Consequences

In Calgary the new boss in charge of the local housing cartel predicts sales will soar 20% this year and prices will jump 4%. In Toronto the head of the world’s largest real estate board tells the media “market conditions remain tight enough to support a sustainable rate of price growth.”

And speaking of the media, the Toronto Star publishes a plea for F to bring Yankee-style mortgage interest deductibility to Canada. “Depending on marginal tax rates, the average home owning family would end up with a nice tax refund which could be used to pay down debt, contribute to savings or spur on the economy through increased consumption — all very desirable things. “

Hey, great idea, reporter gal! Let’s give people the ability to buy inflated houses with virtually no money, borrow their brains out at 3% for thirty years, then deduct all of that nasty interest from the taxes they pay, reducing the effective cost of money to less than the inflation rate. Why not address our staggering debt problem simply by lowering the cost of debt? To nothing?  Wish I’d thought of that.

And why won’t this just exacerbate the problem and end up eating the entire middle class as it did in the States? “When it comes to money,” says she, “we’re generally more conservative than our neighbours.”

See what I mean? It’s hopeless. We’re doomed. The stupids now run the country. I’m back to making squirrel sorbet and watching the wenches detail my bike – I give up. How can you counter such a barrage of willful ignorance and barefaced media manipulation (not that the media cares)?

After all, fact is the first solid real estate results of 2011 are out, and they suck. In the GTA 1,563 houses changed hands in the last two weeks, which means a six-month-long string of declines has continued into the new year. Sales fell 11% from year-ago levels, and would have been worse had it not been for a drought of listings.

The cartel, of course, stresses prices – and at $413,565, the average house is 5% dearer than it was a year ago. It’s all designed to support the ‘buy now or be priced out forever’ mantra which tends to get the house-horny young couples all juiced. But as we’ve discussed here in past weeks, it’s a decline in sales of lower-priced homes which allows average prices to skew higher, even as sales decline.

Still, it works. It’s why they do it. I hear CREA’s now taken out a patent on sunshine enemas. So when you see a realtor with yellow eyes, run.

Yesterday I mused on where all this social hysteria, house porn, debt binging and bad choices is taking us. My conclusion was, into a deflationary phase of unknown duration. It’s hard for me to understand how the immediate outcome (over the rest of this year) could be otherwise.

Of the last four couples I have met in their forties (just this week), only one has more than $150,000. But they have houses. And big mortgages. And no pensions. And kidlets aimed for college. They all had to endure my hallmark, ‘you’re so screwed’ lecture.

With the economy of Canada being 65% dependent on consumer spending, and consumers wallowing in a pit of their own making, figure it out. Oil is going to pass $100 a barrel before long, jumping gas and home heating costs. Interest rates will be rising as soon as Mark Carney figures it out. Taxes are destined to augment after the coming faux election. The dollar at par is chewing up manufacturing and tourism jobs. And at least half of our moribund economic growth is the result of government deficit spending, which means higher future taxes. How does this end well?

So, like I said, all this inflationary stuff is highly deflationary. It creates the conditions under which consumers will inevitably retrench. It means tweaks like F made on Monday to mortgage rules, shutting out some heavily hormonal first-timers, have an exaggerated effect – threatening to become the one thing that flicks the switch of public opinion. With the real estate market now propelled in the GTA, Vancouver and weird places like the Peg and Skatch, simply by emotion and not fundamentals, it’s all most vulnerable.

In any case, I am putting away several vats of Jack Daniels, if you get my drift. And lots of fully-loaded Timmie’s charge cards. I figure it won’t be long before the peasants at the gate are willing trade them for the Maple Leafs that Bullion Bunny sold them.

How to deal with deflation? Sell stuff and pay off debt, of course. That includes real estate. Invest in things that are liquid. Like a balanced financial portfolio. Dump those that turn illiquid. Like your cottage. Buy things that pay you to own them, like dividend-yielding securities. Sell assets that are purely speculative, and pay nothing. Downsize, diversify and delay not.

But then again, I could be wrong. In which case I have enough whiskey and Timbits to make me believe anything.

193 comments ↓

#1 Western Canadian on 01.19.11 at 11:23 pm

“In Calgary the new boss in charge of the local housing cartel predicts sales will soar 20% this year and prices will jump 4%. In Toronto the head of the world’s largest real estate board tells the media “market conditions remain tight enough to support a sustainable rate of price growth.”

Garth, haven’t the predictions from CREA and the local boards on prices been far more accurate then yours for the last three years?

At least I tell you why. — Garth

#2 bsallergy on 01.19.11 at 11:25 pm

I lay the blame at god’s feet. He must love stupid people or he wouldn’t have made so many.

#3 daddybear on 01.19.11 at 11:30 pm

prices rising according to the cartel? what a load of it.
most expensive area of Victoria, North Saanich… a bank foreclosure listing has had to drop the price. Owners gorged on stainless and granite and it sits 1/2 renovated. In Sidney, for the first time in 2 years we see a new listing $30000 less than comparables only 2 months ago. This is the thin edge of the wedge here… yup, sales are down, and now according to Sam Walton, “watch for falling prices”. Ouch. Don’t get hit.

#4 Northern_dirt on 01.19.11 at 11:30 pm

Fifth!!!!

#5 Scooter on 01.19.11 at 11:32 pm

Ah yes! Where would we be without those bovine beauties behind the counter at Tim Hortons. EH!!

#6 HouseBuster on 01.19.11 at 11:33 pm

I cannot believe it either. Houses are way way overpriced. Do any of these people know how long it takes to save $1 million dollars??? And yet they’re buying dumps for the same amount of money.

It is mind boggling to me.

#7 Wayne on 01.19.11 at 11:34 pm

Garth: Does F read your blog? Maybe he should … send him the site.

#8 Ayn Rand on 01.19.11 at 11:43 pm

“The cartel, of course, stresses prices – and at $413,565, the average house is 5% dearer than it was a year ago. It’s all designed to support the ‘buy now or be priced out forever’ mantra which tends to get the house-horny young couples all juiced.”

I’ve been tracking the TREBs data for over a year now and the way they present the numbers is truly in their favour. Damn stats. They use year over year numbers for both sales quantity and average prices.

The peak was May 2010 – average cost $446K, and it has been downhill from there (not steadily, though, a few blips in the fall). You can find the monthly and semi monthly data here:

http://www.torontorealestateboard.com/consumer_info/market_news/index.htm

It will get interesting when year over year data in June 2011 (for May 2011) gets presented. They will need to find a more clever way to present the numbers in their best interests.

If I could figure out how to load my table into this site, I would. Maybe I will forward it to Garth?

#9 squidly77 on 01.19.11 at 11:46 pm

If your picture refers to Harper, we are living in interesting times indeed. Boy, would that ever derail him. I guess us males are weak.

#10 Kilby on 01.19.11 at 11:53 pm

Beautiful, bucolic Summerland in the Okanagan, 6 residential sales in the last month…40 odd realtors. Our was the most expensive (Lakeview) at $497. We are a half hour from Kelowna, in the past this market was fueled by Albertans, and very popular.

#11 tiger_baby on 01.19.11 at 11:53 pm

>The free money craze saw 5/35′s go from 18% to 22% of mortgages.

A quick back of envelope approximation says to me that:
since 25 yr mortgage was the norm for the longest time, every year about 1/25 or 4% of all mortgages are retired and replaced by new mortgages.

Thus almost all new mortgages initiated in the past year have been 5/35 ones, like Garth reports.

#12 jim the poor boy on 01.20.11 at 12:02 am

Great, tax refund for the ones that have a 35 or 40 year terms. I vote for HARPER.

#13 Soylent Green is People on 01.20.11 at 12:05 am

Reporter Gal, ha ha ah a. As if there is such a creature. More like copy and paster.

—————

In practice, this five-year campaign has quietly reshaped the socioeconomic face of the country by altering the way Canadians pay for programs and services funded by the national government.

Altogether, tax cuts decreed by the Conservatives since 2006 will result in foregone federal revenues of $220 billion between 2007 and 2013. Of that, $60 billion in tax savings go to Canadian corporations.

And much of these tax reductions will be paid for with borrowed money. Over the same period, Ottawa will record a cumulative $169 billion deficit.

“They have really implemented the tax cut agenda they championed when in opposition,” said Andrew Jackson, chief economist with the Canadian Labour Congress.

In the long term, this will undercut the federal government’s capacity to support social and economic programs, Jackson said. “It’s a classic conservative strategy — starving the beast, as they say.”

http://www.thestar.com/news/canada/article/924121–tax-cuts-drive-harper-s-right-wing-agenda?bn=1

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#14 realpaul on 01.20.11 at 12:07 am

Hmmmm…so many roads…which way to go?

1) Buy Timmy’s stock…up from 18 to 40 in the past year on the increase in business from those dumb ass credit card junkies. THI-TSX

2)Correct…mortgage deductibility is to pour gas on the fire. Any notion of savings by the sheep will be dashed by the additional leverage the RE industry will gouge you for. IE: A higher disposable equates to higher prices.

3)Carney can’t point to Energy as a reason to raise rates. He’s already stated that ‘volitile’ consumer inputs form no part of the CPI. Individuals should be hedging the inevitable rise in energy costs by buying oil and gas equities, trusts or ETF’s. Same go’s goes for agri-products ( production, fertilizer not retail).

4)A strong $C will benefit the country with higher productivity as businesses can upgrade plant and machinery to international standards. The only reason the $C has been kept down ( Look at the explosion in foriegn reserve holdings as the government has dumped Cdn dollars to buy USD) has been to protect the dinosaur unions. Canada must break away from the Liberal Party concept of keeping Canada down while bolstering Central American economies “so that we’re all equals”.

5) Tourism was falling when the US economy was failing…nothimng to do with the $C. That idea is a red herring. We are getting tourists from stronger currency regimes…ie: Asian markets.

6) Why would you buy a cottage and go to the same dump year in and year out to watch the same fat losers get drunk and fall off the porch and ogle your teens? You can travel internationally for much less, see more and pay no property or capital gains taxes. Staycations are for witless losers.

7) Theres a full court press on from the RE industry to try and mitigate the fallout from the changes to that industry. It s all lies, smoke and mirrors by a desperate cartel that is itself borrowed up to the hoops and scared that ‘it’ will all come crashing down.

8) Mexico is as dangerous as Nigeria…..don’t let the recent Mexican government paid for propaganda campaign to rein in the recent reportage and warnings against going to that country. Don’t forget..tourism is Mexico’s only viable industry and they are fighting like hell to buy advertising and reporters in Canada to make it seem like its still OK to travel there.

Now they’re saying ” As long as you stay within the confines of the resort you should be OK”. Thanks Muchacho….but if I wanted to vacation in a crap hole where thugs ruled the night I’d book into the Dell Hotel in Whalley BC and ‘staycation’ right here. There are better places…with white sandy beaches…cheap air and sunshine. Why do you want to be like the guy who had to throw his wife to the ground and take a bullet? Thats not my idea of a fun vacation.

#15 Devil's Advocate on 01.20.11 at 12:08 am

#5 HouseBuster on 01.19.11 at 11:33 pm

A property is worth what a ready willing and able buyer is prepared to pay a ready willing and able seller neither being under undue influence to buy or sell. That you can not afford it means nothing, absolutely nothing, so long as there IS someone who can and will. No amount of crying will change the fact that some people, for whatever reason, are prepared to pay more for something than you are willing to pay for it. A seller is going to sell to the highest bidder every time and there is nothing you can do about it. You can not deny that you would do exactly the same thing if you were in their shoes. Your whining and complaining is a best nothing more than white noise to those sellers and their buyers.

Why is it such a big deal to you anyway? Don’t get yourself all bent out of shape about it. Clearly you have a more prudent approach to your finances. Good for you. Enjoy! Don’t worry so much about they who, for what ever reason, are prepared to pay more for something than you think it is worth. Either they place more value upon it than you or they place less value on that which it cost than you. It’s just as simple as that…

So what you have HouseBuster is the retention of that which you do not have to give up to get what they are prepared to in order to have that house. If you don’t have the money in the first place then what that amounts to is you are not prepared to make the effort to amass the money it takes to buy a house like that. Because if you put your mind to it HouseBuster you could earn the money to pay for such a house too. Those buyers are mere mortals just like you. It is not that they can do anything you can not, it is that they do what you do not.

If you want it bad enough you will find a way to get it. If you don’t want it then put it behind you and enjoy all that you do have if only the time not spent chasing rainbows.

#16 tiger_baby on 01.20.11 at 12:10 am

>the business or renting MUST show a profit or there will be no rentals.

but it may well be that

operation and maintenance cost < rental income < O & M cost + mortgage financing cost

The last of which is the "cost of ownership" that Garth is referring to.

#17 wetcoaster on 01.20.11 at 12:13 am

But Garth, the mortgage industry has just told us tonite that our “debt fears are overblown”.

And they go so far as to say: “and maintains even before the latest changes an argument could be made that mortgage criteria in Canada is too tight. ”

Too tight before the changes ? I think this is the ulitmate real estate humper quote in Canadian history before the SS Poseidon hits the drink.

Is it possible these are all phone interviews ? Cause I can’t see any one of these pathetic clowns saying this with a straight face. I can smell spring and it smells like horse shit.

Read more: http://www.cbc.ca/fp/story/2011/01/19/4131355.html#ixzz1BXnIxivf

http://www.cbc.ca/fp/story/2011/01/19/4131355.html

#18 Jsan on 01.20.11 at 12:17 am

“#6 HouseBuster on 01.19.11 at 11:33 pm

I cannot believe it either. Houses are way way overpriced. Do any of these people know how long it takes to save $1 million dollars??? And yet they’re buying dumps for the same amount of money.

It is mind boggling to me.”

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

They are buying dumps for a million dollars because that’s what fools do when they think prices will keep going higher forever. I can’t tell you how many times I saw US news clips where they were talking about the soaring home prices and interviewing the young couples buying. Every one of them chanted the same mantra “It’s allot more than we had planned on spending but it will be worth more in years to come”.

They are the ones that read the realtor and real estate “professionals” quotes in the media that keep telling them that prices go up forever. This truly is the most naive, fiscally retarded generation that we have seen to date. The fact that Canadians are holding record amounts of personal debt should tell you something.

#19 nonplused on 01.20.11 at 12:17 am

One of the myths of our time, and it’s a very seductive one, is that by running these large deficits for so many years, “We have indebted our children and our grandchildren. They will suffer high tax rates their whole lives paying it off.” What makes it so seductive is that it somehow assumes as an obvious truth the idea that it will be our children who pay it off, and we won’t suffer a stitch. It’s also patently false.

We have not indebted our children or their children, we have indebted ourselves. Our children will no more pay the government debt back than they will pay our consumer debt back. Everyone who is going to pay it back is already in the room, and finished school. So, for the average Canadian, add about $200,000 to the things like CPP and such that you are going to do without over the next 20 years.

Whether it comes through austerity and deflation, the boogeyman of current times, or through inflation and high taxes as has been the case for the last 40 years, it will come. Maybe you won’t get your CPP because the government is means testing. Maybe you will get it and it’ll by a big bag of dog food and that’s it every month. But one way or another, you will pay your share of the debt off, while trying to climb out from under your own consumer debt.

Ya, it’s a nice boat. Don’t blame you for buying it. After all, what’s the point in having a cabin and no boat? But I think Garth is right, you’d better sell them both and pay off the debt while you have time. Actually, I think it’s too late to sell the boat already.

John Maynard Keynes said of government debt “In the long run we are all dead.” While that’s true, he probably should have pointed out the obvious caveat for the dimwit senators he was addressing: “You’ll still live long enough to have to pay back your own debts.”

I have a feeling the process started in 2008, and it’ll gain traction as we go along from here.

Oh, and Garth is wrong yet again about gold. If you want to sell your coins, take them to Scotia Bank’s bullion desk downtown in every major city, and swap them for cash. They buy at spot, and sell at spot plus a premium. Then charge up your Tim’s card with the cash. Be careful you have your purchase receipt and that you haven’t damaged them, or you’ll have to sell at a discount to spot and possibly pay to have them assayed. Or buy CEF instead. Nice and liquid. With the Silver Maple leafs, I suggest you do not take them out of the plastic wrappers they come in, even though it takes more room to store them.

Of course what Scotia will pay depends on the spot price of gold, so the one part Garth has right is that there are no guarantees what it will be worth. I haven’t been buying here. The only people who should be are those who haven’t got their 5% exposure as recommended in “After the Crash”. And even there I think the miners are a better place to put the money at this point. Some of them are printing cash right now.

Gold will not go up at 30% per year forever. Eventually the central banks of the world will rediscover their original mandate, which is stable prices, and they’ll be forced to do something about food and energy inflation, which is spiralling out of control and is what gold markets are responding to. When the central banks come to Jesus, sell your gold. But not until.

#20 tiger_baby on 01.20.11 at 12:26 am

>I could stick one big gold brick in a backpack, jump on a plane/boat/train and sell it in any country in the world upon landing, without negotiation at spot, and lead a comfortable existence there after.

If you have actually tried that you’ll know that’s probably not quite how it will work out … I reckon the possibility quite high that all you’ll actually get is a bullet :-(

#21 LJ on 01.20.11 at 12:28 am

Anyone who gets suckered into real estate during this final round, will likely be crushed by the oncoming financial bus. Deflation in “wants” and inflation in “needs.”

Then again, I was driving by the local food bank yesterday and saw a BMW, Porsche and a Hummer in line (several blocks long, idling in the cold) waiting for handouts. Talk about backwards!!!

#22 T.O. Bubble Boy on 01.20.11 at 12:31 am

Condos are now sitting on the market for months… price drops will soon follow. Once all of the “investment” condos start falling, the fear starts to take hold, and SFHs are next.

The 3-5 year melt is coming… you might need a few boxes of timbits to eat as you watch it implode.

#23 Angela on 01.20.11 at 12:35 am

Um, sorry, I don’t think I know who “bullion bunny” is. Can someone fill me in? For a while I thought it was the pretty blonde chippie selling condos a month or so ago, but I’m starting to doubt that is right. Selling maple leafs? I’m lost.

#24 Rich in Calgary on 01.20.11 at 12:38 am

This just in!

The rules of Supply & Demand don’t apply to Calgary.
In the CREB’s latest propaganda release, they state that although inventory levels will rise, prices will also rise. ???

Mind you, they also stated that the Calgary market is “recovering”, without ever having admitted that the market had fallen in the first place…

#25 WesternGrit on 01.20.11 at 12:39 am

Realpaul… I don’t even know where to begin. Main point I’d like to make is your suggestion that the Liberals were bolstering unions with their supposedly keeping the dollar down… If that’s your understanding of the economic equation, get thee back to high school. The goal of most sane governments in recent memory is to help our export industry. A low Canadian dollar helped that. Sure you may love/covet that vacation property in the US desert, but in reality, in this land more of us depend on oil, lumber, fisheries, and tourism, etc., to make a living.

The Alberta oil industry and the general resource industry in Canada was the main impetus for PC and Liberal monetary decisions in the past… and it was most often governed by what was in NAFTA, and according to agencies like the IMF, etc. Yes, unions did benefit in some of the sectors where they are involved, but in general that was a byproduct. If you disagree, just ask some of our NDP friends.

#26 rogerthedodger on 01.20.11 at 12:40 am

I’ve been waiting and waiting for the market to go down. If i would have trusted my gut two years ago, I would have cashed in. I keep waiting and waiting and the way i look at it is that had i bought two years ago, i would have made a lot of money. Instead i am making between 8-10% on my money and waiting for the market to drop. Should have would have could have …i am regretting not buying but now thin we are definitely at the top of the market. I do see a lot more deals and am wondering what to do…

Fell Left Out….

#27 Debtisforever on 01.20.11 at 12:40 am

Ya…idiots. Listened to a couple of guys on the radio today, they were discussing how “fiscally conservative Canadians are”-YA DUDES! That’s why there are so many people buying $800k houses in Vancouver while the median household income doesn’t even crack $100k! Fiscally conservative my a**. Sounded to me like they were grasping at straws, trying to justify why this 30 year mortgage will not hurt the market. Dream on, buddies!

#28 WesternGrit on 01.20.11 at 12:43 am

… Exports and (I missed) foreign investment…

#29 45north on 01.20.11 at 12:52 am

squidly77: If your picture refers to Harper

it doesn’t:
http://www.snopes.com/love/revenge/emily.asp

I guess us males are weak.

I guess weak males are weak.

tiger_baby: since 25 yr mortgage was the norm for the longest time, every year about 1/25 or 4% of all mortgages are retired and replaced by new mortgages.

I guess that about 1/5 or 20% of all mortgages are retired and replaced by new mortgages.

#30 nonplused on 01.20.11 at 12:57 am

PS, here is a little thought experiment for the 3 people reading this blog who have done computer programming before: What would happen if you took a compiler and changed out the word “if” for the word “when”? So the change would be say in Visual Basic instead of saying:

If return < inflation – taxes then gosub TheseReturnsSuck

You said:

When return < inflation – taxes then gosub TheseReturnsSuck

See? By using the word “if” in English, we are only implying that the condition might not be satisfied at any point. But “in the long run” any possible condition is eventually satisfied, at the frequency associated with its chance of occurrence.

For example, replace “if” with “when” in any of these common memes and see how it changes your perspective slightly:

“If the government cannot pay government employee pensions, it will be a great problem”.

“If WWIII breaks out, we are all going to be fried to a crisp!

“If the Chinese economy were to go into recession, the world will go into recession.”

“If gold prices go down, I will loose money.”

“If the economy gets worse, I might loose my job!”

“If the economy gets worse, some municipal bonds might be worth junk.”

“If I get as old as Garth, I’m going to turn into an inflexible know-it-all too.”

“If the government defaults, my bonds will be worth a lot less, maybe nothing.”

“If Canadian real estate declined, we’d be in deep do-do”. (This one shows that there may be a grammatical difference between if and when, as you’d normally say “When Canadian real estate declines, we will be in deep do-do”. “When” seems to imply we have more idea when it will happen that “if”. That is the only difference.

#31 LHHW on 01.20.11 at 12:57 am

Garth,

You summarize it perfectly by saying the real estate market is propelled by emotion and not fundamentals. The media, organized real estate, banks and government are working hard to manipulate emotions and create positive consumer confidence. I just think many people don’t care to focus on fundamentals.

Hey let’s face it, many people feel it’s more sexy to exhibit wealth (or perceived wealth) through a big house, fancy cars, cottage, stainless steel and granite than through the boring well balanced investment portfolio. You can’t flaunt your investment portfolio like you can a piece over leveraged real estate. So it comes back to emotion. In our society (sadly) wealth is measured by how many things you have. So those that buy into this (and many do) will strive to achieve this even if the wealth is just an illusion supported by debt.

#32 bruce corell on 01.20.11 at 12:58 am

Hold on a SECOND. gta average is now 413000.
Peak in May 2010 was 446000. Thats a $33,000 drop
since May 2010. Whomever bought in May which was record month has just lost over 7% of its value.
Daaa???? is that Negative equity that has just begun.

#33 EJ on 01.20.11 at 1:00 am

Here we go again with the demands for even MORE benefits for “homeowners” at the expense of everyone who isn’t. And that’s exactly what an income tax rebate on mortgage interest is. Everyone knows that if you take income away from the government, they don’t spend any less. No, they’ll just make up for the loss in some other way. So taxes for everybody will go up. In the end, it’s mortgagees who get a slightly better deal because of the discount, and renters who get shafted because they get no discount to offset the increased taxes.

Not to mention that because of the apparent increase in affordability, this would raise house prices in proportion to the deduction (because you just know that lenders will treat the interest deduction as extra “income” and give out bigger loans). So you’ll be paying even more for a house than before.

Yeah, what a great idea… RE industry benefits, everyone else takes it in the hoop. No surprises as to who you’ll find drooling all over this proposal.

Thankfully, as foolish as our government has been with regulation so far, I don’t think they’re stupid enough to put something like this into play. Of course, every time I’ve said something like that, stupid proves me wrong.

#34 HouseBuster on 01.20.11 at 1:03 am

#24 Angela –
This is a maple leaf:
https://online.kitco.com/images/pdtimags_full_screen/gold/full_gold_maple_1oz_tail.jpg

Pretty, isn’t it?

#35 frankzz on 01.20.11 at 1:06 am

I have been renting since 2007. I find the prices here in Toronto completely out of whack, thus I plan to rent for another few years.

A nice house in a nice area here costs over $2.5 million. I could buy a nicer place in Beverly Hills for that much.

Anyways, I plan to continue renting even though I have the funds to buy a nice house. I prefer to buy assets when people are selling, and sell when people are buying. The herd is usually quite foolish. For instance, I picked up C, BAC, LVS, WYNN, VMW, BMO, and some other stocks in 2009 and made a very large profit. GLD puts are looking very attractive right now. My advice: do not buy a house in Canada till the prices go down significantly. This is not Manhattan, Hong Kong, or Mumbai, there is plenty of land available.

#36 Nostradamus Le Mad Vlad on 01.20.11 at 1:13 am


The Stupids are now running the country into the ground. BTW, is the pic a new conspiracy theory? Nice writing!

“And speaking of the media,” — One can only surmise that the champagne cork has popped and they are finishing with The Last Greater Fools. The m$m is desperate for the ads to continue flowing in, as that is their life blood.

If you can shovel shit, you too can be a journalistic whore!

“How can you counter such a barrage of willful ignorance and barefaced media manipulation . . . a patent on sunshine enemas.” — Stupid is as stupid does. One supports the other, then both collapse. Easy when you figure it out!

“. . . several vats of Jack Daniels, Jim Beam and Wild Turkey (a true shemale), plus tons of Timmie’s, KFC, Fatburgers . . .” — Yep, we’re in good shape at Bunker Barn!
*
Take a look at the lead pic on http://rense.com/ and see how Corexit is helping depopulate the planet (one of many tools the elite use). Covers most of the GoM.

US$100 Trillion Credit At least that’s wot my Credit Card says I’m worth!

Youth Unemployment One and Youth Unemployment Two. This does not augur well for the up-and-coming adults who don’t seem to have a future, because this is one of the reasons.

Beware the Ides of Inflation.

UFO over Moscow.

Palestine Numerous countries, including Russia are declaring Palestine to be a state, which it is.

Yet another myth shattered. There is plenty of land; a redistribution of goods is what is needed.

Smallpox New bio-weapon?

621 ‘quakes in the US in past seven days.

We Don’t Need This Message to banxters and rotting meatheads in charge: We’re better off without you, so set your controls for the heart of the sun, then obliterate yourselves.

Default City, US Probably here, eventually.

Trillions here, there and everywhere.

#37 nonplused on 01.20.11 at 1:14 am

Oh and i forgot the best if/when experiment of all time. Replace “if” with “when” in this one:

“If i win the lottery, I’m going to quit my job and be on easy street.”

This one definitely shows that we don’t differentiate between “if” and “when”. Otherwise nobody would play the lottery, realizing that “when” they win the jackpot is on average 1000 years from today, if they play every week. But someone wins, so we think about “if”. Don’t play the lottery folks. You are much more likely to come up with some cash using the Garth plan. Lotteries are a tax on the stupid. You’ve heard that before, and it’s correct. VLT’s are worse. I cannot believe we live in a country where prostitution is illegal and the government is running VLT’s. Ladies are not allowed to exploit their wares for profit as they always have, but the government can scam everyone using psychology? Boomers have no brains. VLT’s should be illegal. So should pimping and coercion. But the idea that VLT’s, which never loose, should be let loose on a population that cannot help but not understand what’s being done to them is OK? I haven’t been to a prostitute, but I imagine if I did she wouldn’t promise me anything more than what I was getting. State sponsored gambling is the worse sin.

#38 InvestorsFriend (Shawn Allen) on 01.20.11 at 1:19 am

45 Nort said:

“I guess that about 1/5 or 20% of all mortgages are retired and replaced by new mortgages.”

hmmm. I guess that depends on your definition of a “new” mortgage.

Is a renewal a “new” mortgage?

Is a renewal by transfering to a new bank a new mortgage?

Or does a new mortgage mean when its associated with a house purchase?

#39 Devore on 01.20.11 at 1:25 am

#19 nonplused

That’s been my mantra regarding the “borrow now pay in the future” method.

The future is now. We are it.

Looks like the system has only fully served the generation that started it. Everyone else will get a big bag of nothing after paying into it out whole lives.

#40 Hoof Hearted on 01.20.11 at 1:36 am

#14 realpaul

Mexico is as dangerous as Nigeria…..don’t let the recent Mexican government paid for propaganda campaign to rein in the recent reportage and warnings against going to that country. Don’t forget..tourism is Mexico’s only viable industry and they are fighting like hell to buy advertising and reporters in Canada to make it seem like its still OK to travel there.

==========

Interesting..

One wonder why he US doesn’t want to get involved like it did with Escobar(Colombia) and Old Pineapple Noriega) face in Panama.

Oh yeah,…..Mexico is right next to US.

Last thing US is want to fight a war with its immediate neighbour, as well as the family ties many of the Hispanics in US have with family south of the border.

US intervention would be ugly, ill advised, but that No Win scenarion only makes the situation more volatile. Stay the hell out of Mexico, ripe to explode.

#41 Crash Callaway on 01.20.11 at 1:36 am

Garth, I thought you said a few posts back that there were no FEMA Camps!
Up here in Canada we have Realtor Camps…
Little pockets spread out all over the tundra where everybody eats & drinks what they serve up and there is no time off or day of freedom.
Prisoners under the Big Top.

Jack Daniels, Timmies, and squirrel Sorbet are the only comforts left.

#42 Carlyle on 01.20.11 at 1:41 am

Update: Hey Garth, Carlyle from Milton. We sold our house tonight … Apparently at a record breaking price in our home category.

Planning to pay off the debt and then rent for a year or two in a condo downtown Toronto.

#43 Alberta Ed on 01.20.11 at 1:41 am

Speaking of reporter gals, it’s not that they don’t care: they don’t know. Let’s hope Amanda, the bizness gal on CBC, clues in before she further embarrasses herself after sucking up the RE kool aid stats.

#44 Jon B on 01.20.11 at 1:42 am

Garth would you mind posting your “you’re so screwed” lecture on Youtube?

#45 Rich Renter on 01.20.11 at 1:43 am

Those “I told you so t-shirts” are sure getting mouldy in the bunker. All the FTB in my office are going buy before the new rules.

#46 Hoof Hearted on 01.20.11 at 1:44 am

Keep in mind the RE business is based on Sales ie Salespeople…..

They have to keep a smiley face and ” I’m your best friend” feel.

When things go south, every trick in the book is used, every stat manipulated. etc.

However, a suggestion that mortgage interest deductibility is rather STOOPID is it not….wouldn’t that force the Feds to change the capital gains rules re: primary residence? Can’t have it both ways. Then you start a civil war, with those used to the old rules versus those lobbying for changes.( oh……unless of course the mortgage deductees buy from the current owners and everyone wins)

Yeah Right !!!

#47 Utopia on 01.20.11 at 1:50 am

#7 Wayne asked….

“Garth: Does F read your blog? Maybe he should … send him the site”
———————————————————-

The gang reads it every single day Wayne. This has become a news site……first on the scene six days each week with all the latest agonizing assessments and all the blood and gore you can possibly handle about the economy, housing, politics (and weird animal sex too).

Nobody can resist. Like the sight of a full Lunar eclipse or the look of the Cashier at Timmies who just sold you a third double-double this morning, they just cannot look away.

Even the Blawg Dawgs are magnetic these days.

#48 604genX on 01.20.11 at 1:52 am

The new term for journalists covering real estate: “Repeaters”. Not “reporters”. They simply regurgitate whatever CREA and the mortgage brokers feed ’em without any challenge or thought. And CBC is leading the pack lately.

#49 a prairie dawg on 01.20.11 at 1:58 am

@ #24 Angela

Bullion Bunny posts on this blog occasionally.

The maples are a 1 oz bullion coin of solid gold or silver. Minted yearly by the Royal Canadian Mint. Typically called Gold or Silver Maples.

#50 Utopia on 01.20.11 at 2:08 am

@# 14 Realpaul wrote….

8) Mexico is as dangerous as Nigeria…..don’t let the recent Mexican government paid for propaganda campaign to rein in the recent reportage and warnings against going to that country. Don’t forget..tourism is Mexico’s only viable industry and they are fighting like hell to buy advertising and reporters in Canada to make it seem like its still OK to travel there.

———————————————————-

Paul, can I just ask about your laptop?

Are you by any chance using an Acer Aspire One with Windows 7 notebook version installed? The reason I mention this is because of the “smiley” that showed up in your point number 8. I have recently discovered this exact same keyboard flaw and am seeking a software fix. No luck so far.

#51 Anotherlowlyrenter on 01.20.11 at 2:16 am

My least favorite post.

Garth, the reason I (and I guess so many of your readers) come to this site is you’re a lone voice speaking the truth, a truth that we know to be true, but fear is not. Any doubt in your voice, even in jest, pains our fragile souls.

We depend on you Papa G. Stand strong for us! You are our hero. And heros don’t eat timbits.

All jokes aside – I very much enjoy your blog – particularly the last few weeks.

#52 West Coast on 01.20.11 at 2:18 am

Shouldn’t that sign read “Laureen Ann”

#53 realityguy on 01.20.11 at 2:18 am

Garth I find the Canadian Fiasco quite amusing

On one side CREA is boasting great gains for this year
Then cry to the government that they are tightening too much.

On the Flip side the government is worried about the retiring population 1 in 10 people are prepared for it. That means 90% isn’t and probably never will. Then tells them to save. With record low interest rates (what the hell for). At least give them a bone to chew on and not an Aero Bar full of air.

Most will live off of government pension (which is TAX dollars)

It appears that nothing the government does can stop the Media and CREA from pumping up the housing market and also hide the truth from the public.

What the government really really need to do is have warning labels on the Media’s advertisements of the housing pump.

– for Christ sake they force the cigarette industry to print a ugly picture on each package of cigarettes. And a health warning.

– they should force the media and also the real estate signs to print pictures of homeless kids, divorced couples. And a warning, buying a property can lead to bankruptcy and stress on your marriage especially at these prices

enjoy dido’s -“thank you” video
http://www.youtube.com/watch?v=1TO48Cnl66w

#54 First timer in waiting on 01.20.11 at 2:20 am

CBC News Headlines:

Stock markets turn down
Gasoline predicted to reach $1.20 in 2 months
High loonie to hurt growth: Bank of Canada

Yet we are constantly being told that it’s different in Canada, our economy is fine, nothing to fear?

Buy now and be in debit forever!

#55 Edmonton Fool on 01.20.11 at 2:22 am

Any recommendations about where western Canadians might find advisors that will manage the kind of portfolios described in this blog (mix of REITs, preferred, ETFs) at a reasonable cost? I certainly didn’t have any value-add from advisors I used back in the day when I held pricey mutual funds, even when said advisors were also linked into discount brokerages…the advisors seemed much more interested in peddling their respective funds than they were in making sure my portfolio performed well…they certainly never beat the general market performance. I don’t have the time to be actively managing a portfolio, deciding when to buy and sell different sector ETFs, REITs and preferreds. Is it as difficult to find a well performing advisor in these areas as it was to find one when dealing with mutual funds? Is this search a word of mouth endeavor, or are there some indicators I can look for to guide me?

#56 Snook 1 on 01.20.11 at 2:27 am

Garth,

I think back about your three rules: Simplify, Consolidate and Beholden to no one. If people starting changing their lives back to the mentality we grew up with and focused on needs rather than wants, we would not be in this mess. People truly believe they need many houses with many bedrooms and bathrooms, many garages with many cars. I was there and like you I am trying to simplify and consoidate fast! Thanks for the kick in the ass…I needed it!

#57 Thetruth on 01.20.11 at 2:41 am

HELOC and CMHC insurance changes;

Only apply to new mortgages. I guess all the “greaterfools” that have bought and have mortgages have access to funds at lower rates than the rest (renters) and future homeowners.

They are grandfathered and will enjoy the benefits of lower rates in the future. The rest, renters included, will pay higher rates!!! Higher rates to buy cars, invest, pay for their child’s education, etc., etc.

Sounds like a new two-tiered system….

#58 Cookie Monster on 01.20.11 at 2:43 am

Yesterday I mused on where all this social hysteria, house porn, debt binging and bad choices is taking us. My conclusion was, into a deflationary phase of unknown duration. It’s hard for me to understand how the immediate outcome (over the rest of this year) could be otherwise.
———-
What’s hard to imagine? Look at the USA, QE2,3,4… INFLATION ALL THE WAY! Look at every FIAT currency in history, INFLATION ALL THE WAY! The Bank of Canada’s mandate is 2% CPI, so any attempt by the market for deflation will be aggressively offset by the Bank of Canada to meet their CPI, there’s not limit to their ability to monetize debt, INFLATION ALL THE WAY!

Don’t think the BofC will buy government debt, they’ve threatened it for years now, soon they will no longer be just threats, INFLATION ALL THE WAY!

There will be no NET deflation, there will be falling prices in housing for sure, just like the USA, but money printing will begin in earnest to cover CMHC and bank balance sheet loses, INFLATION ALL THE WAY!

#59 Blah on 01.20.11 at 2:58 am

#14 realpaul on 01.20.11 at 12:07 am
Hmmmm…so many roads…which way to go?

1) Buy Timmy’s stock…up from 18 to 40 in the past year on the increase in business from those dumb ass credit card junkies. THI-TSX

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

Why bother buying this at a high price?

Overpriced.

#60 Cookie Monster on 01.20.11 at 3:02 am

Um, sorry, I don’t think I know who “bullion bunny” is. Can someone fill me in? For a while I thought it was the pretty blonde chippie selling condos a month or so ago, but I’m starting to doubt that is right. Selling maple leafs? I’m lost.
——–
Bullion Bunny is an astute and intelligent fellow who at times posts on this forum from the perspective and virtuous understanding for the role of precious metals in economics versus dishonest immoral FIAT paper currency substitutes open to manipulation by modern governments and banks.

Also a compulsive, obsessive, relentless, mindless gold-pumping PITA. Never to be confused with the talented MissyBunny. — Garth

#61 danno on 01.20.11 at 3:38 am

another great post! just wondering how ten – fifteen years out looks! as the boomers retire, a large many of them cannot to retire, or at least as they hope to. Shortly after interest rates start to rise considerably, it may be attractive for these fine boomers to really run to the exits just for the interest! luckily for us the boomers are only a small part of the population. hmmm, when oil passes $200/barrel in the next two to ten years, let the good times roll! ditch your house now, go canadian oil, buy lots of popcorn!

#62 TheBestPlaceOnEarth on 01.20.11 at 3:48 am

Whisky and timbits are solid investments. Don’t forget $2000 Gold folks. Buy the juniors while you can
Gold stocks “to blow the roof off this year” – Embry
Gold prices are going to rise significantly this year and gold stocks are likely to be a major beneficiary of the rise, says, Sprott Asset Management’s John Embry

Geoff Candy

January 19, 2011

GRONINGEN –

Despite its relatively lack-lustre performance for the year to date, John Embry, chief investment strategist at Sprott Asset Management, believes the yellow metal’s price will continue its assault on new highs and hit at least $2,000 during the course of the year.

Speaking on Mineweb.com’s Gold Weekly Podcast, he said, “I couldn’t be more bullish actually, despite the rather slow start we’ve had to the year. This is now the third year in a row that gold has been leaned on at the beginning of the year and gold shares have done very poorly at the outset only to recover smartly as the year has gone on. I see exactly the same thing unfolding this year – the fundamentals are impeccable.”

He adds that while market sentiment seems to be at low ebb at the moment, demand for the physical metal is “on fire, particularly in the East where you see huge premiums opening up on the quoted prices.”

Part of the reason for Embry’s conviction that gold prices are likely to climb higher is his belief that we have yet to see the end of quantitative easing.

“I don’t think that they can really put an end to it [quantitative easing] for the simple reason that the financial system is so fragile. If you really analyse the US banking system which I know to some degree, and you look inside the numbers – they’re marking a lot of their stuff to what I call ‘fantasy’ not the market, and then they have, superimposed on that, massive quantities of derivatives and it seems to be that they just need more and more liquidity to make sure that the thing doesn’t bust.

He adds that given the current situation he cannot see an alternative to gold, he considers bonds to be “certificates of confiscation” and adds that while there are some stocks he likes there are just as many that he doesn’t and “real estate stinks in most markets”.

Gold’s rise over the last 10 years has been a very measured one, he adds, “There have been no big blow offs and there has never been a bull market particularly one of this ilk, that hasn’t ended in a massive blow off and this one will be one for the ages when the price explodes,” he adds.

Embry’s enthusiasm is not confined to physical gold, however, as he believes that gold stocks are “going to blow the roof off before this year is over”.

He says while the big gold majors won’t see massive growth, they are important to have in one’s portfolio for stability’s sake. He says the midcaps too are likely to do well because they are “way behind the big stocks in terms of pure valuation and then, without question, you’re going to get some major home runs in the exploration space.”

Asked about the cost increases that have taken the shine off some of the gold stocks’ performances, Embry does agree that costs have gone up significantly but, he adds, “I believe though that in the next move up in the gold price – and I’m not looking for a small move – I’m looking for at least $2,000 in this year – I don’t think the costs will run anywhere near that rate and that finally we’re going to see some major bottom line numbers for these guys.

“More importantly,” he adds, “they will probably start paying fairly reasonable dividends in a world that’s really short of good income – that will be a major incentive to buy them.”

#63 prayforcrash on 01.20.11 at 3:54 am

Even the six o clock news reporter’s tones are for sale. Here in Australia there was an advertorial a few months ago about real estate and she said something like “you need to BUY NOW”. The head nodded forward twice with the last two words. It’s astounding how much the media has been corrupted. Physically we’re living in the 21st century, media wise it’s like the 19th. Even our government funded “left” wing (“left” because they’ll call someone or something “racist” regularly) ABC ignores the corruption.

So I can’t even watch or listen to the media for anything more than a half hour or hour, I just sit in dead silence during the work day and play computer games at night and read the real news from blogs and forums like this.

#64 Ardi on 01.20.11 at 4:38 am

Multiple offers in GTA are back, I think we will see same trend as last year, due to lack of supply and high demand.

#65 realpaul on 01.20.11 at 4:48 am

#26 Sorry TG, but thats a typical pinko response if I ever heard one. I hinted that you should regard the latest ‘buy’ of USD by our beloved BOC…a ‘drop in the bucket at 75 billion last month alone ( a half trillion so far) to keep the unions in work with an unnaturally low dollar.

Thats a loss that every Canadian has to shoulder as it becomes a ‘small part’ of the exploding national debt. If we want to stay ‘hewers of wood and drawers of water’ thats fine but overall its a net drag on the wealth and potential of the nation to continue supporting these antiquated notions of ‘jobs in the forest’ as being the backbone of the econmy.

I can’t for the life of me understand why the pinko’s all seem to think I am bound by natural law as a Canadian to support them for doing nothing but buying an alarm clock. What happened to the notion of being self supporting. I manage to do it….why can’t you?

And sadly….yes….there is a special feeling a man gets when driving at light speed down a deserted Arizona highway at night juiced up , blaring ZZ Top with the rag down and firing a 357 Magnum at the stars……thats totally cool man.

#66 Mark on 01.20.11 at 5:35 am

It’s always nice to go back in time…

http://www.nytimes.com/2005/12/25/business/yourmoney/25japan.html?_r=2&pagewanted=all&oref=slogin

#67 boomer62 on 01.20.11 at 7:16 am

GT,

Timmie’s cards are great. Starbucks’ cards may be a currency hedge depending on point of purchase.

Jack has always been leverage when used correctly.

Seems to me, the Maple Leaf was introduced in 1980 when the yellow stuff was trading in the $500 to $800 range, several years after we said goodbye to the yellow brick road.

#68 peacekeepa on 01.20.11 at 7:46 am

As posted in the Ottawa Citizen: New mortgage rules don’t go far enough.

http://www.canada.com/mortgage+rules+enough/4137378/story.html

I’m surprised someone in the media for once agrees with you!

#69 Kaganovich on 01.20.11 at 8:44 am

Very good article:

http://www.atimes.com/atimes/Asian_Economy/MA06Dk01.html

What will happen when nations based on consuming try to change their ways?

#70 Herb on 01.20.11 at 8:49 am

#66 realpaul,

Thank you for your contribution, Mr. Cherry. Now back to the Coaches Dunce’s Corner.

#71 bullion.bunny on 01.20.11 at 8:59 am

Also a compulsive, obsessive, relentless, mindless gold-pumping PITA. Never to be confused with the talented MissyBunny. — Garth

Why Thank You Garth, I take that for the compliment it is. But I must correct you on one thing. Gold is just a metal as I have always stated, just a trade that will one day be cashed in………don’t really have time for this now…..more on it later.

P.S. Someone has to hold your feet to the fire.

#72 The Apocalyptic One formerly Old is Gold on 01.20.11 at 9:23 am

Rule changes or no rule changes; my question is where will the ‘NEW’ property virgins come from to keep the game going? With home ownership already at 70%, haven’t all the buyers bought already? Out of the remaining 30%, 15% are probably on social assistance and the other 15% are burger flippers at Macdonald’s’ or coffee brewers at Tim’s who will never make enough to afford even the cheapest condo. The way I see it this game is already in overtime and nothing F or C or H or anyone else can do it to keep from a ‘SUDDEN DEATH’ end. I see D-Day beginning this fall, we’ll putter through spring but I don’t believe there is enough gas in the tank to breeze through summer into fall.

I don’t even think there will be a flurry of activity because of the rule changes. I see a sea of listings but not enough buyers even this spring.

(I see a sea of listings – should have been a poet rather than a doomer)

#73 Kaganovich on 01.20.11 at 9:27 am

Here Cookie:

http://libertarianpapers.org/2010/43-boyapati-why-credit-deflation-is-more-likely-than-mass-inflation/

A cogent and comprehensive objection tp your claim from the Austrian school perspective.

“This article provides an Austrian overview of the inflation versus deflation debate which has captured the attention of the economics profession in the years following the US housing bust. Much of the Austrian analysis of this debate has focused on the massive expansion of the Federal Reserve’s balance sheet and attendant creation of new reserves. Several Austrian economists have predicted that the creation of new reserves will cause a massive increase in inflation. The money multiplier theory, on which these predictions are based, is criticized and an overview of the Austrian business cycle theory is provided to explain why banks are reluctant to issue new credit. Finally, an analysis of the politics of deflation is provided and a class theory is presented to explain why a policy of controlled credit deflation is more likely than a policy that would result in mass inflation or hyperinflation.”

#74 fancy_pants on 01.20.11 at 9:30 am

#24 Angela on 01.20.11 at 12:35 am

Um, sorry, I don’t think I know who “bullion bunny” is. Can someone fill me in?

The bullion bunny is the “greatest prospector in the North”!

Well, maybe that is a slight exaggeration but a little green guy with pointy ears and long shoes once told me he is the illegitimate child of Yukon Cornelius and the Energizer bunny.

Also, word on the street is he has been stuck in the land of misfit toys for quite some time.

#75 Kaganovich on 01.20.11 at 9:31 am

Here is an interesting talk about economics theory with Steve Keen:

http://surkanstance.blogspot.com/2011/01/this-week-on-bear-radio-moment-of.html?source=patrick.net#navbar-iframe

Got a Watch, you might enjoy this!

#76 Moneta on 01.20.11 at 9:33 am

#26 Sorry TG, but thats a typical pinko response if I ever heard one. What happened to the notion of being self supporting. I manage to do it….why can’t you?
————
Sorry RP, but that’s a typical neocon response if I heard one. If everyone was self supporting, we wouldn’t have much of an economy and probably still be living in caves.

No man is an island.

#77 Daystar on 01.20.11 at 9:39 am

Wish I had more time than this, but you are welcome to sit at my fire anytime Garth (hint, hint, bring JD!) :-) Squirrels are not in season at the moment, but freezer is full (heh, heh). ;-)

#78 David B on 01.20.11 at 9:44 am

Speaking of Boomers, was watching morning TV with 3 financial book specialists taking questions. Y’all ready for this????

Q. My mother & father are 80 and owe $12,000 on a line of credit and $21,000 on thier mortgage …. should they downsize now or take re-mortgage and pay off the LOL.
——————–

Wonder how many Canadians are en route to this sad state of $affairs?
——————-

One person …. said sell now, move and payoff the LOC, nothing not a peap about sound investing!

#79 gentleInestor on 01.20.11 at 9:44 am

Garth I agree with pretty much everything you say on this site but this deflation thing is just not going to happen. Sure, down the road a boat and probably that plastic crap at Walmart (wait, everything at Walmart is plastic…and crap) will get cheaper but where it counts – the daily needs of life – that stuff just keeps going up and up and up.

Taxes, taxes, taxes, property insurance (mine went through the roof this last year – because of ‘increased claims’ in the area), all insurance for that matter, fuel, groceries march up and up and up.

There may be deflation in some consumer goods but the general public is still getting stiffed.

I have written this many times – asset deflation and price inflation can (and will) coexist. It is a nightmare scenario for the house-heavy middle class. — Garth

#80 T.O. Bubble Boy on 01.20.11 at 9:46 am

@ #58 Thetruth

HELOC and CMHC insurance changes;

Only apply to new mortgages. I guess all the “greaterfools” that have bought and have mortgages have access to funds at lower rates than the rest (renters) and future homeowners.

They are grandfathered and will enjoy the benefits of lower rates in the future. The rest, renters included, will pay higher rates!!! Higher rates to buy cars, invest, pay for their child’s education, etc., etc.

Sounds like a new two-tiered system….

This is probably the stupidest post I have EVER read on this site. Worse than Nostradamus Jr, worse than Sail1, worse than BPOE.

What part of *anything* that you’ve read on the new mortgage rules would lock in the RATE of a mortgage in the future?

All that today’s 5%/35-yr crowd have “locked in” is the ability to renew their existing amortization period *with the same lender* at whatever rate that lender happens to offer at the end of their term.

Given that every lender simply mails a letter with the posted rate on a renewal document… this is a HORRIBLE deal.

The 0/40 and 5/35 crowd will get treated like they are at a cheque-cashing store unless they convert to a lower amortization at the 5-yr renewal mark.

*** Keep in mind: the first of the 0/40 crowd are up for renewal THIS SPRING!

#81 T.O. Bubble Boy on 01.20.11 at 9:49 am

@ #43 Carlyle:

Congrats! Don’t look back… you’re on the right path.

#82 T.O. Bubble Boy on 01.20.11 at 9:55 am

@ #33 bruce corell

Hold on a SECOND. gta average is now 413000.
Peak in May 2010 was 446000. Thats a $33,000 drop
since May 2010. Whomever bought in May which was record month has just lost over 7% of its value.
Daaa???? is that Negative equity that has just begun.

While this is true, it is also the typical seasonal pattern: average prices peak in the spring (around May) and the Fall (around October).

For example, in the GTA:
http://guava.ca/indicators.html

It will be interesting to see where the lines cross (like they did in 2008)… my guess is that by May at the latest, YOY average price drops will be in place. This could even take place in January or Februrary if there isn’t a mad rush to grab 5/35 mortgages before the rule changes.

#83 Moneta on 01.20.11 at 10:00 am

http://www.ritholtz.com/blog/wp-content/uploads/2011/01/1-14-11-Market-Cap.gif
———-
So either the market tanks or GDP balloons. Probably a little of one and a lot of the other.

If GDP balloons, that means huge inflation. Inflation usually implies rising yields which would deflate the market multiple and keep a lid on the market.

#84 Another Albertan on 01.20.11 at 10:24 am

Nonplused:

You had me at “gosub”.

Unfortunately, there are a few flaws in your pseudo-code.

You have an implied subroutine named “TheseReturnsSuck”. This is wrong. This is at most a binary flag. There’s no way people have a routine written to deal with said sucky returns.

I’m torn to whether or not this needs to be a singly-executed piece of code (check for the existence of sucky returns, then exit) or if it needs to be re-written as a loop. If it’s a loop, it probably needs to have some heuristics applied to at least maintain some timing tolerances.

Personally, I think that some people may get caught in using a highly-optimized 64-bit assembly routine and get stuck in a spinlock. The only real exit is having an outside party issue a SIGKILL, although there is a remote chance that the process may SIGSEGV itself as individual machines malloc() more than their platform can handle.

I also believe that BASIC is probably too advanced. Maybe LOGO is more appropriate.

to beep-forever
beep
wait 1
beep-forever
end

’cause most aren’t going to do more than just chirp inanely and incessantly.

What I really know is that my response here really bytes.

Everyone else’s mileage may vary.

#85 Carlyle on 01.20.11 at 10:40 am

@#72 Cookie Boy

Thanks. We actually had multiple offers on the house.

1 day on the market and 9 people came through with 2 making offers.

The price we got blew me away … 318k for a 1300 sq ft. 2 bedroom starter townhome with no backyard? Seriously? To put this into perspective we paid 264k in Feb 2009 (and I STILL felt we were overpaying at the time, even with Mattamy putting in 15k worth of “Free” upgrades). With that said I’m not complaining about a 54k gain in two years.

I think it was the hardwood, stainless steel appliances and front loader wash/dryer that helped and the fact that the homebuyers were newlywed first timers in their early 20’s.

Our Realtor said it was a combination of lack of inventory in Milton combined with heavy competition for starter homes. He also said that it’s been a free for all in Milton with multiple offers becoming the norm again since the beginning of January.

As I mentioned earlier we “broke the record” for homes sold in our category in terms of price points. Based on this I expect a buyers frenzy for the next couple of months in Milton, maybe the whole GTA.

I feel that none of this is sustainable … prices can’t keep going up forever. Hoping that my wife and I got out at “the top” can pay off our debt and start over free.

I recall Garth said I was “Screwed” when highlighting me in his post a couple weeks ago. Hopefully I’m somewhat less screwed now (although paying off the debt is going to be one hell of an expensive lesson)

Indeed, you are a lesser screwee now that you’ve taken action to get out of an obligation you could not afford. You have done what I suggested in the blog above: sell stuff and trash debt. And I am glad you took the advice to list immediately while listings were thin. Obviously it was correct. You can send the commission cheque along now. — Garth

#86 Agio on 01.20.11 at 10:42 am

I think you have a love-hate lust on for Bullion Bunny. Try gold plating the Timmy charge cards-she’ll sniff em out for sure and it’ll be bunker heaven. Given bunnies travel in packs think of the ‘real valuable gold’ you’ll be getting in return as you mercilessly pillage the masses.

#87 Geology Joe on 01.20.11 at 10:54 am

#43 Carlyle

Good man. It looks like you did find a Greater Fool. Garth will be proud of you.

Now as they say in the oilpatch, “Try not to piss it all away this time”!

#88 Adam on 01.20.11 at 11:06 am

In the US, mortgage interest is deductible (to a certain point), but then again, home sellers pay capital gains taxes on the proceeds of the sale of a home. ($500K exemption for couples and $250K for single home owners). Here in Canada, the proceeds of sale from a principle family residence are not subject to capital gains taxes. The author of the article trumpeting mortgage interest tax credits conveniently left out this part of the equation.

More importantly, she ignored the fact that the mortgage interest deduction in the US did nothing to improve the financial position of the home owner, let alone the US economy. Just like tax savings from RRSPs in Canada, most people spend their tax refunds before it even arrives from the federal government. A tiny percentage reinvests it. Unfortunately.

#89 Utopia on 01.20.11 at 11:11 am

#49 604genX wrote…..

The new term for journalists covering real estate: “Repeaters”, Not “reporters”……. And CBC is leading the pack lately.
———————————————————

Not sure about CBC TV because I never watch it but maybe give CBC radio a try buddy. They have some terrific programming and generally take a balanced approach.

Radio folk, like you and me, are a much more cynical and doubtful bunch than the rest of the zombie world and there is less repeating than there are tough questions and on-the-spot analysis.

One of my fave’s is Anna Maria Tremonti of “The Current”…..I have often wondered how such a sweet faced gal could be so pointed with her guests. Just like a laser beam cutting through all the crap.

She shows no mercy when the interview is turning to BS, distractions, diversions, fluff and talking points. I would be terrified in an interview with her. Talk about taking no prisoners!

Anyway, I have no hesitation in saying that it is the best part of my day when I have the time to sit back with a cup of coffee and listen to whatever is on radio one. Mornings are best in my opinion. I always shut off the Sunday Jazz shows which just confuses my brain too much to be listenable. Whatever.

Can’t have it all I guess.

#90 Dattaman on 01.20.11 at 11:15 am

From Mid-January 2011 report from Toronto Real Estate Board:

Sales of Detached homes in Toronto 416 area down! -8% y/y
Average price of detached homes in Toronto 416 area down! -1% y/y

“…market conditions remain tight enough to support a sustainable rate of price growth,” said Toronto Real Estate Board (TREB) President Bill Johnston.

I guess he means negative growth? I think we have seen the turning point, I’d guess after the 30 year rule comes into place, we’ll see increased growth in prices of the negative kind…

#91 bruce corell on 01.20.11 at 11:17 am

#83 To Boy….
Your theory of Jan Price being lower than May Is False

eg> January 2010 avg gta price was over 10% higher than May 2009……When Real Estate Companies see a 7%
decrease in avg price in largest Market in Canada..This is cause for Concern. This is exactly what happened in 1990 /91. The market was so hot and Spring 91 killed Real Estate for 10 years….It happens so fast before you can say “Jack Frost” You have to understand No One will see this coming it will Hit Fast , Hard and Furious….Hers Food for thought. Go back and see last time Prices in Gta fell 7% from its Peak…

#92 fancy_pants on 01.20.11 at 11:20 am

and off the record, just between the two of us, I am the Abominable Snowman. I can smell an avalanche a mile away and the sniffer is working overtime.

But I am actually friendly. We are both following Garth. He is the one with the red nose. If you want you can be Vixen. If not, at least be careful as you will be on your own.. damned are those who do not heed and follow or the old song goes, “you’ll go down in history!”

sorry, I have been going a little heavy on the Jack Daniels and Timbits this morning… I better get back to work now.

#93 Aussie Roy on 01.20.11 at 11:21 am

Aussie Update

January and February are usually the biggest months for banks to raise funds on global markets, but pricing for debt has skyrocketed since the end of last year.

http://smh.domain.com.au/home-investor-centre/interest-rate-pressure-builds-20110120-19xao.html

Senior financial services analyst Petter Ingemarsson told Australian BrokerNews that as the average mortgage in Australia is continuing to rise faster than the average income, a house price situation is being created that “can’t go on forever”.

http://www.yourmortgage.com.au/news/property-market-forces-come-to-a-head/5064

#94 bridgepigeon on 01.20.11 at 11:22 am

#43 Carlyle; high five

#95 Rich Renter on 01.20.11 at 11:25 am

Irelands average RE price is now back to 2002 levels, http://www.independent.ie/business/personal-finance/property-mortgages/house-prices-dip-to-2002-levels-2501362.html
The good news for FTB is that the prices are still dropping. It couldn’t happen in Canda could it???

#96 Linda Pearson on 01.20.11 at 11:35 am

.#85 Another Albertan on 01.20.11 at 10:24 am

Calling Doctor Daniels…calling Doctor Jack Daniels!

#97 Utopia on 01.20.11 at 11:36 am

#68 boomer62 wrote….

GT, Timmie’s cards are great. Starbucks’ cards may be a currency hedge depending on point of purchase.
———————————————————-

I still contend that Canadian Tire money is the best currency in the country. It is after all backed by a solvent corporation that offers dividends to shareholders and while prices keep dropping in the stores CT money retains its buying power without the risk of devaluation. It looks to be gaining purchasing power actually.

I even used a stack of it to buy fresh chickens from the Hutterites not so long ago. They knew it had real value and never hesitated to accept it.

Cash is cash.

#98 Cookie Monster on 01.20.11 at 11:50 am

#74 Kaganovich on 01.20.11 at 9:27 am

I don’t buy it, even if he’s using correct economics and fully understands the mechanics of inflation/deflation his conclusion still depends on certain assumptions or course of action.

My underlying #1 belief in support of inflation is simple, the US banks all have mountains of bad mortgage debt written up at overly high prices, so the Fed Res is going to inflate over the next five years until the price of everything else catches up.

When a case of pop costs US$15, the banks will become solvent once again, problem fixed! Meanwhile savers will lose. I don’t see any other course of action, what other option is there?

#99 Nick on 01.20.11 at 12:02 pm

Spoke to a friend in London yesterday and he says the minimum downpayment for a house in the UK is now 20%. No funny financing available anymore. Imagine that!

#100 t gray on 01.20.11 at 12:07 pm

Australia and Canada are different and Asians buying Real Estate? First of all thats False. Asians were more involved in California and U.S. West Coast U.S. as well as Arizona…Well guess what they are down 30 to 40%.

1.When Australia gives home owners $7000 then doubles it to $14000 in 2008 what do you think will happen.
2. Australian Renters can use rent money paid in past for deposit on new home. What do you think will happen.
3. 5% down on 40 year mortgage. What do you think will happen.
This is nothing but a Ponzi Scheme and these Governments are using Bubble Economics to create wealth. But no matter what anyone says majority are sheep and will never learn until its too late. What a bloody shame. What happened to becoming, producers, industrialists, inventors and working for a livng. Now we have become speculators living off of Debt.

#101 45north on 01.20.11 at 12:08 pm

InvestorsFriend: referring to my post: I guess that about 1/5 or 20% of all mortgages are retired and replaced by new mortgages.

I said “I guess” because I don’t really know but I was thinking that in Canada unlike the US, mortgage terms are at most 5 years so that 1 out of 5 mortgages have to be rolled over every year.

this discussion would be easier if this blog had a “reply to this comment” link like thehousingbubbleblog
http://thehousingbubbleblog.com/?p=6335#comments

#102 Cookie Monster on 01.20.11 at 12:15 pm

#77 Moneta on 01.20.11 at 9:33 am
Obviously no man is an island, RP’s not saying each man for himself without the division of labour, he’s saying each man for himself with the division of labour and voluntary exchange. He’s saying put an end to government extortion and redistribution of poverty, an end to punishment of the productive to reward the non-productive.

#103 Worldwide on 01.20.11 at 12:27 pm

Gold Tumbles, Dollar Prices Gain
– Lakeland Ledger

http://www.google.ca/search?q=gold+crashes+in+price&hl=en&sa=X&ei=Jl04TbftOMah8QPS8djqCA&ved=0CBMQpwUoCw&source=lnt&tbs=nws%3A1%2Ccdr%3A1%2Ccd_min%3A1979%2Ccd_max%3A1981#sclient=psy&hl=en&tbs=nws:1%2Ccdr%3A1%2Ccd_min%3A1980%2Ccd_max%3A1981-12-31&q=gold+down&aq=f&aqi=&aql=&oq=&pbx=1&fp=87c64d9aae263677

Ah, golden memories. All that is gold is not golden. Learn from history or be run over by it.

#104 Ottawa S on 01.20.11 at 12:45 pm

My “Canadian Natural Resources” mutual funds (in an RRSP) finally recovered from the 2008 crash after 2.5 years. Now I’m back at 2008 levels, and a little higher (the past month has been great). Should I now sell them and get out of mutual funds? Seems like mutual funds are “passée”?

#105 Ottawa S on 01.20.11 at 12:54 pm

#86 Carlyle

Congrats! Looks like you could pay everything off and still have some money left over! $318K selling price, after 5% commission, leaves you with $302K. And you had the following debts, right? $246 mortgage, $25K credit card, and 11K LOC plus $13K owing on your car. I’d pay off everything but the car loan since it’s at 0% (you already paid the interest on it anyway with a higher purchase price than had you paid cash). That would leave you with $20K you could invest or save. You might have some penalties for cancelling your mortgage early though – any chance the buyers will assume the mortgage?

#106 Coraline on 01.20.11 at 12:56 pm

bruce corell: You are correct that in 2010, the Jan price was higher than the price in the spring of 2009. However, in general, Toronto real estate prices experience a seasonal drop every year. We have to compare YOY numbers.

#107 Lorne on 01.20.11 at 1:08 pm

“In Calgary the new boss in charge of the local housing cartel predicts sales will soar 20% this year and prices will jump 4%. In Toronto the head of the world’s largest real estate board tells the media “market conditions remain tight enough to support a sustainable rate of price growth.”

Garth, haven’t the predictions from CREA and the local boards on prices been far more accurate then yours for the last three years

From the Calgary Herald comments on this article:

Gather round, children, and let’s have a little math lesson. At the beginning of 2010, the CREB predicted a 17.7% increase in sales for SFHs in 2010, and a 10.6% increase for condos. The actual increase: -16.2% (yes, that’s a decrease) for SFHs, and -18.1% (also a decrease) for condos. So using the metrics for SFHs from last year, we can expect roughly a 19% decrease this year in single home sales

Read more: http://www.calgaryherald.com/business/Slow+recovery+forecast+Calgary+real+estate/4125861/story.html#ixzz1BaxQcMoz

#108 Mr. Plow on 01.20.11 at 1:18 pm

#43 Carlyle…

Good job man.

I would encourage you to check back in with an update in the late spring early summer.

#109 Carlyle on 01.20.11 at 1:24 pm

Indeed, you are a lesser screwee now that you’ve taken action to get out of an obligation you could not afford. You have done what I suggested in the blog above: sell stuff and trash debt. And I am glad you took the advice to list immediately while listings were thin. Obviously it was correct. You can send the commission cheque along now. — Garth

I bought your book Money Road, I hope that counts. Although I admit I used a credit card to pay for it. One step at a time I guess!

Regardless, I feel that selling the home was the right move, and we are getting out “on top” or as close to the top as we were ever going to get. We’re sad about leaving the home, but feel good about the future. And most importantly we feel free now … free to live where we want, do what we want, and soon to be free of a large majority of our consumer debt.

That in and of itself is worth at least as much as our home was.

#110 Miss Bunny on 01.20.11 at 1:26 pm

Hi Garth,

How are you? I am fine.

I like condos because they are nice.

#111 Mister Obvious on 01.20.11 at 1:31 pm

#31 nonplused:

“PS, here is a little thought experiment for the 3 people reading this blog who have done computer programming before: What would happen if you took a compiler and changed out the word “if” for the word “when”?”

I’m one of the three programmers on this blog (now retired). I don’t think there’s a ‘when’ statement in programming (although, sometimes I wish there was).
But there is something nearly as good in the ‘C’ programming language and that is the ‘while’ statement. Here’s a short program in ‘C’ that even non-programmers can understand:


do{ get_out; }
while{ you_still_can; };

#112 kitchener1 on 01.20.11 at 1:33 pm

#92 Bruce Corell

You are correct. I was thinking th exact same thing when I saw the Jan numbers. Thats quite a drop, in terms of mean or average price in a very short period of time.

To much future demand forward.

The last time prices dropped like that was in 08, before the emergency rates and they were dropping like a stone.

When RE blows its going to be shock and awe for the new buyers that recently purchased. There is a dynamic in any market that the “greater fools” just do not understand.

#113 Got A Watch on 01.20.11 at 1:43 pm

I regret to admit I misinformed you yesterday in my comment #94, about the long-term performance of real estate values. Shows what happens when you hurry – you crsew up.

the % price change of Oil, gold, Bonds for the long run? about which asset class performed best over the last 40 years.

In order: Oil +3,807%, gold +3276, US T Bonds +1,720%, S&P 500 +1,264%, silver +1,092%, homes +905%, electricity +512%, copper +483% – all out-performed inflation at +480%.

Now, there are many assumptions and caveats and debatable points in there, see the comments below. And of course it is difficult to impossible to hold oil, electricity or copper directly etc. Much of the gain would be in the ’70s inflation etc.

Homes did not too badly, came in #6 and out-paced CPI inflation. Another debate there about the effect of recent hedonic adjustments, ie the Government manipulating the statistics to make the inflation rate lower than it really is. Nothing’s perfect, if you don’t like this analysis, do your own.

But the clear winners by a country mile were oil at # 1 and gold at #2, trailed by Bonds, stocks and silver with houses bringing up the rear on the leading pack, the rest are out of contention.

Over even longer periods, like the 100 years of the 20th century, many booms and busts, real estate gained about +3.35% per year on average. So you can see the ’70s inflation bulge effect, and the long term Bull market in real estate from ’93 to ’06, a 13 year run up, typical classic textbook Bull pattern.

On the long term charts, the last 13 years are an outlier, a change in the usual pattern, because prices soared so much higher than in a normal Bull market. Easy Al Greenspan and Banana Ben dropping ca$h from the heavens, the Age of Easy Credit…which always ends in tears, in the inevitable Age of Debt Default.

But such is human psychology, which, after all, is what really moves a market. When the masses buy into it, it goes. When they step back, look out below. We have not really advanced at all since the ‘Tulip Mania’. In fact it is worse now, because everyone can participate in the mania on their smart phone. Humans are clever, not smart, it’s in our nature.

#114 UrbanCowboy on 01.20.11 at 1:59 pm

I have written this many times – asset deflation and price inflation can (and will) coexist. It is a nightmare scenario for the house-heavy middle class. — Garth
———————————————————-
Isn’t the official term for this stagflation? Had it in the 70’s no?

#115 Business Unusual - the BUN on 01.20.11 at 2:44 pm

{Still Laughing}

“I hear CREA’s now taken out a patent on sunshine enemas”

= Funny because it’s true

#116 pablo on 01.20.11 at 2:55 pm

The stupids now run the country. I’m back to making squirrel sorbet and watching the wenches detail my bike – I give up. -garth

“It’s really stupid out there and it’s not getting any better.You really need to understand stupid to make it work for you.” frank Zappa
and my favorite one; “too many freaks and not enough circuses.”

#117 Gary in Vancouver on 01.20.11 at 3:03 pm

Garth can you please comment on Whistler in a future posting?

#118 C on 01.20.11 at 3:04 pm

Funny how when we get a well needed correction in gold everyone chides the gold believers.

Anyways, as another blog dog noted I did find the yr/yr -1% decline in price for a detached home in 905 or 416 (can’t recall which one) for Mid month 2011 interesting. Mid-January 2010 was in advance of the final frenzy the real estate market saw from April-June 2010. So the yr/yr comparables from now till June 2011 should be telling.

#119 SRV ES339 on 01.20.11 at 3:17 pm

Garth… what is the precedent on waiting periods for mortgage policy change, and isn’t the 60 days just a gift to get the real estate cabal through the winter?

Shouldn’t a change like this, that clearly has substantive impact on such a vital market, be done after hours, with no advanced notice, to minimize the effect?

My guess is it’s a nugget to the builders trying to dump the latest round of condo projects on the remaining fools, “before the changes take effect”… although overnight lines are kind of tough this time of year!

#120 fancy_pants on 01.20.11 at 3:38 pm

#111 Mister Obvious on 01.20.11 at 1:31 pm

do{ get_out; }
while{ you_still_can; };

hey another programmer… I do vb.net + ASP.NET, mostly class library dll files and console apps for behind the scenes stuff for search pages. anyways, you forgot to call the your_screwed subroutine passing your_ass as the sole parameter

public sub your_screwed(ByRef your_as as string)

…which contains a for…next loop with a counter that doesn’t let you go until 2015. Then:

If your_ass “bankrupt”

put your_ass back in the loop until 2020

#121 Hoof Hearted on 01.20.11 at 3:45 pm

More reasons not to buy the OLYMPIC VILLAGE condos

http://alexgtsakumis.com/2010/03/30/exclusive-on-the-record-with-former-vancouver-city-electrician-ark-tsisserev-the-interview/

The COV fired the head of their Electrical Inspection dept about 3 weeks before the Olympics. The firing “coincidentally” had press releases that denied their was anything wrong with the work done on the Olympic Village.

The party Mr Ark Tsisserev ,20 year employee , while under a confidentiality agreement re some of the details, still addresses what went on. He was fired without warning after a 20 minute meeting with a superior

This is your Gov’t in action…especially when you have a bunch of whacko lefties in power

Interesting also is the apparent fact the COV Electrical Dept apparently generates $2 MILLION + in revenue annually for the City, and the allegation the COV is trying to gut it.

I wonder what other Olympic Vilage deficiencies will come forward…as such high profile projects with important deadlines almost , by design, end up as bad news and bad investment.

#122 bridgepigeon on 01.20.11 at 3:54 pm

97 Utopia, Canadian Tire money is great. I find the further south you go in the US, the more it’s worth…

#123 Mr. Lee on 01.20.11 at 3:56 pm

As if the realestate boards and various MLS constituents do not have a vested interest to cheer lead.

Fact: Oil\fuel is going up in price, food stuffs is going up in price, wages are stagnent and indebtedness is at an all time high. So folks, do the math, where is all of this money to buy apprciating home values coming from?

#124 Ottawa S on 01.20.11 at 4:02 pm

#119 SRV ES339

I think part of the grace period is to allow those that already signed contracts to purchases houses they can only afford with 35 years the ability to close on the house and get the mortgage, otherwise these legislative changes would mean that people would be immediately defaulting on their legal obligations (purchase contract) before ever having closed.

That said, for existing contracts, give a grace period. For pre-approvals for people that haven’t bought yet, change the rules before they buy more than they can afford. I’d morify the grace period like that. It protects those already in a contract, and prevents a 60 day fury of bids from people that otherwise can’t afford to buy.

#125 Chris in Langley on 01.20.11 at 4:06 pm

So when you see a realtor with yellow eyes, run.

I would say yellow eyes and a brown nose.
“Things are going to be great…I told you things were going to cool off a bit.”

When things don’t happen the way the “just be positive and everything will work out fine regardless of the facts”crowd would like, they change their tune quickly.

Whatever it takes to get a sale, or in hopes of preserving the chance of future sales.

#126 Tony on 01.20.11 at 4:15 pm

The two most overvalued commodities are pladium and oil. I’m short the both of them. All i can see is an implosion in all commodities except natural gas and the stock market will follow the commodites downward.

And you base that on what? — Garth

#127 Shane on 01.20.11 at 4:26 pm

Garth, are you still predicting a 15% correction in 2011 for the housing market?

Shane

What market? You have asked this three times. Why? — Garth

#128 The Coming Depression on 01.20.11 at 4:27 pm

Deflation: Absolutely! Oil is going over $100 and food prices will deflate..Gas will go down. Taxes will drop. Heating will drop. Electricity will plummet. COPPER-SILVER-PLATINUM will ALL spiral down, making all goods cheaper.. GOLD WILL drop into the wee dollars because all the dollars that were “printed” will find its way into the economy. L O L! I have a chicken farm in Penticton for sale next to that infamous Pig farm. Any buyers?

#129 Cookie Monster on 01.20.11 at 4:29 pm

fancy pants, do you do stuff in VC++6.0 / MFC? If so, can you do single page report generation that plot some points on a graph with a few lines of text and then print preview/print?

#130 Roial1 on 01.20.11 at 4:34 pm

#15 Devil’s Advocate on 01.20.11 at 12:08 am
Don’t worry so much about they who, for what ever reason, are prepared to pay more for something than you think it is worth.

Good advice—BUT not when I as tax payer have to back stop the purchase.

You too should be very afraid that YOU are now on the hook for this over payment.

Unless you do not pay taxes????

#131 Vancouver_Bear on 01.20.11 at 4:39 pm

#15 Devil’s Advocate on 01.20.11 at 12:08 am
Where is “buy now or be damned forever” mantra? It’s the only slogan your cartel praises. Just disgusting!

#132 Hell in a Hand Basket on 01.20.11 at 4:41 pm

I’m in a race. A race to get my house ready and put it on the market to snatch that last greatest fool. The cost of failure? I remain in my home for the next ten years until real estate recovers.

#133 Hoof Hearted on 01.20.11 at 4:41 pm

Can you computer geeks please go somewhere else?

I mean, its common knowledge most, if not all of you, have never gotten l*id….

Don’t take out your frustration on the rest of us ,as Garth provides enough soft porn to at least get you and your blow up dolls out of your basement suites for at least an hour.

#134 Two-thirds on 01.20.11 at 4:42 pm

#109 Carlyle on 01.20.11 at 1:24 pm

“Regardless, I feel that selling the home was the right move, and we are getting out “on top” or as close to the top as we were ever going to get. We’re sad about leaving the home, but feel good about the future. And most importantly we feel free now … free to live where we want, do what we want, and soon to be free of a large majority of our consumer debt.

That in and of itself is worth at least as much as our home was.”

Congrats on finding a Greater fool.

Freedom from debt is one of the best feelings in the world.

That, and JD + TB :)

#135 Bill Grable on 01.20.11 at 4:47 pm

Non Plussed = grade three drop out?

Listen chum – if you are going to cast aspersations, use your massisve 67 IQ to at least learn the basics of the English language.

> “If gold prices go down, I will loose money.”

“If the economy gets worse, I might loose my job!”

“If the economy gets worse, some municipal bonds might be worth junk.”

“If I get as old as Garth, I’m going to turn into an inflexible know-it-all too.”

>THAT WOULD BE LOSE, NOT LOOSE, you moron.

Another shining example of a jerk with the intellectual capacity of a Golden Retreiver.

And you wonder why so many people are going to LOSE their pants?

Jeez – these kind of posters drive me to distraction.

#136 Devil's Advocate on 01.20.11 at 4:56 pm

#130 Roial1 on 01.20.11 at 4:34 pm

#15 Devil’s Advocate on 01.20.11 at 12:08 am
Don’t worry so much about they who, for what ever reason, are prepared to pay more for something than you think it is worth.

Good advice—BUT not when I as tax payer have to back stop the purchase.

You too should be very afraid that YOU are now on the hook for this over payment.

Unless you do not pay taxes????

As per another recent post, don’t worry so much about the future that it gets in the way of your enjoying today. Enthusiastically embrace each new day as the first day of the rest of your life and respect, appreciate and live it as were it the last for it may very well be. There are no guarantees.

Lastly, I don’t disagree with you but they who might “cause tax payers to have to back stop such purchases” are not the ones you or I can control. That is the consequence of government policy that these people, and rightfully, take advantage of. If enough of us disagree with the consequences of such policy we will vote them out of office for their sanctioning such behavior.

Yes I pay taxes…

You do vote don’t you?

#137 TheBigLebowski on 01.20.11 at 4:57 pm

Sound money with some sort of backing restricts a governments ability to debase such a currency. They must in essence take from one group of people to give to another in return for votes. But this causes constraint on government spending because you have a group of people that will object. It is a natural built in check and balance in the system. Unbacked currency as we have in the world today allows government to steal from the future generations by building up massive debts. But the future generations are not around to complain, so there is no checks and balances in place. This is why Europe and the western economies are in the predicament they are in today. We have governments who answer to lobbyist groups who pressure government to overspend now kicking the debt can down the road for our children to deal with.

#138 Derek on 01.20.11 at 5:06 pm

#80 GentleInestor wrote:

Garth I agree with pretty much everything you say on this site but this deflation thing is just not going to happen.

The world is a patchwork of inflation and deflation. The US economy is currently experiencing deflation whereas the Chinese economy is currently experiencing inflation. Hence the complicated effect on global commodity prices. Basically anything in demand by the Chinese economy (food, oil, copper, gold, Vancouver, etc.) is still rising in price. Any asset or commodity that they can’t buy or don’t want to buy (Detroit, etc.) is dropping in price.

So Garth is absolutely right. If the general public think that they are getting stiffed now, just wait a year. These will look like the good old days.

#139 Brad on 01.20.11 at 5:15 pm

#59 Cookie Monster

You have too much faith in government to control the money supply. Since Canadian Banks have created 95% of the existing money supply, there is no way C can do much about anything. The Fed is not printing money – do you think they can print $600 billion over night – how much forest would that be? The Fed electronically prints money, they give this to the US Treasury who exchanges this for mortgage-backed securities from the banks. The banks then get the ‘electronically printed’ money. That money is used to ‘improve’ their balance sheets, even though there is no ‘printed’ money in their bank vaults. However, since they’re exposed to a trillion dollar derivatives market, it won’t matter how much electronic money they have. All assets get re-assessed when the credit no longer flows and contracts to the point where we as Canadians only have 5% of the money supply to utilize (the actual cold hard cash not the electronic money you see on you bank receipt). At that point, real estate and gold will only be worth as much as people are willing to pay with actual paper money. Death of the fiat currency still occurs but not until the credit contraction has completed – this is when the printing presses run.

#140 prairie gal on 01.20.11 at 5:33 pm

10 Kilby wrote:
Beautiful, bucolic Summerland in the Okanagan, 6 residential sales in the last month…40 odd realtors. Our was the most expensive (Lakeview) at $497. We are a half hour from Kelowna, in the past this market was fueled by Albertans, and very popular.
___

I spent time in Summerland. Its nice in a sleepy, know your neighbour’s business kind of way. The place is overrun with developer wanna be’s and their hangers on. Love the orchards and vineyards but reallty not enough going on to stick around. I’d return in my twilight years when I have plenty of time to soak in the view.

#141 Devil's Advocate on 01.20.11 at 5:43 pm

#131 Vancouver_Bear on 01.20.11 at 4:39 pm

#15 Devil’s Advocate on 01.20.11 at 12:08 am

Where is “buy now or be damned forever” mantra? It’s the only slogan your cartel praises. Just disgusting!

Please don’t be putting words in my mouth.

Show me just one instance where I ever said “buy now or be damned forever”. You won’t. In fact, as I again feel compelled to point out, I tend to align more with Garth on many of his predictions and criticisms of the various interest groups attempts to influence the market in one direction or the other. This you will surely realize if you read my historical posts on this site with less prejudice of my vocational association.

#142 Stevermt on 01.20.11 at 5:46 pm

#40 Devore
I’m pretty sure that’s usually what happens at the end of a Ponzi scheme. i hope I’m not repeating someone else..didn’t have time to go through all of the comments
anyhoo that’s my 2 cents worth for today

#143 thecomingdepression on 01.20.11 at 5:52 pm

#103-WORLDWIDE, you know how many times the price of GOLD has been beaten down since 2000? Learn how “BUBBLES” deflate, check the graphs since the early Tulip Faze of the 1600’s that went up 16,000 PERCENT…then check each individual BUBBLE that has occurred since that time. THIS IS NOT A BUBBLE! NOT EVEN CLOSE. (GOLD is up ONLY 450%)The stupid posts that occur daily…

#144 realpaul on 01.20.11 at 6:03 pm

#51 Utopia…I don’t use the Acer with Windows 7. I have noticed though that on some sites the ‘smiley face’ emoticon sometimes overwrites the number 8 or the emoticon :) ( which I own the copyright for btw) . Sorry I can’t help.

Moneta…don’t sell yourself short. You have been brainwashed into thinking that you are an incapable incompetant by a government that see’s your ignorance and complacency as a political tool with which to control you. Break that mind set and a world of opportunities will present themselves to you. The idea that ‘the government’ creates jobs or ‘the economy’ is rubbish and I don’t have to spend hours debating this well known fact with anyone. The government spends tax revenue it does not create capital….not a thin dime.

#145 realpaul on 01.20.11 at 6:11 pm

See…it did it again. The emoticon ‘semi colon – right bracket’ was replaced by the happy face. I own the copyright image of the semi colon right bracket emoticon…not the happy face.

#146 $froma$ia on 01.20.11 at 6:17 pm

Those Conservative Michael Ignatief adds are just plain evil. What kind of Gov spreads hate like that. Sick!

Somebody please help us!

$

#147 AG Sage on 01.20.11 at 6:42 pm

#27 rogerthedodger on 01.20.11 at 12:40 am

You feel left out? I have an idea. Call your stock broker on the phone and say, hey, I want to feel like a house flipper, please start charging me 8% on every transaction.

#148 AG Sage on 01.20.11 at 6:46 pm

#43 Carlyle on 01.20.11 at 1:41 am

Awesome! Don’t let the fish off the hook during negotiations. We made that mistake last house.

#149 bullion bum on 01.20.11 at 6:49 pm

Garth, better to stockpile maples. They can always print more $20 Timmie charge cards.

#150 David on 01.20.11 at 6:51 pm

#146 – Sorry, no pity here. I consider the passing of brown envelopes full of taxpayer cash to be much worse. Much worse.

#151 Lonely Limey on 01.20.11 at 6:54 pm

@ 135 Bill Grable

Listen mate, if you’re going to be the spelling police then try not to make a spelling mistake in your very first sentence.

It’s aspersion

#152 HouseBuster on 01.20.11 at 6:54 pm

#15 Devil’s Advocate – I didn’t say I couldn’t afford it. I’m just saying it is idiotic.

#153 LS on 01.20.11 at 7:01 pm

Some high-end rural waterfront properties see substantial price drops

Read more: http://www.vancouversun.com/business/Some+high+rural+waterfront+properties+substantial+price+drops/4140062/story.html#ixzz1BcObTtRA

Can’t be, I thought real estate only goes up? (Particularly any RE in Canada.)

http://www.vancouversun.com/business/Some+high+rural+waterfront+properties+substantial+price+drops/4140062/story.html

#154 Geology Joe on 01.20.11 at 7:05 pm

Those Conservative Michael Ignatief adds are just plain evil. What kind of Gov spreads hate like that. Sick!

Somebody please help us!

———————–

They’re only sick and disgusting because they are true. C’mon… Iggy Pop for lead singer of PM and the Coalition of Dissidents? With JL-Dawg and GD-Ice as the back up band? Can you say drive the bus off the cliff?

The only reason the deficit is as high as it is is because the Three Stooges forced H into it. He knew it was totally useless to rack up the deficit. but the Stooges panicked and wanted to be seen to do something.

Iggy ain’t here for for me. He can head back to Harvard anytime and I will guarantee that in 6 months it will be “Iggy who?”

$

#155 AG Sage on 01.20.11 at 7:16 pm

@ 135 Bill Grable
Also “dropout” is one word, and there is no reason to capitalize golden retriever (which was also misspelled).

All Dogs deserve Capitals. — Garth

#156 Live Within Your Means on 01.20.11 at 7:18 pm

#140 prairie gal on 01.20.11 at 5:33 pm

___

I spent time in Summerland. Its nice in a sleepy, know your neighbour’s business kind of way. The place is overrun with developer wanna be’s and their hangers on. Love the orchards and vineyards but reallty not enough going on to stick around. I’d return in my twilight years when I have plenty of time to soak in the view.
………………………….

Is that anywhere near Naramata?

#157 Pr on 01.20.11 at 7:21 pm

Canadian household debt has set record highs . It is not surprising. After all, if incomes could not keep up with rising home prices, somehow all these homes purchased in record volumes over the last five years had to be paid for.

#158 Live Within Your Means on 01.20.11 at 7:32 pm

#154 Geology Joe on 01.20.11 at 7:05 pm

They’re only sick and disgusting because they are true. C’mon… Iggy Pop for lead singer of PM and the Coalition of Dissidents? With JL-Dawg and GD-Ice as the back up band? Can you say drive the bus off the cliff?

The only reason the deficit is as high as it is is because the Three Stooges forced H into it. He knew it was totally useless to rack up the deficit. but the Stooges panicked and wanted to be seen to do something.

Iggy ain’t here for for me. He can head back to Harvard anytime and I will guarantee that in 6 months it will be “Iggy who?”

$

………

Oh so the excuse is, they made me do it. In other words, Harper didn’t have the spine to say no. He was more interested in holding on to power than anything else ’cause he’s in it for himself.

#159 Vancouver_Bear on 01.20.11 at 7:38 pm

#141 Devil’s Advocate on 01.20.11 at 5:43 pm

Oh, sorry, I misspelled the mantra….it was “buy now or be priced out forever”….. Now it’s correct.

#160 tran, Calgary on 01.20.11 at 7:52 pm

20/20

#161 Behavioral Finance on 01.20.11 at 7:59 pm

thecomingdepression,

Sorry to say, but comparing the percentages of Tulip mania to the Gold rise is simply irrelavant. Those were different times and different human psychology. There is simply too many assets today to invest in to see that type of rise in Gold. Additionally gold is highly illiquid to buy in large quantities for any institutional investor

#162 ballingsford on 01.20.11 at 8:01 pm

Carlyle, glad to hear you heeded Garth’s advise and sold. I must also give a cheer to your wife too for sticking by you! Nice to hear you can pay off your debt and start anew! The wisdom you gained from your past will carry you well into your future.

Newlywed 20’s bought the house at a record price. Man, I can’t believe the entitlement this generation think they have. If you have any at that age group where you work, you’d be amazed at the time they spend texting on their cell phones each day. I’d fire them all if I was boss. Lazy as hell and don’t want to learn anything.

I have to watch I don’t spoil my son and turn him into one of those types. Just this winter, we have bought him 3 types of sledding devices, plastic toboggan, plastic circle flying saucer, and a fold-together toboggan. Took the fold-together back to the store, so now he just has two. How I am doing so far by not spoiling him. ;-)

When I was a kid, our family didn’t have much money. I and other kids I played with used to use unfolded cardboard boxes as toboggans. You felt special when you could find a waxed cardboard box as they would go faster than the uncoated cardboard and you’d win the occasional race downhill.

#163 Cookie Monster on 01.20.11 at 8:11 pm

#139 Brad on 01.20.11 at 5:15 pm

I don’t have any faith in government to control the money supply, that’s why I’m advocating a return to the gold standard.

The Fed IS printing money, printing being a euphemism for creation of base money or high powered money or reserve money, or M0, or M1 whichever it is that’s base money. The Fed’s balance sheet has exploded electronically. The old days of actually printing paper with ink are indeed behind us for the most part, so what we have now is much worse!

I don’t think there will ever be a contraction, not unless interest rates get up to over 10% and governments stop spending, I don’t think its going to happen, they won’t do it.

#164 Nostradamus Le Mad Vlad on 01.20.11 at 8:19 pm


Suzy Creamcheese You’re Wunnnerfull Jes’ felt like blabbing that out.

Way to go Carlyle. As one poster said, don’t let the fish off the hook. Get rid of the debts ASAP, max. out TFSAs (can they be held in trust for children?) and invest the rest as Garth preaches. Let the investments pay the rent.

#156 Live Within Your Means — Summerland is just north of Penticton, close to Naramata. Peachland is next, then West Kelowna, the bridge and Kelowna.

The Okanagan is great for a holiday, but unless one has a relatively profitable business or a good-paying job, cities are better to live and work in.
*
Number One on this list is curious.

Lieberman Gone Hmmm. Interesting headline.

China rebuilds old Soviet aircraft carrier, plus — Chinese trains can’t be any worse than British Rail’s. Don’t need language characters.

ObominationCare shot down.

#165 Behavioral Finance on 01.20.11 at 8:38 pm

Got A Watch,

There is plenty of individual stocks that outperformed oil. S&P 500 +1,264% underperformance over the other assets clearly showns that being diversified in too many companies hurts your returns. Additionally S&P index is overweighted on larger companies so you are losing companies who are small and mid cap and are growing much quicker.

#166 Nickelsworth on 01.20.11 at 8:42 pm

First time posting so everyone be kind.

Have been reading this blog for months on the advice of a good friend. I know alot of the readers enjoy, as myself, antidotal stories. I was embarrassed to talk about this before but now I am hearing other personal stories that are just as bad as mine, so I now have the nerve to share.

My newly married son & wife bought a condo in 2005. Made some money and moved up. They jumped the starter home stage, they wanted bigger. They bought at the peak. When they arranged their mortgage they wanted no advice from the parents. At one point when the baby arrived and DIL was on EI things got tight. One solution we thought might ease their burden was to look at extending their amortization to 30 yr. DIL went to check this out with the bank and guess what! They were already in a 30 yr mortgage and they didn’t have a clue. Seems they bought into the hype or just felt entitled. Now 4 years later they have close to half a million dollar mortgage (the house is worth maybe 400 if they were really lucky), over 60 G in other debt and a brand new car. Guess what! They separated 6 months ago. Well DIL is filing for bankrupcy and son is being told by “everyone” to not let the bank foreclose on him under any circumstances. How’s that going to happen when he now has to pay rent (locked into a years lease) for himself and child support. He’s been avoiding us for months.

When I tell this story to friends they start to open up. Our friend’s son & wife had a 2000 sq ft home in a nice neighbourhood. She just told me the other day that they were moving in a week. Seems her son and wife jumped at the opportunity to built a 2800+sq ft home when a lot they had their eye on opened up! I commented to my friend that they were lucky to sell their other house. She informed me that they could not sell it but they were able to find renters that would cover the mortgage payments. Now this is a couple with average jobs no big money here. The wife is now pregnant with 4th child!

I am so disgusted with banks! What are they doing allowing the 20 somethings to accumulate this much debt! The younger ones don’t think twice about taking on the debt when it is offered to them. They feel if the banks are OK with it then so are they. I don’t know if this is common practice but when my son and his wife met with the person from the bank to discuss the mortgage, they always met at coffee shops?? Is this some psychology they are using to make their victims feel at ease? This was a big bank.

Some of my friends think we are crazy when I tell them we sold our house because we are unsure of what is going to happen with the housing market. They are unaware of the current debt/income ratio, pent up supply of homes for sale, etc. Not to mention 50% of marriages now end in divorce. Newly weds are in a fragile state to begin with and then you add on the stress of a massive debt load. I’d like to see the stats on the divorce rate for the next few years to come.

In the last couple of months I have talked to 3 people who currently own 3 homes? They bought them as an investment!

When we sold our house in Nov our realtor told us that he had sold all his rentals. In his words “The next few years, in real estate, are going to be a blood bath”! And this from a realtor. He also informed us that there were 2000 foreclosures that the banks were holding on at that time because they didn’t want to flood the market. I don’t know if that was true but what did he have to gain by telling me that? Is there is anyway to find out how many foreclosures the banks have?

Well that’s my nickels worth. By the way I’m in Calgary.

#167 Hoof Hearted on 01.20.11 at 8:45 pm

Gotta laugh at all the types that are RE adversive, yet really feel smug re their OTHER investments.

They don’t seem to realize how the world “globally” had been turned into one big casino .

All investments are via a totem pole of information, with Goldman Sachs types at the top with computer programs in place that react at the speed of light to various trading patterns……this was outed months ago.

Gov’ts , Goldman Sachs etc realize RE is toast,onto the next scam…..stir and repeat …… but they must be primed n’ pumped to dump GOLD and other propogandized investments at the right critical mass point.

#168 realpaul on 01.20.11 at 8:51 pm

Bullion Bunny(s) There is a misconception surrounding gold investments generally. People are hyper focused on the headline bullion spot price. For those of us investors without massive vaults to store gold bars are ETF and equity investors.

Look at these earnings revision numbers that were printed this am for the general public…concise numbers…based on the fact that these gold companies are wildly profitable at bullion prices over the cost of production ( generally below $400 p/o)

http://www.theglobeandmail.com/globe-investor/investment-ideas/number-cruncher/theres-gold-in-those-earnings-revisions/article1876540/

Generally most of these companies are grossly underleveraged to the price of bullion…this however also doesn’t fully matter. We shareholders will particapate in the profits of the companies from share buybacks, increased dividends and special distributions…as well as capital appreciation of the share price. Forget the fixation on the bullion price. Forget the argument whether gold is in a bubble or not.

On days when the general markets seem to be exhaling ( like today) it should strike you that these wildly profitable comapnies are enjoying a ‘blue light ‘ sale and should be aquired incrementally.

So why buy this type of issue as opposed to a GIC or CSB…..it’s obvious. Take a look at general returns on resource, energy, precious metals, emerging markets funds and general equity mixed equity ( Canadian Index). If you had taken this sector investment approach to heart over the past twelve months you would be looking at returns of 33%. This figure comes from the average return of this group ( purchased in equal amounts) of a standard mutual fund widely available from a generic bank. Had you picked individual winners within those sectors as well you would be looking at returns far in excess.

Any generic precious metals fund brought in over 50% and many doubled. Poo poo gold all you want….I’ll take the money. Ask yourself what has changed ( except for the fact that Premier Hu is in town) and wonder why commodity prices were off today? Got it? Did you buy what went on sale today? 12 months from now theres only one result from China’s growing at 10%…..regardless of a one day rise in the USD or the threat of rates increases…….if the US/CAN is improving that means growing consumption of raw material AND inflation ( both excellent for gold and rocks). Oh…and they are still debasing the currency at a shadow statistics projection of 15% p/a plus plus. Buy buy buy people….it ain’t getting any cheaper and the purchasing power of your dollar is swirling down. I have said before that a 1970’s dollar only buys .19 cents today !!!!!!!!

Lets see, should I buy a gold coin…a gold stock…..or keep my paper in the bank?

#169 Hoof Hearted on 01.20.11 at 8:51 pm

Okanagan is Phoenix , Las Vegas and Florida North.

It is also much like Surrey…… strip mall capital of BC Interior

Many people got sucked in by its California-esque image (sun, wineries, beaches etc.) which actually last about 3-4 months a year.

Its depresssing to be there in the Fall and Winter, your exit strategy is the unpredictable Coquihalla Highway.

Basically, if you like to do service work for a bunch of retirees….its for you.

#170 prairie gal on 01.20.11 at 9:06 pm

@Live Within Your Means

I could see Naramata from the garden level suite I rented – I had a gorgeous lake view for only $500 a month! Naramata is my favourite community in the Okanagan.

Summerland is on the west side of Okanagan lake between Peachland and Penticton.

#171 Devil's Advocate on 01.20.11 at 9:09 pm

#164 Nostradamus Le Mad Vlad on 01.20.11 at 8:19 pm

The Okanagan is great for a holiday, but unless one has a relatively profitable business or a good-paying job, cities are better to live and work in.

Of course you are entitled to your own opinion just as others are entitled to disagree. ;-) (read last response)

#159 Vancouver_Bear on 01.20.11 at 7:38 pm

#141 Devil’s Advocate on 01.20.11 at 5:43 pm
Oh, sorry, I misspelled the mantra….it was “buy now or be priced out forever”….. Now it’s correct.

To which I then must reply similarily;

Please don’t be putting words in my mouth.

Show me just one instance where I ever said “buy now or be priced out forever”. You won’t. In fact, as I again feel compelled to point out, I tend to align more with Garth on many of his predictions and criticisms of the various interest groups attempts to influence the market in one direction or the other. This you will surely realize if you read my historical posts on this site with less prejudice of my vocational association.

#152 HouseBuster on 01.20.11 at 6:54 pm

#15 Devil’s Advocate – I didn’t say I couldn’t afford it. I’m just saying it is idiotic.

Evidently others would disagree with you as they continue to be sold for those prices others are willing to pay. That you would not pay such a price for those homes says that the money you do have is of more value to you by virtue of the other opportunities that money presents if only the security of having it in your mattress. You are at liberty to manage your finances as you see fit as they are theirs.

#156 Live Within Your Means on 01.20.11 at 7:18 pm

#140 prairie gal on 01.20.11 at 5:33 pm
___
I spent time in Summerland. Its nice in a sleepy, know your neighbour’s business kind of way. The place is overrun with developer wanna be’s and their hangers on. Love the orchards and vineyards but reallty not enough going on to stick around. I’d return in my twilight years when I have plenty of time to soak in the view.
………………………….
Is that anywhere near Naramata?

City folk… go figure?

Ya’ll wouldn’t like Naramata. It doesn’t have a Timmy’s let alone a Starbucks and left up to the Narmations they’ll never have one either. They would be aghast to learn their sleepy little hamlet was even mentioned on such a website as this.

Now I get it… you people really are of the city mindset. Shame. Does explain a fair bit though.

#172 Nostradamus Le Mad Vlad on 01.20.11 at 9:36 pm


1:32 clipLaugh of the day. Hu vs. Bernanke.

China devalues US buying power by 30%.

Insider Selling — Zero for the past week.

GS vs. JPM “Solvency is not even a question…The 4 largest banks are insolvent many times over.”

BDI is sliding downhill faster than the west.

Note the headline and see what the CPC and Harper are doing here.

3:23 clip The US will have no choice but to learn from China.

GPS, tests and dead birds Is all this a strange coincidence or a natural part of life? Humans cannot be considered as natural, BTW.

More on Mass. “It’s a nightmare scenario for the big banks…”

US mfg. BS “Behind the China bashing there is a truth about America you need to deal with.” wrh.com.

Obama’s Dictatorship Oklahoma citizens encouraged to snitch, do someone else’s dirty work.

AGW Even The Guardian is questioning their junk science.

Saving the Dollar Plans for B, C, D and E. Guess A went the way of the dodo bird.

US continuing wars until the economy implodes, which just about now.

Three to 4.3 billion barrels of recoverable oil in North Dakota and Montana? Why is the US causing so much grief across the planet when they only have to look in their own backyard?

Florida Lawsuits dismissed. Sheeple are catching on!

Down Argentina Way Western govts. confiscating private wealth? Also — 4:10 clip on gold confiscation, etc.

China US #1 no longer.

#173 jess on 01.20.11 at 9:45 pm

Where’s Ruth
cookie factory of 45 years in kitchener in receivership

===========

Ruth’s Chocolate Chip Cookie (1933)kept her busy filling orders during the depression years.
With Andrew Nestle’s chocolate and her cookie recipe,
a symbotic arrangement was created whereby Ruth gave Nestle the rights to print her recipe on the backs of his chocolate bars. In return, she merely requested a life time supply of his chocolate so she could continue to make her cookies at the Toll House Inn. IN 1939 Nestle began making his chocolate in morsel (chip) form rather than the bar .

#174 jess on 01.20.11 at 9:47 pm

Keyword APPEARS
not 40b and now 19b. do you feel better now

Oversight committee
Since the Panel last reviewed the bailout of the domestic auto industry, the financial state of taxpayers’ investments has improved starkly. At the time of the Panel’s last comprehensive report on TARP automotive programs in September 2009, the Congressional Budget Office (CBO) estimated that taxpayers would lose $40 billion in the automotive industry. Today, CBO has reduced its loss estimate to $19 billion, and the three largest recipients of automotive bailout funds — General Motors (GM), Chrysler, and GMAC/Ally Financial — all appear to be on the path to financial stability.

#175 Rural Rick on 01.20.11 at 9:51 pm

Its a strange strange world we live in master Jack
Former U.S. vice-presidential hopeful Moosetits could be the next President of Fortress America. Think she is the other woman?

#176 Timing is Everything on 01.20.11 at 9:53 pm

GrammER and Speling poLicE suk.

Do u undERstood me Pointe!

#177 GP girl on 01.20.11 at 9:55 pm

#135 FYI
The golden retriever consistently ranks in the top 10 for excelling at obedience competitions, loyalty, patience, awesome with children, eager to please. Mine also knows how to open doors and brings my shoes when he knows it’s walk time.
More than I can say for some guys I’ve known.
To feel the need to correct something as minor as a few typos or spelling errors must mean you’re a ‘sexual intellectual’. And that translates to four other words which Garth would censor out. :)

#178 Nickelsworth on 01.20.11 at 9:56 pm

How do I thank you! Thank you!

#179 Sean Reynolds on 01.20.11 at 10:08 pm

Talking of inflation, it’s a pity the commonly reported CPI (I assume Canada is the same as Australia) doesn’t take into account *real* inflation – i.e. inflation of the money supply, M3 growth, and the big one – house price inflation! The latest RBA financial aggregate data (see chart below, 8th chart on the page)…

Real Inflation – RBA Financial Aggregates Chart

…shows these forms of real inflation running well above the RBA 2-3% inflation target, meaning we should really have much higher interest rates, and wouldn’t that pop the bubble and bring house prices back to sensible levels!

The source data for that RBA financial aggregates chart can be found on the RBA site here…

http://www.rba.gov.au/statistics/frequency/fin-agg/2010/fin-agg-1110.html

Cheers, Sean.

Oz Housing Crash Blogs

#180 Timing is Everything on 01.20.11 at 10:10 pm

#168 realpaul – Just 4 u (and bullion hare)

http://www.youtube.com/watch?v=63i0ncXiaXE

#181 $froma$ia on 01.20.11 at 10:14 pm

#146 – Sorry, no pity here. I consider the passing of brown envelopes full of taxpayer cash to be much worse. Much worse.

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

Much worse is using CHMC as a tax payer credit card to fund a RE boom all for a popular vote.

On one hand we have one Politition with a brown envelope on the other we have a whole party with a Tax payer credit card.

God help us.

$

#182 Carlyle on 01.20.11 at 10:26 pm

Thanks for the kind words all. We expect to make 27k each off the sale of the hoes I will pay off 22k of high interest credit card debt. Wife is using her share likely to upgrade in school, or to invest (our finances are separate) Our remaining debt will be 7k at 0 percent interest, 11k on a LOC at 6.75 and the car which will have about 13k left to pay at 0 percent interest.

This may still seem bad, but I will be freeing up close to 1k a month by moving through transportation savings and reduced home expenses from lower rent… All of which will be used to attack the LOC with a vengeance and then the 0 percent stuff.

That’s the plan so far.

#183 Utopia on 01.20.11 at 10:26 pm

#166 Nickelsworth wrote…

“First time posting so everyone be kind”.
———————————————————-

Welcome to the site Nickelsworth. We are not all as mean as it sounds some days. Like all families there is bickering and harsh words from time to time. It seems to iron itself out in the end.

I have really been expecting to hear a lot of stories like the one you related. Over the next few months we will likely hear many more too. It is unfortunate the kids would not take any advice from you but that seems to be the norm these days. They are much more influenced by the decisions and ideas of their peers than the protestations and warnings of their parents.

Not much you can do really but offer words of encouragement. I would not take any responsibility for cleaning up the mess though. It is not your burden to shoulder. No more than it was your responsibility to offer advice when attempting to discourage spending behavior that might result in heartache (especially if it was unwelcome advice all along).

You did what you could.

The kids are really adults though. They have earned the consequences of their own poor decisions. And they won’t learn a thing now except but hard experience so bailing them out is not a good use of energy and time.

Tough break for a parent though.

#184 604genX on 01.20.11 at 11:12 pm

#90 Utopia: It was CBC radio one I was listening to when I heard the lousy real estate repeating/reporting.

I can understand my Canwest print media must fluff up the real estate reports, a huge chunk of their advertising dollars come from those glossy advertisements from the industry. I expected a little more from CBC since they’re supposed to be independent. They didn’t deliver.

#185 ballingsford on 01.20.11 at 11:22 pm

Cookie Monster on 01.20.11 at 3:02 am
Um, sorry, I don’t think I know who “bullion bunny” is. Can someone fill me in? For a while I thought it was the pretty blonde chippie selling condos a month or so ago, but I’m starting to doubt that is right. Selling maple leafs? I’m lost.
——–
Bullion Bunny is an astute and intelligent fellow who at times posts on this forum from the perspective and virtuous understanding for the role of precious metals in economics versus dishonest immoral FIAT paper currency substitutes open to manipulation by modern governments and banks.

Also a compulsive, obsessive, relentless, mindless gold-pumping PITA. Never to be confused with the talented MissyBunny. — Garth
***************

You have totally ruined my day. Good Night! I always thought Bullion Bunny was a lady. I didn’t agree with what she (now he) posted, but I liked how sexy her voice sounded.

I’m moving on to Prairie Gal. Lord help me if she is also a he.

#186 walter safety on 01.20.11 at 11:27 pm

I see the real great divide (not rich/poor) but urban /rural has reached this blog. I am always amazed at the finances of the rural ,lower incomes generally but higher savings ,unsophisticated investments but street smart consumption, most know how to make a dollar out of .25 cents.

#187 Hoof Hearted on 01.20.11 at 11:36 pm

# 166 Nickelsworth

Remeber the gamer hot potato?

Aim was to pass the ball till the last person got stuck?

Basicailly the Gov’t , Banks and vested interests met in the backroom bar and realized they had to juice the economy.

The impediment to that was the “old rules” ie
—-large downpayment
—- higher interest rates and
—-a shorter mortgage term.

Solution is simply “Bizarro Universe” re: all 3 aforementioned impediments.

They have no skin in the game…..the Gov’t in theory is US….but Gov’t(Inc.) has been detached from US its constituents for years.

The banks are the biggest whores….knowing as the pump out mortgages they are going to fiscally sodomize entire generations yet literally letting er rip with abandon, knowing full well the Gov’t, via CMHC, has them covered.

I’m just curious how Karma will address this scam…

#188 Derek on 01.21.11 at 2:34 am

#185 604genX on 01.20.11 at 11:12 pm wrote:
#90 Utopia: It was CBC radio one I was listening to when I heard the lousy real estate repeating/reporting.

I can understand my Canwest print media must fluff up the real estate reports, a huge chunk of their advertising dollars come from those glossy advertisements from the industry. I expected a little more from CBC since they’re supposed to be independent. They didn’t deliver.

Trouble is that CBC lost its independence from advertisers when the government made it raise funds by selling advertising directly on its TV channels. So now it has to be careful what it says about advertisers and the government. If the government had really wanted to cut taxpayer funding for the CBC without compromising its independence, it should have used the transmission licence fees paid by the commercial TV and radio stations to fund the CBC. That way the advertisers would still have been indirectly funding the CBC but without having the clout to influence its programming.

#189 Dan on 01.21.11 at 9:55 am

Vancouver – 1.12 mil @ 1812 sqft = $612 per sqft
NYC (Chelsea) – 850K @ 1300 sqft = $653 per sqft

Vancouver is nice but it ain’t exactly NYC. I`d say prospecting has completely replaced prespective in the GVA.

#190 Toronto on 01.21.11 at 11:39 am

Of course, everyone fails to mention the amount of money laundering being done thru condo markets especially in Toronto. Toronto is center of North America for drug money flow right now.

#191 David B on 01.21.11 at 12:09 pm

The multi-generational home makes a comeback

http://www.theglobeandmail.com/life/family-and-relationships/the-multi-generational-home-makes-a-comeback/article1877264/
———————-

Interesting.

#192 David on 01.21.11 at 6:01 pm

#146 – So…those “repulsive” Con. ads were just one day ahead of the equally “repulsive” Liberal ads.

One single day!…..what’s the chances that the Libs got those ads designed, produced, and on the air in one day? Zero.

So the liberals are just as evil, and just a tad slower.

#193 David B on 01.21.11 at 10:39 pm

Know it’s late …. but check this out to understand why Hong Kong money loves Vancouver.

http://www.squarefoot.com.hk/#