Big life

When I was a kid hitting forty life was big. Big cars. Big houses. Big money. Big debt.  One day we sat in our rowboat, drifting on our pond, looking at our waterfall. Just for fun, we added up the money we spent each month financing three properties, three cars and a gardener. In minutes, it was fun no longer.

By the time we rowed ashore, a plan. She wrote it on the back of an envelope and taped it to the fridge. Two decades later, we still remember those three rules. They saved us.

Today so many need saving. Look no further than the media messages that drown us to see the evidence. Every day brings new examples of irresponsibility and what house porn can do to your soul.

Like this. On Friday the country’s biggest newspaper published a how-to story on buying a house without money. No, not just a small down payment and a big mortgage. But absolutely. No. Money.

Of course, it’s not permissible under Canada Mortgage and Housing Corporation rules to purchase with 100% financing using a lender that is CMHC insured. But it’s also a requirement in Canada that any first mortgage greater than 80% of a home’s value be insured, because it’s high-ratio and high risk. So you’d naturally think no-money-down financing is impossible, or maybe relegated to a sleazeball mortgage broker in a strip plaza office over the tat shop.

You might also think a former real estate lawyer who now makes his living coaching realtors on how to goose their sales techniques – and writes for a big newspaper – would know better. But not the ethically-challenged Mark Weisleder.

Is a mortgage with no down payment possible? he asks.

“Some lenders offer qualified buyers the entire down payment on the day of closing, if the buyer has good credit, stable employment and qualifies for the lender’s closed-mortgage rate over 5 years. This can allow you to buy a home worth up to $400,000 in most cases.” And Weisleder also reminds that several of the Big Banks give young cashless buyers a monetary bribe when they take a big mortgage. These cash-back schemes, he advises, can be used to help close a no-money home purchase.

Just to remind: in pre-crash America, when people without any money were allowed to buy homes with 100% financing, it was called subprime. And when they were given loans at ultra-chap rates which were destined to reset higher in the future, likely ruining them, that was called irresponsible lending.

But, of course, it’s different here.

Well, not exactly. Take a look at the Globe and Mail’s feature this weekend on one couple’s finances. He’s 40. She’s 34. They also live big. Two kids, incomes totaling $290,000, and yet  a mere $125,000 in liquid assets.

Their Toronto house was purchased for $1.37 million, and has a mortgage of 1,085,700. Other debts total $105,000. They spend $16,400 a month living, and net worth is about $300,000 – equal to just a year’s income. Fail.

Of course, if mortgage rates rise a couple of points over the next two years (all but certain), then these high-rollers lose their wheels. Not only will mortgage payments escalate, but the value of their property will fall. A 20% correction would reduce it to $1.09 million, completely wiping out their equity. If they sold it with a 5% commission, they’d be $50,000 under water, with a total net worth of $75,000. But I guess they could all move into the Boxster.

This week media celebrated in the Lower Mainland as property assessments soared, ‘creating’ millionaires. They cheered in Winnipeg as a fabricated Royal LePage house price report signaled higher prices on the way. In Toronto they feted  real estate board news that home values were romping higher. And in all three centres, family indebtedness increased, reliance on real estate was augmented, and risk snaked higher.

No wonder the week ended with a warning from the head of the nation’s bankruptcy agency. It echoed that of central bank boss Mark Carney. Mend your ways. Or you’re screwed.

It’s not easy. Or quick. It took us years to unwind the big life. Her three rules helped. Still do.

1. Consolidate.
2. Simplify
3. Be beholden to no one.

280 comments ↓

#1 T.O. Bubble Boy on 01.07.11 at 11:14 pm

That Mark Weisleder guy also wrote the Toronto Star piece in mid-December claiming that “it’s different here”, and that Mark Carney shouldn’t be worrying about a “US-style bubble” in Canada:

http://www.markweisleder.com/10moneyvillearticle1215.pdf

He seems to have written 50-100 “helpful” articles in the Toronto Star over the years, but his topics have become more and more like typical RE Association spam more recently.

#2 T.O. Bubble Boy on 01.07.11 at 11:20 pm

Garth – are you attending F’s big speech on “Controlling Spending”?

http://www.wilsoncenter.org/index.cfm?topic_id=1420&fuseaction=topics.event_summary&event_id=647710

(maybe this is actually a piece of satire?)

#3 First! on 01.07.11 at 11:25 pm

always wanted to be first.

That’s all

#4 Fractional Reserve on 01.07.11 at 11:26 pm

News from our neighbours to the south.
Tim Geithner has message for the 112th Congress: The sky really is falling.

President Obama’s blunt Treasury secretary has dispatched a doomsday missive to congressional leaders, detailing the very bad things that will happen to the country – a default and global economic cataclysm – if the GOP fails to increase the debt limit to $14.29 trillion this spring

#5 kc on 01.07.11 at 11:27 pm

Monthly net income

$16,400

Liabilities

Mortgage $1,085,700; loan from parents $95,000; line of credit/credit cards $10,280.

Total: $1.19-million

Losers…. payoff momsie and pops … Give yourselves a good reality check … 16K a month? down grade your style of living ….

The strange thing to this whole picture is… when you take a look at the monthly expenses, then look at the bank payments/taxes on a 1M$ home, then take into consideration the incomes… now put that into the average home prices in Van/Metro Van where the average income is peanuts compared to these folks…. doesn’t this just open the eyes and shout …. WTF???

#6 OttawaMike on 01.07.11 at 11:35 pm

Fluoride Greg was right all along:
http://www.azcentral.com/news/articles/2011/01/07/20110107water-flouride-levels-too-high-.html

#7 rosie on 01.07.11 at 11:46 pm

#4 Fractional Reserve.

TTT is a presidential appointment. He is saying what he must politically. In Japan it’s called Kabuki Theater, it has no real meaning. The U.S. cannot nor will not default on it’s debt. The world has already made that clear, it’s called globalization. Pay attention.

#8 CS on 01.07.11 at 11:50 pm

Regarding the couple in the G&M…40/34 making 3 large, owe the parents $95K and rocking a mortgage just north of a million: Pay back your parents first (with interest), ditch the McMansion and live within your means.

#9 Soylent Green is People on 01.07.11 at 11:54 pm

So the Harpers are Separated. It Was no Big Secret.

http://pushedleft.blogspot.com/2010/12/so-harpers-are-separated-it-was-no-big.html

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It makes one wonder though, if this story was so far off the Globe’s standards, how did it ever make it up in the first place?

http://thealbertaardvark.blogspot.com/2010/12/globe-and-mail-pulls-norman-spector.html

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#10 doh! on 01.07.11 at 11:58 pm

maybe I’ll be first some other time!

You’re quick T.O. Bubble Boy…….

#11 Pete on 01.07.11 at 11:59 pm

Wow I’m first to post.

#12 Peter Pan on 01.07.11 at 11:59 pm

According to another article written by Mark Weisleder “Our housing market to side step U.S. style bubble”, published December 15, 2010, he lists one of the reason why were so much smarter here:

“The differences between the U.S. and Canada can be summarized as:

American politicians encouraged banks to make it easy for consumers to buy a home. The banks ended up lending to people who never would have legitimately qualified for a mortgage. Basically, if you had a pulse, you got approved.

Government programs allowed buyers to get a down payment from the government as well. In other words, many bought properties with none of their
own money.”

Wow…

#13 Jose Goldstein on 01.07.11 at 11:59 pm

I’m wondering in what ways you believe the bursting of the Canadian housing bubble will be the same or different than it was in the US. If I understand it correctly, Canadian mortgages are recourse loans, while the great majority of US mortgages were/are not. Will that make any difference to how things unfold?

Asked and answered. No. — Garth

#14 LJ on 01.08.11 at 12:06 am

Yep, the couple mentioned in the article is toast. Never mind that the “liquid assets” mentioned are well over 50% in registered accounts that would take a HUGE tax hit if they were liquidated while the couple is still working.

They have also forgotten to use the TFSA – which the “financial planner” has conveniently forgotten about.

Childcare: $3270/month? That’s almost as bad as the half broke retired couple last week who spent $2100/month on travel.

Charity: $50 (generous…) Guess that they are the charity case for their parents.

Where do they find these people?

Oh yeah, they live next door to almost everyone….. Never mind the housing problems.

Have some more Kool-aid guys. You’re rich!!!

I think that a poster a couple of days ago nailed it by saying: “They borrowed the veneer of wealth.”

#15 Devil's Advocate on 01.08.11 at 12:07 am

Garth

Nice piece. It is easy to see that her three rules are the foundation of your philosophy. Good choice.

#16 Signpost in the bushes on 01.08.11 at 12:09 am

“Neither a lender nor a borrower be!”

#17 Bill Grable on 01.08.11 at 12:13 am

Canada’s GDP shrink puts us in league below ITALY.

The jobs are going, and people are so far in the glue, I don’t think the rise in prescriptions for sleeping meds and tranquilizers is any accident.

The Boomer that has been partying like it’s 1999, are going to be a very unhappy, and disgruntled lot – and they have no one to blame but themselves.

Being a Boomer myself – I am just horrified at what is going on, and don’t say that Mr. Turner and a lot of other dawgies didn’t warn ’em.

The writing is on the wall = B R O K E.

Freedom 55? Right.

Buy Kraft shares = Kraft Dinner sales are going to go to the moon.

#18 Nostradamus Le Mad Vlad on 01.08.11 at 12:13 am


“In minutes, it was fun no longer. It’s not easy. Or quick. It took us years to unwind the big life. Her three rules helped. Still do.

“1. Consolidate. 2. Simplify. 3. Be beholden to no one.”

Because you both took the time to see where you were headed, and most have forgotten the basics of taking a day or less to figure this out for themselves. That’s why they’re sheeple, and we’re not.

“Today so many need saving, that was called irresponsible lending.” — And borrowing, as it takes two to tango. As far as unwinding the big life, most now have no choice.

By letting themselves be dazzled by all the banxters’ small talk (where does their responsibility appear?), they have lost almost everything they used to enjoy.
*
#247 dark sad person on 01.07.11 at 10:02 pm

“. . . to get people to understand and accept that we can no longer support these wages and the current size of pensions even in the private sector-”

True enough — Pensions The Eurozone is beginning to steal them, Obama has made noises about 401Ks and IRAs, so what of Canada? Plus — Pensions One Not great when a person’s pension fails; it can lead to suicide.

First Bank Loses “Banks Lose Pivotal Massachusetts Foreclosure Case”

Life on Mars? Women are from Venus, the CPC is from hell, so men are from . . .

Currency Wars + QE = Inflation (maybe).

Fraudgate “A slightly different twist on pernicious fraud…” Plus — Falling Apart “But the notice was for a house Marconi had never seen — on a mortgage he never had.”

How To Sell GW Pic is good.

FFs “And JUST in time to distract the corporate media from today’s Massachusetts Supreme Court Decision invalidating all foreclosures whose mortgages were sold into mortgage-backed securities!” wrh.com. Boy oh boy, are things getting nasty! See previous links about banks losing.

Foreclosure Documents and a few other goodies.

#19 Aussie Roy on 01.08.11 at 12:18 am

Aussie Update

Louis Christopher, the managing director of SQM Research.

”The market is turning softer,” he said. ”We still haven’t seen the full impact of the interest rate rise in November.”

SQM released data this week showing 22.6 per cent more stock for sale in Sydney last month than in the previous December. Other cities had far more property for sale that month – Brisbane had almost 60 per cent more than the previous year, Darwin 57 per cent, and Perth 55 per cent.

”Stock on market measurements reveal a market that is significantly oversupplied in listings for most capital cities,” Mr Christopher said.

”We are deeply concerned about the situation in south-east Queensland and we now believe that Darwin is entering into a downturn.

”We believe that based on these numbers, house prices are likely to fall for all capital cities”

The shortage continues, the shortage of buyers that is.

DA you have a funny idea about retirement, do you really think us oldies just sit around in the rocking chair wiping away our spit and waiting for the grim reaper. – LOL. I retired at 57, travelled the world for 3 years, now at 69 I’ve never been busier, 1800ha of wine grapes, a staff of 3 to look after, not to mention the currency hedging (risk management) programes for more than 60 local growers. Then there is my consultancy work with a major winery, where I’m training the next group of risk managers, for some of us retirement doesnt mean doing nothing, its means doing what we want. It may surprise you to realise not all us oldies just spend our life savings in retirement, we can still make a comfortable living and gain wealth.

155 Mikey the Realtor on 01.07.11 at 1:54 pm

Just spoke to a guy in his early 20′s and the only thing on his mind is buying a house, forget education or anything else that matters. With this type of thinking royal lepage will be right, you heard it here first.

LOL – Bit like the shoe shine boy telling you to buy dot com stocks in the late 90’s. It called a mania, but let me guess you can’t see it, for what it is.

#20 Kevin on 01.08.11 at 12:21 am

Any article in the Globe and Mail about a couple’s finances always and I mean always, shows that the couple have the majority of wealth in real estate like the rest of Canadians.

Real estate assets comprised 38.3% of the net worth of Canadian households in 1999.
Real estate assets comprised 42% of the net worth of Canadian households in 2005.
Real estate assets comprise of over 48% of net worth of Canadian households in 2010
http://saskatoonhousingbubble.blogspot.com/2010/12/canadians-real-estate-wealth-vs-net.html

#21 Devil's Advocate on 01.08.11 at 12:22 am

BTW.. in keeping with the direction the last thread headed on the topic of retirement, got any idea what percentage of new entries to the field of real estate are retirees?

#22 BC Bring Cash on 01.08.11 at 12:25 am

May I quote from a book written by Carmen M. Reinhart & Kenneth S. Rogoff. The books title is THIS TIME IS DIFFERENT. Eight Centuries of Financial Folly.
I will quote just one paragraph. THIS TIME IS DIFFERENT SYNDROME. The essence of this-time-is-different syndrome is different is simple. It is rooted in firmly held belief that financial crisis are things that happen to other people in other countries at other times; crises do not happen to us, here and now. We are doing things better , we are smarter, we have learned from from past mistakes. The old rules of valuation no longer apply. The current BOOM, unlike the many BOOMS that preceded catastrophic collapses in the past (even in our country) ,is built on sound fundamentals , structural reforms, technological innovation, and good policy. Or so the story goes.

There you have it. 8 centuries of the same old crap. Read the book and see what you think. Sounds like the same old FOOLS PARADISE.

#23 Aussie Roy on 01.08.11 at 12:28 am

12 Jose Goldstein on 01.07.11 at 11:59 pm

You might want to google non recourse loan states US.

From memory only 9 states are non recourse and the biggest house price falls have been in many of the full recourse states. This is yet another pumped up stat which the media trots out in both our countries a simple google search provides you with the truth.

Many will point to the differences between markets to prove their point, where those without an agenda (seeking the truth) will look at the simularities, which there are many more.

Its not different anywhere (where there is a bubble) because its a global credit bubble.

#24 T.O. Bubble Boy on 01.08.11 at 12:42 am

RE: that Globe & Mail couple…

The husband is 40, and has all of $50k saved for retirement. That’s *3 months of expenses* with their current spending habits!

Also – how the hell can th G&M call that article ‘financial planning’? They are bascially saying to tweak their current finances, and everything will be fine. There are even comments from the “expert” suggesting that paying off the mortgage is 28 years is a great accomplishment… but, this fails to take into consideration that by this time the husband will be 68 years old, and the wife will be 62 and will have been retired for 4 years (the article states that the wife plans on retiring at 58). So, how exactly do a retired husband and wife come up with $7000/month in housing expenses?

If this is what passes as ‘financial planning’, the whole country is screwed.

#25 nonplused on 01.08.11 at 12:42 am

#7 rosie said: “The US cannot and will not default on its’ debt.”

Why not? They already have, at least partially, twice in the last 100 years. The first time was when they confiscated gold coin and then devalued the currency from $20/ounce to $35, which is a pretty big haircut for anyone who had cash. The second was when they took the dollar completely off the gold standard, this time stiffing external creditors.

And I think the relentless inflation since then counts as a 3rd time. Inflation is a scheduled default. There is no difference between having a borrower say to his lender “ok, but I’m only good for 98% of the money I owe you” and a government causing your money to loose 2% of its value in a year. In the case of persistent inflation at just 2% the money is almost completely worthless compared to its original purchasing power in just 35 years (inflation compounds). It’s no different than a borrower saying he’s going to pay you nothing now, nothing later, and in 35 years he doesn’t owe you any money.

We need to maintain the currency system, because its so dang handy, especially with the electronic part. But once the dust settles, cash is a very bad think to own long term. Even if you put $1,000,000 away in cash (assuming no interest) now for retirement in 20 years, 2% inflation every year on average would leave you with about enough money to buy a used Toyota Prius.

Don’t believe me? Ok, here is one example (play along folks even if it’s obvious): How much does a new 1968 Mustang cost in 1968? $2,800. How much does one cost now? $22,000 – $38,000 depending on options. How about a restored 1968 in original condition? Up to $40,000. So the fact is $2,800, which would have bought a nice car in 1968, saved in cash until now instead, will barely buy you a nice set of tires for THE SAME CAR now.

It’s a default, plain and simple. The plan (and it is a plan) is to redeem the debt later using dollars that are worth pennies compared to what they were worth when the debt was borrowed.

Everyone is in a heck of a pickle now. With bonds now paying less than inflation after taxes, someone who retires at 65 will have to burn capital or speculate successfully to have any income at all and will likely still be penniless if they live to 85.

Of course there is the Garth plan (Money Road) to get around it, as well as other options, but most people aren’t that savvy and will have all of their wealth confiscated by inflation. Luckily most people don’t have any wealth.

As for the couple in the story, well, history tells us that what they are doing is one of the tried and true methods that has worked in the past to beat the government at their own game. If rates were to stay this low for the foreseeable future and the central banks give us guaranteed inflation to go with the low rates, leverage up, baby! It’s the only way to win! No wonder people acted so recklessly. They had no choice.

There will be no US federal default. Get a grip. — Garth

#26 Not Fooled By Property Spruikers Hype on 01.08.11 at 12:44 am

Spruikers Song (Sung to Dolly Parton’s 9-5) Tumble outta bed And stumble to the kitchen Pour myself a cup of ambition Yawning, stretching, try to come to life, ….. Jump in the shower And my Heart Starts THUMPING Out on the streets MY PROPERTY IS SLUMPING And folks like me in a job from 9 to 5, ….. Workin 9 to 5 in a RUT to make a livin Barely gettin by Its all takin And no givin I never use my mind & I just plan to live on credit Its enough to drive me Crazy if I let it ____ Workin 9 to 5 not erming enuf to make a livin, You would think that I would some kinda of notion….. Want to move ahead But HOUSING MARKET wont seem let me,I swear sometimes that PROPERTY is out to get me Mmmmm…… I Had a dream & I’m watching them shatter as I slip down this down this property ladder, But Ive got dream they will never take away ,…… In the same SINKING boat With a lot of my friends Waitin for the day My shipl will come in And finally the PROPERTY tides gonna turn my And it’s all gonna roll my away, …… Workin 9 to 5 in a Dead End Job is no way to Make a livin, Barely gettin by, Property will be my haven, I must use my mind & get me even more CREDIT Its enough to drive you Crazy if you let it .. whoooo Oooh

#27 Burnt Norton on 01.08.11 at 1:00 am

Thx GT – today’s post is very helpful.

#28 kitchener1 on 01.08.11 at 1:03 am

Regarding Garth:

Seventy per cent of Canadians have no pension. There’s no justification of linking the demographic tidal wave we all knew was coming with pensionable government workers. Focus on the big picture. — Garth

I hear you, im not blaming the govt workers, they are just as much victims of bad policy as all of us are.

Problem is politcs is a short term game, just until the next election. Its all about selling the posistive spin- from both sides.

The soundbit sells and nobody bothers to read the fine print, like you proved with your post two days ago regarding the remax “survey”

Left or right of the spectrum does not matter at all. Look at Europe, its all in turmoil, regardless of political stripe of the parties. Current and past.

Everyone wants a free lunch, its all good, so as long as you dont take their lunch away.

I dont blame the grey haired posse for working longer, you got to do what you got to do, they took the bait, kept up with the jones next door and now there screwed.

Just saying that all of those jobs that boomers take in the service/retail biz, along with putting off retriement is another job that the 16 year old or 25 year old cannot take because it has yet to be vacated.

In the end we all get screwed just a little bit.

Devils Advocate, no I did not go to uni to work at Rona–LOL. Just saying that a dude that does not need a job to begin with is working it at the expense of some 20 year old who can;t get one. Times that story but 10’s if not 100’s of thousand and you get a serious ripple effect, but not the good kind.

#29 realityguy on 01.08.11 at 1:03 am

A little reality check. Although the edmonton press are saying what a great market edmonton is and will continue it rise.

A non real estate sponsored article says the complete opposite

http://www.troymedia.com/2011/01/07/alberta-economic-snapshot-for-the-week-ending-jan-7-2011/

#30 pablo on 01.08.11 at 1:05 am

Buy Kraft shares = Kraft Dinner sales are going to go to the moon.

At $9.00 for a case of twelve boxes, I wouldn’t bet on it, me; I’ll stick with the squirrel and mayo on toast.

Oh, Garth, nice pic; cute bear, that’s more like it; thanks.

#31 realityguy on 01.08.11 at 1:05 am

Here’s another edmonton article

http://www.edmontonjournal.com/business/Edmonton+area+house+prices+continue+slide/4068204/story.html

#32 Crash Callaway on 01.08.11 at 1:11 am

Not too many will be saved due to globally accepted and sponsored gambling addiction.
In debt up to their eye balls and others sitting on real estate that could set them free but why sell or adapt 3 simple rules to save your ass when you can spin the wheel for as long as you want.
And when rare moments of enlightenment creep into their lives and they ponder turning their life around a joke elf named “F” hands out frequent spinner points to keep them at the table.

How much is enough?
When do sane people cash in the chips and run?
Oh I forgot ya can’t expect people to sell off their McMansion & run to safe haven because they might miss out on a tupperware door prize yet to be won.
Gotta stick around for that!

Like the executives who earn millions yet steals paper clips & pens from the company.
Blind foolish greed combined with a “gotta have more” addiction.

Things will end badly for these lost souls.

#33 Hoof Hearted on 01.08.11 at 1:13 am

From previous post

“Seventy per cent of Canadians have no pension. There’s no justification of linking the demographic tidal wave we all knew was coming with pensionable government workers. Focus on the big picture. — Garth”

IMHO, focussing on the big picture will be exactly those parties that feel smug, who will be taxed to pay for the social services that will be required for those who for whatever reason don’t have a pension. Rich or poor, votes worth the same, which is the majority is the key.

One thing many don’t realize about previously smug OJ Simpson was that he collected a safe and secure NFL pension….that apparently cannot be confiscated in a lawsuit. (Ultimately Old smug boy got too smug and screwed himself…)

I say within 10 years the Gov’t will be forced into massive cuts in jobs, wages and benefits in the civil service. Gov’t is always on the look for money, and it will come full circle.

#34 john m on 01.08.11 at 1:16 am

Great advice your three rules Garth and an excellent post as always.Sadly so many people are beyond hope though,even in a booming economy (which ours is far from) living the high life on borrowed money and dependent on every nickel of their income to survive,the future spells disaster. How does one get back up when they are down so far? ……… and the very people who are supposed to be looking after the country have encouraged it….not with facts but outright dishonesty!

#35 Paolo on 01.08.11 at 1:17 am

Just more signs of the train wreck that is unfolding…

#36 Amarillo on 01.08.11 at 1:23 am

Part of the blame for public financial illiteracy, a good part, lays at the feet of the union-plagued public education system.

The teacher unions are in cahoots with the superintendants and the next-to-helpless school boards and therefore no meaningful change can occur.

‘Damn it, start teaching our kids the 3 R’s, financial literacy and public speaking’, roared the parent to the PhD-clad administrators in the university Education department.

But it was to no avail. The damned teachers union would have none of it.

#37 Hoof Hearted on 01.08.11 at 1:24 am

#181 realpaul – I have to fundamentally overall agree with most of your rantings.

I had two successful businesses and sold them out several years ago and i can tell you that with all the bureaucratic crap that one has to put up with for compliance and filings, etc. i think i would rather take a bullet than be back in business again.

Life is way way too short for the kind of gut wrenching complexity and risks required to be in business these days.

==========

Well said.

A private sector firm developed , recently launched and successfully landed a rocket capsule, all for the grand total of $800 Million.

Now, NASA is apparently crapping bricks. They can’t do it that cheap, it costs Billions of dollars for them to do the equivalent.

In the article ,one of their private contractors has plead for years that NASA cut back on the useless paperwork the private sector is forced to generate for NASA. Now, the U.S Gov’t is looking at NASA with a sharp pencil.

Sounds like a typical overbloated bureaucracy creating its own black hole aka demise.

#38 Patz on 01.08.11 at 1:25 am

Unemployment in BC just ticked north by quite a bit. Oh well, more time to shop around for a place.

#39 kitchener1 on 01.08.11 at 1:28 am

Just wanted to post one more comment that came up over the holidays and have yet to see it mentioned anywhere in the mainstream.

Across the pond, Europeans are up in arms about raising the retirement age from 58 too GASP 62.

Greece and France were looking a lot like post election Haiti was all over the govt wanting to raise geriatric age up 4 years.

Meanwhile

In Canada, never mind 58 or 62, the talk in the tundra is about working until 65 or 70 or 75

#40 GenXer on 01.08.11 at 1:32 am

A couple of thoughts:

Unbelievable story – the husband is 40 with a 35 year amortization on his mortgage? Where is he going to be working making 150k+ per year when he’s 75? The wife is in better shape, she’ll only be 70 when they pay off the house.

One comment on daycare costs – anyone who thinks daycare is an inexpensive proposition should give their head a shake. Daycare costs are enormous, and there is no income splitting for parents who would like to keep one adult at home, so the financial pressure to return to work is immense. You do get a tax credit for the outlay, but it has to be taken off the lower of the two salaries in order to limit the benefit. Compare that with seniors who are able to income split just fine – how does that make any sense?

The long term implications of these policies will be to limit the dollars that families are able to put aside for higher education. If these policies continue, in a generation’s time, our population will be much less educated and less able to compete globally. Of course, the boomers won’t be around at that point, so I guess they don’t really care too much.

On the topic of responsible lending, rather than change the rules to eliminate higher risk mortgages, I think it is time that F reduce the percentage of mortgage insured by the CMHC for ams over 25 years and downpayments under 10 percent. Rather than ruling them out, they could be brought under control by having the banks shoulder some risk. Dropping coverage to 90 percent would make the financial institution have some skin in the game.

It constantly amazes me that the banks are 100 percent insured on these loans. When was the last time you received a guarantee when investing? Why as an individual investor why am I taking all the risk when the banks are able to take none and walk away with billions in profits quarter after quarter?

#41 Victoria on 01.08.11 at 1:32 am

You forgot Big Hair.

#42 Dave in Victoria on 01.08.11 at 1:34 am

Hey Garth,

It would be cool if you augmented those three points in three separate postings. Or at least augmented in one.

I can guess what you mean by each but it’s only a guess, save for consolidate, but I’m sure it contains some nuances.

It would be nice to take the focus away from the print media nimrods for a little while.

#43 InvestorsFriend (Shawn Allen) on 01.08.11 at 1:35 am

The Globe and Mail couple can do better and are at risk if they lose job(s).

But as long as the jobs are there, thier biggest asset by FAR is the jobs – the stream of future cash from that.

They can turn things around in a big hurry if they want to. They should.

Being underwater on their mortgage will be annoying but far from fatal as long as they get cracking on paying the mortgage down fast using their big incomes.

It’s not low or even negative equity that kills. It’s negative cash flow that can kill if left uncured.

Zero equity combined with a $290k income would be better than $300k equity and no jobs and no prospects of a job.

At 30 my net worth was close to zero but I had a lot of education and a good job. At 50 I am debt free and net worth is well over the million mark and climbing fast. My job is still an important asset. My education and skills can easily earn me what I need until I choose to retire.

Get rich, and become financially independent, it is the sweetest revenge…

#44 Nostradamus Le Mad Vlad on 01.08.11 at 1:35 am


#6 OttawaMike — Agreed. Greg W. always posts good links.

#8 CS — “. . . ditch the McMansion and live within your means.”

Unfortunately, they have no means so wouldn’t understand what you’re saying. Great idea, ‘tho.

#17 Bill Grable — “Canada’s GDP shrink puts us in league below ITALY.”

See link below re: Italy as The Silent Elephant. I make my own Mac ‘n’ Cheese from scratch, with veggies, wieners, hot mustard and Cayenne pepper added in — way cheaper!
*
Obama brings in a new economic death squad to wipe out the middle class.

Five New GM foods.

Italy — The mouse that roared and US Workforce.

0:51 clip “This piece of shit cost $4 million a mile.” NAU. Plus — Obama trying to break the Teamsters’ Union by giving Mexicans free access.

2011 — Money becomes an endangered species. And yet . . .

Bernanke “As a nation, we did not create this dept. The government created that debt without our permission, and now that same government, which may not even have been elected by the people, expects us to sacrifice our lives to pay for the government’s mistakes.” wrh.com.

2:53 clip Flashback — “This should have been the economic scandal of the decade. How lucky for Rumsfeld that he chose to release this information just one day before 9-11 gave everyone in the media something else to talk about!” wrh.com. This is how govts. and the m$m work in collusion, to fool all of the sheeple all of the time.

Ten States want gold as part of a currency.

Uranium Did someone here say the price was going up?

#45 Carp Coyote on 01.08.11 at 1:46 am

I think the follow quotes from history are worth considering today:

“Never in the field of human conflict was so much owed by so many to so few.”

Winston Churchill

“If I owe you a pound, I have a problem; but if I owe you a million, the problem is yours.”

John Maynard Keynes

“A small debt produces a debtor; a large one, an enemy”

Publilius Syrus quotes (Roman author, 1st century B.C.)

#46 Hoof Hearted on 01.08.11 at 1:46 am

#254 ballingsford on 01.07.11 at 10:48 pm

I just watched Conspiracy Theory on the tube tonight about Global Warming, now known as Climate Change. The Kingpin is Maurice Strong. Making Billions and even Trillions off of it. Al Gore, the guy who can’t spell, is one of his puppets who is also making billions on the circuit with his Global Warming and/or Climate Change speeches.

=================================

Saw the same or similar one, hosted by EX GOVERNOR Jesse Ventura.

Sounded pretty good and very plausible.

Scientists and Politicians are on par with pimps. Too many people are falling all over themselves genuflecting on this Global Warming /Climate Change thing.

Al Gore should hand back his Oscar and his Nobel Prize for fraud, like Reggie Bush gave back his Heisman.

Economics and Science is too often denigrated to the level of voodoo and alchemy. When they say it ain’t about the money it is about the money. Gore spouting boogeyman fears like a petulant child” wah wah big bad G.W. Bush beat me out for President…waaaah.”

#47 April on 01.08.11 at 1:58 am

Garth, despite all this real estate pumping do you still see a 15% decline in canadian home values this year and especially in the Lowermainland of BC?

Correction is inevitable. — Garth

#48 Roial1 on 01.08.11 at 2:09 am

#19 Aussie Roy on 01.08.11 at 12:18 am
Hey Aus. Can you give me a hint as to the name of your Vinyard? I am a great fan of Aus. wine. Shyraz from just about anywhere and Hardy’s Riesling Gewerztraminer are my favorites.
The Black Swan of 2005 tastes like it was brewed in a chocolite factory. (To die for)
Loved finding places like Rutherglen and Perricoota.
They are not on our map over here.
Took some SUPER close up pictures of wild koalas at Point Otway while down there.
You have a great country.

#49 brent on 01.08.11 at 2:11 am

Looking to the future for house prices in Canada:

Here is a very interesting map showing the 32 cities with the largest price drops across the USA from 2006 (housing bubble peaked in 2005 in USA) to 2008:

http://www.latimes.com/business/la-fi-ghost-towns.eps-20110106,0,4631232.graphic?source=patrick.net#content

Looking at that map, and extrapolating to Canada, I would guess the biggest drops would be in BC (California/Florida equivalent), with the next biggest drops in cities that supply the Ontario manufacturing sector (Detroit equivalent). Cities that supply populations to work in the oil and natural gas industry should be hit the least (Texas equivalent).

It will be interesting to see what the future holds, and how prices here will fall in comparison to our neighbor to the south.

#50 An Cat Dubh on 01.08.11 at 2:19 am

According to the lame stream media and certain economists, the recession in Canada is over and all the jobs losses since ’08 have been restored. Try telling that to the manufacturing jobs that have been lost, never to return unfortunately. An $8-10 an hour job in B.C. isn’t going to cut it.

#51 realpaul on 01.08.11 at 2:33 am

I keep thinking about the old couple with the property tax bill of $6 500 that took nearly 50% of the old farts pension. Unfortunatley theres a lot of folks in this predicament. House rich…cash poor.

This 6 grand is the average for a SFH in Richmond….not like Grammy is living high on the hog. This is for a tear down with little of the modern features of newer construction. Most likely Grandpa has been mowing the lawn for 40 years or so.

With the truly ridiculous assesments for Richmond BC ( for example ( up 17%) on top of the previous assesment that was up as much ( along with a hefty increases for water, school, fire, sewage etc etc making the increases closer to 30%) these retired Canadians are being squeezed out of their homes by the ramping up of taxes.

Talk to any foodbank volunteer and they’ll tell you that its seniors and young families that form the largest demographic in that growing industry.

Here’s why……food costs have continued to escalate…doubling and in many cases tripling ( or more) over the past few years…but in the past year alone have increased a whopping 18% !!

http://oilprice.com/Metals/Commodities/Food-Prices-18.5-Percent-Higher-than-a-Year-Ago.html

So….we have the average Canadian who is stuck with a piss poor pension income…in an enviornment where costs are blowing up in his face….and the city comes along and sticks ‘it’ in.

Lets see…the official rate of inflation is 1.5% or less…but the tax assesments are adding up to 17% and food costs are doubling that????? It would seem that inflation on main st., is more like 2200%. Its no wonder why the old folks are crawling down to the food bank on empty stomachs.

The smarmy civil servant poster who bragged about feeling ‘mighty fine’ when he cashed his pension cheque is this blogs representative of the apex of arrogance when he said ‘the people I served were grateful’. I bet they were pal…..if they were like this old couple….begging for scraps…and you got to hand them out…what a winner.

BTW…these assesments represent hyperinflation in the making. The recent announcements about a pending recovery are all based on paper dollars flooding the system. This year the US will borrow .40 cents for every dollar it spends. Officially debt is 14 trillion…..critics argue its 20+ times more than that after the facade is stripped away from the ‘adjustors’.

Billions are being spent in an attempt to sway public opinion away from the obvious collapse. Year end book making has merely paused the flow of negative information regarding bank runs, sovereign debt, QE2.

And those billions are being ripped from the flesh of folks just like the old couple I just told you about……pitting one class against another. I think the old folks are seen as an easy target and thats why the finance department has gone after them so egregiously over the past five years. IMHO…..very soon they’ll be coming for the rest of us.

#52 Dan in Victoria on 01.08.11 at 2:53 am

4. Don’t own a boat.

#53 Utopia on 01.08.11 at 2:56 am

#193 It’s Time from yesterday.

“Re: Here’s Timothy F. Geithner’s letter to congress about potential US default on debt”

———————————————————

I owe you an apology. You were right. I have just been reading up on the details and this is one of the most worrisome things I have seen in a long time. I suppose I should say I am not really surprised…but I am.

They are actually talking openly of economic calamity, of financial collapse and of massive interest rates increases that would cause the US Government to default on it’s debt.

Hopefully you will forgive me for having doubted your post “It’s Time” but this is all pretty much over the top news that we usually only see on conspiracy sites.

Now, the madness has gone mainstream. Maybe I will buy a little more gold after all.

There is a 100% chance the debt ceiling will be raised. — Garth

#54 Two-thirds on 01.08.11 at 2:59 am

So, things in Edmonton are not so bad, right?

“First Foundation Offers Buyer Protection Plan to Frustrated Home Buyers and Sellers in Edmonton Real Estate Market
January 07, 2011 Financial News Subscribe via RSS RSS
(PRLEAP.COM) Edmonton, Alberta, January 7, 2011 – Edmonton’s First Foundation Residential Mortgages recently made the Buyer Protection Plan available for the first time in northern Alberta. An innovative solution, the plan is designed to make Edmonton’s struggling real estate market more attractive to buyers, sellers, and REALTORS®.

The Buyer Protection Plan (BPP) offers home buyers price protection; it covers up to 5% of the purchase price of a home over a 12-month period through a trust fund put aside by the seller. After 12 months, the values of surrounding homes are assessed by a third party. If values have dropped, the buyer is entitled to some, or all, of the fund.

First Foundation owner and broker Gord McCallum is pleased to offer the first of these kinds of services to Edmonton: “The BPP program was created to eliminate the downward spiral of sellers lowering prices to attract home buyers, and buyers interpreting price drops as a forecast of even lower housing prices in the future. All players in the real estate market will now have access to action-oriented solutions that address the soft market.”

http://www.prleap.com/pr/168201/

Applaud the entrepreneurial spirit, but yikes! Is this what it takes to sell a house there these days?

#55 Dan in Victoria on 01.08.11 at 3:01 am

KC from yesterday,
No plans for a garden here, might try for some tomatos on the deck.
Maybe some sunflowers on the side of the house for bird feed for next winter. I really like the little guys around the house.
As always salmon, halibut, prawns, dungeness crabs, maybe some sea bass next summer.
How much are you planting?

#56 The Original Dave on 01.08.11 at 5:27 am

@Greg from Oakville.
Hey, I share all of your opinions on flouride, frankenfoods, MSG, chemicals etc This blog attracts people interested in real estate and economics. Many people stick their head in the sand about their health, hence the lack of interest.
I get to work in health care and can spread the word and get paid for it at the same time. (people actually appreciate what I have to say because they came in asking for my help)
You are probably just beating your head against the wall trying to get people here to get as passionate about this topic as you are.
———————————————-

Hi Sue. Maybe if GregW didn’t come across as a machine, people would pay attention more.

How can someone start every single post the same way?

“Hi Garth, FYI article” It’s like it’s a computer generated message blasting information on this blog. There’s no engaging or interacting. He says hi and then posts a link to an article.

What exactly do you expect? I’m sure everyone does the same thing as me. In their mind they think “wow, this guy is nuts. Same posting style again” and then they scroll down to other comments.

#57 Nostradamus jr. on 01.08.11 at 5:33 am

Absolutely must read friends

from, Vancouver, the Geneva of Switzerland

snippet…

…””that Vancouver will look more appealing as people look for ways to get their money out of China.”
Hsu cites another factor that has the real estate industry on tenterhooks: the imminent doubling of requirements for investor and entrepreneur immigrant programs, raising minimum net worth to $1.6 million and minimum investment to $800,000. What will this change do to the supply of wealthy immigrants? “That’s the question everyone is asking,” says Steven Meurrens, the immigration lawyer.
Some 80% of immigrant investors are from Asia; at Immigration Canada offices in cities such as Beijing and Hong Kong, there are three-year backlogs of applicants who qualify under the old rules. Thus it will likely be years before the number of people arriving under the investor program dwindles. And as long as wealthy immigrants continue to arrive, pretty much everyone believes they’ll continue to buy homes here, rather than, say, invest in American cities where property is now much cheaper. “They’re here, not there,” says Hsu flatly. “They need a place to live.”
There’s also general agreement that a large proportion of Chinese immigrants won’t opt to rent instead of buying, even if the economics make more sense. “People in China always feel very insecure if they do not own their own house,” says Fang Chen. “Even those with a very low income will spend their savings to buy.” It’s a trait common to any country with an agricultural heritage and limited land, explains Tsur Somerville, an associate professor at the UBC Centre for Urban Economics and Real Estate. “There are some countries where the only collateral has been real estate.” Historian Yu even compares Vancouver real estate to a Swiss bank account—not for its secrecy, but for its rock-solid value and political peace of mind. The icing on the cake: Capital gains on a primary residence are tax-free in Canada.””

http://seenoevilspeaknoevilhearnoevil.blogspot.com/

#58 Canuck Abroad on 01.08.11 at 6:20 am

Hi Garth, I saw this article too and thought of you. Glad you caught it.

I had a similar epiphany about a decade ago, also age 40. Post divorce, carried on pretty much as before, till I had a good think about what the actual running costs totalled. It was shocking. Decided it was time to leave that life behind and forge my own path. Since then I sold my flat and a couple of trophy vacation properties (aka “money pits”) and basically slashed costs. Simplify, simplify, simplify has been my mantra. And it creates a lot of serenity and peace.

Yes I rent, but it is a VERY nice place. Yes, I drive a 15 year old car, but I only put on a few hundred miles a year on it. No more need for designer suits; I work at home now. At the age of 50 I was able to walk away from the daily soul destroying grind of my pointless job, and work from home managing my own portfolio. My liquid assets are in the seven figures, my pension plan is about the same size again, and I live way below my means.

Any regrets? None. Maybe this is not for people who worry about what the neighbours/relatives think, but it is perfect for me. If I want to take three months and do an expedition I can do it. I know you don’t approve of renting Garth, and this comment section is full of renter-haters, too. But believe me it can be a VERY liberating option.

Garth is absolutely right when he says consolidate, simplify and be beholden to no one. You will not believe how it can transform the quality of your life.

#59 SaraBeth on 01.08.11 at 7:35 am

$16,400.00 per month living expenses? What kind of “living” are they doing?

Damn… that just boggles the mind of this fixed income person.

#60 Calgary REality on 01.08.11 at 7:47 am

“It’s not easy. Or quick. It took us years to unwind the big life. Her three rules helped. Still do.

1. Consolidate.
2. Simplify
3. Be beholden to no one.”

Let me boil them down to 2:

1. Always save a small % of each dollar you earn to pay out debts, save for the future or a rainly day.

2. Appreciate the value of a dollar and spend accordingly.

Worked for us big time.

#61 sail1 on 01.08.11 at 8:34 am

“Synopsis: Housing markets are showing some improvement: we may be seeing a phase of
recovery from the payback period of the summer. Economic trends appear to be improving,
although bad data is creating uncertainty. For 2011, housing trends in the GTA (and elsewhere
in Canada) may be similar to recent levels. House values should be relatively stable.”

http://www.wdunning.com/docs/2010-12.pdf

Dunning ceased being credible some time ago. — Garth

#62 X on 01.08.11 at 8:43 am

Another article on Canadian debt loads:

http://www.moneyville.ca/article/918156–new-debt-warning-as-bankruptcies-stay-high

#63 nibs on 01.08.11 at 8:59 am

Weisleder lost his credibility some time ago making statements like this:

“Banks have made sure over the last few years that even if you qualified for a 1-year mortgage rate of 2.5 per cent, you had to have the ability to pay the 5-year rate, which was closer to 5.5 per cent, in order to qualify for the mortgage.”

Blatantly (and probably intentionally) false!

http://bit.ly/ibWD1m

#64 Renting in Rosedale on 01.08.11 at 9:15 am

Interesting Garth. Your comments resonate with us.

Sadly, the G&M couple are couple are very common here in midtown.

Once upon a time we were similar, but fortunately had more equity than these people seem to have. We cashed in in Feb ’08 and have been renting a similar home ever since. Such a great decision. Just agreed to continue renting for another two years which will make 5 in total, at which time all of our kids will have left the nest.

After that, who knows? If the market has corrected, might consider buying a smaller place.

By the way, from my experience there’s another aspect of living large that most of these Midtown types get caught up in — private schools for their kids. All of your neighbors kids go to UCC, Branksome, Havergal, RSGC so naturally yours go too!

Three kids in private school = $90,000 / year. Trips, special events etc add to the bill. Pressure to make big donations also. Even worse, after that investment you feel compelled to get them into an ivy league school. So you work harder to earn more money, but you never catch up!

Your advice about simplifying makes good sense, no surprise there!

#65 Moneta on 01.08.11 at 9:21 am

Our son was born with a disability in 1999. We had just turned 30.

The red carpet was pulled from under our feet and right there and then, knowing that he would probably never be truly independant, we sat down with a planner and made a will.

We concluded that we would take risks in our careers but not in our personal lives and to accomplish this our lifestyle was set up so we could live on 1 salary, the lowest one. The second one would be invested or used for fun when it made sense. When our employer would ask us to do something we did not agree with we could easily say bye bye.

It was tough in the beginning because while we were accumulating wealth, all our friends were living the big life and looking down on us, pitying us. They either thought we were cheap, pessimists or having trouble making ends meet. In today’s world, most people don’t get their first big shock in life until they are way past 40, so there were not very people out there in our age group that could relate to our situation.

What made the situation even tougher is that in the very beginning, while sacrificing relative to our friends, the savings did not make much of a dent, making it that much harder to stick to our plan.

But when we hit the first 100K, we were 100% committed. A decade has past since then. Time flies. Wow!

#66 Renting in Rosedale on 01.08.11 at 9:22 am

#43 InvestorsFriend (Shawn Allen) on 01.08.11 at 1:35 am

“Get rich, and become financially independent, it is the sweetest revenge…”

Shawn, revenge against whom?

#67 sail1 on 01.08.11 at 9:27 am

#62 sail1

Dunning ceased being credible some time ago. — Garth

One man’s opinion.

An industry shill. That is more than apparent. — Garth

#68 House on 01.08.11 at 9:34 am

57840+44000=101840

That means Grace and Cary will retire on about one third of their former income of 290000.

I thought the banks and the financial planners all say you will live in destitution if you don’t have an income of 70 % of your former earnings.

#69 Aussie Roy on 01.08.11 at 9:35 am

Roial1 on 01.08.11 at 2:09 am

Hey Aus. Can you give me a hint as to the name of your Vinyard?
Dont produce wine myself, most fruit goes to
http://jacobscreek.com.au/
http://www.peterlehmannwines.com/experience/The-Wines/barossa-excellence-collection

Its a great place.

If you ever travel here again, I’m in this region, in South Australia.
http://www.winediva.com.au/regions/barossa-valley.asp

#70 Oasis on 01.08.11 at 9:49 am

There is a 100% chance the debt ceiling will be raised. — Garth
____________________________________

and there is a 100% chance Bernanke will print every penny of money they need… print print print

#71 TS on 01.08.11 at 9:51 am

Thanks for sharing your ‘rowboat plan’ Garth…sage advice. My wife and I never ‘lived big’….but we did have a life altering experience about 30 years ago when my salary/commission structure was arbitrarily changed. This resulted in my income being cut 30% overnight. We had always lived within our means and that 30% income cut meant that for the first time in our married lives we were living under financial pressure from paycheque to paycheque. It took about 6 months to find a new job and restore my original income.

I was 28 at the time and my wife was 26. After I landed the new job we sat down to work out a plan to see how long it would take for us to be debt free so no one could ever put us through that financial hell again. The plan called for this to happen by the time I was 40 years old. It took years of discipline and focus, but three months after my 40th birthday we achieved our goal.

Since that time we NEVER borrowed money again for anything and NEVER had a credit card balance that we couldn’t pay off at the end of the month. Everything has been bought with cash we saved…including cars (leasing is just another form of borrowing so we avoided that like the plague).

We lived through the years of 18-20% mortgages (discovering that the best strategy during that time of sky high mortgage rates was to shorten the amortization schedule down to 10 years which saved thousands of dollars in interest cost), helped put three kids through school, did major home renos and repairs, went on some ‘trips of a lifetime’, and made a trauma-free transition from corporate life (I was downsized over 10 years ago) to our own business.

ALL of the flexibility and stress-free years we have enjoyed for the past 18 years were a direct result of that decision to become debt free.

‘Living big’ costs a lot more than a huge financial nut to crack every month. It costs you years of unnecessary stress, a loss of flexibility in your choice of jobs and career, and at the end of the day – steals your soul.

#72 kw on 01.08.11 at 9:52 am

I have no idea how anyone can live so large with monthly spending of $16400/ mo.
This is what our family has lived on for an entire year! I have commented on here before and said that we were aiming for 12K for the year but our son came back to live with us and we paid $1800 extra on the mortgage.

#73 Moneta on 01.08.11 at 9:52 am

What made the situation even tougher is that in the very beginning, while sacrificing relative to our friends, the savings did not make much of a dent, making it that much harder to stick to our plan.
———
Since many of them bought McMansions well over 400K, the 10%+ tax free annual increases in real estate made them gain wealth much faster than us without having to lift a finger.

Anyone how has built their wealth by saving over the last decade knows how hard it is to put 40K aside and to make it grow in these volatile markets. And it’s this experience that helps you understand how unreasonable the real estate gains have been. There will always be a few people who manage to get a free lunch, but 70% of the population getting one is ludicrous.

That’s another reason why they would look down on us. They were and are still convinced that our strategy is for losers.

What they don’t understand is that our strategy called for discipline. And discipline has huge impact over the long term.

#74 Nostradamus jr. on 01.08.11 at 9:58 am

U.S. Government To Reduce Fluoride Levels in Drinking Water Because Too Much Fluoride Can Cause Health Problems

“”Today, the U.S. Department of Health and Human Services (HHS) and the U.S. Environmental Protection Agency (EPA) announced a reduction in allowable fluoride levels in U.S. drinking water:””

http://seenoevilspeaknoevilhearnoevil.blogspot.com/

Nostradamus jr.

#75 Aussie Roy on 01.08.11 at 10:03 am

From Aussie housing blog.

“Aussie sheeple have been brainwashed their entire lives into thinking house prices only go up. Regardless of how hard they might find this to believe initially, the equity markets and the real estate markets are unconsciously determined by consumer sentiment, the unseen driving force that powers the economy. Interest rates….. irrelevant. Demand and supply….. irrelevant. Population growth….. irrelevant. Housing shortage….. no such thing!

Here in Australia, despite the ‘location location’ prattle from vested interest spruikers, real estate is nothing but a trap for the unwary. The supposedly ‘best located’ real estate near Sydney’s stunning harbor foreshores crashed 75% in the late eighties and early nineties. Although it’s clear to the even the most diehard one-eyed permabull that the Australian economy is again under serious threat, hardly any of them can even conceive of real estate values falling very far in this country. And why? Because they never watched it happen before! (how many saw 50 percent crashes in the ASX before the GFC??)

As I will demonstrate, Australia’s real estate boom was the most excessive in the whole world, rivaled, but not beaten, only by the Irish and Spanish booms. The bust that’s coming, and boy is it coming, will be so much more extreme and destructive. It will destroy wealth for generations! Recent studies by renowned and well respected international property research group Demographia demonstrated Australia has the most expensive houses in the entire planet relative to income! But still the spruikers will tell you there’s nothing to see here, it’s all good, no bubble here, mate. Damn!

Naturally good old CBA ‘economist’ Savanth Sebastian was trotted out to ‘debunk’ the demographic ‘nonsense’. He insisted falling mortgage rates and the 1st home VENDORS grant would prevent the housing collapse here (whoops he forgot to mention the ‘shortage’ silly lad). Clearly he’s never been to Japan recently! Has he heard the phrase ‘kicking the can down the road’?

If the sheeple wish to keep their faith in the Earth being flat, the sun going round the Earth, and house prices never falling in Australia, then they’ll believe any old garbage fed to them by the mainstream media ‘economists’. Sure sure sure, Australia can’t suffer the same fate as as every other property bubble in the world. We’re different here. We’ve got kangaroos!

Real estate markets in the United States, Ireland, Spain, Japan and United Kingdom plummeted precipitously. The reason the spruikers say it can’t happen here? There’s a shortage of houses in Australia. No wait, not just a shortage, make that a ‘critical shortage’. Bah! What else, oh yes interest rates are variable and we ‘don’t have subprime’ (tell that to the FHBs with 100 percent loans) and wait there’s more, everybody here wants to follow the ‘Australian Dream’. Yes it’s oh so different here. Any readers from Japan will at this point be rolling on the ground in stitches.

If you project Australian real estate values using Elliott Wave analysis (as best as possible given the limited availability of accurate property data) we can clearly show property values must revert to at least 1992 values. This means a drop of minimum 50 percent from recent all time peak bubble valuations.

Does it sound so impossible? How impossible does it sound for house prices to go up 50 percent? That’s what the spruikers tell us will happen. Property always doubles they say, every 7 years without fail. Already some of these ‘expert’ spruikers are harping on about the ‘bottom’ of the market being reached, and what great a time to leverage up and take advantage of this ‘buying opportunity’. Believe it at your peril!

None of these so called ‘fundamental’ factors (like the legendary ‘shortage’) has anything to do with what forces up real estate prices. As with all markets, property prices are powered by sentiment, the unconscious urge to be the lemming, follow the herd….. jump off the cliff.

Do you really think property prices in Australia can go against the global trend? Japan. UK. USA. Spain. Ireland. In every country with a real estate bubble the bubble popped. It wasn’t different there. England thought it had a shortage too. Until it didn’t. America had the great ‘American Dream’ until the dream morphed into a nightmare and American property owners woke to the realization they just hocked themselves to the eyeballs for nothing, a wasted dream, a pipedream.

Only recently our corrupt Government and their ill-advised advisers told us Australia’s ‘strong economy’ would save us from any downturn or real estate correction. When the GFC was staring them right in the face they said, no worries here, we’re Australia, we’re different, take this $1000 cheque this $21,000 and go buy stuff on debt. Any old stuff but especially houses. Bid them right up. It’s your debt and ours. Debt is good. No worries, mate.

But now what’s happening. China is stumbling. The emperor has got no clothes. The baltic dry index is at two year lows. Housing stock is building. Nothing is selling. Vendors are panicking. Interest rates are rising. But still the mainstream ‘economists’ are telling us not to worry, trying to prevent us from thinking about what’s really happening. Hiding the fact we’re at the beginning of the biggest real estate downturn ever to engulf Australia. Yes you heard me right, the beginning, not the end.

One year ago there was utter denial the housing market was in trouble at all. Now the realization is starting to dawn on some smarter thinkers that something incredibly serious is underway, but as usual their belief (faith?) is that they can manage the fabled short lived ‘soft landing’. Well good luck with that is all I’ll say. The larger the boom, the larger the crash. The real estate boom that started in the late nineties began long and slow and over its course turned into the greatest housing bubble the world has ever seen. This bust that’s unfolding will be exactly the same. Hold on to your hats real estate speculators. As the year unfolds you’ll come to realize real estate in this country is dead for a generation or more. This bust will be a doozy”.

Personally I still wonder with such strong faith in housing whether we Aussies might just have 1 more go at inflating the bubble before it bursts (1 more new high in the private debt to gdp ratio). I hope not but it wouldnt surprise me. Whenever it happens its going to be messy.

#76 allister on 01.08.11 at 10:15 am

#54 Utopia

Garths right, a raised debt ceiling will happen. This has been going on for 5 decades at least.

The correct solution would be to cut gov waste, but thats not on the table and never even considered.

So congress has a one track mind – inflate forever, until outside forces will not longer accept their currency. The world is already awash in US dollars that are sloshing around the globe like jello on a plate. Nobody knows what to do with them. As I see it, its playing russian roulette with the currency.

The debt may have already past the point of no return.
As a test case, Japans debt will likely hit the wall first.

#77 bullion.bunny on 01.08.11 at 10:35 am

#163 Cheerup on 01.07.11 at 2:29 pm

Hey Realpaul and Bullion Bunny,
The vast majority of people I serve are grateful.
But I will think of you and smile when I deposit that pension check

And as a 4th generation BC resident…
You are always welcome here.
Don’t hate me because I’m beautiful…

————————————————–

I do not hate anyone, even Garth! Once again my comments have been misconstrued and twisted. Here is my comment from 2011/01/05, lets review for the record!

http://www.greaterfool.ca/2011/01/05/how-not-to-get-ahead/#comments

#197 bullion.bunny on 01.06.11 at 2:47 pm

#182 realpaul on 01.06.11 at 2:00 pm

One more ‘civil servants eat babies’ posts and you are outta here. — Garth

Realpaul, you have to get over this “hate on” you have for civil servants. It’s getting kind of ……old. The civil servants we have are the finest men and women anyone could ask for. They are here to help you in every way possible to the highest level and I’m not being sarcastic! Your job is to ask the hard questions of all these fine men and women. Just have a look at the criminal code; it’s full of protections for the individual! Try and find this anywhere else including the U.S of A.
Those who do not exercise their rights have none.
Your job is to be responsible and always ask the “right” questions. It’s more powerful than you can ever imagine.

Listen to this; it will put everything in perspective.

http://www.creditorsincommerce.com/

The point I’m trying to make here is simple. You cannot spend more than you make, this includes government. Most public pension funds are now significantly underfunded! The public purse is stretched to the limit and it’s time to start an open and frank discussion about affordable service levels. The results of “kicking the can down the road” can be seen in the U.S. of A. Massive pension defaults leaving some people destitute, is that really fair? No, so here is the choice. Short term pain now by cutting back government spending for a long term gain or continue with the status quo and suffer the consequence.

“Sooner or later everyone sits down to a banquet of consequences.”

Treasure Island author — Robert Louis Stevenson

Take your pick. So enjoy that cheque while it lasts, we all know where this is going to end.

P.S. Yes Garth, hold your breath. I know the response we can always raise taxes. Sure and all the productive people can also leave the country leaving you and the other geezers to freeze in the dark.

I tolerated you until you turned prickish in the last sentence. Bye, bunny. — Garth

#78 t f on 01.08.11 at 10:38 am

Garth
There is a gap in your archives. Missing many 2010.

This site suffered a nuclear attack which destroyed archival content. — Garth

#79 bullion.bunny on 01.08.11 at 10:40 am

#163 Cheerup on 01.07.11 at 2:29 pm

Don’t hate me because I’m beautiful…

One last thing, I had a place in B.C for ten year. I loved it! Great place to unwind after missions. Sold it in 2006, still miss the place but not the monthly bills. Renting is cheaper and has been for some time now.

#80 BDG-YYC - on 01.08.11 at 10:53 am

#48 squidly77 on 01.08.11 at 2:02 am

Further tightening of mortgage rules would have other far reaching consequences for the economy. It risks causing a home price correction, a drop in the net worth of Canadian households, lowered economic growth and reduced tax revenues. Consumer confidence would be damaged, labour mobility would be impeded, and unemployment would stay elevated.
______________

That looks about right to me. Yup we’re pooched!
Gotta give the guy credit for figuring that much out.

Cheers

#81 Herb on 01.08.11 at 10:56 am

In fairness to the “fluoride guy” I once compared to General Ripper (“to protect my precious bodily fluids”) of Dr. Strangelove, here is a brand new link that squarely backs him up –

http://articles.mercola.com/sites/articles/archive/2011/01/08/warning-fluoride-in-your-water-will-lower-your-childs-iq.aspx

The first link at the bottom there has a Canadian flavour and summarizes the case against fluoride –

http://articles.mercola.com/sites/articles/archive/2010/12/16/canadians-vote-against-fluoridated-water-supplies.aspx

Having posted all that, personally I suspend judgment either way until I figure out cui bono. With claims and counterclaims, the decisive point for me will be who profits by pushing fluoride, and who profits by removing it. One clue: dentists profit from filling cavities, not by preventing them, so why would they be in favour of fluoride?

And now back to politics real estate.

#82 Utopia on 01.08.11 at 11:18 am

.
On January 7 2011, Ben Bernanke appeared before the US Senate Committee on the Budget. He made some very candid statements that are worth noting.

After reading Timothy Geithners letter of yesterday amongst many other comments from Legislators in the US, I think it is fair to say that US politicians, lawmakers and the Fed have jontly arrived at the same conclusion.

US debt is reaching unsustainable levels and far reaching, even severe consequences are now openly being acknowledged and contemplated. Few are making any attempt anymore to deny the obvious nor sweep the problems under the rug.

I think it is important that we all keep ahead of the developing problems to our South as what happens in the US will also have consequences in our country. I am not just talking about housing anymore but rather all aspects of cross border trade, potential impacts on our currency, employment levels and of course on national revenues.

Some say a US default on it’s debts is unlikely to ever occur. Others contend it is nevitable and cannot be avoided. Incredibly, Tim Geithner yesterday openly speculated on the possibility of a US financial collapse if the debt ceiling were not raised.

Pretty strong words for someone in his position. I wish it was all just rhetoric and drama. Sadly it is not and I think it is important that we listen to these words now as early warning signs of what is to come.

Think of it as “the writing on the wall”.

The following is a small excerpt from Ben Bernanke’s Testimony yesterday before the US Senate Committee. You be the judge of how serious the situation in the US has become. Keep in mind here that he is discussing a projection that looks two decades into the future but is on track to be totally unsustainable well before that time.

“……..federal debt held by the public is projected to reach 185 percent of the GDP by 2035, up from about 60 percent at the end of fiscal year 2010.

The CBO projections, by design, ignore the adverse effects that such high debt and deficits would likely have on our economy. But if government debt and deficits were actually to grow at the pace envisioned in this scenario, the economic and financial effects would be severe.

Diminishing confidence on the part of investors that deficits will be brought under control would likely lead to sharply rising interest rates on government debt and, potentially, to broader financial turmoil.

Moreover, high rates of government borrowing would both drain funds away from private capital formation and increase our foreign indebtedness, with adverse long-run effects on U.S. output, incomes, and standards of living.

It is widely understood that the federal government is on an unsustainable fiscal path.

Yet, as a nation, we have done little to address this critical threat to our economy. Doing nothing will not be an option indefinitely; the longer we wait to act, the greater the risks and the more wrenching the inevitable changes to the budget will be”.

The full text of Ben’s speech is available here……..

http://www.federalreserve.gov/newsevents/testimony/bernanke20110107a.htm

#83 boomer62 on 01.08.11 at 11:23 am

#59 Canuck Abroad on 01.08.11 at 6:20 am

I could not have said it any better than you did…kudos to you and everyone else who has achieved this goal.

Its much better to have the bank working for you than vice versa. Mortgage defaults are not good for anyone, especially bank shareholders and tax payers.

#84 Zaza on 01.08.11 at 11:37 am

Actually 11 out of 14 C areas saw price declines in 2010
http://media.thestar.topscms.com/images/d0/40/1b4d614640a18de31c2cf8bba184.jpeg

#85 John_in_Jims_Riding on 01.08.11 at 11:42 am

Hi Garth,

I read The Star yesterday, saw that article and had a vivid image in my mind of you rolling your eyes. Have you ever read through their “Moneyville” section on-line? Honest to your chosen deity, if you follow their advice you are guaranteed to be destitute by the time you are 50. I have NEVER read such a collection of bad advice in my life. The day before one article suggested you have ALL the companies you deal with deduct what you owe them automatically from your accounts and then deal with any discrepancies later? Needless to say this woman was pilloried in the comments section. Where do they find such dumb “reporters”?

#86 Devil's Advocate on 01.08.11 at 11:48 am

I dont blame the grey haired posse for working longer, you got to do what you got to do, they took the bait, kept up with the jones next door and now there screwed. #28 kitchener1

Most are going to work because they want to keep active not because they have to. I know several teachers who receive a hefty pension and are working, not because they have to in order to make ends meet but because they have seen what happens to those who don’t.

This begs the question; why sacrifice youth saving for a decrepit future? Youth is wasted on the young only because older folk have the experience to know that, given the opportunity to do it over, they would treat it with more respect. Well there is a lot of truth in saying you are as old as you feel.

Is it so irresponsible to spread “living life” out evenly over the term of the life. Understandably we don’t know how long we are going to live, if we did it surely would make retirement planning a whole lot easier and I would not be thinking the way I do on the subject. But that we do not know when things are going to go so terribly wrong is good reason to live it up today, within reason of course.

Devils Advocate, no I did not go to uni to work at Rona–LOL. Just saying that a dude that does not need a job to begin with is working it at the expense of some 20 year old who can;t get one. Times that story by 10′s if not 100′s of thousand and you get a serious ripple effect, but not the good kind. #28 kitchener1

So what’s the solution? Are we going have government tell us who can work and who can’t work? If so next they will be telling you what job you must take.

Ever been to Cuba? Cuba is like Mexico but with a Frontal Lobotomy. Why? Because it’s a communist country where people are put to work not so much where they choose as where they are told. It disenfranchises them not just of right to vote but free will and enthusiasm. Yes they do their jobs and generally very well but not very enthusiastically because it is not their passion.

Been to the Dominican Republic? Now the Dominican Republic is like Mexico but on steroids. That is a free society, so much so that the laws of the road appear but a loose suggestion of how to conduct yourself while driving. Driving in Dominican is like walking on a crowded New York sidewalk. Yes you will get there but the chances of bumping into someone along the way are pretty good. There the worker are enthusiastic but not necessarily because they are doing what they want. In Dominican Republic workers incentive and enthusiasm comes from the will to survive in a competitive marketplace. You choose to work or your life sucks. There is no social safety net the likes of that in Canada. You find a job or create one and they get creative in Dominican walk the streets of Puerto Plata and you will soon learn of what I speak.

The jobs Canadian seniors will take will not be those young university grads will want, nor will they be the ones able bodied young labourers will want. The jobs Canadian seniors will take will be the ones the young don’t want that seniors are willing to. In that they might just be a saving grace to a good many employers who otherwise will find it difficult finding employees. A good many of the jobs seniors will take will be jobs they themselves create.

Want to blame someone for taking jobs away, blame the automated tellers at Home Depot and Canadian Tire. Now there’s a ripple effect. ;-)

#87 Cory on 01.08.11 at 12:02 pm

When you say “Be beholden to no one”, we have lived like this for many years of our adult lives, the wife and I. I have never understood why people are ok with banks and employers controlling everything one does because of debt. I watched my father do it. Sick to his stomach as he went to a job he hated. But hey, the house and truck looked good.

I read a book written by Ben Franklin in 1757, called The Way to Wealth. Same things were happening then as now. Debt being the prevailing theme. Going hungry while you wore a brand new coat you just bought. So, it has been going on for awhile.

I agree 100%. To re-phrase your comment… “never let anyone (banks, employers, material goods) own you.” and sleep well at night.

#88 Devil's Advocate on 01.08.11 at 12:07 pm

#83 Utopia on 01.08.11 at 11:18 am.

On January 7 2011, Ben Bernanke appeared before the US Senate Committee on the Budget. He made some very candid statements that are worth noting.

All it means ‘Topi’ is that the rules of the game may change. Actually the rules of the game won’t change so much as the game might change. Be it the U.S., be it Canada, be it Cuba or be it the Dominican Republic people keep keeping on. That’s what we do. We adapt.

Things might get even more challenging for a while. I suspect that is why Garth lives in a bunker and drives a Hummer with a gun rack. Probabilities and being prepared…You know… insurance. Do you have house insurance? What is the actual probability your house will burn down. Minimal but apparently worth paying those insurance premiums to cover you in the event it does happen right?

So if you honestly believe there is a good chance it (a US default on it’s debts) might happen and fear the consequences then take measures to insure yourself in some way against it. Maybe that is why Garth has a gun rack. Maybe that is why I am into physical fitness. Maybe that is why some buy gold… figure out what works for you.

In the meantime things are keeping on and I’ve got real estate clients I need to service and that does not mean telling them the game is about to change. I thought the game was about to change somewhat a couple years ago and it didn’t so much as much as it did. We’re still playing the same game which appears to have a number of innings yet to go.

Batter up!

#89 Mikey the Realtor on 01.08.11 at 12:11 pm

This couple is foolishly squandering their money and need something called ‘forced’ savings. They need to get rid of their small house and pick up something in the $2mil range, their housing costs will be more but their savings will increase as well. Later on they can sell their house and by something for half its value and pocket the rest for retirement money.

This is the tactic that most Canadians use, they save nothing and put everything in their house as that is their ‘savings’, this info has been confirmed and brought to you by your local RE board.

#90 Devil's Advocate on 01.08.11 at 12:13 pm

#77 allister on 01.08.11 at 10:15 am#54 Utopia

Garths right, a raised debt ceiling will happen. This has been going on for 5 decades at least.

” I promise myself that I WILL QUIT SMOKING… after this last one” ;-)

#91 vic_guy on 01.08.11 at 12:23 pm

@ #79 tf :
For missing 2009 Greaterfool.ca archives the waybackmachine has some pages that might provide posts you’re interested in.

E.g. http://waybackmachine.org/20090101000000*/http://www.greaterfool.ca

#92 Utopia on 01.08.11 at 12:23 pm

#54 Utopia

“There is a 100% chance the debt ceiling will be raised. — Garth”
———————————————————-

Exactly. And that is both the problem and the solution, is it not? In the case of a double-dip recession and if GDP were to fall in the US then the ratio of debt to GDP would be even more exaggerated.

The debt always lives on in the absence of adequate revenues to support that debt. Housing is a perfect analogy to national indebtedness and from that perspective we can easily see how debt strangles both family finances and an economy that is stretched beyond its ability to repay its obligations.

If we have indeed reached the point where a failure to increase the debt ceiling suggests a financial collapse then there is no way forward but to keep increasing the ceiling despite the growing risk.

And an eventual default is then both guaranteed and inevitable. Maybe not this year or even in ten years but the day of reckoning is coming. Japan as you know is at 200% debt to GDP now without having defaulted. They had a high level of persoanl savings rates in the past though that have insulated their economy until now.

We don’t. Nor does the US.

#93 Gord In Vancouver on 01.08.11 at 12:29 pm

B.C. unemployment rises

……while the rest of the country gained jobs. Greatest place on earth?

http://www.cbc.ca/canada/british-columbia/story/2011/01/07/bc-unemployment-rate.html

#94 Gord In Vancouver on 01.08.11 at 12:30 pm

Thanks for the great post, Garth.

#95 jess on 01.08.11 at 12:36 pm

“overbloated bureaucracy “! ?????

This adjective trumps yours “STAGGERING” and isn’t this a measure of the known knowns

Economists say official estimates are far too low
· New calculation takes in dead and injured soldiers

February 23, 2008

The three trillion dollar war
The cost of the Iraq and Afghanistan conflicts have grown to staggering proportionsJoseph Stiglitz and Linda Bilmes

#96 Aussie Roy on 01.08.11 at 12:37 pm

I thought some may find these interviews of interest.

5 thoughts on what may be ahead in 2011

Mish talks about housing in Canada and Australia.

Audio and text files

http://commoditywatch.podbean.com/

Mike ‘Mish’ Shedlock joins us to outline his thoughts on 2011

Listener favourite James Turk on 2011

Michael Hampton, trader and investor, aka Dr Bubb is back to discuss his outlook for 2011

Bulls And Bears 2011 Dominic Frisby talks to Bob Hoye

#97 boomer62 on 01.08.11 at 12:37 pm

Statistics Canada 2001 to 2006 Home Ownership vs Rental by Municipality for anyone interested.

http://www12.statcan.gc.ca/census-recensement/2006/dp-pd/hlt/97-554/T805-eng.cfm?Lang=E&T=805&GH=3&GF=0&G5=1&SC=9&RPP=100&SR=601&SO=0&O=A&D1=2&D2=1

Next Census is May 2011.

#98 jess on 01.08.11 at 12:45 pm

#87 Devil’s Advocate – Incentives?

the theory of rats
theory of one price PPP
Wage not inclusive

http://video.nytimes.com/video/2010/12/11/world/asia/1248069362444/china-s-ant-tribe.html
a finance degree, recruiters told him, was useless because he was a “waidi ren,” an outsider, who could not be trusted to handle cash and company secrets.

When he finally found a job selling apartments for a real estate agency, he left after less than a week when his employer reneged on a promised salary and then fined him each day he failed to bring in potential clients.

China’s Army of Graduates Struggles for Jobs
Published: December 11, 2010

#99 Utopia on 01.08.11 at 12:53 pm

#77 allister on 01.08.11 at 10:15 am
#54 Utopia

Garths right, a raised debt ceiling will happen. This has been going on for 5 decades at least.
———————————————————-

100% agree Allister. Both you and Garth are correct here and I myself have no doubt about the debt ceiling being raised as it has been many, many dozens of times in the past. My concern relates to the inevitable outcome of that practice some years down the road.

On the issue of US dollars held overseas we need to keep in mind that China, Russia, Brazil, India and many other countries are now in the process of formalizing agreements to trade in their own currencies and therefore to short circuit the use of the US Dollar as the worlds single reserve currency.

OPEC and many other oil producing nations want to break the pricing of energy as calculated in US dollars and have wanted to do so for some time. This is also a very real and evolving scenario.

This is not conjecture. It is happening now.

Should dollars ever flow back into the US economy as a result of dumping (expected) then we can expect serious consequences and very likely a hyperinflation to result on this continent. This is NOT out of the question any longer.

You may be correct that Japan will be the worlds first major economy where it’s currency hits the wall and splatters due to extreme national indebtedness. I have speculated on this myself for quite some time now. If and when that event occurs I believe that the outcome will result in a levelling of the system everywhere, a credit collapse that affects every nation on the plant.

None would be immune to such an implosion in the currency of the worlds third largest economy and the impacts for all could be devastating.

#100 Hoof Hearted on 01.08.11 at 12:54 pm

#58 Nostradamus jr.

Yes, that was an excellent article;

Much we already knew, the rest filled in the blanks.
The idiots in BC have effectively geared the local economy to a great unknown…offshore money being laundered here through a variety of means, much of it Real Estate.

The idiots in office have basically allowed the local economies to fold, and the economy is based on this immigrant investor scam whereby they socalled”invest” certain amounts….park the family here, go back to Asia , earn a living there and pay lower income tax .

They simply double dip…and take advantage of the capital gain structure here. I don’t know why CRA doesn’t audit many of these Principal residence claims, I’ve seen the same old tricks used over and over for fake residency at empty homes.

QUOTE:
“UBC geographer David Ley has attempted to address the question of “Who’s buying these places?” in a different way, checking sales data for Vancouver neighbourhoods against variables like interest rates, unemployment levels and house construction—none of which correlated well. Instead, the strongest indicators of price movement were related to international investment and immigration. The arrival of other Canadians from elsewhere in the country actually dampened prices. The same effect showed up when Ley widened his lens to Greater Vancouver: The highest values occurred in areas with high immigrant populations and a predominant Chinese ethnicity”.

Ironically, the last news in the last few weeks has shown a number of residential fires where some people had died. These aren’t luxury homes, but places low income people are forced to live. Now the Cities are deciding to clamp down on other code violation buildings on their “list” . More people displaced.

This is an internal diaspora, and people had better wake up. I am not a left winger, and I’m not here to subsidize the a-holes at the top, elected or elite, that have effectively sold out our futures and those of future generations.

Collapse or Revolt, take your pick.

#101 Bill Muskoka (NAM) on 01.08.11 at 12:57 pm

Important decision wreaks havoc on bad paper buys.

Banks Lose Pivotal Massachusetts Foreclosure Case

#102 dd on 01.08.11 at 12:59 pm

#3 First!

…always wanted to be first. That’s all…

U got bronze.

#103 dd on 01.08.11 at 1:02 pm

#7 rosie

..The U.S. cannot nor will not default on it’s debt…Pay attention..

The US has to buy its own debt (QE) because there is not enought demand/investors. They have aready defaulted. Pay attention.

#104 Kevin on 01.08.11 at 1:03 pm

Maybe I am writing about subprime in Saskatoon too much or maybe not.
I am sure there are hundreds of developments like this around the country funded in total cooperation by all levels of Government and guaranteed by our tax dollars.

From Buffalo Ridge Developments:
“FREE Down Payment of up to $10,000
To be eligible for the 5% funding there are 2 requirements:
Total household income must be less than:
$52,000 for families with dependents
$44,500 for singles and seniors
You must be able to qualify for a home mortgage.

What’s the Catch?
There is no catch!”

http://saskatoonhousingbubble.blogspot.com/2011/01/subprime-is-alive-and-well-in-saskatoon.html
Subprime is alive and well in Saskatoon part 3

#105 dd on 01.08.11 at 1:06 pm

#25 nonplused

…There will be no US federal default. Get a grip. — Garth…

BS. Why to you think the Fed is trying to inflate? If they don’t the US is toast.

There will be no federal default. — Garth

#106 Got A Watch on 01.08.11 at 1:19 pm

If you just remember that pretty much every word printed or spoken in the MSM (“Main Stream Media” aka “Lame Stream”) is a lie, a distortion, an evasion, or at best some sort of cooked up half-truth designed to put a ‘positive” spin on the facts – you’ll be fine.

That’s why people are getting most of their real hard information from the internet today, on Blogs like this one – because otherwise you’ll never see it in the MSM. It is a total lack of credibility. It is the reason why younger people get most of their “news reporting” from Comedy shows like Jon Stewart’s “Daily Show” (most trusted and credible source, according to recent polls) – because he tells it as it is really is (on most issues), and they know everything the Government etc wants you to “believe” is just propaganda that bears only a passing relation to the real facts.

Reggie Middleton of ‘Boom Bust Blog’ (a superb forensic balance sheet analyst, and very smart guy) has had a couple of posts recently that spell it out:

The Face Of Media In 2011 Is Not What What Is Being Marketed, But What You Actually Use

“…Back in the days, they were able to make fatter margins because there were significant barriers to entry in distributing content. Those who owned or controlled the distribution channels, owned or controlled the revenues – nearly regardless of the quality of the content. This was true for print, radio, TV broadcast, etc. Now, with the advent of the web and frictionless distribution, they have untold competition for content, which quickly commoditizes it. In addition, aggregators with difficult to replicate technology platforms such as Google, further commoditize the content, and remove the power of brand from it. Content vendors have been complaining across the board that they are having problems charging for content, and the ad model often doesn’t generate the revenues to keep the operation afloat, much less profitable. The results??? Massive and serial bankruptcies/insolvencies across the board.

Well, here’s a solution from Reggie Middleton…Are you ready??? Create better content. You see, truly capable content cannot be commoditized. I mean, really juicy, hard to come by content. I don’t mean adding flash widgets, slide shows, and other tricks and gadgets. I mean producing stuff of interest and of use. Why is Wikileaks so popular?

When news organizations started suffering due to collapsing margins as a result of their inability to grasp the power, potential and risks of frictionless distribution via the Web, they moved in the opposite direction of prudence. They reduced their staff and cut expenses INSTEAD of investing in the business. Why pare down or eliminate the investigative journalists and when they are the assets that can truly set you apart from the commoditizing content aggregators, and the run of the mill web site?…”

And on the recent “home sales numbers reports”:

More Optimistic Fluff And Spin on Pessimistic Macro Numbers – This Type Of Reporting Simply Drives The More Intelligent, Valuable Eyeballs To Alternative Media, Ex. Blogs

“…With all due respect to Mr. Yun, Mr. Lereah and the NAR, (US National Assoc of Realtors) anyone swift enough to complete the registration form for this blog should know, by now, to discount this association’s data and opinions. They do not do the industry justice with this nonsense. Realtors should actually be the first in the protest line. It is their credibility that is being called into question, for this is THEIR trade group. Credibility is the key!…”

Much more at the links. Credibility is like virginity, once it’s gone, it’s gone, and it won’t be back. Avoid the MSM like the plague they are.

#107 Dale in TO on 01.08.11 at 1:31 pm

In the Toronto Sun on Friday there was an article by some twit from TREB that was spewing statistics all over the place that had no relevance in the real world. By the way, the only reason I was reading this rag of a paper was because I could not find a Globe (my IQ dropped by 50 points that day). Anyhow, the article reported that the average home price was up 9% this year as compared to 2009. Woopy shit! Also, it stated that in December, the average rate of price growth was 5%. Are these doorknobs actually taking a price increase in one month of .41% and multiplying by 12 to come up with some fantastical number that is supposed to make people think that RE is skyrocketing. Can one of you dogs please just tell me what the ‘ACTUAL’ average price has been in this City FOR THE LAST 6 MONTHS. All I want to know is, are the prices going down, staying the same, or going up. What is so FRICKING hard about that. I don’t give a crap about some ‘median year or year weighted extrapolated interpolated inflation-adjusted income derated average’!! Why do we allow this industry to manipulate statistics for the benefit of themselves? Why do we not have something like a Federal Budget Office that can beat these yoyo’s over the head when they try to publish this garbage. This is borderline fraud. Why is the government not calling them on this.

The article headline was; ‘Home Prices to Rise 5% in 2011’. What if TREB said that Homes would rise 50% … would the Sun still publish that?

I will bet that when prices do start to rise significantly again in the future (way in the future), the RE industry will go back to publishing monthly stats with added meat grinder lollipop fudge factors.

Happy New Year.

#108 Duke on 01.08.11 at 1:33 pm

Hope you don’t get yourself banned, RealPaul; enjoy your rants although they’ve become rather obsessive of late what with civil servants eating children. Think you need to connect the dots better between an ever growing public sector and the soon to deflate housing market in Canada and dots there surely are. Our neighbor has responded to their collapsing housing bubble by socializing the debt and pain and printing on a massive scale; I suspect Canada will do the same; in fact the process is well under way. While Garth is correct in predicting the coming housing retracement I think he errors in suspecting it will be deflationary on a macro level. Certainly, for the entire housing asset class it will be deflationary but it very much depends on the government’s reaction for the rest of the economy. In Garth’s scenario, the pain and debt destruction falls where it should, governments, households and businesses tighten their belts; civil servants lose their jobs, but modestly, perhaps through attrition. We will muddle through. Government/the public sector is too large here, almost everywhere else as well; it is run by a kleptocracy again almost everywhere that has fostered a housing bobble which has popped and saddled the people with the consequences. As much as I respect Garth’s opinions and appreciate his blog, I suspect he is a statist and know he is a deflationist. I think he is wrong on both counts.

#109 Mr. Lee on 01.08.11 at 1:37 pm

New economic term I just came accross, bi-flation. Having inflation and deflation occurr at the same time.

Deflation on assets purchased through debt vehicles, and inflation on items purchased by non debt vehicles.

#110 Utopia on 01.08.11 at 1:41 pm

#47 April asked…..

“Garth, despite all this real estate pumping do you still see a 15% decline in canadian home values this year and especially in the Lowermainland of BC”?

Correction is inevitable. — Garth
———————————————————-

Hi April,

We have never been closer to a major correction than we are now at today. All the stars haved lined up in a manner that makes the outcome inevitable and unavoidable. It will be a wretched experience for anyone who now steps out of their comfort zone and buys a home at this late stage of the game.

Buy low; sell high….Buy high, get wiped out….. Right?

We have reached the very top of this market and there are significantly more pressures ahead that will result in prices being reduced than prices rising.

If you are thinking of buying you should at the very minimum familiarize yourself with the outcomes that usually flow from rising interest rates.

Typically, rising rates run inverse to real estate prices. What that means is that as interest rates rise, home prices fall. Equilibrium is maintained in this way. Do not therefore be afraid of being “priced out” due to rising rates because it does not generally work like that.

That single factor though does not really speak to the price highs we are currently seeing. The principle there only suggests how a balance is arrived at between costs of borrowing and market rates for an asset.

What you need to focus on more specifically is supply and demand fundamentals. This is where the Canadian market is showing it’s weakness now.

For a primer on the future, you need do nothing more than read through the past two weeks of articles here at Greaterfool. Read the comments too if you have time.

It is my belief that buying a home now is a very, very big mistake and one that every young person just starting out will live to regret for many, many years into the future.

At the minimum, if you are not certain what will happen next, it is always better to continue saving until the obvious trend is clear to everyone including yourself.

That day is imminent.

#111 Linda Pearson on 01.08.11 at 1:48 pm

#53 Dan in Victoria on 01.08.11 at 2:53 am

4. Don’t own a boat

Nah…keep the boat but, whatever you do, stay out of the tackle shop! There’s a money pit for sure.

#112 dogman01 on 01.08.11 at 1:49 pm

Good story by CBC Neil Macdonald about US State and the Local government financial pickle, pensions etc. Ties in with the MUNI Bond stories.

http://www.cbc.ca/world/story/2011/01/07/f-vp-macdonald.html

Been a lot about crappy Journalism lately on the blog; must generally agree about MSM and thier RE masters.
I find Neil Macdonald a first rate commentator on a lot of stuff; if you have some time check his archive stories.

If you fine globalization and crappy Chinese stuff an interesting theme read this one:
http://www.theglobeandmail.com/news/technology/science/honey-laundering-the-sour-side-of-natures-golden-sweetener/article1859410/

#113 boomer62 on 01.08.11 at 2:12 pm

Very funny video…hope this isn’t Devil’s Advocate.

http://www.youtube.com/watch?v=HAeprWIOQqQ&NR=1

Cheers

#114 Utopia on 01.08.11 at 2:18 pm

#76 Aussie Roy on 01.08.11 at 10:03 am

“From Aussie housing blog………”

———————————————————

Wow! That was an amazing post Roy. I was riveted right to the very bloody end. Cripes mate, you make me happy to not be an Australian (Oh wait, I live in Canada, we are in pretty much the same boat).

Keep us posted. Maybe one day Garth will dedicate an article just to your country. It is absolutely beyond belief what is transpiring down-under.

One day you guys will be giving away your coal and gold and other national treasures just to keep your sorry heads above water and stay solvent as a country.

See, in the big picture, that’s how they are getting you. Once your economy is on the skids you will be forced to sell out your resources cheap just to make ends meet. Think I am kidding? There is plenty to report on that subject.

So Bye Bye independance. Same as in Canada.

#115 young & foolish on 01.08.11 at 2:27 pm

“If I owe you a pound, I have a problem; but if I owe you a million, the problem is yours.”

John Maynard Keynes

An excellent remark and one which should instruct us about how the future may unfold. All those “unpayable” debts will be, well, unpayable. As the debt ceiling rises, so will inflation. And that includes rents.

#116 Milhous Plumbers on 01.08.11 at 2:29 pm

Truly rich people are often dead stingy and don’t jump in at the deep end. What would be wrong with a starter home for this youngish couple above? Forget the fancy home and flashy wheels, max out the pension/TFSA and [should have] concentrate paying down a smaller mortgage. Ah well I guess its too late for this pair now.

#117 Moneta on 01.08.11 at 2:32 pm

Amarillo on 01.08.11 at 1:23 am
Part of the blame for public financial illiteracy, a good part, lays at the feet of the union-plagued public education system.
———–
One of this biggest problems with the public system is probably ta daaaa… the credit bubble.

In Quebec, 1/3 of high school kids go to private school. Something lile 2/3 are from families making less than 60K!!!

If parents couldn’t leverage themselves to the hilt, they wouldn’t be able to afford private schools. The kids would stay in public schools and the public system would not have deteriated as much because it would not have lost as much money. The system is diluted.

Parents are frantic and have bought into the “race to the top”. The irony is that many of these new private schools charge over 10K per year but are not much better than the public ones. They don’t seem to grasp that there are 2 elements to the concept of private schools: quality of education, mingling with the brass. Parents think they’re better because of the price tags while many are just a money grab.

This credit bubble is distorting all our social structures but no one seems to see how insidious it has been!

#118 grantmi on 01.08.11 at 2:35 pm

Well Mark seems to be doing well for himself!!

nice home!

http://i55.tinypic.com/24zzu3l.jpg

Source? — Garth

#119 kc on 01.08.11 at 2:36 pm

#58 Nostradamus jr. on 01.08.11 at 5:33 am

“And as long as wealthy immigrants continue to arrive, pretty much everyone believes they’ll continue to buy homes here, rather than, say, invest in American cities where property is now much cheaper. “They’re here, not there,” says Hsu flatly. “They need a place to live.””

I asked about “rich Chinese” leaving china on the chinadaily newspaper. you might want to read what the answers are…

http://bbs.chinadaily.com.cn/viewthread.php?gid=2&tid=687787&extra=page%3D1

and this has been cross linked to the Global rich chinese segment that was youtubed, waiting for responce from it, for I am not sure if the chinese “firewall” allows youtube to be seen there.

#120 Think Tank on 01.08.11 at 2:38 pm

just shows you how the sheeple feel that they have to live up to a perceived status and have all of the symbols to prove it..hey everyone look at our beautiful home !!

#121 LS on 01.08.11 at 2:41 pm

Consolidate, simplify and be beholden to no one.

And guess what, when you do this, you might actually enjoy your life a bit more because you know if you don’t like your job, your spouse, or whatever else is not so great, you have the FREEDOM to change it.

As a reply to GenXer, #40. Totally agree regarding the costs of daycare. On the west side of Vancouver, I pay $1,200 a month for a 2 year old and $770 for before and after school care of my 5 year old. And the best part, I get $7,000 per kid credit on my tax return. That’s $14,000 – and I fork over $24,000 in expense. So $10,000 of my childcare expense is in after tax money! (Better than last year though when my total childcare expense was $28,000.)

And yes, the lower income spouse needs to take it on their return, further ground down to the lower of the childcare expense or two-thirds of their income.

Also this doesn’t include any extras like swim lessons, dance, pre-school etc.

It is easy to understand why it is hardly worthwhile for some people to go back to work. I also think a full tax credit should be provided, or at least raised. $7,000 per year assumes $583 cost per month of childcare for a child that is 7 and under.

#122 cellar dweller on 01.08.11 at 2:43 pm

Garth , that photo of the Grizzley in the tent reminds me of a story a few years back when some tourists in Africa on an overnight safari were told .” Zip up your tents at night and the lions wont bother you”.
Well one of the tourists forgot and at about 3am was dragged out and eaten while screaming for help.
When the guides ( with the guns)were asked the next day why they didnt help him. They replied, ” We were too scared to leave our tents !”
Kinda reminds me of our “hide in the tent ” fiscal mindset here in Canukda.
The Grizzly’s are circling…………

#123 doctore on 01.08.11 at 2:47 pm

The past two months the BoC, F and H, and now the Bankruptcy agency coming out telling us big debts are a big problem. On the flip side you have all the realestate cartels coming out pumping their industry and that 2011 will be a good year. You think they would be prudent and at least warn customers of what is happening. Guess all they see is $ today and not looking at what decline is going to come tommorow. Oh well……

What is the theme with all the bears lately?

#124 Moneta on 01.08.11 at 2:52 pm

It is my belief that buying a home now is a very, very big mistake and one that every young person just starting out will live to regret for many, many years into the future.
———-
When we bought our 1st house in 1995, all the houses we visited seemed to be listed by couples who had split up… They had all bought at the peak circa 1989-1990 and were all taking huge losses. It took them 5 years to admit defeat.

In the US the market peaked in 2005 and 5 years later they are at maximum hurt.

So if the Canadian peak is 2008-2010, the real hurt would be felt in 2013-2015.

#125 dark sad person on 01.08.11 at 2:53 pm

#103 Duke on 01.08.11 at 1:33 pm

While Garth is correct in predicting the coming housing retracement I think he errors in suspecting it will be deflationary on a macro level. Certainly, for the entire housing asset class it will be deflationary but it very much depends on the government’s reaction for the rest of the economy.

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

Obviously it is deflationary and there’s nothing the government can do about it-

Printing trillions has done no more then goose the stock markets into extreme overvaluation and caused speculation in the futures market-

Where is the evidence of the inflation they’re trying to create?

If people see inflation other then what has goosed stock markets and commodities-i would like to see where it is-

How does a credit dependent world economy have inflation when borrowing is drying up and overall credit is contracting?
When asset prices fall (we know they are) and credit contracts (we know it is)
Game over for inflation-
Governments can print and create temporary price increases in some places but sentiment has shifted and borrowing and crazy spending is over-
So is any hope of any sustainable inflation-

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

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

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

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

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

#126 sail1 on 01.08.11 at 2:54 pm

#68 sail1

An industry shill. That is more than apparent. — Garth

I think Dunning projections are taken much more seriously then yours would be.

That was unnecessary. You are my guest. — Garth

#127 kc on 01.08.11 at 3:06 pm

56 Dan in Victoria on 01.08.11 at 3:01 am

“How much are you planting?”

Hey Dan, Been working on making sure the 2 (garden) tractors are primed, greasing/oiling the tillers, and repainting the discs. Now waiting for spring…. Putting in at least 1 & 1/2 acres, maybe 2 if I can get enough help. One of the families who helped last 2 years (on a small back yard garden) decided to move 50 miles east over the winter, and this leaves a bit of a dent in plans.

I am thinking of asking people in here if they live close to me and they are serious about gardening if they want to help … We thought to give the first refusals to others in here before asking in CL. Want to grow enough to sustain a freezer full/cold storage to last the winter spring. and be able to sell excess at farmers market during summer. (will pay for seeds and seeding for next spring) Already looked into seed supply and ordering dates. will be getting 3 pigs and a beef calf this spring too.

cheers

#128 AACI-Okanagan on 01.08.11 at 3:10 pm

TS – “‘Living big’ costs a lot more than a huge financial nut to crack every month. It costs you years of unnecessary stress, a loss of flexibility in your choice of jobs and career, and at the end of the day – steals your soul.”

Great words and so true. As a real estate appraiser I have seen things during the “boom” that support what Garth has said for years. During the boom I was appraising the same homes every 6 to 9 months as people were using their homes as banks. Every little jump in home values, the home owners were using the equity to pay off recent spending sprees. One house I was there 9 times in a span of two years, and every time I was there it was for a new “fly by night” mortgage broker, and each time it was to refinance to pay off the credit cards, etc. The driveway and house was filled with the latest toys and gadgets. (ie: 52 in tv, boats, ski doos, etc). During the boom, I saw people from Alberta, and BC come to the Okanagan to buy a “summer home” just to keep up with their neighbours. Many of which put “blanket mortgages” on their properties. We are talking about million dollar + mortgages . We are now seeing those 2nd homes coming up for foreclosures, and the ones that treated their homes as banks, have filed bankruptcy and left their homes for foreclosure, while still keeping their toys, now that pisses me off. In the last 3 months, our office has seen more foreclosures than we have sales. Is that a scary pattern?

It amazes me that the “media” always goes to the “realtor” to get the inside scoop on current market conditions, when in fact they should be coming to us to get the real truth.

#129 Devil's Advocate on 01.08.11 at 3:11 pm

#111 Utopia on 01.08.11 at 1:41 pm

Who are you to give advice on whether to buy or not?

I’m a REALTOR and I don’t give that advice.

I offer my services to those who have made the decision to buy and, in fact, sometimes I end up presenting them information they might want to consider which could compel them to rent.

You can not tell the future and it is patently wrong to present yourself as being able to. To try convince someone not to buy because of what you believe the future has in store is as grossly unethical as the “personal sales agenda” you accuse my profession of being disease ridden with.

#130 Jeff Smith on 01.08.11 at 3:19 pm

>#58 Nostradamus jr. on 01.08.11 at 5:33 am
>Absolutely must read friends
>http://seenoevilspeaknoevilhearnoevil.blogspot.com/

It’s good to know that there are lots of foreign money coming into Canada. For once you are giving us useful info Nosty Jr. Good job! Keep the realty hot, we gotta build more condos in GTA proper, so that rents will stay low. Loving it every time I pass by a hole on the ground where a condo is going up!

#131 rosie on 01.08.11 at 3:32 pm

#104 dd

The rest of the world doesn’t think so. And at the end of the day that’s all that really matters.

#132 jess on 01.08.11 at 3:32 pm

Arizona congresswoman among 12 shot at Tucson groceryBy the CNN Wire Staff
January 8, 2011 2:17 p.m. EST

#133 Devil's Advocate on 01.08.11 at 3:34 pm

If I were to influence a client to make a financial decision one way or another that went awry I could well find myself before a court trying to justify my imparted logic and proving the caveats I packaged with it. The claim “buy now or be priced out forever” is just such an ill advised “pitch” that could easily lead to litigation. Of course you would have to prove it and the spoken word is hard to prove which is why we have written contracts. But rest assured a Judge will tend to side more with the lay person than the “professional” in such disputes. Professionals are directly responsible for their actions not their employer as they are employed by their principle (their client).

And that is where the term “professional” comes into play when referring to a REALTOR®. Which is why we do not “sell” we help you buy. The only thing we sell is our services. It’s your house we help YOU sell it.

#134 echo on 01.08.11 at 3:38 pm

A young couple that make close to $300,000 a year and own a home that probably went up about 14% last year alone…….I wouldn’t worry too much about them…..really

#135 GregW, Oakville on 01.08.11 at 3:49 pm

Dear Mr. Garth Turner,

I must apologize to you for causing you so much unintended suffering for far to long.

You are a most generous host of your grand blog.
I clearly was not paying close enough attention to the intimation of yours words and others on Dec31. I did mange to correctly comprehend your unwritten intimation in your response to #205 rosie , Hence my #225 response to you, before I actually saw your much clearer wishes in your response to #209 Sue.

If it’s any consolation, I would strongly encourage the other people mentioned on Dec 31 to take the time necessary to again question there own motives, and take into consideration Garth feeling. Which I did not fully grasp and consider in length on Dec 31.
I hope that inflicting additional suffering onto Garth is not anyone’s sole motivation, because he clearly has never done anything to me to warrant it. It has never been my intention to cause Garth such affliction.

I will strive to retain some dignity with an elegant solution.

I am truly sorry.
Sincerely,
Greg

Irritation, not suffering. Just obsess about various things, and give fluoride a rest. Apology accepted. (Some others have a lot more to repent for.) — Garth

#136 No crystal ball... on 01.08.11 at 3:51 pm

Is this guy’s name pronounced “Wise Leader”? How ironic.

I would really like to know what Mr. Weisleder considers to be “stable employment” nowadays? Ask all the civil servants in California how guaranteed their paychecks are.
Gone is the day where anyone can consider their employment to be stable.

The family that you talk about in your article could be one of a thousand (or more) living here in Oakville. They live in the best homes in the most exclusive parts of town. The harsh reality is that the higher the climb, the bigger the fall. But at least the Range Rover has good suspension to catch them.

I was reminiscing with someone the other day about when I was a kid (born in 63). My parents saved for things they wanted – no one used credit cards and lines of credit. They exercised patience when they wanted something, and it was really appreciated and taken good care of, when they finally got it. And yet there was always enough for emergencies if it meant they had to tighten the belt for a month or two.

We had a home, a cottage in Muskoka, two cars, a boat and a couple of snowmobiles. My parents worked hard, we never went shopping for things other than groceries unless it was absolutely necessary, and we dined out a few times a year. And my parents never worried about losing any of it to the bank. We were not affluent but very fortunate.

Interesting times we are living in.

#137 El Magnifico on 01.08.11 at 3:53 pm

Garth and all,

Below is a fantastic documentary regarding monetary policy and what should be done to fix our recurrent bubble & burst problems.

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

I urge all of you to watch it. It’s two hours long, award winning documentary made by Bill Still, the author of Monetary Masters in the 90’s.

This one is called “The Secret of Oz”. Who new the that the “The Wonderful Wizard of Oz” kid novel ” book contained “an allegory of the late 19th-century bimetallism debate regarding monetary policy”?

(http://en.wikipedia.org/wiki/The_Wonderful_Wizard_of_Oz)

#138 Edmontonian on 01.08.11 at 3:53 pm

FYI: Housing Disaster in 2011 in Edmonton ALberta
1) Bankruptcies surge in December-very rare people usually wait until after Christmas to throw in the towel.
2) Condo prices down $24,000 since may
3) Housing prices down $40,000 since May
4) Upgrader work being done in the Fort McMurray Area have the Big Oil Companies looking to fly in Men from Newfoundland & Quebec, the newer lower wages thy are offering one can’t survive on in ALberta with our inflated Grocery, Electricty & Housing costs. (Even Dell pulled there office out of Alberta after the City Of Edmonton gave away the farm so they would set up here-Electricity costs too outrageous since the Conservative Govrn Deregulated the province).
5) Foreclosures surging again up to 25 foreclosures a day in AB
6) People are waking up, the mainstream media is actually printing what is happening-for a change.

#139 Nostradamus jr. on 01.08.11 at 3:54 pm

Big Crackdown by “Big Brother” over US citizens coming real soon now.

(Dont be surprised “Big Brother” was behind today’s assassination either.)

…This will continue making Canada look like a safe oasis.

Nostradamus jr.

#140 Duke on 01.08.11 at 4:11 pm

#126 dark sad person on 01.08.11 at 2:53 pm
Appreciate your response to my post. I will respond although probably not today.

#141 GregW, Oakville on 01.08.11 at 4:15 pm

Garth, I just reread the apology I sent to you. To remove the ambiguity someone may infer I should have added, PS, looking forward to reading your blog in the future.

#142 Steven Rowlandson on 01.08.11 at 4:38 pm

Hello Garth.
You wrote: “This week media celebrated in the Lower Mainland as property assessments soared, ‘creating’ millionaires. They cheered in Winnipeg as a fabricated Royal LePage house price report signaled higher prices on the way. In Toronto they feted real estate board news that home values were romping higher. And in all three centres, family indebtedness increased, reliance on real estate was augmented, and risk snaked higher.

No wonder the week ended with a warning from the head of the nation’s bankruptcy agency. It echoed that of central bank boss Mark Carney. Mend your ways. Or you’re screwed.”

Perhaps the realtors , the banks and the home owners cum real estate magnate wannabees need to get screwed and then fed to the bears. Financially speaking of course. It could be that the only way they will learn is the hard way and then may be.

Steven

#143 realpaul on 01.08.11 at 4:54 pm

BC bleeding full time jobs in white collar industry and no one asks where the home sales are coming from? Its not politically correct to mention immigration , drug money or the outrageous civil service pay….but…..even a blind dog will find his way to the bowl after a while.

I think a majority of British Columbians are aware of EXACTLY whats going on. I just have to read the comments sections that follow the incredibly biased articles printed in the newspapers to figure out which way the wind is blowing. Often the crowd is so negatively vociferous against the propaganda they’ve just read that the paper cuts off the ‘discussion’ becaus there are thousands of citizens calling ‘bullshit’.

The political officers who run the media in Canada have an audience of complacent thralls. Anytime anyone says anything regarding a ‘culturally sensitive’ issue…they’ll issue a threat against the speaker…call them rascists..crazy…generally bad. On cue the public school trained brain dead zombies will jump up and start barking the politically correct catch phrases they’ve been taught.

Complacency is the one issue in this society that has led to the train wreck we are today.

On the point of cultural sensitivity. We have Inderjit Singh Reyat in the news again guilty of lieing 19 times at the Air India trial. The judge said ” I can only wonder if the outcome of the trials of Malik and Bagri would have been differant if he had not lied to us”. Judgey….”No DUH”

Of course he lied…they were all accused of an alleged co conspiracy to murder 300 people!!!!!!!! Did the police not investigate the murders because it was politically expediant not to ruffle the feathers of the Indian community in BC when they were the only western seat for the federal Liberals? You don’t need WikiLeaks to figure out that ‘cultural sensitivity’ in this country is a political weapon…in the streets..in the classroom…in the government.

So…don’t be afraid to ask if the millions of Chinese non citizens buying real estate are affecting the price of that commodity. Be afraid of the official response to your question. Now….seals….on que…..start barking….cause I’m a bad bad man.

#144 Mountain Girl on 01.08.11 at 5:07 pm

I like “simplify”.
I think it applies to all manner of home economics, lifestyles, and financial planning.
We don’t really get a detailed picture of the daily spending habits of the couple mentioned, but one suspects excess. A house in that price range seems pretty excessive to me, anyway. Sure, it’s a nutty market where they are, but you don’t have to play the game.

The whole lifestyle seems full of anxiety and discontent, and must be exhausting.

Simplify.
Scale down.
Relax! :)

Better for the planet, better for your family, better for you.

#145 prairie gal on 01.08.11 at 5:15 pm

Utopia, you keep bees, make your own cheese and flour, have cattle, use candles and a wood stove? May I ask where you live?

That’s very impressive. I like to brag to people that my family hunts and preserves veggies but we’ve never made our own cheese. I’d love to learn that.

#146 grantmi on 01.08.11 at 5:16 pm

Well Mark seems to be doing well for himself!!

nice home!

http://i55.tinypic.com/24zzu3l.jpg

Source? — Garth

From your link to his web site…

http://www.markweisleder.com/contact.htm

and then just google map the address… and presto.. his house shows up on Google Maps.

http://i56.tinypic.com/14uj9kn.jpg

#147 AACI-Okanagan on 01.08.11 at 5:42 pm

“And that is where the term “professional” comes into play when referring to a REALTOR®. Which is why we do not “sell” we help you buy. The only thing we sell is our services. It’s your house we help YOU sell it.”

and the cow jumped over the moon.

#148 Devore on 01.08.11 at 5:44 pm

#77 allister

The debt may have already past the point of no return.
As a test case, Japans debt will likely hit the wall first.

Everyone should be keeping their eye on Japan, not Italy or Spain. I’ve read somewhere recently, not sure how true this is, that this year one of Japan’s large pension funds will begin selling their treasury holdings.

As Japanese citizen’s legendary savings rate dropped from the highest in the world at the top of the Japanese boom, right down to zero today, their fabled domestic market for government debt will eventually evaporate, and Japanese will be forced to flog their debt abroad, at at least double or triple their current interest. And then things will get interesting.

About savings… people should very seriously think about the relationship and causality between a high rate of savings, and real prosperity and wealth.

#149 dd on 01.08.11 at 6:01 pm

.#132 rosie

…The rest of the world doesn’t think so. And at the end of the day that’s all that really matters..

No? Why do you think commodity prices have gone through the roof? The rest of the world is already voting to buy hard assets as oppose to dollars. Dig a little more before you write … the answer will suprise you.

#150 dd on 01.08.11 at 6:05 pm

#106 dd

…There will be no federal default. — Garth..

With people in government not really understanding what QE really is all about, no wonder the Western world is in shambles.

There will be no federal default. — Garth

#151 LS on 01.08.11 at 6:12 pm

Talking to a friend on the bus the other day about kid’s birthday parties. At most parties now, if gifts are even asked for, they sit, unopened until after the party. That is, they aren’t opened in front of eveyone as the host is too busy spending $500 on a craft/event party that is too structured to allow time for this.

(Some parents, thankfully, opt for a twonie party, where one twonie goes to charity, the other to the kid.)

Children don’t obsess about the pile of presents in the corner because of the mountain of toys and crap they have upstairs.

Stuff these days is cheap. Toys are cheap. And they are disposable. It’s so much different from when I was a kid. That pile created a huge obsession. Tears even when one kid didn’t want to give the present.

People, kids, all of us, who are privileged have far too much to appreciate what we have. It is part of our current culture, buy whatever you want now, even if it’s on credit. Current grads from upper middle class homes have no hunger to get ahead or to work that hard, it’s all been provided.

Law firms and accounting firms are now recruiting from areas where kids come from “hungrier” backgrounds. For example, in Vancouver they go to Vancouver Island.

People aren’t doing themselves or their children any favours spending themselves into oblivion.

#152 dark sad person on 01.08.11 at 6:12 pm

Fed Governor Hoenig shocked many observers yesterday when he stated, “The gold standard is

DELETED. This is not a gold blog. — Garth

#153 sail1 on 01.08.11 at 6:18 pm

#127 sail1

That was unnecessary. You are my guest. — Garth

No harm intended, just stating a fact.

It’s not about injury, but civility. This is not a competition. — Garth

#154 Brew on 01.08.11 at 6:29 pm

@#52 Unrealpaul

“With the truly ridiculous assesments for Richmond BC ( for example ( up 17%) on top of the previous assesment that was up as much ( along with a hefty increases for water, school, fire, sewage etc etc making the increases closer to 30%) these retired Canadians are being squeezed out of their homes by the ramping up of taxes.”

_____________________________________________

May your hose run dry, your basement fill with sewage and the assessment office find out about your renovations.

Brew

#155 dark sad person on 01.08.11 at 6:32 pm

DELETED. This is not a gold blog. — Garth

*********************
Keep your readers in the dark G

Hoenig is a Fed Governer not what you call a goldbug-

How’s this wonderful system working for you?

So afraid of change-

Unafraid of anything. Sick and tired of the bullion pumpers. — Garth

#156 Duke on 01.08.11 at 7:00 pm

#126 dark sad person on 01.08.11 at 2:53 pm
“If people see inflation other then what has goosed stock markets and commodities-i would like to see where it is-”

I would add to that gold and silver. I don’t know where else one would expect to see the early signs of inflation. Of course assets backed by debt will deflate and credit will contract. I don’t lend my money, I buy commodities and ETFs as do many other people concerned about maintaining purchasing power. I suspect this year will give us the answer to this much debated topic.

#157 VICTORIA TEA PARTY on 01.08.11 at 7:16 pm

DREADFUL DAY IN TUCSON

From the Web-site of Economic PolicyJournal.com, this:

Jared Lee Loughner, the alleged shooter of Congresswoman Gabrielle Giffords of Arizona and others in Tucson while Giffords was holding a public event, maintained a YouTube channel and listed the following as his favorite books:

I had favorite books: Animal Farm, Brave New World, The Wizard Of OZ, Aesop Fables, The Odyssey, Alice Adventures Into Wonderland, Fahrenheit 451, Peter Pan, To Kill A Mockingbird, We The Living, Phantom Toll Booth, One Flew Over The Cuckoo’s Nest, Pulp,Through The Looking Glass, The Communist Manifesto, Siddhartha, The Old Man And The Sea, Gulliver’s Travels, Mein Kampf, The Republic, and Meno.
Email This BlogThis! Share to Twitter Share to Facebook Share to Google Buzz

Apparently the suspect used a heavy-calibre (.45) small machine gun with a large mag that enabled enough bullets to be sprayed outside a Safeway store in that Arizona city. Six people, including a nine year old girl, and a judge, are dead. Some dozen other people are wounded and receiving treatment.

What to make of this? The sociologists, and all the rest, will be out in force soon, no doubt, trying to suss this out.

Some may ask if this dastardly and cowardly act has something to do with America’s declining prospects, some kind of perverse narcissistic outrage, or the actions of a raving lunatic.

My bottom line is this, and it is something that Garth has been hammering away at quietly and steadily for some time, now.

It is just fine to criticise a political party, whether it is in government or in opposition, on policy matters, and to criticise the sitting members for their votes and positions. Sure.

But to go after a politician on the Web, for instance, (you should see the venom that’s been directed at outgoing BC Premier Gordon Campbell–outragous comments against him) using words amounting to character assassination can have horribly grave outcomes, to wit: what happened today in Tucson.

The Congress woman is a Democrat who favours liberal gun laws, and immigration curbs for illegals. She was also apparently a “target” of the Tea partiers.

She was, in fact, a victim of character assassination and now she has taken a heavy calibre bullet to her head because of her views and her service to her community.

This is beyond disgusting. The American political process has been degraded for a very long time, to come, because of this single event.

The only way for America’s “political system” to begin to redeem itself, any time soon, is for this lovely woman to recover and return to her job in Congress serving her constitutents. My thoughts are with this very brave woman and her family. Just beyond tragic.

It is also a very hard lesson in civics. All of us take note. Please.

#158 Jeff Smith on 01.08.11 at 7:28 pm

>#137 No crystal ball… on 01.08.11 at 3:51 pm
>Is this guy’s name pronounced “Wise Leader”? How
>ironic.
>I would really like to know what Mr. Weisleder considers
>to be “stable employment” nowadays? Ask all the civil
>servants in California how guaranteed their paychecks
>are.Gone is the day where anyone can consider their
>employment to be stable.

Absolutely right. The last 3 years, I have seens so many friends and relatives lost jobs, it’s unbelievable. California was a good example, but look at Greece and other european states. Ask them about stable government jobs.

Oh by the way, Canadian civil servants are quite stable for now. But I doubt it will last. All we need is for this gas bag to expand for a while, and when it does go heidenberg (sp) style, watch out!

#159 TheBestPlaceOnEarth on 01.08.11 at 7:58 pm

Canadians who have made out like bandits in other parts of the Country should sell now before the fall and invest in Genevancouver Vancouver has come out of the gate in 2011 like gangbusters. All the news is just great. Look for another 10 to 25% return in 2011 as billions of dollars migrate from China to Vancouver. China wants Vancouver, pro renters like Junius just don’t get it
**********
There’s also general agreement that a large proportion of Chinese immigrants won’t opt to rent instead of buying, even if the economics make more sense. “People in China always feel very insecure if they do not own their own house,” says Fang Chen. “Even those with a very low income will spend their savings to buy.” It’s a trait common to any country with an agricultural heritage and limited land, explains Tsur Somerville, an associate professor at the UBC Centre for Urban Economics and Real Estate. “There are some countries where the only collateral has been real estate.” Historian Yu even compares Vancouver real estate to a Swiss bank account—not for its secrecy, but for its rock-solid value and political peace of mind.

#160 dark sad person on 01.08.11 at 8:00 pm

Unafraid of anything. Sick and tired of the bullion pumpers. —

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

40 years is all its taken to destroy this absolute stupid Government vote buying Monetary system-

40 short years and you speak of gold as if it’s a relic from some ancient civilization-

This is not a financial crises-
This event is a political crises-
Gold is not a hedge against a monetary event-
Gold is a hedge against a political event-

And I’ll debate you about this anytime-

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

#157 Duke on 01.08.11 at 7:00 pm

#126 dark sad person on 01.08.11 at 2:53 pm
“If people see inflation other then what has goosed stock markets and commodities-i would like to see where it is-”

I would add to that gold and silver. I don’t know where else one would expect to see the early signs of inflation.

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

Not sure why you would look at gold and silver for signs of inflation-unless both had been going down-

Here’s how poorly both do in inflation-

http://www.barchart.com/chart.php?sym=GCG11&style=technical&p=MN&d=X&x=39&y=7&sd=&ed=&size=M&log=0&t=CANDLE&v=1&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=100&indicators=&addindicator=&submitted=1&fpage=&txtDate=#jump

http://www.barchart.com/chart.php?sym=SIH11&style=technical&p=MN&d=X&x=47&y=4&sd=&ed=&size=M&log=0&t=CANDLE&v=1&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=100&indicators=&addindicator=&submitted=1&fpage=&txtDate=#jump

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

If you want to track something that reflects inflation-use these-

When you see the curve turn back up on these and continue climbing-then inflation is back in play-
We can’t deny we were in inflation from the early 70’s up until this thing blew up-

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

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

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

#161 Donmarboy on 01.08.11 at 8:18 pm

I think it’s just dear to see the comments under these ridic articles about RE in Canada. They’ve woken up AND use Garth’s blog to wake up the rest. It’s dear to see GT is the guy to quote. I’m doing it too. We all should.

#162 Nostradamus jr. on 01.08.11 at 8:36 pm

Arizona shootings today

If the Republicans can be accused of 9-11,..

http://seenoevilspeaknoevilhearnoevil.blogspot.com/

It is sure making Canada look better and better every day.

Nostradamus jr.

#163 Nostradamus Le Mad Vlad on 01.08.11 at 8:39 pm


Plenty of great reading today, not the least of which is . . .

#140 Nostradamus jr. — “…This will continue making Canada look like a safe oasis.”

Not sure about the whole country, but certainly the western provinces.
*
Re: Shooting “I am reminded of Archduke Ferdinand, for some strange reason.

“Note that there are reports of two other suspects now being sought. So much for ‘Lone gunman.’ This feels like a Columbine-style setup. No motive is given for why this guy pulled the trigger, but everyone is trying to milk this for all it is worth. [ Nobody is mentioning that Jared is a veteran of Afghanistan. ] “. wrh.com. First para. says and shows how political hacks are turning this into a self-serving political event. Instead, why aren’t they focusing on the real problems of everyday life?

Plus: “The TV networks will have nothing but this shooting for the next several days. It is up to YOU to make sure all America knows of the Massachusetts Supreme Court decision in Ibanez case and how it might affect their own foreclosures. Remember, the news it what affects YOUR life; everything else is a distraction. And right now the bankers are desperate to distract Americans from the Ibanez decision, lest identical lawsuits start appearing in the other 49 states! Trillions are on the line.” wrh.com.

5:34 clip Sucking money. “THE US GOVERNMENT TOOK YOUR JOBS SO THE BANKS COULD TAKE YOUR HOMES TO COVER THE COSTS OF THEIR MORTGAGE-BACKED SECURITY FRAUD.” wrh.com.

Dire Straits Not the group. “I think this article was written before the Ibanez decision came down yesterday. The situation is more dire than described above. ” wrh.com.

Acquiring gold, dumping dollar. A new trend?

Dictatorship “It’s “the absolute perfect spot in the U.S. government” to grab more money for an ID system that won’t stop the hackers.” wrh.com.

3:01 clip The US has lost control of its debt. Deliberately?

Traitors “Draw and quarter the bastards who sell their people into the slavery of the banks!” wrh.com.

Chile “Palestine on the rise. USA on the decline.” wrh.com.

7:02 clip Corporations and WH destroying America.

Illinois 75% income tax hike proposed.

#164 Devil's Advocate on 01.08.11 at 8:44 pm

<b?#148 AACI-Okanagan on 01.08.11 at 5:42 pm

…and the cow jumped over the moon.

Hey diddle diddle what’s your point?

#165 grantmi on 01.08.11 at 8:44 pm

#159 dark sad person on 01.08.11 at 8:00 pm

Try this!!

http://bit.ly

;-(

#166 Devil's Advocate on 01.08.11 at 8:46 pm

#148 AACI-Okanagan on 01.08.11 at 5:42 pm

…and the cow jumped over the moon.

Hey diddle diddle what’s your point?

#167 AACI-Okanagan on 01.08.11 at 9:13 pm

“Hey diddle diddle what’s your point?”

what you can’t follow along?

#168 Timing is Everything on 01.08.11 at 9:29 pm

#53 Dan in Victoria said – “4. Don’t own a boat.”

The two best days of being a boat owner….
The day you buy it, and the day you sell it.

#169 realpaul on 01.08.11 at 9:48 pm

The hangover after the siesta. Spains has its Olympic Village sites aplenty.

1.5 ++ million listings and the fun has just started. Sound familiar?

http://www.realestatechannel.com/international-markets/residential-real-estate/real-estate-news-spain-real-estate-bubble-torre-lugano-tower-valencia-property-sales-wsj-3248.php

The US property pimps freaked last week when the judge shut off the pimps lies regarding forclosures.

The pimps have ‘millions’ of houses already shelved in inventory that was waiting for the market to ‘pick up’.

Now just days later reports are coming in suggesting prices will fall for decades………..

#170 April on 01.08.11 at 9:50 pm

Thank you Utopia. I have no intentions of buying for sometime. The real estate pumpers will pump all the way to the bottom but hopefully more and more people are with Garth on his outlook. Spread the word verbally and in writing.
Thank you Garth for telling it like it is.

#171 InvestorsFriend (Shawn Allen) on 01.08.11 at 9:51 pm

Number 67 Renting in Rosedale asked:

“Get rich, and become financially independent, it is the sweetest revenge…”

Shawn, revenge against whom?

Answer:

Why against anyone and everyone who, even for a minute, doubted you in any way. Get rich to make them all jealous!

Look we all want to be recognised as superior beings, admit it.

It’s biological, superior human specimens get more reproduction opportunities. Hence deep down we all yearn to recognised as superior. But only some of us will admit that.

It’s especiallytrue for males… since we can father unlimited offspring.

It’s biological, admit it.

And money is not the only scorecard. Looks are very important too. But money is an important scorecard. Admit it.

#172 a prairie dawg on 01.08.11 at 10:22 pm

@ #45 Carp Coyote

from wikipedia…

Never was so much owed by so many to so few was a wartime speech made by the British Prime Minister Winston Churchill on 20 August 1940. The name stems from the specific line in the speech, Never in the field of human conflict was so much owed by so many to so few, referring to the ongoing efforts of the Royal Air Force and Allied pilots who were at the time fighting the Battle of Britain, the pivotal air battle with the German Luftwaffe with Britain expecting a German invasion. With the battle won a few months later and German plans postponed, the Allied airmen of the battle, many of whom were Polish, ultimately became known as “The Few”.

#173 Dark Sad Monster Bunny on 01.08.11 at 10:23 pm

DA – we established months ago that realtors are not professionals. Don’t meet any of the basic criteria. They also have zero liability. Now if you mis-represent something (ie lie) then yes, you could be held responsible. But most 9 year olds understand that.

You can always hold yourself out as “acting professionally” just like the guy who emptied my septic tank.

#174 Utopia on 01.08.11 at 10:47 pm

#130 Devil’s Advocate asked #111 Utopia

“Who are you to give advice on whether to buy or not?I’m a REALTOR and I don’t give that advice”.
———————————————————-

I think you need to read my post a second time. If you notice I have deliberately used the words “it is my belief” which very clearly indicates that my words are an expression of personal opinion only and not specific advice. We still have free speech in this country and I am entitled to my opinion as you are entitled to yours.

Furthermore, you are here (like me) as a guest on a real estate site that openly discusses contrarian positions and points of view on Canadian real estate and the economy.

If you don’t like the opinions you read here then feel free to post on the TREB or CREA sites where your own pro-real estate opinions will be warmly welcomed.

Below is the exact line of mine that you seem to object too. As you can see it is not “advice” nor do I represent myself as a real estate professional. I do incidentally believe that what I have written is the most probable outcome. As I said “I believe”……..and I do. And I stand by my remarks.

———————————————————-Excerpt from post #111

“It is my belief that buying a home now is a very, very big mistake and one that every young person just starting out will live to regret for many, many years into the future”.

#175 theletterM on 01.08.11 at 10:54 pm

Mark Weisleder is lying again.

BEFORE you COULDN’T buy a house without a down payment:
http://www.moneyville.ca/article/907383–our-housing-market-to-side-step-u-s-style-bubble

NOW you CAN:
http://www.moneyville.ca/article/917296–you-can-buy-a-house-with-no-money-down#comments

#176 Utopia on 01.08.11 at 11:53 pm

#146 prairie gal said:

“Utopia, you keep bees, make your own cheese and flour, have cattle, use candles and a wood stove? May I ask where you live”?
———————————————————

Hi Prairie Gal,

Impulsively I thought I might say I live in “The Best Place on Earth” but that would probably be over the top. But no, I am in the one place on earth that Garth himself would not want to be stuck as a snowstorm shut down the airport for a long weekend. God forbid! Even his Hummer might not start here on the wrong blistery cold night. A forlorn snowy prairie land this is indeed and it is Saskatchewan. I love it here too.

(Cheese is easy by the way. Just another kind of cooking really. It is just very time consuming and you need a nice cool basement year round and a way to control the humidity and temperature. After that it’s a snap. Just load up the shelves over time as you make your “rounds” and eat as you please on the right occassion. Cheddars and others can age for years so its a great food to make and keep for the long term)

#177 bridgepigeon on 01.08.11 at 11:54 pm

‘Gifford Gunmans Final Video- Jared Loughner’ on YouTube shows some insights into a troubled young man. He makes reference to the gold standard. Thousands of war veterans are coming home messed up for life after being a part of yet another US foreign war and endless occupation. ‘Afghan Massacre part 1 of 4’ on YouTube is a documentary that should make our press but won’t…

#178 Dan in Victoria on 01.09.11 at 12:09 am

Shawn @ 172.
Sigh…..
“Why against anyone and everyone who even for a minute doubted you in any way. Get rich and make them all jealous.”
I guess we would be complete opposites Shawn, no big deal really.
I’ve never really cared what anybody has ever thought of me, never cared to have the fancy car, fancy clothes or all the “in” friends.
Never kept a score card on how much I was worth at what age.
The way I figure it I came with nothing and I’m going with nothing.
Plain and simple really. Anything that is left goes to the sick kids at BC Childrens hospital. Maybe it’ll make a diffrence in some struggling kids life.
The realtives get a picture of some money. And a reciept ” Paid in Full”
I’m spending my life having as much fun as I can, being a kid for as long as I can.
Helping people along as best I can.
Revenge, why bother.
I spend a lot of my time in the summer on the water.
Watched a young eagle being trained last summer by its parents to hunt seagulls.
Watched two mature bald eagles fighting in the air locking talons and crashing into the water a hundred or so feet from the boat.
Laughed at a baby seal being a clown on its mothers back last summer.
Watched countless whale shows like these guys.
Ever watched a whale swim up beside the boat and look at you from 15 feet away?

http://www.youtube.com/watch?v=QsiUoagsCJM&feature=related

Had a campfire with my buddies a few nights last summer on the beach, ate fresh prawns, oysters, crabs cedar plank salmon.
Too many beers to count.
How much was that worth ? Could never buy my friends, never had to buy any of the eats.
Priceless I guess.

Any how Shawn goes back to Garths post today,
Be beholden to no one.
Don’t let the money own you Shawn, own it.
Any one that judges me by my bank account doesn’t get to hang around.
Good Luck I do enjoy your posts.

#179 Outlier on 01.09.11 at 12:16 am

On the not owning a boat topic…I had bought a boat in a deal that was too good to pass up, of course you know the rest. My dad gave me a cartoon shortly after my purchase showing a guy whistling in his car as he headed to the marina. He arrived, got out of his car with bucket in hand. He walked towards his boat, emptied the bucket that was filled with money onto his boat, then got back into his car and drove away. Quite fitting.

#180 BC Bring Cash on 01.09.11 at 12:16 am

How’s this to keep your head spinning. In the Jan. 8 edition of the Kelowna Courier business section the top story headline is STRUCTURAL UNEMPLOYMENT ON THE WAY, employment scene changing in okanagan.Below that article , HOUSING MARKET WILL FIRM UP IN 2011. I will quote Elton Nash Kelowna based REmax of Western Canada Vice President. ” We will see steady improvement in provincial and local economies, which will bode well for housing markets across the board.” He claims that this year the Alberta economy is expected to rebound with better oil and gas prices, which in turn will buoy the Okanagan real estate market because Albertans are prime buyers of Valley recreational real estate.
I’ve heard that spin for years. In Vancouver and Richmond its Chinese money. Ive asked people, bankers included for years here in the Broke- onagan why is housing so expensive. The answer always was. Here its different, you can’t loose on real estate in Kelowna because it’s Alberta oil money. I believe the oil money BS was just that and and we are in for a major reality check in “K” town.

#181 Lance on 01.09.11 at 12:21 am

Ouch… what would this family do if they lost an income? They’d be able to survive a few months at best.

#182 Timing is Everything on 01.09.11 at 12:24 am

#78 bullion.bunny

That’s no way to treat a host. That is what parasites do.

as in [parasite] One who habitually takes advantage of the generosity of others without making any useful return.

Why be so rude to the host of this blog? I thought you were smarter than that.

Sorry Garth, your blog, just my opinion. You can nuke this if you want.

#183 Robert on 01.09.11 at 12:54 am

#160 — aka the Bestplaceon blah blah.. If I understand you correctly, the imminent collapse of our real estate bubble is to be forestalled by selling off the country to foreigners.. That’s a brilliant solution.. When in doubt, why not sell the crown jewels to keep the party going too. Is this what we remember every Nov 11; all that “fought to save the world for freedom” is so much tripe when schlubbs like you cheer on the sale of the land from beneath our feet. Disgusting..

#184 jen on 01.09.11 at 1:04 am

Yeah and guess who actually funds the ‘moneyville’ blog – a supposedly objective source for personal money matters – oh yeah Scotiabank.

That is pure advertising.

#185 jen on 01.09.11 at 1:17 am

Check out this website. It seems to suggest that you can withdraw RRSP money as a down payment through a ‘RRSP home buyers plan’. I had no idea such a thing was even legal.

http://www.pacecu.ca/high_ratio_mortgages.php

You’re joking, right? — Garth

#186 Nostradamus Le Mad Vlad on 01.09.11 at 1:27 am


An idea for C-H-F and the CPC. No doubt they are reading this.

“Dear Mr. Harper,

“Please find below my suggestion for fixing Canada’s economy. Instead of giving billions of dollars to banks and car companies, that will squander the money on lavish parties and unearned bonuses, use the following plan:

“There are about 20 million people over 50 in the work force. Pay them $1 million apiece severance for early retirement with the following stipulations:

“1) They MUST retire. Twenty million job openings — unemployment fixed.

“2) They MUST buy a new Canadian car. Twenty million cars ordered — auto industry fixed.

“3) They MUST either buy a house or pay off their mortgage — housing Crisis fixed.

“4) They MUST send their kids to school / college / university — crime rate drops.

“5) Buy $50 of alcohol / tobacco / petrol a week . . . there’s your money back in duty / taxes, etc.

“It can’t get any easier than that!

“P.S. If more money is needed, have all members of parliament pay back their falsely claimed expenses and second home allowances.”
*
Terrorists The only terrorists are the military and govts. Leave sheeple alone.

GW Scam Perhaps sheeple may get a healthy dose of reality.

Sudan Oil and peace works. Politicians screw things up.

Wal Mart Nutty facts and figures.

HAARP Ignorance is Bliss. Map with possible locations.

Obama’s Much-Needed Event “And today he got it!” wrh.com. Interesting how so many events and incidents are happening everyday now, all designed to take our attention away from the big picture.

Imposing Contracts on unions, and Obama’s Czars.

As DSP says, there cannot be inflation (unless hidden) while economies are tightening.

#187 dark sad person on 01.09.11 at 2:15 am

LMV-

Traitors “Draw and quarter the bastards who sell their people into the slavery of the banks!” wrh.com.

****************
Good link-
Poor Ireland-they’re getting the exact same rap we are-
We just pretend it isn’t happening-

#188 jen on 01.09.11 at 2:19 am

From my own research in this area I have come across a variety of sub-prime lenders that advertise the fact that they provide mortgage loans to people without good credit scores and/or offer no down-payment/cash back mortgages. See the list below of some of these subprime lenders making these claims.

http://absolutemortgage.ca/
http://www.canequity.com/no_money_down_mortgage.stm
http://www.canadianmortgagesinc.ca/home_mortgage/
http://www.midislandmortgage.com/services.html
http://www.realmortgagesolutions.ca/
http://www.mortgageopportunities.ca/Loan_Programs.html
http://www.mortgageland.com/bad-credit.html
http://www.onestopmortgage.ca/products.html
http://www.pioneerwest.com/services.htm
http://www.canadian-mortgages.com/index.php?option=com_content&view=article&id=33&Itemid=80
http://kamloopsmortgagegroup.com/
http://www.alexandermacleod.com/default.aspx?PageID=1001

#189 Tre on 01.09.11 at 2:25 am

Hey Garth like they say if you have to ask then you truly can’t afford it. There are a lot of basket cases that will be exposed in the real estate crash. Lastly that’s where if they had a balanced portfolio, along with financial sense and prudence they’d have a fighting chance. Sadly, a lot of people are like that and they just have no idea.

#190 Patz on 01.09.11 at 2:34 am

Texas tanks without the help of the usual suspects. Well isn’t that inconvenient!
http://www.nytimes.com/2011/01/07/opinion/07krugman.html

Sad news on a bad news day. One of the great essayists on modern America, Joe Bageant, has been struck with a serious form of inoperable cancer. He will undergo chemo but … well I just hope. Here’s just a couple of lines from a blog on American cultural ignorance:
Meanwhile, here we are, American riders on the short bus, barreling into the Grand Canyon. With typical American gunpoint optimism, we’ve convinced ourselves we’re in an airplane.

For more go to: http://www.joebageant.com/joe/

We’re in a sh*t ship and it’s sinking but… oh look, a shiny thing!

#191 LB on 01.09.11 at 4:13 am

Canuck Abroad, TS and Moneta.

Thanks for your personal perspectives and experiences which all share the common strategy of avoiding debt as the primary means to achieve liberation,peace of mind, financial security and to establish control over one’s own life course, beholden to no one. Valuable insights and alternatives to hear, in these tumultuous financial times,especially for the young.

Eschewing debt of any kind IS the answer, and more and more people are recognizing and adhering to this philospy.

#192 Mark in Edmonton on 01.09.11 at 4:30 am

OMG!
Just noticed the House Sales in DEADMONTON is down to one of it’s lowest levels ever in years! Scary!

#193 Jeff Smith on 01.09.11 at 4:33 am

>#18 Nostradamus Le Mad Vlad on 01.08.11 at 12:13 am
>True enough — Pensions The Eurozone is beginning to
>steal them, Obama has made noises about 401Ks and
>IRAs, so what of Canada? Plus — Pensions One Not great
>when a person’s pension fails; it can lead to suicide.

Lets put it this way. If they can go and spend the EI money, how difficult is it to go and spend pension money? Always prepare for the worst.

#194 Jeff Smith on 01.09.11 at 4:38 am

>#47 April on 01.08.11 at 1:58 am
>Garth, despite all this real estate pumping do you still
>see a 15% decline in canadian home values this year
>and especially in the Lowermainland of BC?
>Correction is inevitable. — Garth

Our friend in high places Harpie et al (F & C) will prove you wrong again. They are not god, but one thing they can do is keep RE going up and debt level going up. Count on it!

#195 Jeff Smith on 01.09.11 at 4:59 am

>#101 Hoof Hearted on 01.08.11 at 12:54 pm
>#58 Nostradamus jr.
>Yes, that was an excellent article;
>Much we already knew, the rest filled in the blanks.
>The idiots in BC have effectively geared the local
>economy to a great unknown…offshore money being
>laundered here through a variety of means, much of it
>Real Estate

Anyone know what happens to the 25 billion that Lai Changxing brought into vancouver? Did he lost them all in the Dotcom bubble burst? Seems he is destitute now a day and needs to find a job.

http://www.chineseinvancouver.ca/2009/02/lai-changxing-granted-work-permit-hope-to-do-real-estate/

http://www.chineseinvancouver.ca/2009/02/lai-changxing-gets-a-high-pay-job-offer/

#196 Jeff Smith on 01.09.11 at 5:13 am

>.#25 nonplused on 01.08.11 at 12:42 am
>#7 rosie said: “The US cannot and will not default on its’ debt.”

>Why not? They already have, at least partially, twice in
>the last 100 years. The first time was when they
>confiscated gold coin and then devalued the currency >from $20/ounce to $35, which is a pretty big haircut for anyone who had cash. The second was when they took
>the dollar completely off the gold standard, this time stiffing external creditors.

The US dollar is the reserve currency, so when they need to pay off debt, they just print more money. Yes it creates inflation but hey, the inflations get passed on to other countries like China, Germany, France etc. It’s great when your dollar is the reserve currency.

#197 allister on 01.09.11 at 9:43 am

#100 Utopia

So doesn’t that mean some gold is necessary in everyones diversification plan.

I know there are people who always point to the fact that it fell from $800 to $325, but my in lifetime it has risen from $35 to $1400 and tracked inflation beautifully.

I’m expecting a fairly large correction in gold in the near future, but I do believe that it’s only a correction. My opinion would change if governements all of a sudden found religion on debt, but i don’t see that happening. I mean, even Ireland bought another day of survival by taking on more debt – i can’t see that as a survival plan.

Correction will be a bear trap. — Garth

#198 Bottoms_Up on 01.09.11 at 10:05 am

#186 jen on 01.09.11 at 1:17 am
————————————–
Perfectly legal. But remember you owe back to your RRSP the money you took out.

Nothin’ like buying a new house and having an RRSP bill on your hands.

There is no advantage to the HBP other than taking an available down payment and putting it into an RRSP for 90 days in order to get a tax refund, which can then augment the deposit. Other than that, using RRSP money (which appreciates in a tax-free environment) to buy a house (which will depreciate) is hardly a genius move. — Garth

#199 allister on 01.09.11 at 10:16 am

#149 Devore

Yes, Japans is way more screwed than the US and it’s the third largest economy.So this is no Greece were looking at. It use to be the second largest economy but China took #2 recently.

Their debt is 200% of GDP way more than the US, their population is greying faster than the US, their exports are threatened by China, they have no natural resources, and they are very socialist. I have a nephew who married and moved to Japan in the 90’s. He says RE prices are down about 50% since 1990.

Remember the book “Land of the Rising Sun” in the late 80’s. Every boardroom was reading and memorizing it, and reorging to emulate it.

#200 Tim on 01.09.11 at 10:29 am

An articulate well thought out response gets this from Garth:

There will be no US federal default. Get a grip. — Garth

Even when faced with overwhelmingly good evidence garth is more stubborn than a mule. This is why he would make a good politician.

A US debt default would result in 20% mortgages, a societal depression greater than that of the 1930s, intense human suffering, massive unemployment and the loss of 90% of the wealth of the middle class. It will not happen. It will not be allowed to happen. To suggest so is pure fiction and fantasy propagated by people utterly devoid of factual evidence or an understanding of global economic and political leadership. Get a grip. — Garth

#201 Moneta on 01.09.11 at 10:32 am

I mean, even Ireland bought another day of survival by taking on more debt – i can’t see that as a survival plan.
——
Rates have been coming down for so long that no one can imagine GDP growth through inflation.

With inflation, a lot of government funding problems go away. We just get poorer but that’s to be expected.

#202 BDG-YYC - on 01.09.11 at 10:56 am

#139 Edmontonian on 01.08.11 at 3:53 pm
FYI: Housing Disaster in 2011 in Edmonton ALberta
1) Bankruptcies surge in December-very rare people usually wait until after Christmas to throw in the towel.
2) Condo prices down $24,000 since may
3) Housing prices down $40,000 since May
4) Upgrader work being done in the Fort McMurray Area have the Big Oil Companies looking to fly in Men from Newfoundland & Quebec, the newer lower wages thy are offering one can’t survive on in ALberta with our inflated Grocery, Electricty & Housing costs. (Even Dell pulled there office out of Alberta after the City Of Edmonton gave away the farm so they would set up here-Electricity costs too outrageous since the Conservative Govrn Deregulated the province).
5) Foreclosures surging again up to 25 foreclosures a day in AB
6) People are waking up, the mainstream media is actually printing what is happening-for a change.

______________________

Re: #6 … By the time something actually hits the media it has become “NEWS” which means “it” has allready happened. Such news is of very little value as in information after the fact. Sure … “People are waking up” … too late. Housing in Edmonton and Calgary actually peaked in ’07. As you can see from the chart per the following link – most of the purchases since then are lost money and prices are currently back to ’05 levels. That’s 6 years of dead money. The losses since May have brought prices to a fairly critical point and we could well be in the process now of falling off the cliff. We’ll know soon enough. http://www.chpc.biz/Major_Cities_Chart.htm

Re: #5 … Again … Current pricing is back at ’05 levels so a great deal of the buying over the past 5 or 6 years and particularly all the “no down” stuff with variable rates etc. are in negative equity positions and coming up for renewals etc. and many have HELOCs piled on top of them to boot. It is going to be very interesting to see what happens when the spring surge of listings from all the hold-outs that decided to delay listing so they could take advantage of better prices in the spring does to the market. Cough …

Re: #4 … The use of workers from outside Alberta is very old news indeed. The demand for tradespeople to support oilsands construction far outstripped Alberta capacity. The boom in Oil Sands construction activity peaked several years ago. Over 50,000 foreign workers alone were brought into Alberta over a few years as things started heating and local labour availability was sopped up by oilsands related employment. You can clearly see the effects of the oil sands surge on the chart that culminated in the explosive run up to the peak in housing prices for both Edmonton and Calgary.
As for the “inflated” electricity and grocery prices in Edmonton … ummm … huh? Why would Edmonton be different? Food and Energy prices are an issue globally.

Re: #3,#2,#1 … Hang onto your hat … lots more to come.

And Finally … “Housing Disaster in 2011” … You are likely right on the mark – Edmonton and Calgary could just be in for a world of hurt this year. The market has been silently languishing and breaking down for much longer than most realise.

#203 The American on 01.09.11 at 11:00 am

At #106: dd, there will be no U.S. default. World markets will not permit it to happen because they cannot afford for it to happen. I’m not saying it shouldn’t happen, given the economic circumstances. But, I am saying it most certainly will not happen.

#204 bridgepigeon on 01.09.11 at 11:04 am

179DIV: beautiful

#205 Nostradamus jr. on 01.09.11 at 11:17 am

Will the next Generation prefer to live and work inside Ontario’s Manufacturing Economy?

Understand and appreciate the Coming Education Paradigm Change… LINK DELETED

Nostradamus jr.

The site you linked to alleges the shooting yesterday of the Arizona Congresswoman was a political act orchestrated by the US government. It says: “With Wall Street Bankers controlling the Politicians, but the financial system falling into chaos, what a simple method/act this was to convince the Masses that troops out into the streets are needed to provide for their safety?.” You are now banned for life from this site. — Garth

#206 Utopia on 01.09.11 at 11:27 am

#199 allister on 01.09.11 at 9:43 am
#100 Utopia

So doesn’t that mean some gold is necessary in everyones diversification plan.

———————————————————

I own some but I limit my exposure to it. Been there before. I have to agree wholeheartedly with Garth on this one topic. I only see gold as a strategic investment for today but one with an uncertain shelf life. When the busts come (as they always do inevitably with precious metals) they can wreak carnage on your portfolio. I do not personally want to be overweight there because the recovery between dips in the metals is just so long. This last one took 30 years and still has not returned to the inflation adjusted highs of 1980.

If you are asking me what you should buy I can’t help because that is a personal thing. Get some advice from a professional. For me,….I just don’t trust metals over the long run. Personal experience dictates my attitude.

#207 Devil's Advocate on 01.09.11 at 11:31 am

#175 Utopia on 01.08.11 at 10:47 pm

On free speech; you are, of course, correct and I would certainly be the or one of the very last to suggest ones opinions and their right to express them should be censured in any way. With that in mind, is not my participation on this blog scorned because I am perceived as having contrary views to the bulk of the posters here. I, in fact, am not so polar opposite in opinion to Garth as so many believe. I am, in fact, on side with Garth in many a opinion. That I happen to be a REALTOR clearly prejudices the majority of the participants on this blog against me that they hear not what I say but what they think I might say before reading my words. What one says is not nearly so important as what their audience hears.

I participate here to offer some different perspective. If you all wish to maintain closed mind and ban me in some way from participation as has often been suggested by more than a few of the pups and poodles they make a further plea to Garth to do so. But would that not be hypocritical? To suggest that I should rather post on the TREB (an organization to which I do not belong by the way) or CREA website shows the limits to your welcoming objectivity.

You should embrace my participation here as fostering open intellectual debate. You should, in fact, seek out someone further to the right than I. There was a gentleman who was the subject of one of Garths articles here not long ago who defended his position in these forums. The relentless chastising of him by the pups and poodles led that clearly intelligent man abandoning this place in a quick hurry not because of the soundness of the pups and poodles arguments against him but because he has far, far better things to do with his time. Trust me that was their loss not his. I gotta ask myself; am I just too stubbornly stupid or is my time just not worth better?

The time and effort I spend here has clearly done something for me or I wouldn’t spend a second here. I think too that it has done something for the Pups and Poodles as unbeknownst as that may be. Certainly I do often question my time spent here – time well wasted? Maybe not so much.

How long have I participated on these blogs Garth? Two years. More I think. And how has the sentiment of the pups and poodles changed. Not one iota from what I see. Mine has though. Really it has. Up until two years ago I was more in the camp the Pups and Poodles occupy. Today – not so much. I owe that to you Pups and Poodles. You scared a wake up call in me that caused me to look beyond to the opportunities rather than the doom and gloom. Sorry I have been unsuccessful doing the same for you. I may continue trying, I may not. Certainly you are making it difficult to for me to want to continue. Keep it up and you will eventually succeed in banning me from your pitty party.

#208 Amarillo on 01.09.11 at 11:32 am

Sunday morning, cup of joe and blizzard swirling out my do’. Talk of bees, making cheese, holding gold and growin’ old. You guys/gals are great, have a nice Sunday.

#209 InvestorsFriend (Shawn Allen) on 01.09.11 at 11:39 am

Allister at 199

See the following link to see how Gold has tracked inflation beautifully in your lifetime (NOT!)

Good god, how well did it track inflation from 1980 to 2002, when if was falling from $800 to $250???

See the two Gold graphs in the article here. (you need to scroll down a little to see them)

http://www.investorsfriend.com/December%2014%202010.htm

Gold has been a great speculation since 2002. Up hundreds of percent, while inflation is up at most 30% since 2002…

#210 InvestorsFriend (Shawn Allen) on 01.09.11 at 11:47 am

Allister at 199

And if Gold has matched inflation when you consider just two points in time, 1930 or so at $35 and today at $1400 (and ignore every year in between)

Why would you want an investment that merely tracked inflation? Stocks absolutly walloped inflation.

http://www.investorsfriend.com/asset_performance.htm

Why buy Gold when per my post just above it is currently well above its long term trend line? It may go much higher. But do be careful. It is an out and out speculation. Not an investment at all, just a gamble.

#211 GregW, Oakville on 01.09.11 at 11:53 am

Hi Garth, This is interesting sounding work! Maybe there is a reader of your blog that would be interested in this job or knows someone that should apply! Thankfully F,H,& C does not meet the qualifications spelled out in the link!!!!
Sorry you don’t seem to either, what a shame. ;)

Ron Paul Wants You! (To Take On The Fed)
http://www.infowars.com/ron-paul-wants-you-to-take-on-the-fed/

“Ron and Jeff want an economist with a “strong personality to match their strong analytical skills.” The Fed and its shills are significant opponents, after all. The “salary will be respectable, a solid 5 figures, though depending on experience.”

Write me if you are that person, or can recommend someone. The preference, btw, is for someone with no Beltway experience. And probably you should be single. But what an opportunity to work hard, do good, and have fun. I will add, from personal experience, that Ron Paul is a great boss, too.

This can be a life-changing experience for the right young person. Imagine an 18th century classified: “Wanted, Economist-Assistant to Thomas Jefferson.” This is the equivalent, although Jefferson was not as principled in office as Ron Paul.”

#212 InvestorsFriend (Shawn Allen) on 01.09.11 at 11:54 am

Sorry for one more post on Gold as this is not a Gold blog…

It is okay to buy some Gold as an insurance against the risk that paper currency collapses.

But remember in most cases when you buy insurance, the fire never happens and you LOSE your premium.

Buy some Gold as insurance but be prepared for the fact that the U.S. dollar migh survive after all and Gold fall back.

If our currency collapsed, so would society. Gold would be just metal, not a medium of exchange. What people needed – food, fuel, shelter, energy, protection – would be the things of value. This bullion fetish is laughable. As I wrote some days ago, my insurance against potential troubles includes a stable and independent supply of water, food and electricity. I recommend this path instead of collecting chunks of useless yellow stuff. — Garth

#213 a prairie dawg on 01.09.11 at 12:00 pm

#187 Nostradamus Le Mad Vlad

Usually I like your stuff Vlad, but I have to call you on this one. I’m cursed with the math gene.

“There are about 20 million people over 50 in the work force. Pay them $1 million apiece severance for early retirement with the following stipulations:”

20 million times 1 million>

1000 millions is a billion
1000 billions is a trillion
1000 trillions is a quadrillion

x 20 = 20 quadrillion dollars

$20,000,000,000,000,000.00 fix

Sorry but this fix even makes Harper look good.

#214 GregW, Oakville on 01.09.11 at 12:05 pm

Might this be part of that secret society JFK was speaking of before he was killed?

Royal Family granted new right of secrecy
http://www.infowars.com/royal-family-granted-new-right-of-secrecy/

“…will no longer be disclosed even if they are in the public interest…”

#215 Devil's Advocate on 01.09.11 at 12:06 pm

I would be willing to wager, in very high stakes, that there are far, far more REALTORS who hold post secondary degrees than any other vocation which does not require the same.

I would also be willing to wager, in very high stakes, that a poll of members in any of those “professions” which do require a post secondary degree for entry would, by far, show that those “professionals” hold in higher esteem REALTORS than would a similar poll of those in vocations that do not require such pedigree.

I would further be willing to wager, in very high stakes, that the participants in this blog resemble the later group by far more than the former of that preceding paragraph.

And finally, I would be willing to wager my whole net worth that it can be easily proved an educated man is far, far more objective than an uneducated man.

#216 BC Bring Cash on 01.09.11 at 12:28 pm

#184 ROBERT

Couldn’t agree with you more. The sale of our assets to highest foreign bidder should be discouraged.

#217 Devil's Advocate on 01.09.11 at 12:30 pm

2,351,000 is the number of homes owned by those 65 and older across Canada. How many owned homes in Canada? (population (34 mil?) / average number per household (3?) * % home ownership (70%?) 8,000,000?

#218 GregW, Oakville on 01.09.11 at 12:34 pm

The USDA’s Organic Deception article
http://farmwars.info/?p=4913

“It makes perfect sense, however, in a Machiavellian sort of way.”

#219 GregW, Oakville on 01.09.11 at 12:48 pm

Hi Garth, FYI article, and the pic with it I found interesting too. I hope it of some use to help keep your site and others up and running.

Network Defense Gone Wrong
One common distributed denial-of-service defense could in fact make a Web site more vulnerable
By David Schneider / January 2011
http://spectrum.ieee.org/telecom/internet/network-defense-gone-wrong

#220 Painted Toenails on 01.09.11 at 12:57 pm

#201-Devil’s Advocate

Your post is timely as I was thinking the other day that your posts get a rise out of a fair number of people. They can be inflammatory, I’m sure you know this. You have to take your lumps for that. Having said that, anyone here calling anyone else a ‘RealTurd’ or worse should seriously examine why they have such a level of vitriol towards one group. Seems to me there is plenty of blame for high prices, shell-game negotiations and ‘surprises’ to go around.

Respect is a beautiful thing. Mutual respect is even better.

I don’t agree most of your sentiments, the majority of us here do not but please continue as it seems to me you have some insights and information of merit.

#221 Junius on 01.09.11 at 1:00 pm

#216 DA,

You said, “I would also be willing to wager, in very high stakes, that a poll of members in any of those “professions” which do require a post secondary degree for entry would, by far, show that those “professionals” hold in higher esteem REALTORS than would a similar poll of those in vocations that do not require such pedigree.”

Are you serious? You think that the legal profession has a high opinion of Realtors?

Go take a Real Estate lawyer who is recently retired (or doesn’t need the work) and their conveyancing assistant out for lunch and ask them what they really think. They will give you an earful about how appalled they are by the lack of professionalism amongst Realtors and how they make WAY too much money for what they do.

Guaranteed.

#222 GregW, Oakville on 01.09.11 at 1:03 pm

BLOGS // Energywise
Oil Prices in Economic “Danger Zone”
POSTED BY: Bill Sweet / Sun, January 09, 2011
http://spectrum.ieee.org/energywise/energy/fossil-fuels/oil-prices-in-economic-danger-zone

FYI: Bill Sweet wrote this, I think informative, book.
http://www.amazon.com/Kicking-Carbon-Habit-Warming-Renewable/dp/0231137109

#223 Agio on 01.09.11 at 1:07 pm

And here we have an anomaly. A couple doing it right. Mayhap commonsense or they read, listened and learned.

http://www.theglobeandmail.com/globe-investor/personal-finance/financial-facelift/modest-needs-equal-early-retirement/article1848644/

#224 a prairie dawg on 01.09.11 at 1:13 pm

1. Consolidate.
2. Simplify
3. Be beholden to no one.

Pretty good rules. But it goes against some peoples ‘free’ will, not being able to spend their way to happiness or ‘keep up’ with their friends/neighbors.

So you give up vacations in the sun for awhile. You give up 50″ plasma tv’s. You give up toys that sit in your driveway 50 weeks a year. You give up expensive new cars and trucks sitting beside the toys. You give up the Mcmansion with the granite and stainless, and buy a house well below your means. You save and invest early in life. You spend every spare dollar you can to pay down debt along the way.

Started ‘the plan’ in 2000. Mortgage will be paid off in 3 more years, which is 11 years early, on a 25 year amortization.

It’s a choice between wants and needs. And they are not synonymous.

#225 InvestorsFriend (Shawn Allen) on 01.09.11 at 1:17 pm

Number 210, BC Bring Cash

You don’t like the sale of “our” assets to the highest foreign bidder.

The notion that citizens collectively own anything is not very realistic and is rather communist.

If YOU own it you can sell it.

If YOU don’t own it, the sale is none of your business.

If YOU think you own a portion of crown assets, you don’t. If you do go and try to collect your dividend on it or sell your share. you can’t.

Foreigners are people too.

Long live the free markets. Of course sell to the highest bidder. That is the essense of free markets which is the greatest institution of man and responsible for all progress.

#226 Lonely Limey on 01.09.11 at 1:26 pm

Owning a boat can be likened to standing under a cold shower and tearing $20 notes to pieces.

#227 cellar dweller on 01.09.11 at 1:27 pm

@#144 realpaul
Totally agree with your statement withone exception.

“…On cue the public school trained brain dead zombies will jump up and start barking the politically correct catch phrases they’ve been taught….”

I went to public school and most of the politically correct brain dead barking dogs were …..

“Student loaned, university educated, politically correct, brain dead zombies that would mindlessly parrot (verbatim) whatever their prof would regurgitate out of his/her politically correct tenured pie hole. ”
Otherwise, your statement was excellent.

#228 Junius on 01.09.11 at 1:32 pm

#184 Robert,

Thanks for calling out this pumper again. However I am afraid it is no use.

There remain so many who believe the solution to our economic problem is just to open the floodgates to a new class of “rich investor” from Asia or anywhere to prop up our Re market. Somehow they miss that fact that the real goal needs to be to build a sustainable economy for all Canadians. Instead they just pump and hump every new possible scheme to keep the ponzi scheme alive.

I am in favour of immigration from any country but I have real concerns about so called immigration investment programs.
History has shown that the best immigrants are those committed to the country, earn their citizenship and want to integrate into the country. These are also the immigrants who are more likely to contribute to the overall economy as entrepreneurs.

The “investment” immigrant has generally proven not to be tied to this land or our future. I had significant experience with the immigrant investor programs in the 90s and saw up close the difference between immigrants who “bought” their citizenship and those who came the traditional ways.

They generally have far less of a commitment to our country. Far less respect for our society and institutions. Less interest in integrating. Will move in an instant. Often more tied still to where they are coming from then Canada. Most importantly for this Blog, generally not interested in investing in Canada beyond a Real Estate asset or whatever investment got them in. There is far less of a trickle down effect than many people would assume. In short, they wrote their cheque so they can do whatever they want. Citzenship on the cheap.

Personally, I don’t believe hype. I know we will have rich investors from China and other countries buying Real Estate. It has been that way for decades. However I don’t see it changing things enough to make a difference except to create more bull for the bulls.

What is so strange is that this delusional crowd doesn’t even begin to contemplate the political consequences of creating a situation where a group of immigrants priced out ordinary Canadians from the Real Estate market. There is enough resentment in Vancouver and Toronto already. I cannot imagine how it would be if the wishes of these pumpers came true.

#229 dd on 01.09.11 at 1:35 pm

#213 InvestorsFriend (Shawn Allen)

…If our currency collapsed — Garth

Shawn, we have seen what a currency collapse brings. Read about the second world war and what was used for currency at that time. Read about other societies in the 1980’s – 2010 that have faultered. Don’t take anyones word on it.

Yours included, I would say. During WW2 the US dollar was the world`s reserve currency. As it is today. — Garth

#230 dd on 01.09.11 at 1:39 pm

#204 The American on 01.09.11 at 11:00 am

…World markets will not permit it to happen…

I know. They will paper it over. Watch the price of goods go even higher over the coming years. Food, energy prices to the moon while wages stay flat.

#231 cellar dweller on 01.09.11 at 1:40 pm

@#158 Victoria Tea Party
The riding that the Arizona shoots occurred was hotly contested. The election of the congresswoman was won buy a 1% margin. Feelings were running very high.
The “Tea Party” had put a map of the US on its web site with 20 Congress members ridings superimposed with Gunsites. Apparently these Tea Party members didnt agree with the way she voted on Health reform.

To segway into “poor” Gordon Campbell character assassination makes me wonder if your a staunch supporter of the Premier ( perhaps one of his staff?)
As for Mr. Cambell and his “character” I only have three words left to say.
B.C. Rail

#232 dd on 01.09.11 at 1:43 pm

#202 Tim

There will be no US federal default. Get a grip. — Garth

True. But there is no real solution put forward by governments. Even with all their cutting to budgets they cannot meet bond interest payments. I ask a simple question for which most do not have an real answer. Most only say …. it can’t happen backed by zero analysis.

Of course bond payments will be met. — Garth

#233 GregW, Oakville on 01.09.11 at 1:44 pm

This is short and cripitc only if your interested. Two responce letters have been write, you know were. ;)

#234 dd on 01.09.11 at 1:48 pm

#199 allister

…Correction will be a bear trap. — Garth…

At near zero % interest rates. Funny.

#235 Utopia on 01.09.11 at 1:59 pm

Devil,

You might have already noticed I have not ever been one of the people calling for your expulsion. I have in fact defended you many times. You would make more friends though if you stopped being so superious all the time and calling everyone here “pups and poodles”.

Your opinion is not the only one and I assure you there are some very well educated people who come to this blog regularly as there are also many wealthy individuals. None of them likes being insulted and preached too.

So I will make peace with you and refrain from saying “REALTURDS(r)” if you knock it off with the pups and poodles commentary.

#236 rory on 01.09.11 at 2:22 pm

#158 Victoria Tea Party and all …

Please read Karl at http://market-ticker.org/akcs-www?post=176851.

We should all reserve our judgements until we really know something – like the truth.

#237 a prairie dawg on 01.09.11 at 2:34 pm

@ #225 dd

“They will paper it over. Watch the price of goods go even higher over the coming years. Food, energy prices to the moon while wages stay flat.”

That is true dd. And also significant tax increases to cover all the stimulus spending. This further dilutes the value of the dollar.

All of the above, is the inflation part.

Coupled with falling asset values when the property orgy is over. (It may not happen this year, but within a few, guaranteed. When interest rates rise meaningfully, mortgaged paper kingdoms will fall)

That’s the deflation part.

It’s like a double-edged sword. It cuts both ways.

So stock up on bandaids. The next decade will be memorable.

#238 Dark Sad Monster Bunny on 01.09.11 at 3:02 pm

216 DA – doubful, definite no, not sure and irrelevant.

Quit trying to muddy the waters and lower the bar. Try
defending yourself by showing how you meet true
professional criteria. Of course you will quickly find that
you do not.

Again, I support your approach in “acting professionally”.

229 Junius – Many solutions to this may only be throwing out the baby with the bathwater. I believe its Thailand that has a requirement to create a Thai corporation for
foreigners to own land. I’m guessing the objective is to
somehow keep tighter control. Opinions?

#239 45north on 01.09.11 at 3:09 pm

rory: I’m with you. The cause and effect argument is put forth by the left to damage the right.

However, I do question the right of the shooter to remain aloof from the efforts of law enforcement to search for accomplices. Here I am not thoroughly familiar with the law in the United States although I have watched “Law and Order”.

He (the shooter) should be persistently questioned, his meals should be withheld and he should be made to stand up and sit down on command.

In this case, “innocent until proven guilty” is foolishness.

#240 bill on 01.09.11 at 3:21 pm

”there’s nothing . . . absolutely nothing . . . half so much worth doing as simply messing around in boats.”

but get one that fits your wallet….

#241 BC Bring Cash on 01.09.11 at 3:33 pm

# 226 InvestorsFriend

I don’t claim to have answers to these complex issues, just questions. Why is it OK for the CONservative mind to support long shots with tax payers $ like bailing out big banks and car manufacturers. It is not ok for public participation in a sure bet like the tar sands but foreign govt. owned Statoil of Norway is welcomed and of course Chinese Communist Govt. owned companies as well. It doesn’t fit into my stupid head. Try getting access to their resources? Good luck. Free markets exist only in theory.

#242 kitchener1 on 01.09.11 at 3:50 pm

Boat =

Bring– Break

Over– Out

Another

Thousand

#243 dd on 01.09.11 at 4:07 pm

#230 dd on 01.09.11 at 1:35 pm

…Yours included, I would say. During WW2 the US dollar was the world`s reserve currency. As it is today. — Garth..

Along with gold, silver, diamonds, coffee, etc …

Do you understand what `currency`is? Doesn’t appear so. This is my last communication on a wasted topic. — Garth

#244 Alister on 01.09.11 at 4:16 pm

#207 Utopia

I said “Some” for “diversification” because I’m a huge fan of diversification. Diversification has saved my bacon many times. Putting your eggs in one basket is always risky – Garths blog is all about not being ALL IN RE.

Your right, gold has 20 to 30 year cycles, but everything has cycles. The trick is to catch the wave – RE included. Like Japans RE. Timing is everything always.

#245 a prairie dawg on 01.09.11 at 4:22 pm

@ #238 myself

“This further dilutes the value of the dollar.”

Meant to say ‘dilutes the value (amount) of disposable income.’

#246 CJ on 01.09.11 at 4:41 pm

There are several comments here stating or implying that the Arizona murderer Jared Lee Loughner is a war veteran. This is not true. He is not an Afghanistan war veteran and has never served in any branch of the U.S. military.

#247 Nostradamus Le Mad Vlad on 01.09.11 at 4:59 pm

#194 Jeff Smith — Not difficult for the feds. to take away one’s pensions at all, and this alone is good enough reason to do away with politicos once and for all.

People are actually quite good at looking after themselves and those in need; if you’re ever in Mexico (say Tijuana way), note how the the average family lets a homeless person sleep a night in their home, no questions asked, no money demanded.

Politicos and banxsters are the problem; do away with them altogether and better than 95% of the world’s problems would vanish overnight.

They may need us, but we certainly don’t need them. There was a great story this morning, at half-time in between the soccer from England.

Remember the Golan Heights, the source of irritation between Syria and Israel? People live there, in the desert part.

The local Muslims had an average soccer team, but no one to play against. The Israelis also had the same thing.

So the Rabbi approached the Muslim cleric, they put religion and politics aside and their children now enjoy playing games against one another on a regular basis.

No cups or money exchange hands, no one keeps count of the score, referees and linesmen / women are interchangeable, the communities help each other.

Where are the politicos? Nowhere, same as the money.

#202 Tim — “It will not happen. It will not be allowed to happen. — Garth”

From these two sentences, I surmise that someone else is pulling all the strings, in control of things. Then again, shit happens when it is least expected, and that is when the most trouble happens.

But — “What people needed – food, fuel, shelter, energy, protection – would be the things of value. — Garth”

That’s better, ‘tho I do like my creature comforts, so a bunker is a no-go for moi!

#209 Amarillo — “You guys/gals are great, have a nice Sunday.”

Thanks Amarillo, and the same to you!

#214 a prairie dawg — Therein lies the difference a’twixt us — you can figure math out, whereas I don’t even know how old or decrepit I am!

#225 a prairie dawg — “It’s a choice between wants and needs. And they are not synonymous.”

Well said. Western society still has a lot of unnecessary needs, most of which are not needed anyway.

#248 Coho on 01.09.11 at 5:07 pm

This can be a life-changing experience for the right young person. Imagine an 18th century classified: “Wanted, Economist-Assistant to Thomas Jefferson.” This is the equivalent, although Jefferson was not as principled in office as Ron Paul.”

Without Jefferson, there would be no bill of rights in the American Constitution which means we would be enjoying much fewer “privileges” as Canadians.

Jefferson believed that a person holding political office should be in service to his or her country and was against career politicians, who imo, ultimately end up serving themselves.

Like most everyone else, I like Ron Paul’s rhetoric, but please……

#249 Tim on 01.09.11 at 5:30 pm

I sincerely hope you’re right Garth because all those things would indeed be as horrible as you describe.

An articulate well thought out response gets this from Garth:
There will be no US federal default. Get a grip. — Garth
Even when faced with overwhelmingly good evidence garth is more stubborn than a mule. This is why he would make a good politician.
A US debt default would result in 20% mortgages, a societal depression greater than that of the 1930s, intense human suffering, massive unemployment and the loss of 90% of the wealth of the middle class. It will not happen. It will not be allowed to happen. To suggest so is pure fiction and fantasy propagated by people utterly devoid of factual evidence or an understanding of global economic and political leadership. Get a grip. — Garth

#250 Kevin on 01.09.11 at 5:35 pm

Looks like Saskatoon first time buyers had a tougher time entering the market in 2010.

“Sales for Saskatoon in 2010 dropped 7% compared to 2009, but sales for properties listed at $300,000 and lower dropped more than 18%. This is a sure sign that demand from the future is being exhausted.”

http://saskatoonhousingbubble.blogspot.com/2011/01/saskatoons-first-time-buyers-are.html
Saskatoon’s First Time Buyers are Disappearing

#251 cornel on 01.09.11 at 5:38 pm

Dear Garth ,
Please have some advice about BMO’s Retirement Income Deposit Program … Just : YES or NO !! if not more infos!
Thank you!

Congratulations to BeeMo for finding a new way to sell mutual funds. Read this. You can do better. — Garth

#252 Canned Goods and Buckshot on 01.09.11 at 6:00 pm

KC 128

In which part of the country are you gardening?

#253 jim on 01.09.11 at 6:17 pm

Beholdant to no one=impossible as Bob said “You gotta serve somebody”

#254 kw on 01.09.11 at 6:26 pm

In comment 199 Garth said “Correction will be a bear trap. “— Garth
What is meant by this term? Would this be a buying opportunity or would you expect a further drop in price?

When assets fall in value after achieving a plateau, or rise suddenly after cratering, they may look worthy of buying. The latter happened in 1932 with stocks, the former in 2006 with US real estate. Investors who let first impressions guide them, or lack analytical ability, may jump in, only to see devastating losses. Hence, a bear trap. — Garth

#255 VICTORIA TEA PARTY on 01.09.11 at 6:35 pm

237 Rory

I read Karl’s blog regularly and his latest on that shooting is a good one. I mentioned the Tea Party outfit in my piece, but did not pass any kind of judgment.

As the investigation unfolds more will be known of the accused’s motives if any, the bigger picture. We await with interest.

232 Cellar Dweller.

BC’s political atmosphere gets pretty inflamed from time to time, regardless of one’s political stripes. In the normal course of events the issues are hotly debated and when election time rolls around most of us, who are eligible to do so, vote. And the rhetoric tends to decline for a while.

Character assassination has also been an unfortunate part of our political process. It rears its ugly head on occasion (study BC’s political history for several examples). And that is why I must make note of the poisonous rhetoric levelled against Gordon Campbell over the years by legions, it seems, of bloggers and their poster cohorts.

How many of these folks had, or have, the jam to identify themselves, other than through their handles? Probably none, is a good guess. Gutless. There is a difference here between free speech and license. Many don’t know the difference. Pity.

And, no, I’ve never been a Campbell “staffer”. My political leanings are only my business, not your’s; don’t be silly.

#256 Live Within Your Means on 01.09.11 at 6:42 pm

Hi b’dogs. We got enough snow that DH actually used the s’blower today. Been cooking all weekend & freezing – good, inexpensive, hearty & tasty meals. Try to take advantage of off peak hours.

Utopia – do you grow heirloom tomatoes? I was v. big into growing my own from seed (& saved the seed). Had a brandywine tom that weighed 3.5 lbs one year & was it delich. Shared all kinds of seeds with others from around the world. Used to grow about 600 plants under lights in the basement each yr. (annuals/perennials/veggies). Gave lots away. Unfortunately, have a bad back & hips & other health problems. Last yr. was the first time in 20 yrs. that I did not get a veggie garden put in – Shoved a few purchased toms, etc. in some flower gardens, but taste doesn’t compare.

Re takeover of our resources. This govt preaches free markets, until it might affect their seat count, e.g. Potash, Air Canada (UAE) and now the F-35’s (Quebec).

Nite all.

#257 realpaul on 01.09.11 at 6:50 pm

BTW ….I never said ‘civil servants are eating babies’…that was what some left winger said …….to try to redirect an argument with politically correct persoanl invective so as to convolute any valid argument they stand to lose in the face of fact, logic and common sense.

I have included visual metaphors of fat sloppy civil servants driving their SUV’s over the skin and bones of hungry and forgotten children and seniors to underscore the argument that these same greedy pigs are steamrolling the general public and taking far more than they deserve.

I have said that civil service costs ( now greater than all the money spent on services combined) is taking away support and opportunities for those services that caused the hiring of those civic servants in the first place. School books and seniors facilities etc have all suffered because of the 95% ++ drag the wage and pensions have on individual ministries. Its completely one sided and people are suffering while the few benefit cloaked in union rhetoric and ‘privacy laws’.

I have called civic servants power crazed self centered scum and worse….but I never accused them of eating babies !!!!!!!! C’mon…who would say that?

The fact that civil service hiring is the textbook reaction to a recession is pure Keynsian. This underscores our politicians and civil service agrrement that constant inflation is the only system they agree to support.

In fact the US and UK did exactly the same thing…except there the two systems collapsed under the weight of the mistake already….Canada is well on the way.

We have loaded up on civil servants …they were thinking that this would balance unemployment while the private sector was unable to do so. The trouble is that the expense of the expansion has now depleted the coffers of every other revenue stream and now it is only feeding the civil service costs and beggaring every other. In other words…we have also hit the wall.

We are constantly reading about the milllions and billions being wasted by ineffectual programs and wasteful spending. We have ‘saved jobs’ for new immigrants who are not otherwise employable…we have created an entire industry of feather bedding ‘visible minorities’ when historically these people should be working hard to develop their own financial infrastructure as did generations of new comers before them.

Has the idea in politically correct Ottawa become that Canada has becoame a place where new immigrants get precedence by the fact of entry and now deserve a civil service job because the general economy either can’t support them or they are not willing to support themselves?

Its political correctness gone wild folks. Ask yourself..

1)”Why is the government the countries largest employer?”

2)”Where does the money come from to support this massive industry when they don’t create a single dime but only rake in tax revenue and piss it away on other useless programs that create zero capital?”

3) Isn’t this build up of a massive unfunded civil service just another gargatuan pyramid scam that is doomed to take us all down?

It happened in UK and the EU…..cities, counties, states etc are collapsing under the weight of an ill thought out and now utterly unsustainable ‘recession economy’.

Will your taxes go through 100%? Will you be forced to take on debt to stay in your own home as wage and benefit costs rise ( as they are in Vancouver and Richmond).

What is the breaking point…will the citizen become a slave to the civil service pensions in the future?

Anti-government. Anti-immigrant. Anti-taxes. Bitter. Myopic. Repressive. Bigot. The Tea Party comes to Canada. I fought wingbuts like you 20 years ago when they were called Reform. — Garth

#258 jess on 01.09.11 at 7:07 pm

The truth about tax havens:
Nicholas Shaxson
guardian.co.uk, Sunday 9 January 2011 22.09 GMT

Special report: Tax havens
The secret history of Britain’s treasure islands

#259 Live Within Your Means on 01.09.11 at 7:11 pm

Forgot to add in my last post that we were watching Gail Val D- You’re a Princess. Unbelievable how people are so in debt. DH said that guys he supervises (earning $45-50K) call him if they are 1 day late in receiving their car mileage allowance. Some of them are 1 or 2 pay cheques away from going under.

BTW, the other day I said we put in $60K on our house. Some stuff I bought a year before and all was paid in cash.

#260 Herb on 01.09.11 at 7:15 pm

#237 Rory and #256 VICTORIA TEA PARTY

would you mind telling me what the Tucson shooting and the “Shameful Left” have to do with “capital markets”, the purported subject for comment on your market-ticker.org link? Of course, if that blog merely is a false-flag propaganda medium, no further explanation is necessary.

To make the search for “truth” a little more balanced, here is one of the inevitable accusations of Sarah Pailin that the Right has been decrying in anticipation:

http://www.nydailynews.com/news/national/2011/01/09/2011-01-09_palin_put_a_target_on_her_she_should_have_known_the_dangers.html

I’m all in favour of suspending judgment. All that is known is that the culprit(s) went to a Democrat gathering and shot a Democrat representative. And then he/they muddied the waters and kept going and shot a lot of other people. This kind of rules out a political assassination, and kind of leaves a “normal”, murderous nutbar whose mind morphed suggestion/autosuggestion into an imperative to act. Gun control certainly would have reduced the collateral damage.

If American ultra-Republicans (and Canadian neo-Republicans) suspended pre-emptive attacks on the “Shameful Left”, the heat of debate might get turned down a bit, and people might be prepared to wait for and consider “the truth” instead of just flailing away at each other with partisan rhetoric that is pointless – except to its purveyors.

#261 Roial1 on 01.09.11 at 7:16 pm

I recommend this path instead of collecting chunks of useless yellow stuff. — Garth

I concure completely.
However, I have a store of an other “prescious” metal that could be very usefull in a collaps.
Lead combined with copper and tin, a few chemicals and you have a tradeable esential if T-S-H-T-F.
Single bits of this can be used to feed your family and/or defend the home if needed.
It is easy to store and will cary a very high value in a break down.
It is also very cheap to obtain at the present .

I do NOT advocate violence in any form.
However, insurance is never a bad thing.

Garth, never underestimate the stupidity of neo-consevative (Tea bager) thinkers. THEY KNOW THEY ARE RIGHT!

#262 Hoof Hearted on 01.09.11 at 7:22 pm

Red Tape Woes plague business

http://www.theprovince.com/news/tape+woes+plague+businesses/4082021/story.html

Realpaul may have a wee bit of hot spices to his comments, but the overall body of his comments are spot on.

ANYONE who is even remotely tuned to the actions of gov’t can see far too many examples of irrational and irrelevant empire building and hence lifetime entrenchment by the civil service and moreso at the local gov’t level .

The humble peons on the outside looking in are continually forced to develop survival skills to stay afloat, which will in the end serve them well, as in my view the civil service will, as Europe is showing, be out on the streets ….they are authors of their own demise.

More stories like those mentioned in the article will be the catalysts. We let in products from Asia with high lead etc. contents, yet worry about rice ?

#263 Live Within Your Means on 01.09.11 at 7:39 pm

not quite g’nite.

Anti-government. Anti-immigrant. Anti-taxes. Bitter. Myopic. Repressive. Bigot. The Tea Party comes to Canada. I fought wingbuts like you 20 years ago when they were called Reform. — Garth

……………..
That’s why my vote went for RealPaul the other day. He is really over the top. Reminds me of a young person in the news yesterday. He’s not the only one on this blog who is, IMHO, out to lunch. Maybe they should find a deserted island and create their own ‘just & perfect’ society. Wonder how long that would last. LOL

#264 Hoof Hearted on 01.09.11 at 7:51 pm

” If voting changed anything, they’d make it illegal “.

Emma Goldman (b 1869 – d 1940 )

The modern extrapolation/s of that quote is that Gov’ts and their minions are dictatorships between elections and that the true democratic process is rarely if ever harnessed by the citizens .

Tea party , whatever…..change only results in the 99% of the time between elections when citizens aka THE Bosses tell their servants (aka the elected representatives and the “employees” civil service )what they want.

Optimistically, that would be the collective good, but unfortunately the system has evolved ( denigrated) to special interest groups (private and public sector) trying to access the public trough with a ” me first ” quasi-entitlement philosophy.

Recommended re- reading: Orwell’s “Animal Farm”…..more apropos now than the original printing.

#265 realpaul on 01.09.11 at 8:03 pm

After being pushed down for three decades under the Trudeau – Maniacs Canadians began a movement to struggle free from the legislated constraints of the Liberal left…..

….and now we have formed government. By turning over the rocks and exposing the leftist rot we have slowly began to take the country back for Canadians from the politically entrenched bourgoise leftists.

Because of the leftist judicairy left over from the Casrto era Liberals and the aging bureaucracy that allowed unions to proliferate and poison social poilcy in this country for generations the progress has been slow…but effective and methodical…Canadians are waking up and realizing that we were duped and have tremedous constraints to cut away before we become the thriving nation that Trudeau and the red menace sought to defile.

The Conservative Party of Canada ( what you and Craig Oliver want to still referance as the Reform party) is the inevitable future of Canada.

People realize they can no longer support the criminal waves of popular movements like the Tamil Tigers or the Babar Khalsa hiding out in Canada which were darlings under the Liberals. After the Conservatives took power both those wars are ended you

DELETED. Your over-the-top, political tirade is done, and so are you. Just a shame an obviously intelligent person could be so narrow and hate-filled. You have nothing to contribute here – to this blog, or this country. — Garth

#266 dark sad person on 01.09.11 at 8:03 pm

A US debt default would result in 20% mortgages, a societal depression greater than that of the 1930s, intense human suffering, massive unemployment and the loss of 90% of the wealth of the middle class. It will not happen. It will not be allowed to happen. To suggest so is pure fiction and fantasy propagated by people utterly devoid of factual evidence or an understanding of global economic and political leadership. Get a grip. — Garth

To suggest so is pure fiction and fantasy propagated by people utterly devoid of factual evidence or an understanding of global economic and political leadership. Get a grip. — Garth

*********************
Nothing but black or white-nothing in between-
The US will never default alone-in fact the US would never “have” to default-
They could simply print until the bond market pukes-then you will see 20% interest rates-
There are many ways of defaulting-printing is one-clipping another-

There is the Icelandic model-
Diss those great people all you want-what they did worked perfectly-
They are debt free and it looks like the bankers and politicians might end up in jail–this is good too–
There currency is gaining “strength” and their GDP is improving-

There is also a way of international debt repudiation-many smart people have suggested this route-
also would be a good thing-not a bad thing-

Banks can and should be bankrupted-bond holders defaulted on and banks should be nationalized and all depositors should be made whole by printing the money-
Kinda like we’re doing now for these sleazy bankers-to hell with them-

You say this will not be “allowed” to happen –
There’s many things that couldn’t happen-that did happen-
Bernanke said–deflation would not be allowed to happen-
Guess what happened-

Bernanka said stimulus would turn the economy around–Oooops

Debt repudiation would not weaken the dollar–it would strengthen the dollar but would clip bonds which is likely why they don’t do it-
We can’t speak of another solution here because you don’t like gold-

You use the “power to tax” as if it’s some bottomless money pit-
With low unemployment and inflation this is halfassed feasible-but unemployment is climbing and will continue to climb-
Most people are in debt and the danger of loosing their job is increasing-
People have little purchasing power and those that do will spend less-this will add to the above deflationary effect-
We are in or nearly in deflation and will continue to deflate as borrowing and lending and spending dries up and unemployment climbs and trade decreases-
There is a bottom to this taxpayer pit and if they continue on this path-it will be found-then what?

You also put way too much faith in world political leaders being able to solve this-
They aren’t big enough-nor do they have enough political will-or knowledge to do what needs to be done-
“NONE” of them seen this coming-
H &F still can’t see it and you think we got a hope with these clowns?

What a friggen joke-

#267 kitchener1 on 01.09.11 at 8:11 pm

Realpaul

Man, you got to chill out about this civil servant tirade.

Dont worry, layoffs will hit them as well, all in due time.

Look at Rob Ford in toronto.

Got record turnout for his election, simple message of cutting spending etc..
Harris did the same thing in Ontario.

We are in a huge demographic transisiton right now. We simply cannot spend and build and fund the way we used to because the workforce will be much smaller== smaller taxable base while the entitlement base will be much larger (boomers hitting 65 plus)

Weither or not people/govt want to recognize the fact or not, its immaterial.

Spending will have to be cut at multiple levels across all verticals, municipal all the way to federal.

It has to happen and it will happen.

Taxes will rise, spending will be cut.

the govt is never going to be able to meet the pension requirements for its staff as there expectations are based on 7-8% annual return YoY. All the while, they must maintain or invest in triple AAA rated paper.

Countries are folding and govt are falling in Europe over the prospect of having to pay 5 or 6% interest on debt.

The civil service workers would be well advised to have a back up plan for their golden years because the govt will not be able to pay there work pensions. They wont be able to bail them out either as the tax base is just not there.

#268 Debtfree on 01.09.11 at 8:30 pm

I wonder how tom ( calling for the murder of Julian Assange ) flanagan is feeling today ? How about those pukes that what to set up fox north in our country ? Are they going to get one of their useful idiots to target our politicians ? sara palin and her backer rupert murdock should it existed get the dochebag award for the decade . They both have the blood of the murder of 5 adults and a nine year old girl on their hands.. shame on them.

#269 Basil Fawlty on 01.09.11 at 8:34 pm

“There will be no federal default. — Garth”
Given the ongoing increase in the debt ceiling, coupled with the purchase of their own treasury bills, with money created out of thin air, what should one call the situation in the USA?
If not default, what are the consequences associated with the current crisis in the US? How could anyone think that current US government financial policies will cure the crisis of too much debt, while leaving the purchasing power of the dollar unchanged?

#270 Debtfree on 01.09.11 at 8:36 pm

When the craziness comes to us lets not forget who brought it to us .

http://www.lifesitenews.com/news/archive/ldn/2010/jun/10061106

#271 Nostradamus Le Mad Vlad on 01.09.11 at 8:54 pm


FOX Rocks! NOT!! “This is a push to shut down the blogs and alternative media and return us to the enslavement of ABC, NBC, and CBS, all of whom lied to us about JFK, RFK, MLK, Vietnam, Pearl Harbor, etc. etc. etc. etc. which created the public climate of distrust that led to the popularity of the blogs.” wrh.com.

Silver being withdrawn in large amounts from Comex. Hmm . . . wonder why?

3:16 clip dubya’s legacy in Iraq.

Mother Of All Recessions “Even discounted homes don’t sell anymore…”

Africa Just as China gains a foothold in Africa . . . “With 4.5 percent of the world’s population, the U.S. accounts for approximately 30 percent of crude oil consumption.”

GC It’s about to get a darned side colder world wide.

Volcker Great reason to finish with politicos once and for all.

US$8 Trillion Housing Bubble How many ‘economists’ count that high?

Cuts Look for the same at the HoC, BoC and 24 Sussex Drive soon.

4:09 clip The sweet economy is in fine, hunky-dory shape!

43.2 Million on foodstamps. Revolt! — Obama (and Soros) must go!

BP drilling again.

#272 45north on 01.09.11 at 8:55 pm

realpaul: I have called civic servants power crazed self centered scum and worse

did you ever consider that civil servants do not hire themselves and they do not create the programs in which they work? For example civil servants did not create the gun registry. As a civil servant, I am not in favour of building more prisons. Are you?

Here’s an article about peak civilization that’s I think gets to the point:

http://mcaf.ee/ade42

Tainter has one thing very clear: complexity gives a benefit, but it is also a cost.

In my work, the cost of Treasury Board’s Common-Look-And-Feel far outweighs the benefit. If managers were given discretion to implement the rules then I think the benefits would outweigh the costs.

For 10 years I maintained an IT infrastructure. I was frustrated that the costs of the government purchasing rules outweighed the benefits. I had to put maintenance of computer equipment up for bids and I was terrified that an unqualified bidder would bid low and I would have to accept him. While I was running an IT infrastructure on a shoe string, a guy named Paul Champagne responsible for $100 millions was literally stealing the government blind!

http://mcaf.ee/51c04

realpaul: do you even care?

#273 Pat on 01.09.11 at 9:10 pm

#257 Live Within Your Means wrote:

“Been cooking all weekend & freezing – good, inexpensive, hearty & tasty meals. Try to take advantage of off peak hours.”

Hey, you realize that freezing costs (additional) energy too, right?

#274 Dark Sad Monster Bunny on 01.09.11 at 10:04 pm

274 Pat – LWYM can just put things outside to freeze. I think she is in NS. I keep most of my beverages in my un-
heated garage. The coastal BC temps thru the winter
work nicely (0-10C)

#275 Hoof Hearted on 01.09.11 at 10:08 pm

#268 kitchener1 on 01.09.11 at 8:11 pmRealpaul

Man, you got to chill out about this civil servant tirade.

Dont worry, layoffs will hit them as well, all in due time.

Look at Rob Ford in toronto.

Got record turnout for his election, simple message of cutting spending etc..
Harris did the same thing in Ontario.

=============================

Seriously….

Do you really think Rob Ford (or even Christ himself) is going to changed Gov’t ?

After the honeymoon, the newly- minted(mounted?)elected officials will see what they got themselves into. If they don’t cater to the old boys club, they’re gone. That old boys club is the senior civil servants and/or the private sector power brokers.

Unless they identify the lead dogs which are the impediments to change and turf them ASAP as a message to the rest of the pack, the views the same, ad nauseum staring at the same arseholes.

#276 Utopia on 01.09.11 at 10:30 pm

Wow, Bullion Bunny, Nostradamus Jr. and that raving anti-government wingnut known as RealPaul all gone in one single weekend….

Thank you Garth.

Now let’s get back to business.

#277 Onemorething on 01.09.11 at 10:35 pm

#206 NOS JR. Thanks Garth…Finally!

#278 Another Albertan on 01.09.11 at 10:50 pm

#257:

Off-peak hours? Unless you live in an area with an Advanced Metering Infrastructure in which your use is polled every 15 or 60 minutes (and then billed proportionally based on the price during those intervals), you are wasting your time.

If your utility bill has a fixed kWh cost that covers most of your billing cycle, your rate is already smoothed to cover the peaks and troughs.

I consulted on this exact issue 3 years ago. It’s costly enough to get the meters replaced, never mind the ancillary communication, data aggregation, and billing systems.

So why would utilities look at investing >$1000 per billing location? It’s certainly not meant to save the average customer money, as the charge will be factored into your base rate. While some users may see their bills drop, most will have paid for the privilege to actually pay more for their use.

Everyone else’s mileage may vary.

#279 cellar dweller on 01.09.11 at 10:52 pm

@#256 Victoria Tea Party
Sorry, didnt mean to ‘pry’ about your political leanings.

However, in this day and age of instant communication, internet, blogs, etc. to think that public officials will escape character assassination is somewhat optimistic at best.
I agree that the anonimity of the internet makes people “braver” with their libelous, lunatic rants but if your willing to run for public office.
In 2011, thats the nasty part of “the game”.
If the news media today were not so bland perhaps we wouldnt have so many people, so angry with politicians, Big business, and the mingling of the two in far too many conflicts of interest.
B.C. Rail comes to mind

#280 604genX on 01.09.11 at 10:54 pm

The US will not default. They can simply devalue by printing dollars or QE3, 4, 5. Same result. The Brits have just done it. Japan has been trying for years. It’s Old Skool.