

Only Sarah Palin quits half-way through something…

So, unless you are going to start doing segments from the bunker in Caledon for Fow News North, keep the blog and its mission going!

#102 GregW, Oakville on 12.24.10 at 11:11 am

Hi Garth, fyi article

Bad enough they gave ‘the people’ ‘hanging chad’ then the powers that be gave them the ‘corruptible’ vote counting machines. Home of ‘the free’ indeed, not anymore! Unfortunately the Canada that the PM ‘H’ wants and said you wouldn’t recognize (if he had a majority), isn’t that much different. Is it already here anyway or soon to be? The PM H has asked for electronic vote counting machines too!
I wonder which of ‘your rights’ the PM H new boarder trade deal (for your safety of course) will try giving away this time?
What kind of place do you want your family to wake up in???

Florida Fusion Center Surveilled Ron Paul’s Campaign for Liberty

#103 DM in C on 12.24.10 at 11:19 am

Happy Holidays & Merry Christmas to you and yours, Garth. And to all the regulars who make this site a must-read every day.

and DSP, this made me chuckle, thx

“If even one of them had a friggen clue-they’d probably be all be down on the floor playing with it”

#104 TheBestPlaceOnEarth on 12.24.10 at 11:29 am

Merry Christmas Garth. I think your blog is dead on with the exception of Vancouver. 2010 was an awesome year in Vancouver Real Estate folks. 2011 is looking even better especially for the West Side as we make the move from bargain basement 2 million dollar lots. As well some banks are now offering minimal payment on credit lines as opposed to the traditional 3% so get those credit lines maxed and jump in before its too late
2011 will be fantastic TO INFINITI AND BEYOND
Merry Christmas All

#105 Bottoms_Up on 12.24.10 at 11:30 am

#81 Moneta on 12.24.10 at 9:26 am
But having one (out of ten) marginal players at the table versus five makes a difference.

I believe that per capta, the US had a higher ratio of marginal buyers.

The question is what is the extent of marginal buyers in Canada? And then the next question, how high and how fast are rates going up?

The answer to these questions can make or break a Canadian real estate market crash.

#106 GregW, Oakville on 12.24.10 at 11:34 am

Hi #99 Got A Watch, re: “Closer than you think. — Garth’

I wonder if Mr. Turner has been talking with F about this non-CPP plans?

I’d bet money that Mr. Turner already has a relationships with some Financial advisory services.
I’d assume they adhere to high standards, especially if he lets them manage some of his own money.

#107 SCalgary on 12.24.10 at 11:34 am


Merry Christmas and happy new year to you and your family…!

Warm Regards…!

#108 Tim on 12.24.10 at 11:35 am

Ho ho ho Garth,
Pour yourself a hot rum and tally up those book sales!

Merry Christmas!

#109 sue on 12.24.10 at 11:35 am

#15 Angry Bird
You’ve got problems. You seem irrational and very ignorant.

#110 Cats and Hogs on 12.24.10 at 11:36 am

Merry Christmas to you and your family Garth, as well as the blog dawgs.
As one of the readers of your blog that you personally helped through the financial wilderness, I would like to thank you and remind you of the words of the famous Commander Peter Quincy Taggart: “Never give up, never surrender”.

#111 Rich Renter on 12.24.10 at 11:39 am

Happy Christmas Garth, Dorothy and all the blog dogs.
You can’t quit you old fart, there’s noting on the telly anyways.

I’m assuming you use ‘fart’ in the affectionate mode. — Garth

#112 garth turner jr on 12.24.10 at 11:42 am

and Happy Holidays to all of you and yours back at you all too.

…So many positive responses and well wishers and I’ve only been posting two or three days here.

It is very moving and so positive.

Thank you all.

Frankly, it never occured to me to run for public office but perhaps I should consider.

I am just an average bloke who lives on the Left Coast, our country’s paradise.

#113 S.B. on 12.24.10 at 11:42 am

I read a shocking tale in a (Toronto) King West lifestyle magazine that is published by a builder.

A woman bought a unit pre-construction at $400/sq foot and sold a few years later for “over $600/sq foot”. A 987sq foot unit, so this is a $200k gain.

She immediately paid asking price for larger unit in same building! Buy low, sell high, buy higher?

Her quote: “Buying a more expensive condo is an investment”.
And she added, she went from having NO mortgage to a “substantial” mortgage.

AND…she bought another “tiny” unit on spec in the builder’s next unbuilt condo development, and I know these units start at $349k for barely 400 sq feet.

Her quote was along the lines of: find a good builder, park money with them, and gain over time.

A single 50-60 somthing speculating on R/E like this…will end well??

#114 Aussie Roy on 12.24.10 at 11:42 am

Well folks its early Xmas morning here. The G kids left out a bottle of red for the jolly man, he must have been its nearly all gone (hic) couple of glass left to go. The carrots for the reindeer have gone (seriously I think the roos ate them). Nearly time for me to turn in, I’m sure the young ones will be up in a few hours. Its so nice to have all the family home although the grand kids can really take it out of you, must be getn old.

I have really enjoyed all the banter over the last few months since stumbling across this great blog and look forward to seeing you all again soon.

To you Garth have a great Xmas and I have really enjoyed you daily articles (although, you know you have never left a comment on any of my posts). I suppose thats a good thing – LOL..

Good night all, and hope everyone has a great Xmas, yes even the deusional.

You have not needed a comment. Your insights and reporting have added a needed texture. The colonials on this side of the world thank you. — Garth

#115 Tri State Pat on 12.24.10 at 11:44 am

Thanks for your blog.

Garth, Lache pas la patate.

#116 macduff on 12.24.10 at 11:45 am

I think you need to curb you vitriol. People come to this blog to be enlightened to a view that is vastly different than the spin they read in the media. And, ironically, if you read the newspaper (you can read a newspaper, no) many journalists are coming around to GTs thinking. I also think you need to get to know you fellow bloggers before you call them losers: me, age 48, professional, $1M in liquid assets.

#117 stealth on 12.24.10 at 11:48 am

Merry Christmas everyone.

Garth, are you still doing a posting tonight?

As soon as I finish my coal delivery. — Garth

#118 Live Within Your Means on 12.24.10 at 11:48 am

#16 Roial1 on 12.24.10 at 1:00 am

Looks like it’ll be a green Christmas here on the east coast as well, but no rain. They’re predicting 1 cm of snow on Monday. Our odds are 50/50 usually for white Xmas.

#119 Burnt Norton on 12.24.10 at 11:52 am

Best if the season to you and yours Garth and to all of the blog dogs who take the time to post helpful comments.

Garth, you are teaching an entire generation to think for themselves. We are listening to your message because it Just. Makes. Sense.

If enough of us direct our friends and family to your blog we can collectively chip away at the sleazy crust of lies and deceit that prevents hard-working Canadians from achieving their goals and dreams. We know that this is the fight that you alluded to a few months ago. Chaaarge!

#120 farmer on 12.24.10 at 11:53 am

We did it backwards when we sold the place this summer, and then went searching through the dross pile for insight into how to hang on to the proceeds; we found this blog. It has helped greatly and I thank Garth for providing the forum, the editorial and the wonky pictures. Also many thanks to the bloggers who contributed, with a special thanks to “The Queens” who appear to have a greater understanding in the field.
Thanks All. Have a great Christmas.

#121 GregW, Oakville on 12.24.10 at 11:53 am

Hi Garth, fyi anyone article link

For anyone that doesn’t recall the Canadian PM H told Hon. MP Mr Turner at the time, to shut down his open public Blog!!!

“Jefferson said that “information is the currency of democracy” and that, given a choice between government and a free press, he’ll take the latter.”
Wikimania and the First Amendment

#122 GregW, Oakville on 12.24.10 at 11:58 am

Hi Garth, fyi Has H-F-C been talking with China yet?

China says it will bail out debt-ridden nations
“China has said it is willing to bail out debt-ridden countries in the euro zone using its $2.7trillion overseas investment fund.”

#123 Dan on 12.24.10 at 11:59 am

Angry Bird # 15

Angry Bird is either an angry going broke realtor or an angry going broke greaterfool who is close to going bankrupt. Many home “owners/bank renters” are going bankrupt. In Brampton power of sales are going through the roof. Fake home sales? Here is a home that had a HUGE sold sign last month and this month it a POWER OF SALES?

Brampton RE board has STILL NOT PUT OUT September, Octobers , Novembers horrible numbers out yet. I think we know why?

As you can see the housing crash is getting worse and worse .

POP………….What was that?

Realtors…..We are going bankrupt. I could lose my home.

Greaterfools………We have gone BAKRUPT. FU realtor whores. you ruined our lives.

#124 T.O. Bubble Boy on 12.24.10 at 11:59 am

When the Financial Post (right-leaning newpaper) is saying that more government regulation (shrinking the CMHC) is how to stop the mortgage/credit bubble, you know that things are unsustainable.

It seems that Flaherty can’t find a single person who agrees with him that this is a Bank problem and not a CMHC problem… oh, wait – there’s always the mortgage brokers:

#125 Moneta on 12.24.10 at 12:05 pm

The question is what is the extent of marginal buyers in Canada? And then the next question, how high and how fast are rates going up?
Just like all you need is one bad apple in the cart, in economics, all it takes is one extra widget to get the supply/demand balance out of whack.

The extra ones will just make the imbalance last longer.

#126 Live Within Your Means on 12.24.10 at 12:06 pm

#30 Peter Pan on 12.24.10 at 2:02 am
Why don’t these people ask… “What kind of person is so desperate, they would pay someone 9% (plus the middle-man’s fee) for a mortgage instead of going to a bank?” Even Bernie Madoff’s rates of returns were lower than 9%…

You’d figure people would read newspapers once in a while…


We sold our last home (3 level townhouse condo) almost 20 yrs ago. Our agent arranged a 2nd mtg for the single guy who bought it. AFAIK, the guy still lives there.

#127 Junius on 12.24.10 at 12:13 pm

#93 Aussie Roy,

Give up on the fear and greed crowd. This guy is here all the time and he changes his name – Mick the Realtor is another name. The “pups” comment give it away. He is condescending and abusive like all bullies when deep down he knows he is wrong. Not worth the effort this time of year.

#128 Junius on 12.24.10 at 12:16 pm


Merry Christmas to you and your family. Thanks for your excellent work in 2010. I look forward to your posts in 2011.

Merry Christmas to all including the delusionals, the abusive bulls and relentless pumpers. You need it the most.

#129 GregW, Oakville on 12.24.10 at 12:18 pm

Being that Xmas is about peace and stiff, right?
Just something to think about. article link
(Canada is intimately linked into the military industial complex)

Don’t Go, Don’t Kill
Cindy Sheehan | Instead of “Don’t ask, don’t tell

#130 Ret on 12.24.10 at 12:22 pm

“We have approx. 400K in liquid cash earning 9% annually, paid quarterly, and re-invested in the account. All our cash is invested with a good friend of my wife’s in private mortgages.”

This doesn’t pass the smell test for me. Teaser interest rate, total re-investment of dividends, good friend investing, and privately held (unregistered?) mortgages?

What are they thinking? I’ve seen this movie before. Bernie Madoff directed it as I recall. The ending was financial ruin.

#131 dark sad person on 12.24.10 at 12:22 pm

#224 Calgary Bust Day? on 12.24.10 at 7:15 am

#211 dark sad person “If a Countries Currency was crashing and they did have Gold (Canada does not Oooops-there goes your leverage story) that Country would have no choice-but to weight that Currency with their Gold-… .You don’t know what you’re talking about-

Dark sad person, sorry to interject, but you have no idea what you are talking about either. Canada does have gold reserves. Now your whole arguement is out the window. Plus you have you be (gold) NUTZ to think the CDN will crash as it is a COMMODITY currency… (ie. Gold, oil, lumber, etc)… so better gold agaist the CDN is the SAME THING…


Canada has less in Gold Reserves then the amount of money Bernie Madoff scammed with his Pyramid Scheme –
Yeah for sure-we’re gonna back the CAD with that which amounts to (get this) 1/6 of the amount we’ve stuffed into CMHC

Here’s the picture of what happened to those Gold reserves–

I think you need to learn to read and then learn how to decipher what was said-

Neither Me nor the poster i was responding to-ever said once-that the CAD “would” crash-we were talking in Hypothetical terms and the conversation was about “Government ‘s ability to control the “price” of Gold-

So-what the hell are you talking about?

#132 Kevin on 12.24.10 at 12:27 pm

Just in time for Christmas, more subprime loans in Saskatoon.

Subprime is alive and well in Saskatoon part 2

A new development in Featuring 94 townhomes, all with single, attached garages, Hartford Greens aims at helping families with limited incomes move into their very own home.
Developers, Innovative Residential, say the ambitious $25 million condominium project will expand the opportunities of home ownership to families whose household incomes might otherwise have limited them to the rental property market.

Mortgage Flexibility Support Program

If these mortgages were not insured by CMHC the banks would not even give these loans a sniff.
Did we not learn anything from the US?

#133 Moneta on 12.24.10 at 12:31 pm

The question is what is the extent of marginal buyers in Canada?
Everywhere I go, there is this same guy walking. I drop off the kids at school, I pass him. I go do the groceries, I pass him. I pick up the kids, I pass him. I go for my jog, I pass him. At any hour of the day within a 5 km radius!

I can’t prove it and it’s anecdotal but my conclusion is that he must walks a lot. In fact, we pass him so often that my 9-year old daughter actually hypothesized that he could be stalking us! LOL.

When I sold my house in Montreal on 2008, we got more than 10 visits in a couple of hours and 3 offers on the 1st day. The pictures did not even have time to make it onto MLS. The bidders: A boomer couple downsizing, a young couple freaked out by the oil price and traffic trying to get back onto the island and a fresh off the boat South American taking on a 40-year mortgage with 5% down (CMHC forced this one because he was a little risky). The South American offered the best price with the least conditions. Then he lost his job and we had to relist. We instantly got 3 more bidders… vultures thinking we were in trouble. We had to shake those off.

In total I think we got 9 offers and apart from the downsizing boomer couple, all were going to finance more than 90% of it.

Of course, it’s anecdotal but I’m using the same logic as with my walker. I think there are a lot of marginals.

#134 45north on 12.24.10 at 12:33 pm

you know I was thinking of applying for a job at CMHC

here’s a great idea – demand 20% down payment for Brampton! Save $ millions.

CMHC please contact Garth for my e-mail!

Merry Christmas!

#135 Daisy Mae on 12.24.10 at 12:38 pm

Keep your chin up, Garth. Merry Christmas to you & Dorothy…

#136 1ObtuseObelisk on 12.24.10 at 12:40 pm

Mr. Turner,
From a year-long reader and first-time poster, just a word of heartfelt thanks. (My family will be among the first in line if ever you create a “referral network of “independent” advisors across Canada, who adhere to high ethical standards and disclose all commercial relationships?” – nice post Got A Watch.
From ours to everyone:
At Christmas play and make good cheer,
For Christmas comes but once a year!
~Thomas Tusser

#137 kitchener1 on 12.24.10 at 12:41 pm

Merry Christmas to Garth and family and all the blog dogs.

Always enjoy reading the posts and comments, great sense of perspective.

Lets all be grateful this Christmas and Holiday season to have what we do, there are many all over the world- including your own town/city that are not as fortunate.

#138 Bob on 12.24.10 at 12:43 pm

It looks like people are maxed out. Did my Christmas shopping yesterday and today with no problem. On top of that sales are everywhere. Walked in to best buy last night and had to trouble parking. Got my gift and found no line and in fact there where more sales people then shoppers. Just got back from yorkdale and the mall has very light traffic. Walked in and out in under an hour. The people in the malls seem to be doing more window shopping then buying. People are slaves to their mortgages and LOC now and can’t afford to do anything. The house of credit cards is about to fall down.

#139 Junius on 12.24.10 at 12:47 pm

Easiest prediction for 2011,

The pumpers, fear and greeders and delusionals will continue to make posts that are absent any rational economic argument.

#140 Daisy Mae on 12.24.10 at 12:51 pm

What would we do without you?!

#141 dark sad person on 12.24.10 at 1:11 pm

#60 Sam on 12.24.10 at 5:07 am

You should have stopped too.

Canada has no reserve requirement.


I don’t think that the poster you are responding to said what you are addressing-

Of course Canada has no Reserve Requirements and that is what he/she said-

Without looking back-i believe he refereed to 1% in Reserves?
If so-then he’s probably correct-

Obviously they have to hold some Reserves-otherwise how would they be able to handle withdrawals and carry Commerce?
On the other hand-if everyone decided to withdraw all savings at once-then we are hooped because they do not hold $ for $ Reserves-or even close to that

Even his figure of 1% is levered 99-1-Credit to Cash-
I’m not sure anyone really knows the ratio of leverage-but i think that poster was likely fairly close and could be a little low to the amount of Reserves held-

#142 Rosita on 12.24.10 at 1:20 pm

Poor Garth!! You deserve a break….Have a Happy Christmas, eat turkey, have a drink, snooze and put your feet up in front of the fire. Your words are a welcomed part of my mornings as I sip coffee and prepare to face the day, and I appreciate your humour, intelligence, and candor.
Don’t throw in the towel just yet….your advice to all and perspectives are too important!!

#143 Leanne on 12.24.10 at 1:20 pm

I think it’s time to pull this little number out of the closet again. Sorry, Garth, couldn’t resist ~ I like you with long hair:

Also, the Christmas story as told by children:

Merry Christmas & Rock On.

#144 jess on 12.24.10 at 1:20 pm

I noticed the heavy emphasis on the word “too”

Your words today made my brain frame go to Mr. Loch. What is the “truth” essay.

Loch – Book IV of the Essay with a deceptively simple definition of knowledge. Knowledge is just perception of the agreement or disagreement of our ideas. (Essay IV i 2)

im/ex plicit guarantee
and this financial industry is tooo metaphoric – e.g. special purpose vehicles !

#145 BrianT on 12.24.10 at 1:28 pm

#122Greg-China is buying that debt with their stash of US dollars they need to offload. IMO it is not really about the return on the debt investment, rather they would like to have increased political control over these countries, while diversifying away from the US.

#146 This is Wonderland on 12.24.10 at 1:37 pm

Dear Garth,

Never Give UP! Never Surrender!
–Galaxy Quest–

Merry Christmas to you Dorothy and bad ass Bandit as well as all the bloggers out there; except for # 15.

#147 ralph on 12.24.10 at 1:50 pm


Time to take a break from the insanity and have a very Merry Christmas and a Happy New Year.

#148 Two-thirds on 12.24.10 at 1:53 pm

Merry Christmas, Garth.

This blog has been very helpful and entertaining too in the past couple of years.

Will blog readers get special deals when your financial product/network is launched?

Merry Christmas to all the dawgs – even to Nosty Jr with his new handle.

#149 jess on 12.24.10 at 2:04 pm
The concept of the Human Library originated in Denmark in 2000

Oh the humanity!

#150 realpaul on 12.24.10 at 2:18 pm

I posted that 2 million was the minimum to retire with dignity these days….many freaked…some disagreed. According to the ‘experts’ I wasn’t too far gone in my estimations.

“The $2-million target is in line with an estimate from founder Aaron Patzer that the average Canadian will require $2-million to $4-million in assets at retirement, including the value of their homes. People generally need 80% to 90% of their working incomes in retirement, Patzer said. Investors should assume a 1% to 2% average annual real growth rate until their target retirement age. If they stay invested they may need only 20 times their last year’s salary on the day they retire in order to make ends meet for 30 years. “If you’re counting on CPP or OAS you’ll need roughly 15 times.”

Read more:

The case mentioned an alternative scenario of $300K where the people basically eat Kibbles, sit in the dark and hope for an early death. This is why I commented that the couple with the same amount was screwed and had done themselves a wrong to be 47 with 2 kids and such meagre savings. But….these ‘experts’ are there to also be disagreed with. I think people react with disonance to bad news when it effects them personally and they just don’t want to face the facts as they are. 300K and you’re screwed…….what a country eh?

#151 prollywrong on 12.24.10 at 2:22 pm

Happy holidays all.
Garth: “shaved weasel”. Even if you’re wrong about everything (which I doubt; I’m converted), the “shaved weasel” comment makes it all worthwhile.

#152 Western Canadian on 12.24.10 at 2:22 pm


How can you group so many cities accross the country together and make generalizations?

Specifically your outlook on Alberta.

Correct me if I’m wrong:

-Alberta has a growing population (1 year of negative immigration does not a trend make)
-There is billions of dollars of capital and investment moving in to the province
-Median household incomes are among the highest in the country, Calgary is over $90,000
-With oil marching back to +$100 the province WILL return to surplus and the province has virtually no debt, this means no substantial tax increases

I am NOT saying everything is rosy. But you cannot compare a province with a growing population, little to no provincial debt, high wages, huge capital investment and falling unemployment to places like Southern Ontario.

Am I way off base here to say the comparison is ridiculous??peaked two years ago

Yes, way off. The Albertan population could fit into part of Toronto. There’s a reason real estate prices in Edmonton and Calgary peaked two years ago. Shale gas alone may be Alberta’s demise. — Garth

#153 jess on 12.24.10 at 2:24 pm

go to the mountain if it doesn’t come to you

who are the copy cats?
“Hallelujah Chorus.” But before a single note could be sung, firefighters ordered the mall to be evacuated because the “flash mob” gathered on the second-floor threatened the structural stability of the building.

“Hallelujah Chorus”
Nov. 13

#154 mousey on 12.24.10 at 2:27 pm

#15 Angry Bird
Oh, ya, you are definitely angry. Hell, you may even be some kind of a bird. However, you are definitely wrong about your wild (and entertaining) generalization about the readers and bloggers that come to this site. Are your shoes too tight? Underwear a size too small? I know you can’t be as mean as you sound.

Merry Christmas….everyone.

#155 Jon B on 12.24.10 at 2:31 pm

Exactly. GIC and ING stocking stuffers this Christmas. This is what happens when most people don’t have confidence in the financial investment industry. We get lied to by all levels; salespeople, investment managers and the corporations that employ them. Your frustrations are well understood.

#156 dd on 12.24.10 at 2:39 pm

Is the US government buying equities?

#157 Fractional Reserve on 12.24.10 at 2:44 pm

Merry Christmas Garth! Thanks for all the informative and entertaining posts throughout the year. Keep up the great work in 2011.

#158 X on 12.24.10 at 2:44 pm

re #99 :
btw ever given thought about starting ‘The Turner Financial Group’, to give people an easy vehicle to put your investing concepts into action, via ETFs or Mutual Funds or advisory services? I think there is a market out there just waiting to be tapped. Or how about a referral network of “independent” advisors across Canada, who adhere to high ethical standards and disclose all commercial relationships?

Thanks. Closer than you think. — Garth

A low fee Turner fund or ETF? Garth Turner investment advisor franchises, fee only advisors? Glad to hear that something is in the works, looking forward to hearing more details in the future.

#159 Mike Turner on 12.24.10 at 2:45 pm

Sales down 43% in the mid tier market in Newfoundland
for November prices are up 9% though… Going to be an interesting year

#160 Greetings and Sorry from Calgary on 12.24.10 at 2:45 pm

Merry Christmas and Happy New Year!

Thank you Garth for making me a better investor with your books and blog. By using your ideas I have been able to regain control of my money.

Your glory days are around the corner.

#161 Amarillo on 12.24.10 at 2:51 pm

As a group, we obviously think about money a lot, perhaps too much, just sayin’. Let’s also remember to help those less fortunate, no shortage there.

Alberta has negatives but perhaps its greatest attributes are (1) a positive, can-do attitude and (2) an aversion to doorknob nanny-state premiers like McGuinty.

Merry Christmas everyone!

#162 BrianT on 12.24.10 at 3:00 pm

#150Real-Try to ignore your authority figures and use basic common sense-saying the average Canadian “needs” 4 million dollars at retirement is no different than saying that the average Canadian “needs” to live to 120 years of age. That is one of the stupidest articles ever printed, and quoting it and repeating it is just as stupid. The average Canadian doesn’t have the 4 mill and they are not going to get the 4 mill, and anyone who thinks you “need ” 4 million at the age of 65, otherwise you are doomed, is, IMHO, an idiot.

#163 [email protected] on 12.24.10 at 3:09 pm

I really feel all the talk about ghosts towns in china and a china real estate bubble is nothing but a lot of talk to make the west feel better.

Their inflation is much different then our inflation. China like other asians countries actually have been saving for years. They also pay far less or no taxes at all. Their salaries are increasing very fast. Even the retired are getting regular increases of 10% or more per year.

How many cities do you think there are in China? Lately we see images of a few chinese ghosts towns. Wow compared to the population there and the number of +1milllion cities there, there is absolutely no impact of a few ghosts towns. Good for them to be able to by a 2nd or 3rd home.

Unless the world all of a sudden switches from bying Chinese goods (impossible for us at this stage) then I see no way of stopping wealth from moving from the west to the east.

Free trade all sounded like a good idea to ship all of our general laborer jobs over seas so we only leave ourselves the higher skilled, higher paying jobs. Sounds great until you realize we don’t have enough qualified people to fell these higher skilled jobs and they start being shipped overseas too. We will eventually all be outsourced. Better stick with the service sector.

-China has the most english speaking people of any country in the world.

-China and India each have more honor students than all of the US students combined.

So you can expect the majority of all future scientific advancements to be made by foreigners and expect any scientific research jobs in North America to be filled by foreigners or immigrants.

The rest of us can find jobs at McDonald’s or Realestate
since neither of those actually require a brain.

#164 Thetruth on 12.24.10 at 3:11 pm

Just the responses i expected…emotional ones. Okay, You are the correct ones if that’ll make you feel better over the holidays. What a waste of time!

#165 UrbanCowboy on 12.24.10 at 3:26 pm

Agreed with one of the previous posts – walk around the stores and seems there are lots of sales like even 50%! Does this mean products are not moving well, even during the busiest time of the year? Can’t wait for boxing day then to get bigger discounts, maybe we’ll see real estate 90% off :)

#166 Frank Hart on 12.24.10 at 3:32 pm

Merry xmas Garth. I have been a daily reader of your blog for a couple years now and also have enjoyed your books a great deal, especially Money Road. Thanks for all the info and good luck at Turner Tomenson & Associates.

#167 bill on 12.24.10 at 3:35 pm

Thanks garth for all the advise
you do more good than perhaps you know.
hope you and your family have a great christmas and equally festive new year.
i am very intrigued by the thought of a “garth turner fund” so to speak .
i think there are many here who would invest.
anyway dont let the bastards grind you down. we’ve got your back.

#168 Cookie Monster on 12.24.10 at 3:55 pm

“Tu ne cede malis sed contra audentior ito”

which means

“do not give in to evil but proceed ever more boldly against it.”

#169 AG Sage on 12.24.10 at 4:04 pm

>Chickens and veggies are great but will get a bit boring when they are all there is on the menu for months at a time.

Chicken? I think it’s about time you Canadians were introduced to the American staple of hobo beans.

And on that bright note, Merry Christmas to everyone!

#170 Hell in a Hand Basket on 12.24.10 at 4:18 pm

Merry Christmas Garth, you have been a good boy so I think Santa should bring you a new pair of cowboy boots, or a new hummer, or at least some furnishings for your bunker.

Santa, however, is not going to be so kind to F and H. Flaming bags of dog poop and a kick in the tender parts for those bad boys.

#171 Cookie Monster on 12.24.10 at 4:27 pm

#123 Dan on 12.24.10 at 11:59 am
Greaterfools………We have gone BAKRUPT. FU realtor whores. you ruined our lives.
Hey, take it easy on the Realtors Dan. They’re only people who picked a career because it suited them. You know how it is when we all pick our careers, it’s that feeling of what do I want to do, can I make money, will I enjoy it?

Real estate is attractive, good money if you’re successful, very social, if you like housing it’s fun and if you’re narcissistic you get to promote yourself, sound perfect!

Remember the villain is enabler and that’s our government, CMHC and our banks. The villain is socialism because it removes all the natural checks and balance of a free market. In socialism you lots of rules and regulations enforced by regulators, but for some reason it just never works out due to corruption and carelessness. No one cares!

#172 Cookie Monster on 12.24.10 at 4:37 pm

BNN’s top news maker of the year is Brad Wall! The premiere of Saskatchewan, and elected official, a politician. Ha!

Welcome to Canada Business; please forgo your property rights at the border as we deem suitable to our benefit. UNBELIEVABLE!

#173 eddy on 12.24.10 at 4:42 pm

Merry Christmas to Garth and all bloggers!

Christmas is always a good time to watch your back -Federal Reserve Act, December 23, 1913 redefined STEALTH, just when everyone was making merry.

One more kick at the Max Keiser can:
First Max tricks you into liking him by bashing Goldman Sachs. Then in Pt 2 (below link) he advocates a Bretton Woods 3 and return to a gold standard!

His co-shill and fake adversary recommends a new system which is- global, with world governance

Anyone advocating a gold standard is a ROTHSCHILD AGENT

#174 echo on 12.24.10 at 4:51 pm

Merry Christmas Garth.

I enjoy your blog and mostly agree with your views on R.E. Like you I believe that Canadian real estate is way too expensive and have been predicting a correction for over two years now.
I admit I was wrong. Had I sold property in Vancouver two years ago, 1 year ago, or even 6 months ago I would not have made as much as I would if I sold today.
So your timing (like mine) hasn’t been great, and at this point a 15% correction is barely going to effect anybody that bought in the last 3 years. They’ll either still be “up” or have at least paid off some principal with these wicked low rates that they’re locked into.

regardless, Happy New Year, maybe your predictions will finally happen in 2011.

#175 Al on 12.24.10 at 4:51 pm

Interest rates going way up – dump those REITs now !

#176 Shy Blawg Dawg on 12.24.10 at 4:52 pm

GT, don’t be discouraged, you are ‘fighting the good fight’ and not all victories are reported back on this website. I am not a regular contributor to the site, but the thought of you discontinuing compelled me to write. Even though I am not the type of person to meddle in the affairs of others – I have followed this site for a few months, and recommended it to others. I also bought your last book, and have recommended it to some and loaned it to others.

Also, the suggestion of #99 (Got A Watch) is dead on point I believe. You can sense the demand/thirst for help in many of the posts on this site. I bet you already see it.

So don’t stop now, the message is getting out. Hang in another year, and I will share some of my favorite squirrel recipes with you.

#177 Al on 12.24.10 at 4:53 pm

The Ghost cities of China are in Mongolia. Mongolia is going to boom with its huge mineral deposits.

#178 realpaul on 12.24.10 at 4:57 pm

‘Moral hazard’ in pimping RE with ZIRP has the government in a corner. After all it has been F that has suckered CDN’s into unsupportable debt with the phony ZIRP. The policy has also served to beggar millions of seniors and fed many more to the taxman as they have had to clean out their savings to subsist. The huge debts have wiped out the future aspirations of a generation of FTB’s who are stuck in mortgages that can only go underwater in the current enviornment. Thanks F….Merry F….ing Xmas to you too.

“Moral-Hazard Position of Bank of Canada

Toronto-Dominion’s CEO does not give a damn about fundamentals, about acting on their clients’ interests, or for that matter acting on shareholder interests. Clark’s only concern is in not losing market share to the other Canadian banks until the whole mess blows sky high.

Canada’s banks clearly don’t care what happens as long as they can pass the trash to the Bank of Canada, the Canadian equivalent of Fannie Mae.

Clark’s statements, as well as statements made by the chief economists of BMO and Toronto-Dominion, put a spotlight on the decidedly stupid moral-hazard mess the Bank of Canada has gotten itself into by backstopping mortgages of Canadian borrowers.

But hey, look on the bright side. The music is still playing. In memory of Chuck Prince, Keep on Dancin’


I said Bank of Canada in a couple of places where I should have said CMHC.

Here are a couple of corrections from Canadian readers.

“RP” Writes ….
Quick corrections here Mish. Mortgages in Canada are guaranteed by the CMHC, which is a crown corporation equivalent to Fannie Mae. Anything less than 20% down requires this insurance, so that’s the source of the Canadian banks’ “health”. The loose lending standards were set by the current “Conservative” government, a few months after they came in office. We had 0 down, 40 year mortgages insured by the government for a couple of years. Now it’s officially 5% down and 35 years, but every bank will lend you the downpayment. The government also insures mortgages for rental properties.”

#179 Roy Stacey on 12.24.10 at 5:00 pm

Cranked CaAnucks are a good thing!! Stay Cranked, and keep giving us light on the investing and Real Estate Games you see both in the US as well as Canada.
We are inevitably linked together, though hope you won’t fare quite as badly as a lot of us Americans have these past few years. Greed & Stupidity make for interesting choices.

Merry Christmas & Happy Gnu Year.

#180 dark sad person on 12.24.10 at 5:10 pm

#150 realpaul on 12.24.10 at 2:18 pm

I posted that 2 million was the minimum to retire with dignity these days….many freaked…some disagreed. According to the ‘experts’ I wasn’t too far gone in my estimations.

from your link

Just for a couple to survive in a Canadian city, McCurdy figures on $2,500 a month pre-tax or $30,000 a year as the bare-minimum income. The big nut is housing. You either must rent from $800 to $1500 a month or if you own your home (even after paying off the mortgage), you’ll pay the equivalent of rent in property taxes and/or condo maintenance fees, plus homeowner insurance. So $800 a month is a rock-bottom figure for renters. Homeowners should pencil in at least $1,000 a month.

That leaves only $1,500 to $1,700 to cover everything else from taxes to food and utilities and entertainment. This is an ultrafrugal “cable TV and library books” lifestyle without car ownership, vacations or much dining out.


If those numbers were to continue holding or escalating at the past and current rate-then those numbers would likely be close-
The problem with trying to extrapolate forward-is the always shifting dynamics of free market forces-

Are those prices sustainable?
I say no-in fact i believe the cost of living based on dollar value will fall and continue to fall-which will make the amount of savings for retirement much less then today or in the future as money in circulation becomes scarce-due to the Deflationary forces that shift sentiment and as affordability and spending decreases-prices must fall to affordability
(Food and Oil) always an anomaly due to weather and geopolitical influences-

Here are some signs-that living costs are coming down-keep in mind-we’ve just begun the cycle of deflation-

savings rates climbing = decrease in velocity-

unemployment high and rising = lack of purchasing power-

rent and house prices are falling-so cheaper shelter prices-

CPI –note the historical trend break-which was stopped (temporarily) by 3 trillion in stimulus-which is clearly unsustainable and will revert back to the downtrend as soon as the money gun runs out of bullets and it will-

and here in Canada-where we still have a bubble-although the air is escaping at a quickening pace-note the trend change-

Those are 60 year charts and the sharp trend breaks/changes cannot be ignored-
Governments cannot create sustainable employment-nor can they continue to print money in order to hold prices up-
The lack of consumer purchasing power will force prices down and with that comes more affordable living-which will not require the amount of money based on the current and upward projected living costs as described in your link-

The big one-
Which shows that the ability of Governments to continue printing and taxing is fast diminishing-

#181 Live Within Your Means on 12.24.10 at 5:29 pm

#109 Tri State Pat on 12.24.10 at 11:44 am
Thanks for your blog.

Garth, Lache pas la patate.

Can you explain what it means. Hubby, from France, & lived in PQ for many years, has no idea. Just curious.

‘Never pee on your potato.’ — Garth

#182 BudTheSpud on 12.24.10 at 5:36 pm

#114 Aussie Roy
Even if Garth doesnt comment . keep up the interesting observations.
always good to hear from the other side of the Pacific “Pond”……
Merry Christmas all.
Coal for the “Pumpers”

#183 JC on 12.24.10 at 5:37 pm

Merry Christmas Garth and thanks for showing us how even a lump of coal can eventually turn into a diamond of opportunity with enough prudence and patience… and how what is percieved as today’s diamond can easily become tomorrows lump of coal.

#184 Mark on 12.24.10 at 5:52 pm

#152, using your same logic, Houston Texas should have some of the highest house prices in the nation. Instead, Houston has some of the lowest house prices in the nation.

Having oil in Alberta should mean lower house prices, as people use their capital to invest in other things that have a higher return on investment (as compared, to, say Toronto, where there’s really not a lot to invest in, so housing naturally becomes an outlet for speculation!). What has been driving the Alberta economy in the past decade has been real estate, and pretty much real estate alone — oil has been just a sideshow.

#185 Sam on 12.24.10 at 5:55 pm

#93 Aussie Roy on 12.24.10 at 10:28 am
I’d be happy to debate you, just get off your high horse stop trying to look superior by calling people pups, it doesnt help your credibilty or your arguement, it reminds me of a childish bully.
Which reminds me again of an observation I’ve had often.

very few of the real estate pumper posts ever show humility or curiosity or questioning or a tiny bit of “I might be wrong … here’s my data, what do you think?”

Granted a lot of them are trolls, or have some kind of mental problem, like the most frequest poster … but stll, the difference is striking.

#186 Mark on 12.24.10 at 5:55 pm

#163, Canada/USA has plenty of very qualified people to fill all the scientific and engineering positions that are actually available. Only 1/3rd of the population trained in science or engineering actually are able to find jobs in the science or engineering professions. Your claim that the jobs will simply dissappear is not because of the lack of educated people, but rather, because of the extremely high expenses associated with doing stuff in Canada.

For instance, in Canada, an engineer expects to earn enough to at least, in his career, pay off a mortgage, and enjoy a middle class lifestyle. Something that likely costs an employer $150-$200k/year to employ such a person. An engineer in China can buy the same quality of house, and the same basket of consumer goods for 1/10th to 1/5th the price, hence, can charge 1/10th to 1/5th the price for his services. Simple as that.

#187 comfused and a little crazed on 12.24.10 at 5:58 pm

Hi Garth,

Like many posters ..they like you to continue with your blog. the lone voice or reason. People confuse you as a real estate hater but you are not. You just don’t think having 80-95 % of your net worth in one asset regardless of what it is. Especially a house b/c it doesn’t generate income unless you rental returns exceeds the carrying cost.

in the long term…when all of us get old everyone has to sell and live off the money. But your not saving any money to retire on…that’s just not logical…common sense is just that common

Anyways I just repeating what you have been saying all along…maybe coming from me it will open a few eyes out there

keep the faith Garth :) it’s not what we leave behind that is remembered…but in the memories of the peoples lives whom we ‘ve touched that matters

somthin like that

#188 Junius on 12.24.10 at 6:06 pm

#163 [email protected],

You said, “I really feel all the talk about ghosts towns in china and a china real estate bubble is nothing but a lot of talk to make the west feel better.”

Perhaps. However you can still be bullish on China in the long run and be concerned about the current state of their economy.

The current concern is that they have vastly over invested in commercial and real estate construction. Meanwhile the average salary is still in the US$3,500 per year category which makes much of what has been build unaffordable.

The Chinese middle class is yet to emerge. China still has a long way to go before the poor class is absorbed into the economy.

The fear is that their construction bubble has created a commodity bubble that will not last. When they stop or slow building there will be a huge drop in demand for an extended period while the rest of the economy catches up. This would hit the countries who are floating on this commodity demand such as Australia, NZ, Brazil and Canada pretty hard.

By the way, India has the most English speaking people in the world. I would be surprised if more than 20% of the Chinese population speaks English. Most of them do not even speak the same Chinese dialect.

#189 Junius on 12.24.10 at 6:09 pm

#175 Sam,

You said, “very few of the real estate pumper posts ever show humility or curiosity or questioning or a tiny bit of “I might be wrong … here’s my data, what do you think?”

Exactly. Every argument is some form of “It is different here” or “buy now or be priced out forever.”

They got debunked in the US. Coming to Canada in 2011.

Hope Mick has the receipt for that coat.

#190 DM in Calgary on 12.24.10 at 6:13 pm

“A low fee Turner fund or ETF? Garth Turner investment advisor franchises, fee only advisors? Glad to hear that something is in the works, looking forward to hearing more details in the future.”

Me too — put me on the list!

#191 Junius on 12.24.10 at 6:14 pm

#152 Western Canada,

You said, ” the province has virtually no debt, this means no substantial tax increases.”

Ummm. Did you not see that Alberta just ran a $5B deficit? Guess you missed that.

Your right though. It is different in Alberta. Just like it is everywhere.

#192 jess on 12.24.10 at 6:24 pm

dave said:
“China and India each have more honor students than all of the US students combined.”

…wouldn’t that mean that within china/india these students are competing with each other for jobs since we seem to have many unemployed brains here?

Wu-speaking region influenced the development of the language. Wu was gradually excluded from most modern media and schools. Public organisations were required to use Mandarin. With the influx of a migrant non Wu-speaking population and the near total conversion of public media and organizations to the exclusive use of Mandarin, as well as the radical Mandarin promotion measures, the development of the Wu dialects was greatly hampered. It became common in the region to encounter children who grew up with Mandarin as their mother tongue, with little or no fluency in Wu at all. [3]

Many people have noticed this trend and thus call for the protection of this language. More and more TV programs are appearing in Wu (wiki)
CHINA: Dialect use on TV worries Beijing
Government fears popularity of multi-dialect TV shows threatens national unity

Mind your language

Saturday, November 19, 2005
Dialects from across China are being squeezed out by the relentless spread of Putonghua. But in Shanghai, defenders of the local language are mobilizing. Steven Ribet listens in

#193 garth fan on 12.24.10 at 6:28 pm

Merry Christmas, Garth!

Watch “Scrooged”; Bill Murray helps.

#194 VICTORIA TEA PARTY on 12.24.10 at 6:33 pm

#142 Rosita.

Exactly! But now…


Since the 2007-08 economic meltdown, pundits whether or not they know what they’re talking about, use this time of year to try and predict what’s up next. Years of playing that game, largely unsuccessfully, should have taught me a lesson by now, but probably hasn’t!

So, with this post, I’ll forget about forecasting and think about our family’s blessings in the here and now.

Christmas of 2010 is especially wonderful because it is the second Christmas for our granddaughter who turns15 months old on Christmas Day. In honour of this happy little child a look at some verses of a few traditional Christmas carols that she will be hearing throughout her life, no doubt!

O Little Town of Bethlehem was written in the 1860s by an American preacher after he visited Jerusalem. The story of this song’s genesis was described during a Mormon Tabernacle choral Christmas concert broadcast on PBS this week.

One of the participants, famous American historian David McCullough, noted how the song had an impact on both President Franklin Roosevelt and Prime Minister Winston Churchill, during a Washington DC church service, following the Japanese raid on Pearl Harbor, in late 1941

As the choir sang, he said, the following few lines attracted Churchill’s attention. It can also attract our attention now!

“…Yet in the dark streets shineth, the everlasting light
The hopes and fears of all the years are met in thee tonight.”

Other carols evoke other feelings and messages.

The Huron Carol (‘Twas In The Moon of Winter Time)
was written in 1643 by Jesuit missionary Jean de Brebeuf, in the wilds of Canada (but not put to music and translated into English until centuries later), it is Canada’s oldest Christmas carol.

A beautiful if haunting melody sung by many well-known Canadians artists, including singer and actor Tom Jackson, makes this one carol listeners do not soon forget. A few lines:

‘Twas in the moon of wintertime when all the birds had fled
That mighty Gitchi Manitou sent angel choirs instead;
Before their light the stars grew dim and wondering hunters heard the hymn,
Jesus your King is born, Jesus is born, in excelsis gloria…

…O children of the forest free, O seed of Manitou
The holy Child of earth and heaven is born today for you.
Come kneel before the radiant boy who brings you beauty peace and joy. Jesus your King is born, Jesus is born, in excelsis gloria.

My favourite carol is Silent Night. I’m not sure why it evokes so much emotion amongst so many people:

Silent night! Holy night!
All is calm, all is bright
round yon virgin mother and child,
Holy infant so tender and mild,
sleep in Heavenly peace!
sleep in Heavenly peace!…

Silent night! Holy night!
Son of God, Love’s pure light
radiant beams from Thy Holy face,
with the dawn of redeeming grace,
Jesus, Lord at Thy birth,
Jesus, Lord at Thy birth.

As we catch our collective breath this Christmas season, we also turn our attention to what lies ahead next year. I promised at the start of this piece to not make forecasts, or predictions. Instead I must tell you what my gut tells me. It says to hang on because it’ll be a multi-facited economic ride in the dark.

In the meantime we must not forget the messages and meanings of Christmas, to watch out for those around us who find themselves in trouble in 2011 and to assist where possible, even if only to utter some words of comfort. Ah yes, comfort. We do need more of that.

So, Merry Christmas and a Happy New Year to Garth and all of the posters in the Great Out There who visit and share their valuable thoughts, a gift in its own right.

#195 Live Within Your Means on 12.24.10 at 6:38 pm

Hi Garth – Will be loaning your book ‘Money Road’ to a bro over the holidays when he comes to visit. He actually called me looking for investment advice. I laughed. Hopefully he’ll learn something from Money Road.

#196 Alliston on 12.24.10 at 6:41 pm

Merry Christmas Garth.
Waiting for your next book
All the Best in 2011

#197 expat_engineer on 12.24.10 at 6:45 pm

#187 Mark

An engineer in China can buy the same quality of house, and the same basket of consumer goods for 1/10th to 1/5th the price,
You are totally wrong. The same quality of house and goods costs almost the same here and there.

The engineers there work for 1/10 of the wages here and consume 1/10 of the good and services of the engineers here.

Thats why engineers line up in the immigration queue to enter Canada and the US.

#198 JRH on 12.24.10 at 7:00 pm

Merry Christmas Garth

#199 Bottoms_Up on 12.24.10 at 7:11 pm

Regarding Brampton stats:

Prices and Starts up in October; absorbed (sales) down.

#200 Tom on 12.24.10 at 7:12 pm

Hey, you’ve got my support Garth. Say it ain’t so for quitting! Saw your talk. Took heed to your bear-day blog. You saved me Garth from making some big-time mistakes. Now I load up on TFSAs earning more than basic interest, no debt beyond a mortgage worth 15% of house value, RESPs for my kids, don’t yearn for granite or stainless, couldn’t be happier. THIS website is where you enact the most change, Garth! Grass roots all the way. Like everyone says…. you’re just getting us rolling!

#201 Danforth on 12.24.10 at 7:17 pm

Is this “good friend of my wife’s” INSURED?

What if this person goes bankrupt?
Are your investments protected? Typically private loan sharking isn’t.

Look what happened here.

Harry Snoek went bankrupt.
Hundreds of investors lost their retirement.
He, too, paid great dividends just like you’re receiving.–the-trail-of-harry-snoek-leads-to-europe

I concur with Garth….Get Out. Now!

Get out before other investors come calling for their money.

And…merry Christmas to all

#202 Junius on 12.24.10 at 7:26 pm

#164 thetruth,

Aww, C’mon Mick. You didn’t expect a positive response to your usual “it is different here” diatribe did you?

Here is one. Most immigrants don’t have a lot of money. Immigration remains high from the Philipines, Vietnam and other countries.

Our house cleaner is from the Philipines. She is fantastic and a hard worker but she is not investing in the West side anytime for the next decade. My wife goes to a nail bar owned by Vietnamese immigrants. They are wonderful people but barely eaking out a living.

The vast majority of immigrants come to Canada to seek a better life. They come with very little means and certainly not enough to invest in Real Estate right off the boat.

Feel better?

#203 Junius on 12.24.10 at 7:30 pm

#178 Al,

You said, “The Ghost cities of China are in Mongolia. Mongolia is going to boom with its huge mineral deposits.”

Yes, no doubt that Mongolian and Chinese mine workers who make less than $100.00 per week are going to start buying up homes that cost a few hundred grand or more. New cars as well.

Good thinking!

#204 Jody on 12.24.10 at 7:31 pm

Merry Christmas to Garth and all the comment dogs. Thanks to the no BS approach of Garth I have two friends whom are still married, they read this blog and got out of financial hell. Here’s hoping in the new year that more people are upfront and honest like Garth, it makes a world of difference. Keep on with the blog, it’s a voice in the wilderness.

Hot Mulled Cider

1/2 cup brown sugar
1/4 teaspoon salt
2 quarts cider
1 teaspoon whole allspice
1 teaspoon whole cloves
3 inches stick cinnamon
Dash nutmeg

Combine brown sugar, salt, and cider.
Tie spices in small piece of cheesecloth; add.
Slowly bring to a boil; simmer, covered, 20 minutes.
Yum Yum!

#205 Junius on 12.24.10 at 7:35 pm

#172 Cookie Monster,

You said, “The villain is socialism because it removes all the natural checks and balance of a free market.”

Why is it that you keep getting this part backwards? Socialism is about a command economy with no free market. Traditional liberal economics is about putting in place checks and balances.

The culprit of the current financial meltdown are the corporatist forces that removed the checks and balances on the banks. These are found on the new right in the Republican and Conservative parties and, unfortunately, in the liberal parties like the Democrats who should have known better.

You need to read more George Orwell and less Ayn Rand.

#206 ballingsford on 12.24.10 at 7:42 pm

Merry Christmas Garth and you Blogdogs and best wishes to you and your families in 2011. May there be few worries and lots of happiness and great health!

Garth, take a few days off between now and the New Year to recharge your batteries. It seems like the contrarian in you is being frazzled by the other side of the fence. They are the ones distorting the truth and don’t care if they screw someone over!

We need and appreciate a straight talker like you in these crazy times.

I mean it with all my heart!!!

#207 jjpetes on 12.24.10 at 7:59 pm


I am more ally than foe.

Merry Christmas to you and your family, all the best in the new year!


#208 CalgaryBoy on 12.24.10 at 8:00 pm

Merry Christmas, Garth! Keep up the good work! Am excited to see what happens in 2011, aside from Lady GaGa’s new CD! Hopefully some more explosions coming from her chest!

#209 Denisa on 12.24.10 at 8:02 pm

Merry Christmas. I gained a lot of insight this past year re “wealth management”. I’m on the “Money Road”. Thanks.

#210 Cookie Monster on 12.24.10 at 8:15 pm

#206 Junius on 12.24.10 at 7:35 pm

Junius, you’re clueless!

There’s either a free market or there is not.
There’s either government intervention and regulation or there is not.
There is either moral hazard or there is not.
People are cautions and wary with there choice of banking or they are not.
There is risk of bankruptcy or there is bailout.
There is either truth or lies.
There is either understanding or ignorance.
There is reality or propaganda.
There is either free markets or socialism.

Socialism can take many forms, limited only by the imagination of a socialist dreamer, reality and people with guns. Merry Xmas.

#211 Snowman on 12.24.10 at 8:30 pm

“Yes, way off. The Albertan population could fit into part of Toronto. There’s a reason real estate prices in Edmonton and Calgary peaked two years ago. Shale gas alone may be Alberta’s demise. — Garth”

Qatar’s population could also fit into part of GTA, I just don’t see what that has to do with RE prices.
Just because you have 15 mil low income people concentrated in one area, don’t see how it that supposed to support higher RE prices as opposed to a 3 mil highly paid people area. That way you can fit Toronto into part of a Chinese vilage, does that mean the chinese vilage can support higher RE prices?
Bad comparison Garth.

Calgary and Edmonton prices have picked three years ago (soon to be four) not two.

There is plenty of shale gas in Alberta as well, not to mention Calgary head quartered OG companies are involved in developments elsewhere including northern BC where about %75 of the work force are oil and gas guys stationed in Alberta.

Not to mention those tens of billions of $$ pouring into the oilsands.

Is Alberta different? of course it is, various cities whithin Alberta are also different, neighbourhoods whithin same city are different, streets within same neighbourhood are different, houses on the same street are different.

Merry Christmas to all !!!

#212 Duke on 12.24.10 at 8:38 pm

re 196 Live Within Your Means
Not too many authors want to hear their books (intellectual property) are leant rather than purchased and given as gifts during the holidays.

#213 Phil on 12.24.10 at 8:55 pm

Hey angry bird..sounds like you are pissed at something. However, in your juvenile rant, you succeeded in insulting not only your host, but every one on this board. I am only speaking for myself, but I don’t consider yours truely to be a loser. Granted, I’m not the sharpest tack in the box, and haven’t gotten rich by working for a living, but I do hold property, and have a few bucks to spend at the end of the day. From very poor and humble beginnings, I think we have done ok. I hope after you cool down, you can see that your rude and insulting rant has only proved to show what a jerk you are for speaking that way, no matter how you really feel. Most of us are here to try and glean a little financial knowledge, so if you haven’t got something constructive to say, shut the **** up. Merry Christmas.

#214 realpaul on 12.24.10 at 8:57 pm

The wack-jobs and economists who apologise for the government insist that since the price of computing power and flat screen TV’s has gone down slightly that it means that inflation is tame and the cost of living is mageable going forward…..BS !!

For one thing…purchasing power has steadily deteriorated every year for the past thirty. A mid 1970’s dollar now buys .19 cents.

I don’t think the starving seniors and hungry families who are standing in line at the food bank today are there to save money so that they can buy a flat screen or increase the RAM of their new Chinese game consul. This is the HEDONIC run around you get from civil servants who while serving themselves up million dollar pensions get paid to insist that inflation doesn’t exist.

The bad news for the naysayers is that labour costs are also going up in the third world and the cheap t shirts and electronic crap the government uses to fill out the CPI after discounting things like FOOD HOUSING AND FUEL, TAXES, INTREST RATES, ETC ETC ETC and the inflation deniers will no longer be able to relie on cheap labour and slavery as a way to keep CPI down in the western economies.

Local governments are certainly experiancing inflation……wage inflation from their own civil service labour force that is as is outlined in this quote

“We have argued repeatedly that municipal councils need to address this gap by actually reducing spending in some areas, not just slowing the rate of increases. We need to look at whether we are overpaying municipal workers compared with people who do similar jobs in the private sector. ”

Read more:

So it seems that given enough time in an interview even the civil service spokesman can’t deny that the problem of overpaying the parasites is an internal debate. They are wondering how to deflect the topic away from individual departments.

Inflation is absolutley raging in the budgets of these agencies who have no idea how to keep costs in line except to load up the rate payer with more taxes to maintain the staus quo.

While the civil servants are downloading porn in the office we have seniors starving and kids who’s parents can’t afford to feed them….its shame beyond shame on these greedy pigs.

#215 Bullion.Bunny on 12.24.10 at 9:22 pm

#206 Junius on 12.24.10 at 7:35 pm

he culprit of the current financial meltdown are the corporatist forces that removed the checks and balances on the banks.

It’s called common law……..lots of checks and balances already in place. Just has to be enforced.

#216 Nostradamus jr. on 12.24.10 at 9:32 pm

Lots of rain out here on the Left Coast last couple of days.

…At least we wont die of thirst…

Happy Holiday wishes to all the Posters, Commentators, even to all those banished to Greater Fool Purgatory.

Nostradamus jr.

#217 Bullion.Bunny on 12.24.10 at 9:42 pm

#198 expat_engineer on 12.24.10 at 6:45 pm

Thats why engineers line up in the immigration queue to enter Canada and the US.

We have lots of unemployed engineers here in Canada. My wife has five working for her part time in the retail trade. Two electrical, two mechanical, one civil. Oh and one older project manager form the software biz. All of them have degrees from Canadian Universities. Yes we need to bring more in to Canada!

#218 Bullion.Bunny on 12.24.10 at 9:59 pm

#181 dark sad person on 12.24.10 at 5:10 pm

Love your charts and agree with your argument, everything is about to get a major haircut!
Just take a look at England…..

The mortgage freeze will continue next year, with net lending expected to slump to its lowest level in 30 years, the Council of Mortgage Lenders warned yesterday. It predicts that net mortgage lending will hit a low of only £6billion, a paltry amount compared with the peak year of 2006 when £110billion was handed out. Net lending is the total amount lent by banks and building societies after subtracting the money paid back by homeowners.[..]

The speed of the meltdown is remarkable. In 2008 – the year of the bail-out of the banks – net lending was £40billion, but the situation has got dramatically worse since then.

In 2009 net lending was £12billion and this year the total is predicted to be £9billion. The CML’s figures, published yesterday, also reveal that last month was the worst November for a decade. Gross mortgage lending, which is the total handed out, was only £11.1billion, the lowest level in the month of November since 2000. This year gross lending is expected to be £135billion. In its peak year of 2007 it was, £363billion.

Credit contraction in full swing, coming to Canada soon.

#219 Min in Mission on 12.24.10 at 10:26 pm

#205 – Thanks Jody

#220 Moneta on 12.24.10 at 10:26 pm

Even if you are mainly preaching to the converted, my family owes you a big thank you for your website. They’ve been able to go through 2010 without having to hear me rant about the bubble and its excesses.

Merry X-Mas!

#221 Calgary_rip_Off on 12.24.10 at 10:33 pm

#15 Angry Bird:

You are an IDIOT.

Let’s see I just grossed $100K this year and I am renting. Still saving up a down payment because the net income is a lot less than the gross due to taxes here in Canada. So It’s pretty difficult to save to buy a place in Calgary. And then there are the arrogant pompous sellers and market value that makes no sense.

You lack ethics and its people like you who I would like to see imprisoned. The scum of the Earth. I have no doubt though. You’ll get yours in the end. Whatever I really want, if I want bad enough, I get. And to me, people like you should go pack sand. And get pounded. In prison.

Your comment about Stephen Harper is pathetic. The conservative party is an embarassment. If I am going to pay 25% taxes(at least) the taxes should do something. Other than the medical care, my taxes are going to fuel that stupid war crap still in Afghanistan when the oil left in northern Alberta exceeds the reserves in Saudi Arabia? What’s with my taxes fueling this? Harper may be a fine human being, and the party he is a part of sucks. And the Wild Rose is even worse.

“Bird has Flown”-Deep Purple

#222 Cookie Monster on 12.24.10 at 10:39 pm

BB and DSP, I don’t think credit is contracting, the expansion is just slowing. Credit won’t contract until people start saving again and paying down their debts. Default is not contraction either, once the expansion occurs and the money is created, if its not paid back the bank will write down the loss and expense it and if they lose enough money they will start monetizing the bad debts which simply solidifies them as high powered money which then can then in turn lend on again at high ratio.

I don’t see any chance of deflation, meaning contraction of money and credit. Prices are flying and once the bond market chokes and China, India and Japan and everyone else give up on the dollar inflation’s going to rocket.

#223 Cookie Monster on 12.24.10 at 10:46 pm

High inflation is Ben Bernake’s plan to make the US banks whole again, drive up the prices of everything to catch up the the prices of houses from the bubble era.

When a 12 pack of coke costs $15-$20, a $500k mortgage will be nothing and the banks will be whole

You know how it is with inflation, who ever receives the money first benefits from it, those who see it last or not at all lose.

#224 rower on 12.24.10 at 10:56 pm

Please, don’t ever quit. There are a lot of us who read your advice and quietly put it into action.
We need someone who tells the truth.

Who else can wear the boots like you can?

Merry Christmas Garth, Dorothy and all the blog dawgs!

#225 mac on 12.24.10 at 10:58 pm


You’re distorting the facts about Mortgage Investment Corporations. Granted these people should diversify but 9% over the past decade or so, which is probably what these people have earned ain’t bad. MICs must invest in commercial and residential property. It’s the law. And not many of them give primary mortgages to mom and pop borrowers. Sometimes they invest in residential renovations, like old people’s homes, etc., which are secured by high ltv ratios.

#226 hobbygirl on 12.24.10 at 11:12 pm

I posted a ‘Merry Christmas’ here earlier, but also wanted to say that we are all giving you a bit of our valuable time each day to read your comments. Now this couldn’t be if we didn’t believe in the core message you are sending out here. Speaking for myself, yes, there are touch points that many of us will disagree on, but the common sense of the general message resonates with us all.

You like anyone else also deserve to take a break once in a while and we’ll be OK while you forget about us for a week or so to recharge those batteries.

So once again in the spirit of the season to G and my fellow bloggers, have yourself a most meaningful and JOYOUS Merry Christmas with love, peace and HOPE in your heart.

#227 hobbygirl on 12.24.10 at 11:17 pm

#15 Angry bird.

I own a new home paid cash, live comfy and have $ in the bank.

All I will say in response to you: ‘Anger is a poison that only destroys the vessel in which it is contained’. Better you angry than me.

Merry Christmas.

#228 Rob on 12.24.10 at 11:32 pm

Jeez garth, don’t bail out now!!! I’m just starting to make a little money following our last meeting. Not only that, I’m able to sleep at night now!!! MERRY CHRISTMAS, and thanks for your help.

#229 45north on 12.25.10 at 12:20 am

realpaul: While the civil servants are downloading porn in the office we have seniors starving and kids who’s parents can’t afford to feed them….its shame beyond shame on these greedy pigs.

I work in the Federal Civil Service and I dispute your charge. That the civil servants are downloading porn in the office.

They are not or at least not to any extent.

#230 nonplused on 12.25.10 at 12:37 am

Garth on 152,

“Demise” might be a bit strong of a word, depending on what you mean by “demise”. But shale gas definitely is a game changer, and it is going to put a cap on natural gas prices for a long time.

I can talk about shale gas at length, because it’s my job to know. It’s relatively early in the game, but even if the high EUR’s (Estimated ultimate recoveries) are not what they are forecast to be (as per Art Bergman, nobody has a 20 year old horizontal multi-stage shale well yet), what I can say is that it makes very little difference in the short term, after you discount the cash flows the high early production rates make what happens 20 years out almost irrelevant. And the US has lots and lots of its’ own shale gas, hence the problem for Alberta. But we still have tar sands. Not like that can produce anywhere near the revenue conventional oil and gas did, but it’s there.

However, the real losers in the short term from the shale gas revolution is likely to be the green energy industry. Who on earth wants to build a windmill now???? Low gas prices mean low electricity prices, from here to as far as the eye can see.

GE will benefit either way. If the government says “build windmills”, GE builds them. If the market says “build gas co-gens”, well, GE builds those too. GE may have to one day cede the windmill market to the Chinese, because they still want to build windmills. They think they might have shale gas, but they don’t know yet, so windmills are still going up in China. And, as with everything, they build their own.

#211 Cookie Monster

Everything lies on a continuum. All of us have some understanding and much ignorance. To say there is only truth and lies is to say there is only infinity and zero. Instead, there are a great many points in between that could be considered “some level of misunderstanding”. I think you must be quite young. Tell your dad to turn on the Norton parental controls.

It is only a lie when somebody says something they know to be untrue in an effort to deceive. If everyone who was somewhat mistaken (but honestly) was a liar we’d all be in jail. Heck, even Garth’s “bent the nail” a few times in my mind. (For those with absolutely no experience in carpentry, I refer to hitting the nail slightly off the center of the hammer, such that it bends. Close, but now you got to straighten the nail and try again.) And of course there is the proverbial “lightning carpenter” (never strikes twice in the same place). We’ve all been there!

A really good carpenter can actually slightly bend the nail with one stroke and actually straighten it with the next. OK, now I am rambling. But I’ve actually done it! If you hit too far to one side but not so much that the nail is too far gone, you have to intentionally hit it off a little to the other side. Of course the only reason you are doing any of this nowadays is if you don’t have an air nailer handy. And to one of Garth’s analogies, I did actually shoot myself in the foot with one once. Turns out the safety is no good if you don’t let go of the trigger. Luckily it didn’t hit any bones.

To draw a point out of this, Garth cannot quit. He is hitting the nail on the head. And the purpose of the many fine repliers who post comments is to help him become more precise. But he is now the head of this community of thought, and if he quit, where would we go? I’m sure we’d recover eventually and all meet over at another blog, but for now I think Garth does a bang up job leading this forum and the many conversations that result. Otherwise I would just leave. So, I think the 200 replies per blog +/- means the vote is for Garth to fight on! Go get ‘em, Garth!

#231 Timing is Everything on 12.25.10 at 12:43 am

#211 Cookie Monster

Black or White…No compromise. Hmmmm….

#232 TD69 on 12.25.10 at 12:47 am

Happy holidays folks. We’ve had quite a run over the year or so. Really enjoy this blog, what an age we live in. Let’s have a happy 2011.
#222 lighten up it’s x-mas. #15 expresses a view that like or dis-like as you do is valid. Stop renting. Start living. And as for Harper #15 is right -politics is a game as in life. But Garth as any good player knows has to intrigue and obviously be intelligent. It’s bad enough we are fighting a crusade in Afgan. These people have lived for thousands of years in a desert-what are we teaching them again???? And survived. And as for Harper there is a reason why Canadians don’t give him a majority. Not because he is a little packing cowboy. But because he lacks judgement. We would be in another hell hole 1000’s of times worse-Iraq-if he was PM in 2003. That’s how it is in this world.
Good health and whatever kindess in 2011.

#233 Bullion.Bunny on 12.25.10 at 1:02 am

#224 Cookie Monster on 12.24.10 at 10:46 pm

Sorry, I have to disagree with you on this point. Deflation will once again rear its ugly head. I agree at this point in time we are seeing inflation from all the QE1, 2, 3. This is but a temporary phenomena. Hot money is flowing into stocks, commodities, metals etc. Once the market starts to punish Ben and his Central Bank cronies, look out. The Euro states are a basket cases waiting to buckle under the debt load. Central banks will be powerless to stop the deflationary wave. Central banks can chop every tree in the forest and print to infinity, it still will not be enough to pay all of the debt accumulated to date. The revolution has started and the deflation will follow. It’s followed the same pattern with remarkable fidelity over the course of financial history, 1720,1772,1825,1873,1929. Why would it be different this time?

Just look at the Baltic Dry Index, it’s falling like a stone. A warning of deflation? Maybe, time will tell.

Merry Xmas and Happy New Year. May all your trades be golden.

#234 throwstone on 12.25.10 at 1:32 am

#215 Real Paul ….Well Said!

#230 45north…
you been working in the comfort zone too long!…

Personally I have friends working in the muncipal, provincial and federal “disservice” who sat at the table for drinks last week openly stating they are waiting for the new year and their subsequent “hiring dates” to engage in shopping spree’s of $1200 or more per person for everything from prescription sunglasses, to orthotic footwear, massages, and every other benefit unavailable to a private sector employee.

If you doubt this fact ask around a bit….

BTW…These dudes download porn!

#235 dark sad person on 12.25.10 at 2:23 am

#219 Bullion.Bunny on 12.24.10 at 9:59 pm

Good explanation of Deflation staring everyone right in face-

Most tend to look at the distortions in this early stage Canadian blowoff and see wages in some sectors still climbing and grocery receipts going up or the fact that not much has really gone down-which is all so tiny in comparison to the destruction of massive amounts of Credit Money involved in this unprecedented Credit Contraction and asset collapse (loss of Bank Capital) (loss of personal net worth) and scarcity of circulating Cash-

As for the Inflationists looking at escalating wages-they are cherry picking to make their case and not looking at the big picture-

If Credit expansion drove prices to these levels-
Credit contraction will do the opposite-
People expect things to happen immediately-
There’s a thing called lag in the Market and that’s exactly what’s happening-combined with idiot Government Stimulus-which has only served to goose prices and suck future demand into today and when we get a little further out on the curve-where will that demand be?

#236 dark sad person on 12.25.10 at 2:29 am

#223 Cookie Monster on 12.24.10 at 10:39 pm

BB and DSP, I don’t think credit is contracting, the expansion is just slowing. Credit won’t contract until people start saving again and paying down their debts.

The charts above shows that the savings rate is going up-they show wages decreasing-they show credit contraction-they show falling tax revenues-
All Deflationary-

Here’s some more-

I think what you’re not taking into account is Sentiment when you talk about lending-
People are already loaded with debt-money has never been cheaper-yet looking at US data-lending is on the decline-
This is what’s killing Bernanke-
He’s staring into the face of the Free Market and Sentiment has shifted from borrow and spend to save and wait-
With Businesses-we see Cash buildups on their balance sheets-which most of is cheap borrowed money-but they are nor deploying that Money and why would they into a falling Economy-
Charts prove Contraction in all but Fed levels-
If Inflation is to get a hold-Credit must flow first-that is not happening and not likely to happen-
I see absolutely no chance of Inflation as long as the Credit Market which is so leveraged to Cash keeps Deflating-

I don’t see Inflation out of that-
Money/Credit in circulation is still collapsing-

#237 randman on 12.25.10 at 4:51 am

“I work in the Federal Civil Service and I dispute your charge. That the civil servants are downloading porn in the office.

They are not or at least not to any extent.”

You can’t be…A LITTLE BIT pregnant!!

#238 Jeannie on 12.25.10 at 6:34 am

Merry Christmas Garth, Dorothy, and Blog-dogs.
Thanks to all for a year of interesting opinions.
For Aussie Roy…we’re currently hosting a couple from
Australia, and are hearing first-hand about the seriousness of your economy.

#239 Herb on 12.25.10 at 10:33 am

Unreal Paul,

if you must keep dancing your one-step samba about “civil servants” being the source of all ills, get at least one fact right. We do not have “civil servants” in Canada, any more than we have a civil service. We have “public servants” working in a public service.

There is a difference, not that a blog roach would be bothered by it any more than by any other factual consideration.

#240 Timing is Everything on 12.25.10 at 12:34 pm

#238 randman

“Don’t blame a whole group of people for the actions of a few.” – Archie Bunker (All in the Family)

#241 S.B. on 12.25.10 at 2:20 pm

I think we need a back-up blog site in case Garth is hacked again or ‘disappears’ for a while. 8O

The site will of course be named :D

#242 S.B. on 12.25.10 at 2:38 pm


China Increases Interest Rates to Curb Its Fastest Inflation in Two Years
By Bloomberg News – Dec 25, 2010 12:20 PM ET

China raised interest rates for the second time in 10 weeks to counter the fastest inflation in more than two years and more moves may follow.

The benchmark one-year lending rate will rise by 25 basis points to 5.81 percent and the one-year deposit rate will climb by the same amount to 2.75 percent, effective today, the People’s Bank of China said in a one-sentence statement on its website late yesterday.

Economists surveyed by Bloomberg News earlier this month forecast one percentage point of increases in 2011. Premier Wen Jiabao is seeking to slow gains in property values and consumer prices that are making it harder for families to buy homes and pay for food. Bank lending and a wider-than-forecast November trade surplus have pumped more cash into an economy already awash with money.

“This demonstrates how determined the government is to control inflation,” said Wang Qing, a Hong Kong-based economist with Morgan Stanley. “Interest rates on medium and long-term loans are adjusted by banks at the beginning of every year so by raising rates now, this will have a much greater tightening effect than it would have in January.”

Wang said he expects three more interest-rate adjustments of 25 basis points each in the first half of next year. Ken Peng, an economist at Citigroup Inc. in Hong Kong said yesterday he forecasts increases totaling 100 basis points next year.

#243 S.B. on 12.25.10 at 2:41 pm

Will BoC follow the China playbook? China: the greatest capitalist (communist) economy in the world at present…will we become more like them or they like us? I think I know the answer…

#244 Utopia on 12.25.10 at 4:36 pm

#143 Leanne

Ha. Thanks Leanne. You made my day. That Christmas story was the highlight of everything I read today. I watched it twice. Cracked me right up. Priceless!

#245 S.B. on 12.25.10 at 4:59 pm

Tale of two charts:

1. FXI, the ETF for China has taken a beating over the past few months after a rally attempt:

2. But S&P 500 has rallied non-stop during this time period. Something’s got to give? Is China a leading indicator?$SPX&p=D&b=5&g=0&id=p37502985924

#246 45north on 12.25.10 at 5:06 pm


let’s review the original charge:

While the civil servants are downloading porn in the office

you really haven’t said that your friends download porn at work

the reality is that downloads are easily logged and reviewed. The consequences are serious enough to deter the behaviour.

#247 cellar dweller on 12.25.10 at 7:25 pm

#15 Angry Bird
Wow ! According to you.Everyone that reads this blog is an idiot!
I assume you have included yourself in that all encompassing generalization.
If you DID include yourself, you’ll get no arguement from me.