The revenge of F

It took merely a week for F to do to the housing market what he said he was avoiding. By announcing 35-year mortgages were kaput – but not for another two months – the little faux bubble-pricker unleashed what seems to be a torrent of kamikaze buying by the HGTV youth corps.

Mortgage brokers tell me they’ve seen a big surge in kiddies getting pre-approved, while realtors dealing in starter homes are watching multiple bids and panic buying. The generation that only cares about monthly carrying costs (because they know the debt will never be repaid) is desperate to rent a huge pile of money before F’s wee reforms take hold.

And as I told you last week, the flames are being fanned by an industry steeped in irresponsibility. For example, here is part of an email blast sent out by GTA-area realtress Michelle Alton. I did not alter her words, by the way:

35 years amortization being removed, Maximum amortization will be 30 years.
This will increase debt service ratios and reducing the maximum a customer is eligible to purchase.

VERY IMPORTANT!
No news on deals currently approved if the rules will apply if the mortgage closes after March 18th, I suggest anyone looking to refinance or purchase to get an application started and completed before March 18th. Existing mortgages approved I recommend getting me all outstanding conditions met so that we can ensure you do not get effective.

If you have been thinking of buying a home, NOW is the time to do it as there will be less people qualifying to buy a home after the March 18th, 2011 expected effective date!

Thinking of selling? NOW is the time to do it as there will be less people qualifying to buy a home! This includes yours! There could be a lot more houses on the market than there are buyers qualified to buy them. This could in turn, decrease the current value of your home after the March 18, 2011 estimated effective date.

It’s unethical, amoral and carnivorous to be egging on inexperienced and naive property virgins if Michelle expects – as she admits – that house prices will likely tumble after March 18th. She’s encouraging maximum borrowing and immediate purchasing, even though the 5/35 newbies could have their equity wiped out and be underwater by June. She, however, will have a commission.

If I were F, and had not engineered this whole thing just to create a robust housing market and the patina of consumer confidence amid hopes for rising home equity and economic recovery just weeks before a federal election was called, I’d be pissed. Poor dude.

In any case, here’s Jeff. I wrote about him a year ago when he contacted me with a hard-luck story as a former property virgin himself. At that time, this is what he told me:

I bought a home in Central Vancouver Island in 2007 for $300K – $10K down – 40 year amort.  (I know, I know – at least now I do) I did this for sheerly personal, intangible reasons, for the most part.  I had a pretty fiancé, I thought I needed forced savings…and I thought we would settle here. She is gone now.

I am renting the house out for a loss of around $500/month after mortgage + taxes. I am *really* bad with money.  At the time I bought I was generating around $100K a year.  I’ve just seen that reduced to $65K.  Still, I should be able to afford my bills, right?  Since 07, through my own stupidity, laziness and immaturity, I’ve managed to accumulate an enormous amount of debt – and recently found that due to my incompetence with managing my finances, I owe around $95K – over $50K of that to CRA. I am 38 years old.  I’ll be lucky to get a consumer proposal approved.  It would be my second bankruptcy, if I have to go that route, and screw me for life.

The tenants called on the weekend.  The house has carpenter ants. It’s in a place that I assumed will attract boomers, and wouldn’t lose a lot of value, but, realistically – it sure hasn’t gone up much, even through the last 2.5 years. What on earth would I do in 2.5 years when I have to renew at a rate of 7% or more, or even better, NOBODY is buying and if they are, it’s for 2/3 of what I paid or less?

I’ll have to walk away from it. I’m a financial idiot, and I’m hoping you aren’t laughing too hard at me…hopefully I’ve finally learned a lesson.

Last night Jeff unexpectedly sent me an update. He did declare bankruptcy. And he walked.

Hi Garth: Today I signed my consumer proposal and was given the option of walking away from my mortgage, or continuing to pay it and remaining on the hook for it with 2 years left before renewal, and all of the uncertainty with recent developments in mortgage rules and the obvious issue of consumer debt.

Is it not slightly obscene that I had the option to hang on to it at all?

Given that by signing the proposal I have next to no extra income for a few years, I am ecstatic that I will avoid the certainty of dealing with tenant issues (the dryer is already making a noise, the fence is rotting, and who knows when the carpenter ants will return), and don’t have to worry about being underwater when the time would have come to sell.

I took about 2 minutes to decide to walk away.  The freedom is indescribable.  I’ve been a fair bit more responsible with money, and now I’ll be forced to, but the upside is clear as a bell, even considering my non preparedness for retirement.  I won’t have to deal with that albatross anymore.

Thanks for your continued commentary and I look forward, in a sort of morbid way, to seeing what the market holds in the next few years.

There is no good ending to what we are now doing with the commodity that used to be called shelter. No soft landing. No gentle descent to earth and affordability. No escape for the kids that cougars like Michelle will be feasting upon.

But it will be morbid, speckled with ants.

211 comments ↓

#1 JO on 01.24.11 at 10:26 pm

Any secrities / MF licensed staff who dare recommend that clients with limited or no knowledge and minimal financial means enter into a massively leveraged deal (usually 20 to 1)to buy an illiquid asset would likely loose their license and rightfully so.. I work in compliance and keep an eye out for people trying to enter into this dangerous deal…that most people who bought homes in the last 5-7 yrs have done so in these exact circumstances is truly disturbing…I consider it a great danger to the country that we allow this blatant fraud to go on (fraudulent because all deals with less than 10 % down are in fact the gov’t sanctioned issuance of KNOWINGLY UNAFFORDABLE DEBT).

That you can allow different financial sectors to be treated differently despite essentially the same issue is a question for another day..thank god I left credit 6 yrs ago…and I did only a small # of “insured” deals per year…

JO

#2 Montrealer on 01.24.11 at 10:29 pm

My friends just bought a chalet lakeside. Second mortgage, both are 35 years amortization.
I remember when they bought the condo 2 years ago they told me they took 35 years because they would increase their payments soon to repay faster.
Now instead they are getting a second mortgage, also at 35 years.
They probably think in cash flow, not in debt. Their “cheap” chalet will cost a fortune in interest.

#3 reality guy on 01.24.11 at 10:31 pm

If I were these new buyers, try to put as little down as possible.

If the market swings after the 18, and you lost all your down payments, then spend like crap, don’t pay for the mortgage. And have free rent for 9 months until they kick you out. Then you can do what our hero of the story did (Declare bankruptcy ) because its that easy

And put the load on the fully loaded tax payers.

Lie like crazy about your income, because most likely noone gives a dam. Mortgages are handed out like canadian tire money.

Lets catch up the Japan and get the National Debt to 2.0..

F is and Idiot, and the media which is suppose to report the truth is only egging on the situation.

#4 squidly77 on 01.24.11 at 10:31 pm

Michelle Altons grammar is worse than mine, that’s saying something.

Her lack of ethics is un-Canadian and sad.

#5 jake the snake on 01.24.11 at 10:32 pm

Mamma mia! Mario is homeless!

#6 Industrial Guy on 01.24.11 at 10:37 pm

Lemmings …….

#7 Hoof - Hearted on 01.24.11 at 10:38 pm

Hey, I’m #1 (?)

The tale of Jeff will be an oft repeated tale in the coming months

#8 enjc on 01.24.11 at 10:40 pm

Charge the carpenter ants rent – problem solved.

#9 SuperPL on 01.24.11 at 10:40 pm

Anyone claiming to be a professional should be legally bound by their advice, just like an engineer or a doctor. Advice based on unicorns with theories pulled out of thin air should be subject to the same type of scrutiny. Realtor tells you that prices will be 10% higher next year and you buy and end up loosing 10% – sue the realtor that claims to be a professional for the losses.

#10 Stevermt on 01.24.11 at 10:44 pm

I may be #1..woohoo

#11 ted23 on 01.24.11 at 10:47 pm

Well Their’s no fool like a greater fool. But ate least he is in a happier place now.

#12 dmc on 01.24.11 at 10:47 pm

If you ever wondered about those real estate stories with the happy couple making their big purchase…

http://tasmanianrealestatetrouble.blogspot.com/2011/01/meeja.html

#13 Love this Blog on 01.24.11 at 10:56 pm

Excellent post, as usual Garth. Thanks for what you do.

#14 squidly77 on 01.24.11 at 10:57 pm

Stock markets are going to the Moon, but I’m all out, completely and entirely. It’s madness that the DOW is nearing 12,000 in a recession and 10% unemployment, total madness.
http://www.youtube.com/watch?v=ueuauKKjPZI

#15 Lewis on 01.24.11 at 10:59 pm

Get the ants to fix the fence.

#16 LJ on 01.24.11 at 11:00 pm

Realtors should be required to take an English course. Their abuse of the English language is an embarrassment. Look at any listing or posting they make.

And, Jeff, congratulations for leading the way. Soon you will be joined by many others in the same predicament who will find that life is a lot easier not being burdened by excessive debt and tied to a house.

#17 squidly77 on 01.24.11 at 11:07 pm

Yes, Jeff’s bad decisions and debt will be pushed onto the innocent Canadian taxpayer. We need debtor prisons.

#18 BC Bring Cash on 01.24.11 at 11:12 pm

RE Michelle Alton’s advice.It is a typical comment from RE agent. Its always a good time to buy and at the same time its always a good time to sell. It all depends on who she is talking to, a buyer or seller. Its unusual that she is talking from both sides of her mouth at the same time.

#19 Mtl RE Observations on 01.24.11 at 11:13 pm

This year’s Demographia report was just released and Montreal is now the 2nd least affordable city in Canada, just behind Vancouver and surpassing Toronto. I am not surprised in the least bit. I have seen unbelievable speculative buying in the city.

https://financialinsights.wordpress.com/

Also, while sales activity has been declining for the past six months in the rest of Canada, sales volume in Montreal has declined for the past 8 months.

http://www.cigm.qc.ca/en/nouvelles_comm.aspx?id=652

Garth, I’m not sure why you don’t reference Montreal in your posts, but it would be nice to get your perspective on this market as well :)

#20 Mikey the Realtor on 01.24.11 at 11:15 pm

I hate to say it but once again I called. And its so ezzzeee to see but the poodles are having a hard time following along.

I will give my next prediction right now folks, aren’t you all lucky. After the 18th of March sales will slow a bit, not enough to reduce pricing though, for a while. Sometime in the fall/winter you might see prices starting to drop a bit, but once again, F, H or C will come out with another enticing move, the sheeple will not be able to resist their pent up frustration and will be back out full swing. Now, the little price reduction that happens in the fall/winter will be short lived. It will be a 2009 fall/winter déjà vu; don’t miss out this time around.

#21 Ayn Rand on 01.24.11 at 11:15 pm

So many stories like Jeff’s will be heard. It is comforting to return to this site, this competant refuge, to hear about sound financial and investment planning.

I can’t wait until the new Garth Turner book comes out….maybe February???

Huh???

#22 Off-Gridder on 01.24.11 at 11:19 pm

Hey Jeff…if your reading this…I can’t help you with your debt. But I can help the carpenter ant problems. Diatomaceous Earth. Don’t abuse it, dispose of it properly, and research it for yourself for proper precautions. It is natural and from the earth but as it takes strip mining to obtain it it is not worth wasting. Use a womans blush brush and put it on all edges of the house including the entrance from outside. Trust me. The ants will never come back! Vacuum it up and garbage it. Vacate the house 24 hours.

#23 Utopia on 01.24.11 at 11:19 pm

“If you have been thinking of buying a home, NOW is the time to do it as there will be less people qualifying to buy a home after the March 18th, 2011 expected effective date”! —–Michelle Alton

———————————————————-

What logic! Cripes.

Well thanks Garth for the laugh of the day. The words of Michelle are such a soup of illogical confusion and desperation that it is hard to know where to start criticizing.

I won’t even ask Devil to try explaining her away. He is not responsible of course and would be equally appalled by the mix of sales pitch, panicky desperation and urgent confusion directed to both buyers and sellers simultaneously.

Anything for a commission I suppose. Must be getting tough in Toronto. What I do notice lately though is that the message is finally sinking in with Realtors and the thin veneer of confidence has finally broken down.

They know the jig is up and many have left the business already. Has anyone else noticed how many new faces are appearing as “new” Realtors at various agencies?

Seems that many of the old guard could not handle the poor sales and competition and have just given up and dropped out. There are plenty of openings and office space for the new crop of guys and gals who will be optimistically seeking listings and sales this spring.

Too bad for most of them. It is poor timing.

#24 BC Bring Cash on 01.24.11 at 11:21 pm

My educated guess is that its always a good time to buy and at the same time its always a good time to sell is to keep inflating the bubble. This way the RE industry is working over both sellers and buyers no matter what the the market conditions are.

#25 Mark on 01.24.11 at 11:26 pm

#14, the economy was cr*p (barely any job creation in the past decade, high unemployment, high outsourcing) yet housing went up to ridiculous levels in the past decade. Why can’t policy makers simply replicate the same in the stock market? Better yet, why won’t they?

I personally see the TSX at 25-30k in the next few years, while policy makers continue to try to keep interest rates low to prevent mass defaults on housing. Dow will probably end up lagging because so much of their economy is consumer-leveraged, not commodities-leveraged like the TSX is.

#26 Throwstone on 01.24.11 at 11:29 pm

How does a bankruptcy play out with a CMHC mortgage?

Does the bank get the insurance $ from CMHC and the house to sell via power of sale?…If the house can not be sold at fair market value, is the homeowner still on the hook for the difference through bankruptcy/insolvency laws?…(double whammy?)

I’m sure each situation may vary…Just wondering how it pays out.

#27 Don on 01.24.11 at 11:32 pm

With this e-mail, I think Michelle Alton has ensured she do not get effective. But I do admire the chutzpah to make both the “Buy Now!!!!1!” and the “Sell Now!!!!1!” arguments in the same e-mail.

#28 a prairie dawg on 01.24.11 at 11:34 pm

Why is it so friggin easy to declare bankruptcy in Canada anyway?

For the truly stupid repeat offenders, they should bring back debtors prisons.

#29 Mean Gene on 01.24.11 at 11:35 pm

There is always a feast before the famine.

#30 HouseBuster on 01.24.11 at 11:45 pm

Donald Trump also declared bankruptcy twice. So Jeff, there’s always hope and it’s never too late to turn things around.

#31 Memories on 01.24.11 at 11:45 pm

I don’t see any problem with the realtor’s email. Sales is sales. Her words are no different than the financial planners I’ve spoken with.

Clearly readers are upset that the real estate market will potentially get another boost in sales because of this change by the government, but let’s be real – nothing negative was going to happen to the Canadian real estate market anyway so it’s just as well.

Canada has recouped all jobs lost during this supposed ‘recession’, interest rates will continue to be low low low (even if overnight is ‘jacked’ to 2%), the CAD is crazy strong (able to leap tall buildings in a single bound), there will be no asset deflation (stocks and real estate will continue to rise), and debt won’t kill us because we’ve stockpiled over a trillion in cash. Did I mention that interest rates will remain low too?

As Canadians we should just enjoy this prosperity! Go Canada!

#32 mid-Ontario on 01.24.11 at 11:46 pm

There is no doubt that an election will be held this Spring. H wants to keep the elastics in place to give it another shot.

It won’t result in a majority as most will never trust H with a majority. Iggy will soon be gone and a minority will oversee the melt of RE.

The slowdown will prevent anyone from getting an upper hand leading to a majority for several years at least. H will be forced out before another election.
World wide debt will be the focus in Canada and beyond for many years.

This blog will debate future melting rates thru 2011. The melt will be quite apparent by May 2011.

The suckers pounding into RE in the next few months will be strewn along the roadway and forgotten by the RE boomers who will be wondering what happened yet again as their homes just will not sell antwhere near what they could have brought in 2010.

Interest rates will start the climb towards values north of 6% over the next 3 years.

#33 nonplused on 01.24.11 at 11:52 pm

The media is reporting that a condo just sold in Calgary for $4.1 million. Mind you, it’s a 4,400 sqft penthouse in Eau Clair, so I suppose it’s pretty unique, but 932/sqft? Somebody has more money than brains. (Source: AM 660)

I wonder how this will affect the January average sales price numbers? With declining sales volume I can just see the headlines: “Calgary condo prices skyrocket 20%, sales down 5%. Realtors say market is poised for continued growth.”

#34 Rachelle on 01.24.11 at 11:56 pm

Well Garth I feel better…I’m not the only one predicting that a bunch more people will rush to buy before the rules change again.

I have to say that as someone who works with landlords that every time they tighten the mortgage rules, I keep getting better tenants at long last. I can’t tell you how grim it’s been when anyone with first and last, a job and decent credit could just go buy a place instead of rent. Every person who bought with 0% down last spring is down about 10% on equity already.

#35 Housing is CRASHING on 01.24.11 at 11:56 pm

*************DO NOT BUY***************Realtors like mikey the realtor are here since the biz is in the dumps and faces and US style crash. Sales are down yet again for the 7th month in a row and POWER OF SALES have jumped throught the roof since people have gone BANKRUPT . Those who are stupid or uneducated (this realtors believe is the majority of the public) who fail to understand that the new rules will LOWER prices to where people can afford them. Realtors are very worried about a housing crash that could be worse then the US . Realtors like mikely know they are con artists. They also know the scam is up.

#36 Bill Grable on 01.24.11 at 11:56 pm

Criminal.

Along with Mr. Turner – read “Freakonomics” and read why Real Estate agents are S C U M.

This “Realtor” has the IQ of a wheelbarrow.

God help anyone who follows her cretinuous ‘advice’.

Here on Maui – 675 REO’s within a 10 mile circle.

You can get a condo starting at, ready for it? – $16,000 bucks. (Lease land).

NOTHING IS SELLING.

Like Vancouver – after the newbies get skinned in the race to beat the Flaherty Flap.

#37 Mark on 01.24.11 at 11:59 pm

“Does the bank get the insurance $ from CMHC and the house to sell via power of sale?…If the house can not be sold at fair market value, is the homeowner still on the hook for the difference through bankruptcy/insolvency laws?…(double whammy?)”

It is impossible for a house to not sell at ‘fair market value’. A house that cannot sell at any price is worth precisely $0. In some instances, certain houses may be worth less than zero because of environmental or tax liabilities.

And yes, CMHC will pursue anyone who defaults and forces them to make an insurance payout. Typically the result of defaulting on a CMHC-insured mortgage is personal bankruptcy, in which case, personal assets that are not exempt are available for distribution to creditors.

#38 David on 01.24.11 at 11:59 pm

It never ceases to amaze me that the realty business was not entirely disgraced and thrown onto the trash heap of history years ago. Most people engaged in it are incompetent, and the most successful ones are charlatans. The payday is egregious, the accountability non-existent.

And now, with the real estate gas tank needle approaching ‘E’, any of them that had even one scruple is looking to make a few last scores.

Good luck, doe-eyed buyers…and thanks for everything, F-head.

#39 steve p on 01.25.11 at 12:01 am

now all we need is for the yield curve to flatten so that the rate on 3 month tbills equals the rate on 5year bank of canada bonds then real estate is really is gonna get killed. Minumim 25% price drop from peak to 40% drop in prices if rents drop another 10% due to flood of new houses for sale on the market

#40 SafetyBear on 01.25.11 at 12:06 am

Just like in Australia, the delaying tactics. The excuses. Nobody wants to be holding the bomb when it goes off. But it will, they always do.

#41 charles on 01.25.11 at 12:12 am

“Existing mortgages approved I recommend getting me all outstanding conditions met so that we can ensure you do not get effective.”
WTF?

#42 Kilt on 01.25.11 at 12:13 am

Michelle isn’t feasting on anyone but idiots. If you read her whole letter, one paragraph states buy now before its too late, and then next states sell now because prices are gonna fall.

Garth – something that I don’t fully understand and maybe you could address it in more detail at some point.

The new rules state you can only get a 30 year amortization if you need it government insured. This implies that if you put more than 20% down, you should be able to extend the amortization beyond 30 years. But I suspect most major banks will make 30 year amortizations the maximum.

What about mortgage brokers? And isn’t there optional mortgage insurance other than CMHC?

If you took out a 40 year mortgage in 2008, do these people get grandfathered along.

Last thing, unrelated, why aren’t interest rates linked to credit scores? If a business has to pay a premium on it’s bonds due to its poor credit ratings, why isn’t that the same for everyday joes. What is the point of trying to preserve a good credit rating when everyone seems to be treated the same (take Jeff as an example).

Kilt.

#43 AG Sage on 01.25.11 at 12:15 am

>#15 Lewis on 01.24.11 at 10:59 pm
Get the ants to fix the fence.

Get the ants to EAT the fence and then decide you prefer a view.

But on topic: Enforcing professional standards sure SOUNDS easy. But if it were, I’d assume functional standards would already be in place. In Florida 1000s of former felons became loan brokers and no one noticed. Until later.

#44 Freedom 55r on 01.25.11 at 12:16 am

In my opinion, people like Jeff are completely irresponsible!! He knew what he was getting into, got himself into huge debt, and now walks away from it all!!! How does one owe 50k to CRA? This burns me because the rest of us taxpayers end up paying for his greed and stupidity.

#45 T.O. Bubble Boy on 01.25.11 at 12:22 am

So, if there is no election called in 2 months, does that mean Harper and F will come up with another announcement to try and push a few more greater fools into the top of the bubble? (like a 10% down payment requirement?)

#46 Jeff Smith on 01.25.11 at 12:23 am

What would the vocabular by? Realturdess? or Realturda ?

#47 TheFirstRick on 01.25.11 at 12:26 am

Since we are on the topic of Realturds®, it seems another BC ‘turd has been charged with a serious criminal offence;

http://www.theprovince.com/news/Husband+among+three+charged+2007+murder+Amanpreet+Bahia/4158960/story.html

My numbers may be a bit off, but this is something like a half dozen serious charges against ‘turds in the last couple years.

Great ‘profession’ eh?

#48 Hovering on 01.25.11 at 12:27 am

http://finance.yahoo.com/news/McDonalds-may-raise-prices-as-apf-3346242375.html?x=0

inflation cometh for our big macs

#49 Victoria on 01.25.11 at 12:29 am

Bankruptcy is the easy way out. I know people here who are bankrupt, still drive a Porsche, travel and their kids go to private school. They owe people money all over the place. When I asked how do they do it they say with bankruptcy there are ways around it if you know what you are doing.

I also met someone else who has declared bankruptcy for the third time. Due to over spending on luxury items and trips. She said it is not the first time and won’t be the last.

So there is a way around it and it is the easy way out. I would love to figure it out – put all our assets in husbands name and spend like a crazy person.

#50 Vancouver smart renter on 01.25.11 at 12:32 am

I moved here from Europe last year. Am at the saddledome watching the flames play the Nashville predators.

There was a cathartic moment when the national anthems were sung. The US one talking of land of the free and referencing the freedom to pursue happiness. Then came the much more humble, yet moving “Oh Canada”.

You have such a wonderful people and country, no matter what persuasion or political lean, wonderful altogether.

You have all the things the American anthem expresses, and yet are behaving in a way that will make you more like them through ignorance and arrogance, house lust and the like…

Every market is as fallible but Canada is unique in that it IS under populated and over gifted in natural resources.

Why is everyone so narrow-mindedly short termist so that debt is threatening all which is beautiful and plentiful in this country.

There are enough natural resources to make us (using “us” in credit until I earn the right and am awarded the privilege of citizenship) as prosperous as the Norwegians.

Small populations with large natural reserves (a good alternative to currency backing aside from Gold) can successfully win in the global economy, dictating protectionism and globalism when it is convenient to their people (look at Norway and other rich petro countries).

We have the natural resources and yet export all the value add (eg making machines in Canada with Iron ore mined and turned into Steel in Canada then exporting the whole finished good abroad and keeping the whole value add revenue) to china, to then re-import the finished goods and in the process reducing our industrial know how and biasing our GDP towards an empty shell consumer economy when we could be a producer economy (as the base of an industrial pyramid supporting a knowledge base one too but overall employing more people).

If we had the “full stack” model in place, I would then believe that the fundamentals underpinning real estate were sound, but as it is I think a correction and financial fall-out which will weigh on the shoulders of a future generation is almost inevitable…

It would be a tragedy to see it all go that way when our souther cousins have already shown us the result…

#51 Jeff Smith on 01.25.11 at 12:33 am

>#14 squidly77 on 01.24.11 at 10:57 pm
>Stock markets are going to the Moon, but I’m all out,
>completely and entirely. It’s madness that the DOW is
>nearing 12,000 in a recession and 10% unemployment,
>total madness.
>http://www.youtube.com/watch?v=ueuauKKjPZI

Its because of the degradation of the US dollar. People are starting to put their savings in something more tangibles such as products, milks, microchips, wheat etc. But still its a dangerous time. I am looking to liquidate my shares too.

#52 Soylent Green is People on 01.25.11 at 12:34 am

Flaherty is just a puppet of Steve Harper. Anything Jim does is because HarperCon told him to bend over and take it like the…, okay, ran out of words here.

————-
Stephen Harper and Jim Flaherty’s Economic Myths
http://www.youtube.com/watch?v=vZy8W-rkIhg&feature=player_embedded

good repost: I am a conservative. This is why I deeply resent (Steve Harper’s) neo-conservatives who are not conservatives at all. They are the opposite: radicals who are destroying cherished institutions and wreaking havoc on our human heritage as well as our natural heritage.
http://www.batemanideas.com/GlobeMail.html

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#53 EJ on 01.25.11 at 12:35 am

While I do think there will be a noticable uptick in sales this spring (no doubt to be greatly exaggerated by the usual gang of amoral deceivers), there will likely be an even bigger increase in listings, putting downward pressure on prices.

The reason is due to the fact that some 70% of people already have houses, leaving the remaining pool of buyers quite small. Also, given that the lowest hanging fruit were already picked in the uptick preceding the announcement of the removal of 0/40, you have an even smaller pool of eligible buyers.

Each time F tightens the reins, fewer and fewer greater fools will be caught in his snare.

#54 dave in calgary on 01.25.11 at 12:36 am

Excuse me, waiter! I’ll have what #31 Memories is drinking! Thanks!

#55 Soylent Green is People on 01.25.11 at 12:37 am

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Flaherty’s broken record on Canada’s fiscal propriety is wearing thin

Of course, it suits the Harper government to keep talking about 2008 and 2009. There could be an election in the near future, and the drumbeat of happy talk is designed to keep opponents down.

But that was then. Here, we are in 2011. The stimulus cash is running out, the bills are coming due and the economy isn’t exactly bursting out of the gate with a lot of momentum. Indeed, the economy was decelerating in the summer and fall of last year, and it begins 2011 more sluggish than the United States.

Mr. Flaherty might want to start focusing – and talking – about the challenges that lie ahead instead of resting on his laurels (Canadian Press Business Newsmaker of 2010 and Euromoney magazine’s Finance Minister of the year).

http://www.theglobeandmail.com/report-on-business/commentary/barrie-mckenna/flahertys-broken-record-on-canadas-fiscal-propriety-is-wearing-thin/article1863204/
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#56 luke8929 on 01.25.11 at 12:40 am

What could go wrong with CMHC approving mortgages through emili in only 7 seconds…now that’s doing your due diligence.

http://www.cmhc-schl.gc.ca/en/hoficlincl/moloin/moloin_009.cfm

Of course they will be there to help you when you get into financial trouble. Help I’ve got the CMHC after me. Well not me but some other poor soul who discovered CMHC seems more interested in protecting the lender and not the home buyer.

http://www.canadian-money-advisor.ca/threadview/2232.html

Bankruptcy, collection agencies and garnished wages if CMHC can’t recoup their loss when the bank sells your place, better hope values stay in the stratosphere, I wonder how many homeowners actually think or had some realtor tell them they purchased insurance against default with CMHC, good luck.

#57 Tony on 01.25.11 at 12:41 am

#25 Mark on 01.24.11 at 11:26 pm

First the manipulators take their profits on all the commodities… there never ever or ever will be any signs of inflation then take the stock market indexes down next. It’s called pump and dump. When something goes up for no reason it’s dumped after all the suckers have bought. Since the stock market have been manipulated since around 1994 it could in essence fall 80 percent or more.

#58 bridgepigeon on 01.25.11 at 12:44 am

23Utopia: DA can’t explain her away right now, he just took his car out for a spin…

#59 HouseBuster on 01.25.11 at 12:50 am

An avalanche of listings are on the way. Sellers know it’s the last chance to dump at these prices.

#60 City Slicker on 01.25.11 at 12:52 am

“No escape for the kids that cougars like Michelle will be feasting upon”
———————————————————-
“Cougar” – pun intended?

#61 Rich Renter on 01.25.11 at 12:54 am

Weekly grocery bill $200, Gas $150, Utilities $300, Car payment $450, Monthly payment to bank $2200, for everything else go see F, C or H. The era of want and greed.

#62 Silentblogger on 01.25.11 at 12:57 am

Reposting here as EVERYONE needs to read it:

Oh, and I know in the week long course taught by the president of CAAMP and the vice-president & ethics chair, it was prefaced by a speech saying something like: we’re not here to teach you how to be a mortgage broker, we’re hear to teach you how to pass the exam for your license. My friend was shocked. also: no mark, just a pass or fail. If you were on the bubble, the instructors would “verbally question” you. Her table mate was one. From what she could glean from said desk mate, the “questions” were structured to push it over the line (whatever line that was!! )

AMP – YOUR Accredited Mortgage Professional

ya think those with that registered name are any better?

Hey RE scumbags, forget your own: “But I’m better educated” and answer: Who can get the basic designation?

DA – Shut the pie hole on this and let basic buddies answer. I’m betting that isn’t likely.

#63 Heinz Skitzvelvett aka eGrammarian on 01.25.11 at 1:01 am

Well, if Ms. Alton’s real estate gig doesn’t pan out, at least she’s got a fall back in teaching english.

It bears repeating, although it hurts to have to do this again:
‘less’ – referring to a quantity of abstract or generally uncountable items (debt, intelligence)

‘fewer’ – referring to a quantity of finite or countable items (greater fools, ethical realtors)

sheesh.

#64 Utopia on 01.25.11 at 1:01 am

#37 Mark wrote…

“And yes, CMHC will pursue anyone who defaults and forces them to make an insurance payout. Typically the result of defaulting on a CMHC-insured mortgage is personal bankruptcy, in which case, personal assets that are not exempt are available for distribution to creditors”.

——————————————————–

Do you know the mechanics of this Mark?

I have already been told that it is not possible to bankrupt on student loan debt or spousal support payments but is CMHC insurance also included?

That could be interesting. Do you actually know the answer to that? Does CMHC indeed have the power to pursue those who default on the insured portion of the debt following a bankruptcy?

In other words….are these young newbie debtors who are “in deep” over their heads all prisoners for life with no escape?

#65 CalgaryBoy on 01.25.11 at 1:05 am

So what exactly happens when one has to declare bankruptcy and foreclose?

#66 OnlyTheBankersLaugh on 01.25.11 at 1:13 am

I don’t doubt that the RE upkick will be one impetus for one final attempt at a majority in the heart of good news with stock market recovered, jobs recovered (McJobs replacing big corporate big $$$ jobs) and real estate just crusing at a more modest level of growth should be an excellent platform.

Just sickening but F, H and C may make it work. Carney’s briliance was on hand again today with his sage words on diversifying from the USA as they’re reclining. Holy crap, reclining? IS that investment banker speak for betting against US of A, our treasured partner? Wow, the brain trust just keeps forming fantastic flatulence – perhaps, a little too much reclining.

#67 kitchener1 on 01.25.11 at 1:41 am

Well, talked to my contacts this weekend, here is what they told me.

Mortgage broker 1- Phones are busy, started on Wenesday its like ” someone turned on a light switch”, running about 50/50 for new approvals and HELOC’s.
He does not thing that all those who are pre approved will be buying as he is getting repeat customers whose preapprovals have expired in the past.

Mortgage broker 2- same thing, lots of pre approvals , running about 75/25 preapproval vs HELOC. Same opinon, people getting HELOC’s will max them out but does not feel that all pre approval business will take advantage before the deadline.

RE agent buddy- Tells me that things are heating up at the office, lots of listings coming online with sellers as well. Sellers that were few and far inbetween are coming out of the woodwork. were a few weeks ago they were hard to find. His thoughts were that we will see an increase in sales but it wont be spectacular like last year. RE biggest concern right now is that listings will well surpase buyers and that what does not sell before March 18 will not sell for a while.

Right now, there is lots of “hype” but not much action in actual sales. well see

#68 kitchener1 on 01.25.11 at 1:46 am

Regarding the election talk, really wonder what H and F will put in the budget to force an election.

The only thing on the table, that is somewhat dicey is the North American Perimeter agreement. Thats it. Possibly some sort of hardcore immigration reform?? that would cause an election for sure.

Keep in mind that F won a lot of ridings and seats by 2000 or less seats. That means that he got his vote out will the other parties did not. Not a big margin.

Election right now will be a very bad move, no majority in play right now and its a given that NDP and Libs will offer more in way of benefits then the Cons will so not sure what he is thinking.

#69 tmg on 01.25.11 at 1:52 am

I am in need of some moral support! I’m living in a rental house with a mold problem and water gushing through the roof of the dining room. My youngest daughter has a chronic sore throat and cough from the mold. We are looking for a new rental, but there is precious litle in Vancouver for a large family. We did recently look at another place…hundreds of wood bugs in the basement
(all basements have woodbugs the landlord says), oh, and rat droppings with dead rat smell (landlord can’t smell anything)…could be ours for $3500/month!

My husband keeps saying that we need to move out of the city now and buy something. He says that with so many people in China, they will never stop buying here. How do I convince him to sit tight???

#70 Timing is Everything on 01.25.11 at 2:00 am

#17 squidly77

Watch the nice video…Makes ya wanna break the law, so ya can go to the nice place….

http://www.correctionscorp.com/

http://www.courthousenews.com/2011/01/17/33358.htm

http://www.youtube.com/watch?v=l6MFN8yiVc0

#71 Chris in Langley on 01.25.11 at 2:17 am

Mikey you rock!

#72 Another Albertan on 01.25.11 at 2:21 am

#33/nonplused:

The friend to whom I referred in my comments yesterday about Hawaii lives across the parking lane in the original Princeton highrise and has knowledge of the penthouse in question. He just emailed me the following:

“The guy has too much money & NO taste.”

Needless to say, the selection of cars in the Princeton underground parkade has always been fairly impressive, and there is a disproportionate number of big-engine Teutonic vehicles. Can’t wait to see what the “new guy” drives…

Everyone else’s mileage may vary.

#73 Utopia on 01.25.11 at 2:23 am

To Nostradamus le Mad Vlad.

We need our daily fix buddy. Where were you yesterday?

#74 Timing is Everything on 01.25.11 at 2:25 am

Just sayin’….

http://tinyurl.com/5vtgb4g

#75 Jane on 01.25.11 at 2:26 am

#8 enjc……ha ha!

#16. LJ.
And, Jeff, congratulations for leading the way. Soon you will be joined by many others in the same predicament who will find that life is a lot easier not being burdened by excessive debt and tied to a house.

Who do you think is going to pay for the debt now that he is in bankruptcy? You and me as tax payers, dummy.

Thanks for a great post, Garth. Is it possible that some of these realtors really understand as little as the fools they are selling homes to? And how can F throw so many buyers/Presumably young Canadians to the wolves? How does he sleep at night?

#76 canuckfilly on 01.25.11 at 2:31 am

Did everyone have a chance to look at the smug self satisifed look on the realtors face when he sold that tear down in Vancouver for 500K more than the listing price? Guess we know what realtors really think about the sheep being sucked in by the panic of Owning a house.

#77 David on 01.25.11 at 2:41 am

The mortgage rule changes seem to be coinciding with the latest propaganda offensive from the Harper government. Whether or not this is a coincidence or planned is subject to debate.
It all smacks of neurosis. The fact that Canada is slightly better off than Ireland does not mean much to someone without a job. Changes to the mortgage rules now for those families that bought over priced bubble homes on the never-never will not impress voters. Too late me thinks.
Might as well call this end stage bubble denial.

#78 Extra on 01.25.11 at 3:02 am

Re Michelle’s attitude: “It never troubles a wolf how many the sheep be.” –The Aeneid, Virgil

Nor does it matter that the wolf is semi-literate. To paraphrase Thomas Jefferson, first time buyers tend to get the kind of wolf they deserve.

#79 Montrealer on 01.25.11 at 3:02 am

#36 Bill Grable – I forgot about that book. It’s a very good read (Freakonomics). The stats about home prices when an agent sells his house vs yours is an eye-opener. Agents donT’ care about client, their commissions is much easier earned to sell at a low price than spend the extra effort to get just a few more commission $.

#19 Mtl RE Observations – Glad to see i’m not the only fron montreal here. I posted about the report on Garth’s last post. I can finally back my claims that Montreal is not affordable even though house prices are not in line with Toronto… and remember the income and sales taxes are higher in Quebec! The ratio showed is gross income.

#80 Seen this in the states and now its here in Canada on 01.25.11 at 3:27 am

Here in Kelowna housing has been coming down in price and will continue. At Barona Beach
, West Kelowna, there are about 48 units for sale, in a very small condo complex. There hasn’t been a sale in that complex in almost a year, nobody is buying. Now you’re seeing many million dollar homes go into foreclosure, many of them lakeshore. A 5 million dollar house on Pritchard Dr. had to reduce its price to 4.5 million and it still hasn’t had any offers. Another house on Pritchard asking price 2.1 million is in foreclosure. The inventory of homes is piling up; now the realtors have only 67 days before housing Armageddon commences. They may have a small blip in sales, but they’re losing the battle. If you live in Kelowna and you’re thinking of selling now is the time.

#81 Thetruth on 01.25.11 at 3:33 am

Garth, you said a correction followed by a melt!

If RE goes down, it will be a slow downward slide (melt) followed by a Cliff! Here’s my reasoning:

For example, say Mr. X buys a first home with 5% down. In 5 years (assume he took a 5 year fixed rate initially), he will have to refinance as his mortgage term will end. Say at that time he wants to lock in for another 5 year fixed term. Mr. X better pray that he has > than 15% equity in his home IN ORDER TO BE ABLE TO SHOP AROUND for the best rate for that next 5 year term. If not, he WILL have to take the bank’s posted (not discounted) 5 year rate…, which will incidentally be much higher than a discounted rate!

Three scenarios:

1) If house prices rise over the first 5 years after purchase, Mr. X will be fine.

2) If house prices stay the same over the first 5 years, Mr. X will have 12.7% *** equity (5% Downpayment + 7.7% reduction in principal over 5 years) in his home based upon initial purchase price. Mr. X can’t shop around… he will have to take the posted rate or give the bank a cheque for 2.3% ( to get >15% equity) in order to shop around.

***aside: Interesting that when you use a 30 year amortization (as opposed to 35 used in this example), the equity after 5 years becomes exactly 15%.

3) House prices drop. Mr.X will be at the mercy of the bank’s posted rates! This is where is gets interesting…read on

IMO, what may become important (obviously not the only thing) is the price of a home exactly 5 years before renewal. 5 years because most new mortgage terms are for that long. For example, if a renewal occurs in 2012, the value of initial purchase at 2007 becomes very important. Might have to refinance at a much higher rate. You can use other 5 year differentials and come up with your own conclusions.

But if house prices drop to 2006 levels, look out below!

Thoughts?

#82 wes_coast on 01.25.11 at 3:39 am

Anyone who beleives a realtor like that deserves what they get.

#83 confused and a little crazed on 01.25.11 at 4:10 am

how can it be a great time to buy and selll @ the same time? it doesn’t make sense it’s either one or the other? but i guess it like the weather it’s how you look at it… If you weere a duck it great here in raincouver but if yiu were a lizard not so much.
but you do notice the underlying fear she is trying to instill ” BUY NOW…SELL NOW” Or else….” Blank”

Strangely …i am at peace. i don’t care if rel estate goes up or it goes down i have learned the way of making my money work for me albeit slowly….and i’ll be ok
no hassles….and let the dividends roll in tax free or at least half..\

can you imagine if real estate market causes the stock markwet to crash or vica versa…it could happen . nothing really has changed . loans are being made with money given back…in Surrey there is a development offering money back with a purchase of a new home…lovely

#84 Responsibility on 01.25.11 at 4:55 am

Wow Garth, what a broad range of emotions this topic is!

One side, I feed sorry for Jeff. It took 2 times to learn a hard lesson about financial responsibilty. But he did in the end. It’s just too bad there isn’t an undo button (CRTL-Z) in life. But there is always hope moving forward. A life lesson is worth more than gold.

And on the other side, REALTORS(R) like Michelle burn me up. These are supposed to be “professionals”, salesmen you can turn to for “unbaised” advice to make the biggest purchase in your life. But it’s becomming quite evident that although there are good salesman out there realtors like Michelle represent the majority. Their Commish is more important that someone else’s life. Sad what they will do for money. Hopefully they will have the opportunity to meet those they ruined and see the negative effects they helped assist with.

I have noticed house sales are moving slowing up, I was hoping this wouldn’t be the case (foolish people rushing in to get the last 35 yr ams) but again, you shake your head in sadness at the herd for they run off the cliff and there is little you can do to stop them from financial death.

After March, I doubt there will be much demand for RE. Prices will fall, those who got 35/40 year ams or bought in the past 2 years will wish they had the undo button like Jeff.

#85 Responsibility on 01.25.11 at 4:59 am

#33 nonplused “The media is reporting that a condo just sold in Calgary for $4.1 million. Mind you, it’s a 4,400 sqft penthouse in Eau Clair”

I hope they enjoy their new apartment. Just imagine the monthly rent they have to pay on that! (“condo fees”). More money than brains indeed.

I bet it was cheaper to rent than to own.

#86 realityguy on 01.25.11 at 5:26 am

#37 Mark

Yeah sure , CMHC will pursue them for whatever they have, but if you Bought a house at 5% or zero down
Most likely they don’t have much equity which CMHC.

so for we have enjoyed of housing price increase since 2000 to 2008 which was the peak. But with housing prices goes down 10% then most likely your mortgage is worth more than you house title.

Don’t forget if you sell, your going have to pay the real-estate agent and the banks and the lawyers and a whole list of people who wants a piece of your pie.

So whats to stop a person from filing bankruptcy and starting with a clean slate and then live with their parents, or hide their money in the process.

Yeah, its against the law, but same with growing pot, but that doesn’t appear to stop people, and BTW how many actually get caught by our laughable justice system

#87 TheBigLebowski on 01.25.11 at 6:08 am

We live in a world gone mad and there is only a few of us that are sane but the rest think we’re crazy. We have had our common sense drained out of us with standardized education, bought and paid for media, and a government system who’s only goal is self preservation at any cost.

#88 MythBuster on 01.25.11 at 6:08 am

#31 Memories on 01.24.11 at 11:45 pm

I don’t see any problem with the realtor’s email. Sales is sales. Her words are no different than the financial planners I’ve spoken with.
====================
What calendar year do you live in?! Sounds like you reprinted your memories from a decade ago… lol

#89 The Apocalyptic One formerly Old is Gold on 01.25.11 at 8:35 am

To keep things in perspective about multiple offers and an explosion in sales before Mar. 18, we need to keep in mind that inventory is still very low out there. We’ll see how many first time buyers are still left when inventories begin to rise. Secondly, most of the first time buyers closed on their properties only in the last 2 years or less, and some have not yet taken possession of their brand spanking new granite and stainless steel. These recent victims may not be in dire enough straits to have to sell like Jeff but the majority of them will follow suit once they find out that a house, whether new or old, is a money pit – once the credit cards have been maxed out and no more HELOCs are available, their dreams will become nightmares, as is starting to happen in Brampton. I expect the real state of the financial health of Canadians will begin to be revealed by fall of this year, and the terminal state of their health will be undeniable by spring of 2012. The RE world for many may truly end in 2012, if not the planet. BTW I did say last fall that Brampton will be ground zero in the GTA as seems to be happening, but the contagion will spread everywhere, sooner now than later.

#90 David B on 01.25.11 at 8:42 am

Inflation rate rises to 2.4%

Last Updated: Tuesday, January 25, 2011 | 7:10 AM ET

Read more: http://www.cbc.ca/money/story/2011/01/25/inflation-canada.html#ixzz1C36GN0O6

BINGO! and just how much was your Christmas bonus and if not this means a drop in household income plus the new payroll deductions for Harpers’ past spending sprees ? Still thinking of running out and buying that overpriced home before Flaherty really closes the door?

#91 fancy_pants on 01.25.11 at 9:05 am

Better to keep your mouth shut and be thought a fool than to open it and remove all doubt.

This agent’s message has no logic and even worse grammar. poor woman. I would almost be inclined to buy through her out of pity.

um… no.

#92 Moneta on 01.25.11 at 9:13 am

a prairie dawg on 01.24.11 at 11:34 pm
Why is it so friggin easy to declare bankruptcy in Canada anyway?

For the truly stupid repeat offenders, they should bring back debtors prisons.
——–
It takes 2 to tango.

Why is so easy for a 1st time bankrupt to get more debt?

I hope one of the jails they are building is jor bankers and their white collar crime.

#93 D from London, ON on 01.25.11 at 9:31 am

I am with those who believe that Jeff is merely one of the first through the door, with many more to come.

Jeff, you did the right thing for you, given the circumstances.

For those who will rant on about personal responsibility, etc., hold your fire until you see the whites of their eyes. There is a whole horde of “Jeff’s” just over the horizon.

#94 Fractional Reserve on 01.25.11 at 9:40 am

http://www.bloomberg.com/news/2011-01-24/buying-home-is-cheaper-than-renting-in-72-of-big-u-s-cities-trulia-says.html

The above article states that it is currently cheaper to buy than rent in 72% of big American cities.

#95 Moneta on 01.25.11 at 9:40 am

#19 Mtl RE Observations – Glad to see i’m not the only fron montreal here. I posted about the report on Garth’s last post. I can finally back my claims that Montreal is not affordable even though house prices are not in line with Toronto… and remember the income and sales taxes are higher in Quebec! The ratio showed is gross income.
—————-
I left Montreal 2 years ago… got sick of the rat race induced traffic. Unless you can find work close to home, quality of life with 2 kids now officially sucks. If you are willing to rack on the debt, quality of life can be just fine but when the spigot runs dry, many will be in for a rude awakening.

Only 2 major ways to make money in Montreal now: banking and real estate. Look around… the money is in their hands. All the others are racking on debt.

When I was growing up I noticed that my anglo friends always had the Queen Anne furniture and the plastic remained on the cushions whereas the French Cdns changed their decor every 5-7 years. Now everyone just keeps on changing everything. It’s just 1 big orgy.

Anyway, Quebec is a fiscal paradise for couples with 2 kids thanks to the daycare system. The problem is that since everyone lives on a monthly cash flow basis, house prices have just gone up to monthly cash flow break even.

#96 S.B. on 01.25.11 at 9:49 am

Here is an observation I found from someone who lives in Florida:
___________________________________________
Here’s one for you, homes that complete foreclosure procedure are being reported as sold!! The buyer is obviously the bank or finance company and it’s usually reported as a sale at $100-$300..

The amount of empty homes in South Florida appears off the charts with barely a “for sale” on any of these..At first glance one would think a lot of homes have been sold with these signs gone, at second glance 90% of these homes remain empty unless they are rented out…

It’s clear both the banks and real estate brokers do not want the public to know had bad the situation really is.. Their excuse has been they are afraid of vandalism with all these homes on the market, so they are taking the signs off.

On the bright side the banks are maintaining outside properties when needed with a basic lawn cutting at least around these parts..

Still, it’s creepy with all these empty homes around. Sellers are being told by brokers around these parts that it could be as much as another 10 years before the real estate market turns around to the point where they can get their money back if they bought during the last 3-4 years of the real estate market topping..

Banks are also going as far as parking old cars in the driveways of these homes to give the appearance of being lived in.

#97 S.B. on 01.25.11 at 10:06 am

(meant for today’s comments, postedo yesterday’s by mistake)

– What recovery? Or time for buying stock?

http://www.bloomberg.com/news/2011-01-24/bank-valuations-stuck-at-2009-lows-showing-no-recovery-from-credit-crisis.html

Bank Valuations Stuck at 2009 Lows Showing No Crisis Recovery

Valuations for U.S. financial stocks have fallen so far, it’s like the rebound from the worst crisis since the 1930s never happened.

Banks, insurers and asset managers in the Standard & Poor’s 500 Index trade at 12.3 times estimated earnings, close to the lowest level since the bull market began in March 2009, according to data compiled by Bloomberg. The group is the second-cheapest among 10 industries in the gauge even as analysts say profits will rise 18 percent this year, exceeding the S&P 500, data compiled by Bloomberg show

AND: A follow up to a late post yesterday. Timing of Russian bombing which was instantly “solved” with no evidence or investigation (as they usually are these days). Someone is angling for a certain outcome, one bomb at a time.
It was a warning, I am sure. By way of deception we make war…as their saying goes. Also, these same people backed and funded Georgia during their skirmish with Russia. Motovation is clear.

“Medvedev reaffirms Soviet recognition of Palestine
Ynetnews – Elior Levy – ‎Jan 18, 2011‎

Russian President Dmitry Medvedev said on Tuesday Moscow had recognized an independent Palestinian state in 1988 and was not changing that position adopted …

http://www.ynetnews.com/articles/0,7340,L-4015504,00.html

#98 Fractional Reserve on 01.25.11 at 10:17 am

Sobering article from the NY Times. States are considering bankruptcy to get out from their crushing debt obligations including pensions promised to retired public employees.

http://www.nytimes.com/2011/01/21/business/economy/21bankruptcy.html?_r=1

#99 Zeny B on 01.25.11 at 10:21 am

She’s encouraging maximum borrowing and immediate purchasing, even though the 5/35 newbies could have their equity wiped out and be underwater by June.

Explain further please….

#100 David B on 01.25.11 at 10:31 am

Woah ….. what’s up, according to several posts here and CTV homes in Vancouver are selling for over a million dollars even ones that must be torn down to live in? Why did Jeff just not list it?

Vancouver is not central Vancouver Island. And don’t believe everything you see on the news. — Garth

#101 Young Old Fart on 01.25.11 at 10:39 am

It’s too easy….

I’m an idiot but a simple signature and I can walk to screw up again…

There needs to be stronger consequences…

Who is left holding the bag?????

#102 Mark on 01.25.11 at 10:42 am

35 or 30 year…what difference does it make if we have severely overvalued real estate to begin with? We should have never allowed 35yr amorts to begin with. Now we’re mopping up the mess and hoping nobody notices.

10 Most Expensive Cities in for Real Estate in Canada:

http://www.planbeconomics.com/2011/01/24/10-most-expensive-10-least-expensive-cities-in-canada/

#103 refinow on 01.25.11 at 11:06 am

For all you playing the victum card for the poor un-educated homebuyers and how they were dupped into the traps of home ownership. And the finger pointing at the realtors and mortgage borkers alike that we are all unscupulous money grubbing commission hounds.

Lets look back at the last 20 years when granting homeownership, lead to 6-8% annual gains year over year. Didn’t matter if affordability was ever in question, they could always tap the the home equity atm and hit the reset button. It amazes how the homeowner has no fault in this transaction. That the realtors and mortgage brokers are the resident experts on the housing market, and we should be morally responsible to stop all new homebuyers from entering into a life of debt…

Guess what ??? If we did do that, and convince every possible homebuyer that buying a home today will be the worse mistake of their lives…. Guess what happens to prpoerty values for all the existing home homeowners.

Guess what happens to that equity ATM, (It comes up with “Insufficient funds”, which means the fact that so many Canadians who feel the need to live the American….. ooops Canadian dream of homeownership with two brand new leased vehicles in the driveway, granite, hardwood and stainless appliances, I guess we are at fault for them too.

I just wonder how many years does one have to own and actually take responsibility for their financial decisions.

If a new first time homeowner meets the qualifying criteria of CMHC, and the Bank’s then how am I morally corrupt buy finding the mortgage for that individual that will make homeownership a reality? And getting paid a commision for that, most of the time by the banks. I have been brokering mortgages for 20 years, and have no trouble looking at myself in the mirror.

Accept the responsibility for your decisions to buy a home.

#104 Marty on 01.25.11 at 11:21 am

Got to love Michelle Alton’s doublespeak:

“If you have been thinking of buying a home, NOW is the time to do it as there will be less people qualifying to buy a home”

In other words, hurry up and buy now before the changes come in effect and you may not qualify, or qualify for less.

“Thinking of selling? NOW is the time to do it as there will be less people qualifying to buy a home”

In other words, hurry up and sell now before the changes come in effect and that drives down prices.

My reply to that: doubleplusungood.

The message is (for those that can’t see past the pretzel logic) is that it’s always a good time to buy, AND it’s always a good time to sell. I guess the mantra “buy low, sell high” doesn’t seem to apply here.

Unfortunately a lot of young buyers won’t add two and two together and realize they’re better off waiting until after March 18th – even after reading statements such as hers where she admits home values can decrease after March 18th.

For an excellent primer on this, see: http://financialinsights.wordpress.com/2011/01/19/why-a-rush-to-buy-is-completely-irrational/

#105 English good not on 01.25.11 at 11:35 am

I hardly understood a thing she wrote aside from the NOW is the time to buy and sell.

More like… NOW is the time to go back to school.

#106 SAD on 01.25.11 at 11:45 am

F the little bubble pricker decision and the reaction by agents, sellers and buyers describes Social Darwinism so well. The instinctual drive and reaction by GTA-area realtress Michelle Alton just shows how some humans have not developed and some still eat there young.
Your comment as follows is a classic: If I were F, and had not engineered this whole thing just to create a robust housing market and the patina of consumer confidence amid hopes for rising home equity and economic recovery just weeks before a federal election was called, I’d be pissed. Poor dude.
If F cared at all ( I think he is quite proud of the Michelle Altons of this world) he would of implemented the rule to take effect the very next day. That picture describes so well what F manipulated once again.
I am somewhat dismayed ( and surprised) that there appears to be no politicians left with a social conscious. This Country needs wisdom, stability, hope and confidence. H F and C seem to enjoy providing the opposite and playing with young peoples lives. These three Ego’s love the power and have engineered and continue to engineer a similar situation as exists in the States with all the known consequences.
Short term thinking with long term consequences.

#107 SAD on 01.25.11 at 11:47 am

#102 refinow on 01.25.11 at 11:06 am

Get a conscious and stop rationalizing your behaviour. Look in the mirror and get honest.

#108 Dodged-A-Bullit-in Alberta on 01.25.11 at 11:48 am

Greetings: # 77 Squidly77 [We need debtor prisons]

Wrong: We need a nationwide class action lawsuit against the CREA, the major banks, mortage brokers, and the federal government, charging them with fraud, mis-representation and failure to meet standards of due diligance . There is no way a couple with a combined income of 100 thou should be approved for a 500 mortage and then allowed LoC ,no way, none, nada. Outright fraud and corruption. Interesting that I see today, the Americans just may be going after the crooks who collapsed their system and ripped off their taxpayers.

http://www.huffingtonpost.com/2011/01/24/financial-crisis-commissi_2_n_813415.html

#109 Moneta on 01.25.11 at 11:50 am

Accept the responsibility for your decisions to buy a home.
——————-
They are accepting responsibility. They are playing the cards they have been dealt and foreclosing is one of them.

I think it’s time for Canadians to get off their high horses, see the forest for what it is and stop clingin to a past ideal.

Our system is based the Magna Carta. It was not written for the little people but for property owners. If you have no wealth, you have no rights. But it was not so bad over the last hundred years because our country was a large expanse of land that was up for grabs.

Not so long ago, people escaped the UK and France, to come here. They were poor and risked everything for a better life. They wanted to live in a place where government and royalty would not suck them dry. Remember the Tea Party? Americans fought to get their independance and for a while it was paradise because if you wanted land all you had to do was go West. It was free for the taking. First come, first served.

Well now guess what? The land is all taken and we are the new UK. And in case you have not noticed there are no more undiscovered places on this planet.

Today’s wealthy are so full of themselves they are completely oblivious to the forces our there. They complain about the spendthrifts but they sure like selling their overpriced million dollar houses to these greater fools.

They are still trying to sell us the idea of the American dream and judging us on it but it is OVER. And the ones with nothing KNOW the cards are stacked against them. Those who go to university still think they can make it to the top 10% but they are fast realizing that their degrees aren’t worth the debt that was taken.

Upward mobility is dead in the US and dying in Canada. The social contract is dead. Wake up and stop judging.

#110 BAD on 01.25.11 at 11:51 am


What fuels our RE boom?

At the end of last week, real estate debt comprised about one-third of all new Canadian debt to date in 2011. Taking out the bank issuances, it blows every other sector out of the water.

Real estate dominating Canadian debt deals

Surprise, surprise…no?
Which language I should learn first, Cantonese or Mandarin?

#111 DARLENE on 01.25.11 at 12:00 pm

I got a call from a real estate agent yesterday. He was asking if I was interested in selling as he has buyers who would like to get in to this area. Has anyone else received cold calling from any real estate agents?

Please note this was not my regular realtor who has always called me on a regular basis. I’ve never had a real estate agent cold call in the last eight years I’ve lived here. I’ve had the usual mailers and junk emails but not any cold calls until now.Just in case for those who might want to know what area I’m in, it’s Waterloo Region, in Ontario.

#112 Moneta on 01.25.11 at 12:02 pm

Today’s wealthy are so full of themselves they are completely oblivious to the forces our there
—-
Correction:

The wealthy are always so full of themselves they rarely notice a change in winds. I guess that is why we got US independance.

#113 tinman on 01.25.11 at 12:02 pm

Have you ever thought about getting a FACEBOOK following? Might be a good way to get the word out to all the naive property virgins. Also, some Search Engine Optimization might be in order.

Like this? — Garth

#114 ticked off on 01.25.11 at 12:13 pm

Ya Jeff just walked away ,he just spent someone elses money !!!mine what a country

#115 Spiltbongwater on 01.25.11 at 12:17 pm

Jeff, hope you got the engangement ring back when your fiance left, unless of couse you kicked her out, then you are SOL on the value of the gem.

#116 Grrr on 01.25.11 at 12:20 pm

It’s a good time to buy, and a good time to sell, both because of the same rule change. It doesn’t take too much time or effort to figure out that this is complete nonsense.

The scary thing about Michelle Alton and her ilk: they probably believe this logic that was fed to them by CREA.

#117 wetcoaster on 01.25.11 at 12:20 pm

Alot of boo hooing over on the CMT site, the brokers are mad at those meanie bankers. What a joke, they get into basically a new industry going up against the deep pockets and can’t handle a little change to the over leveraging of millions of sheep.

#118 VICTORIA TEA PARTY on 01.25.11 at 12:31 pm

ANOTHER REAL ESTATE WARNING SIGN FROM SOUTH OF THE LINE

Just when Canadian property virgins thought the next two months, thanks to Mr. F., was yet another real estate nirvana-in-the-making, or a last chance to jump on the property band-wagon before new mortgage rules come into play, this zinger out of the USA today…

‘Price Drop Points to Likely Double Dip in Housing Market

Tuesday, 25 Jan 2011– By: Reuters

U.S. single-family home prices fell for a fifth straight month in November and could plumb new lows soon, a closely watched survey showed on Tuesday.

The Standard & Poor’s/Case-Shiller composite index of 20 metropolitan areas declined 0.5 percent in November from October on a seasonally adjusted basis, though it was not as sharp as the 0.8 percent fall expected by economists.

Prices have fallen 1.6 percent in the past year, sharper than the 1.4 percent predicted by economists polled by Reuters.

“Everything in this report is unfortunately still sagging and still pointing downward,” David Blitzer, S&P 500 Index Committee chairman, said… “…We still seem to be at best scraping along the bottom.”

Sixteen of the 20 cities showed annual price declines in November, while 19 of 20 cities showed monthly price drops.

The housing market has been struggling since home-buyer tax credits expired earlier this year. To take advantage of the tax credits, buyers had to sign purchase contracts by April 30.

“A double-dip could be confirmed before Spring,” Blitzer added… Blitzer defined a double-dip as both the 10 and 20-city composite indices setting new post-peak lows.

…Unadjusted for seasonal impact, the 20-city index fell 1.0 percent in November after a 1.3 percent decline in October.

“I find it hard to believe that if we get a double dip in home prices we could get the consumer back in a meaningful way. Right now it seems like a coin toss as to whether that’s likely. So I’m disappointed,” said Uri Landesman, president of Platinum Partners in New York.’

Will this be the future for the highly leveraged here? Yep.

There seems to be little to stop this fast real estate freight train other than the looming financial stone wall at the end of the tracks.

I chalk real estate greed amongst as a combination of ignorance in not realizing the dangers of bringing forward future demand (going into debt), family pressures and young goosed-up pick-up truck-style egos.

We seem to be in a bit of an economic quiet point right now. But the storm of change will start to hit after the mortgage changes start coming in.

Also, watch for austerity measures that Ottawa and the provinces may decide to engage in during the approaching budget season.

Sack-cloth and ashes for the indebted property masses. Demand for those two commodities could bring its own speculative bubble!

Meanwhile, back at the UN’s International Labor Organization, disquieting numbers out today show that unemployment around the world is a stubbornly high 6.4 per cent.

The vestiges of 2008 haunt us all still.

#119 Abitibidoug on 01.25.11 at 12:32 pm

It’s quite obvious that it’s buyer beware out there for buying houses and dealing with realtors. Keep in mind that REGARDLESS of what is going on in the market they will tell you now is a good time to buy. In this day in age where the mentality is deregulation and less government intervention in your life is best, you MUST do your homework before making any major purchases.

We hear horror stories (does anybody actually believe this stuff?) about catastrophic cosmic events happening in 2012. Whether you believe all that stuff is your business, but one thing that’s very likely is the real estate market will be shaken up next year as poster #88 said.

#120 Utopia on 01.25.11 at 12:36 pm

#35 Housing is CRASHING (AKA Dan)

POP!!!…………………………..What was that????

#121 Got A Watch on 01.25.11 at 12:45 pm

#79 avenirv – “so you want to tax all electronics (including the laptops) produced by NA companies in China ? do you know that the NA companies moved willingly to China ? is not that the Chinese forced them, they choosed to move. whose fault is then ?”

When China (and other 3rd world nations) have environmental and labor standards equal to ours, I’d drop those steep duties. That’s what I’d ‘choosed’. In the meantime, we aren’t having “free trade”, we have “exploitation trade” where corporations can jurisdiction shop for the lowest and least costly rules and regulations, and manufacture the goods there that they sell here. And it’s the fault of our corrupt bribed Governments here for allowing it, and our clueless consumers, and the Mal-mart mentality of constant “rollbacks”.

Or maybe you like lead and cadmium contaminated children’s toys, melamine in your baby formula and pet food etc. I could not care less if the Chinese economy collapsed into a smoking black hole, it’s what they fully deserve because of their reckless behavior. Screw ’em.

#101 Utopia – “The problem we face under globalization though is that we are having to compete directly on many fronts with low-wage and low-regulatory environments.” – See my response to avenirv above. “Competing” is not possible when the playing field is tilted. I’m all for real fair trade and fair competition, which is not what we have today.

Mirroring their abusive anti-trade policies which discriminate against our finished goods – absolutely. The fact that they will object, I could not care less. Go sell your toxic garbage somewhere else, scumbags.

You both seem to have some wildly misplaced and hugely naive ‘faith’ that large global mega-corporations will do the right thing out of the kindness of their hearts. Hold fast to your delusions.

In my business life, I have always found the larger and more ‘global’ the corporation, the more they try to screw you. That’s just the way it is. It’s a cold harsh world, and it’s time we started treating other nations exactly as they treat us, which means not enabling their economic crimes.

#122 Utopia on 01.25.11 at 12:51 pm

#93 Fractional Reserve wrote…

http://www.bloomberg.com/news/2011-01-24/buying-home-is-cheaper-than-renting-in-72-of-big-u-s-cities-trulia-says.html

“The above article states that it is currently cheaper to buy than rent in 72% of big American cities”
———————————————————-

Thanks for the link. You can see a turning point despite all the hysteria that US housing prices will continue into freefall for the forseeable future.

In fact, US housing is finally becoming a good bet and while it may continue its decline this year I am betting they are close to a market bottom.

Any solid evidence of positive cash flow on rentals means that investment money will start to flow back into the market and that will buoy prices as the landlording class returns.

#123 kitchener1 on 01.25.11 at 12:53 pm

Just wanted to dispell some myths on here.

If someone has a 0/40 or 5/35 mortgage, that will be grandfathered in, the banks cannot change the ammort after the fact.

BUT, and its a big one, people will have to qualify for their renewals at their current income and rates.

every 5 years or whatever term you sign in for, X amount of principle has to be payed off. If for whatever reason, its not then there are two options.

a.) Lender asks for a cheque to cover the difference– unlikely but possible
b.) Lender increases the monthly payment to ensure that you are caught up in the next five years
c.) The qualififcation must be current rates, once banks have your business, they wil not be as likely to give the discounted rates.]

Regarding Bankruptcy:

Homeowners with no equity in there homes are given the choice of keeping it or not– reason is that its a net neutral stance for the creditor.

If you have substanial equity in your home, then you will be forced to liquidate it.

same is true with cars, there is a cut off amount that your car can be worth $5000-$7000??? I dont know but under that and you keep it, more then that and it gets repo’d.

Sounds stupid but its almost a system set up to reward those that leverage up.

#124 Montrealer on 01.25.11 at 12:57 pm

Garth vs Facebook. there is also this fan-page, with 72 “likes”. http://www.facebook.com/pages/Garth-Turner/109560412403741

Garth did you know about that one?

#125 canali on 01.25.11 at 1:17 pm

this just in: “BC cities are world class in their lack of affordability”…yeah, no [email protected]t.

B.C. cities are world-class in their lack of affordability

Read more: http://www.vancouversun.com/business/cities+world+class+their+lack+affordability/4161484/story.html?tab=PHOT#ixzz1C4ETfXgH

#126 Hoof - Hearted on 01.25.11 at 1:19 pm

There is no record Carpenter Ants ever having bounced a rent cheque…unlike Plumber cockroaches or Electrician silverfish.

#127 fromcalgary on 01.25.11 at 1:21 pm

#80 Thetruth on 01.25.11 at 3:33 am

But if house prices drop to 2006 levels, look out below!

Thoughts?

Here’s a thought: keep dreaming :-)

After few short months of cooling down (that failed to bring lower prices) RE is hot yet again. It might not be smart to invest in it at this very moment but if you are looking for a place to live than you should have bought yesterday. That being said, today’s still better than tomorrow.

#128 Western Canadian on 01.25.11 at 1:23 pm

#33 nonplused, regarding the $4.1 million dollar sale and its impact on the average price…

“I wonder how this will affect the January average sales price numbers? ”

Instead of “wondering” what it will do to the average price, why don’t you use your brain and do some junior high math and figure it out.

Take 350 condo sales at average price of $290,000.
Implies total value of sales of $101,500,000

After sale we have 351 sales and total sales volume of $105,600,000. New avg $300,854

So not even close to the 20% you predicted, try 2.7%.

And I guarantee you in the CREB press release they will mention the sale as being responsible for the uptick in the average.

Also this is why the median is more useful calculation as average because outliers have less impact.

I think the RE industry is very flawed and arguably quite unethical.

I guess what I don’t get is why Garth seems to think it is so unique? If that’s the right word.

You think the world of personal finance is any better? You think the energy industry cares about its customers?

#129 Mister Obvious on 01.25.11 at 1:32 pm

#110 Darlene

“Has anyone else received cold calling from any real estate agents?”

I lived in a bungalow in Burnaby for 25 years. I got about 4 or 5 cold calls per year on average the whole time I lived there. Mostly from agents who had “clients wanting to get into the area” or develpers who wanted the land.

I sold there and moved into Vancouver proper about 9 months ago. My phone number is unchanged so I still get these calls at about the same rate as before. They dont even bother to check recent sales. They just call the numbers on the list, one after the other. Must be kind of quiet down at the office these days.

#130 The Original Dave on 01.25.11 at 1:45 pm

this is like when a stock splits to give a stock owner more shares at a lower price (instead of stock being $15, each share owned at that price now gets 5 shares at $3). The purpose is to deceivingly get more buyers into the stock. 5 shares at 3 bucks is the same as 1 share of 15 bucks. The wise see the signs and head for the exit. The herd sees it as a buying opportunity and jumps in. Eventually the stock falters….no one saw it coming.

#131 Hoof - Hearted on 01.25.11 at 1:45 pm

Anyone on this blog recall the late 1970’s early 1980’s?

I still recall the BOOM, where the news was full of RE stories . At the time, 30 years ago, houses were increasing $1000 per week….line-ups for bidding wars.
SFH were being demolished at an amazing rate to put up the Feds MURB projects. The big difference was interest rates kept pace, till they reached the meltdown point of approx. 22 %.

Then, the Gov’t pulled the plugs on the MURB projects. The “qualifer” was that the foundations of the projects had to be poured before DEC.31(if not mistaken). What was hilarious to watch was the incredible amount of activity to have forms built and cement poured during Christmas.

Then nothing….I recall projects sitting for years growing weeds. One contractor must’ve been owed $$$ becuase they went in an recovered as much sand as they could from a foundation that had been poured.

People who were highly leveraged were bailing and declaring bankruptcy..my Dad knew a Professor who was forced into this and handed the keys to the bank.

So….this trick to juice the economy is an old one.
The current one is more stealth. IMHO, “F”, ” C” and ” H ” probably project the last juicing will draw enough in before the deadline to juice the numbers, bask in the glow, call the election, and then the hammer falls.

They will have “we didn’t see this coming” well rehearsed, and the Liberals and NDP wouldn’t have a clue on what to do anyway.

#132 Blobby on 01.25.11 at 1:48 pm

@#100 Young Old Fart :

Bankrupcy is NOT easy, especially not in Canada. We’re talking complete asset stripping, and wage garnishing.

He wont be able to go “mess up again”, as he wont be allowed to take out another mortgage/loan for a LONG while. At least during the 2 years of bankrupcy – then when he’s finally let out of that – his credit rating will be screwed for much longer.

Bankrupcy is NOT the easy choice…

#133 Daisy Mae on 01.25.11 at 1:49 pm

In our local paper I see a cartoon…Harper is celebrating his ‘5-year anniversary’.

Flaherty is ready to pop out of the cake. Under the lid of the cake is written ‘HIDDEN AGENDA’. Harper is yelling: “Not yet!”

#134 SpinDoctor on 01.25.11 at 1:57 pm

#84 Responsibility

A guy who can afford a 4.1 million dollar condo can probably afford the condo fees.

#135 C on 01.25.11 at 1:59 pm

I’ve been keeping track of listings in Burlington, Ontario $300K-$400K “house” on MLS for the past year. Recent numbers are:
January 7th, 2011 207
January 14th, 2011 216
January 17th, 2011 (F drops the bomb)
January 25th, 2011 244

That’s basically a 13% increase in listings in 11 days. A big jump in such a short time.

#136 Mark on 01.25.11 at 2:04 pm

#56 Tony, “Since the stock market have been manipulated since around 1994 it could in essence fall 80 percent or more.”

Earnings on the TSX have grown from somewhere around 100-200 per unit per year of the TSE/TSX composite Index, to nearly 1000/year today. Don’t you think this deserves a greater valuation?

#63, “That could be interesting. Do you actually know the answer to that? Does CMHC indeed have the power to pursue those who default on the insured portion of the debt following a bankruptcy?
In other words….are these young newbie debtors who are “in deep” over their heads all prisoners for life with no escape?

No, a judgement arising from defaulting on a CMHC insured loan with a deficiency is definitely dischargeable in bankruptcy. Provided, of course, that the CMHC insurance wasn’t obtained through fraud, in which case, the Bankruptcy judge may order a longer period in bankruptcy.

#85, “So whats to stop a person from filing bankruptcy and starting with a clean slate and then live with their parents, or hide their money in the process.”

Nothing. I personally believe certain ethnic groups in Toronto and Vancouver, specifically intend to return to their homelands, once they’ve stripped as much equity as possible out of over-inflated Canadian real estate through the CMHC. Stay in Canada and face the music, or return to prosperous India or China with bagloads of money….really tough choice…

#137 SAD on 01.25.11 at 2:05 pm

Thought to ponder.
Is CMHC operating under its original charter?

Regulations Governing CMHC
National Housing Act

The purpose of the Act is to promote the construction of new houses, the repair and modernization of existing houses, and the improvement of housing and living conditions.

Canada Mortgage and Housing Corporation Act
The purpose of the Act is to incorporate the Canada Mortgage and Housing Corporation, Canada’s national housing agency, and provides the objects and powers of the Corporation.

Apparently the brain trusts ignored the living standard principle when reducing down payments and lengthening amortization schedules. Short term gain and long term pain. We are in good hands….

#138 Bottoms_Up on 01.25.11 at 2:06 pm

Sorry blogdogs, the world is about to enter a period of long-term economic growth:

http://www.ottawacitizen.com/business/World+entering+prolonged+growth+period/4160495/story.html

#139 Hoof - Hearted on 01.25.11 at 2:07 pm

Ethics… ETHICS? E-T-H-I-C-S ???

Anyone seen or remember the movie ” THE CORPORATION ”

It’s Excellent.

There is one part where a “Commodities Trader ” is interviewed.

He talks about 9/11 . He confesses , with great excitement that he and his Trader colleagues literal instant Pavlovian response to the 9/11 news was GOLD PRICES will now take off. Then he sort of went into ” faux human mode” and said yes, 9/11 was a tragedy, one of the worst things ever seen, blah blah, but the challenged any other Trader to deny that’s what they all thought at the time.

Then he said many of his clients were already in gold, but on average they doubled their money in this time frame

Then he discussed the bombing of Iraq in 1991, and how OIL prices jumped from around $14 per barrel to around $40. He says he and his fellow Traders were cheering on the bomb dropping, as their was obviously a direct connection to the Traders and client fortunes to outright man-made human misery and tragedy.

I watched this with my mouth dropping, but then realized these types of parties are souless whores who must create an” out of body” manifestaion of themselves in order to detach themselves from the consequences of how their profiteering impact others, either directly or indirectly. ie dropping bombs kills people abroad,drives oil prices up, and then screws you own citizens/neighbours who pays these jacked up prices via the OPEC cartel.

This must be the same “detachment” model Realtors , Bankers, Politicians etc use to not blow their brains out,….. when any other party can connect to dots and see the ” Nuremberg defence” is “null and void”.

#140 Roial1 on 01.25.11 at 2:13 pm

squidly77 on 01.24.11 at 10:31 pm
Michelle Altons grammar is worse than mine, that’s saying something.

Her lack of ethics is un-Canadian and sad.
———————————————————
That is so unfair.

EVERY Realturd is or will be doing it.
IT IS THE CANADIAN realtard WAY!
(The spelling IS intentional.)

#141 young & foolish on 01.25.11 at 2:17 pm

… “The generation that only cares about monthly carrying costs (because they know the debt will never be repaid) is desperate to rent a huge pile of money ….

” Sounds like Greece! Coming soon to our shores.

This is what it’s all about, the coming demise of the “Age of Entitlements” where personal responsibility has been trumped by the evolution of the Nanny State. Not about realtors (they are just salespeople).

And “the commodity that used to be called shelter” is a necessity which is now priced relative to credit. It’s been the direction of the developed world since WW2. Is this about to change? Will the coming austerity measures (including tighter credit) lead to the re-pricing of assets? Will the body politic revert to a culture supporting the notion of personal responsibility in the near future? And what politician will lead the charge?

#142 wetcoaster on 01.25.11 at 2:22 pm

Blame the banks for the mortgage rule changes. Who begged for it to go to 35 and 40 to create the mortgage brokers living in the first place ? The banks. Keep biting the hand that feeds you when you’re a one trick pony, real bright.

Sounds like alot of naive people trying to flog mortgages who weren’t even born in 1981 and are totally clueless to what a real market correction is.

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2011/01/top-10-effects-of-the-new-mortgage-rules.html

#143 richard kovacs on 01.25.11 at 2:31 pm

Found this today. Doesn’t any one seem to learn, still it made the realtor happy !!! http://www.cbc.ca/video/#/News/Money/1239849460/ID=1758092890

#144 thecomingdepression on 01.25.11 at 2:37 pm

WAIT! Garth you told your readers to BUY AMERICAN HOUSING! For instance you can buy a beautiful CONDO in N.J. for 200k with taxes of 20k a YEAR. It used to be 600k. WHAT A DEAL! You can buy a condo in FLA. for 30k. taxes are 5k. They used to be 200k! WHAT A DEAL! These taxes will double or more in a few years. The worst investment you can possibly do is BUY AMERICAN HOUSING. Great deals in ARIZONA, FLA, CA and the list goes on, as the US collapses under it massive deficit, who do you think will pay off that bankers criminal debt? That’s right, the new CANADIAN USA HOMEOWNERS assoc.

#145 Roial1 on 01.25.11 at 2:37 pm

36 Bill Grable on 01.24.11 at 11:56 pm

This “Realtor” has the IQ of a wheelbarrow.

Bill! You’ve got to STOP! insulting wheelbarrows.

#146 Patiently Waiting on 01.25.11 at 2:38 pm

In some markets US home prices are down by more than 50% from their peak – and prices are still going down. The perfect storm is brewing in Canada – Home prices in Canada are at record highs, Debt to income ratio in Canada is 148% (a record high and above where American debt level was when their housing market imploded), and interest rates are at historical lows and poised to begin climbing back to historical norms, Canadaians are spending 50% of income to support their housing costs (70% in Vancouver/lower mainland) yes another record high. Unfortunately many Canadians will soon find out that it is not that differene here.

http://www.theglobeandmail.com/report-on-business/economy/housing/home-prices-drop-faster-in-major-us-cities/article1881998/

#147 Chris in Langley on 01.25.11 at 2:53 pm

Unethical me thinks.

Many months ago Garth called out another real estate agent’s blog comments as being clear evidence of a “lack of ethics.”

This same person is silent today on the topic of ethics…I wonder why?

Probably because he’s used that kind of logic on potential buyers in his “sales career” for years.

Like Garth said, “she gets the commission,” her job is done.

At least the woman mentioned in this post has put her name and face beside her sales letter.
Why won’t the winner of the 2010 “greatest fool” award put his name and picture with his bizarre posts?
The answer is simple, he would have to be accountable and not simple hide behind his moniker.

There is also a chance that people in Kelowna would read this blog and see his mug shot, and that wouldn’t allow him to hide.

#148 jess on 01.25.11 at 2:56 pm

Leakage here’s some case histories

“Anyone claiming to be a professional
The promoter, Dr. Lawrence Turpen, of Reno, Nevada, specialized in offshore transactions, publishing a book on the subject in addition to his manual.

Turpen-Holliday: A How-To Manual.

In 2004, both Mr. Holliday and Dr. Turpen pled guilty to tax-related conspiracy charges.

http://levin.senate.gov/newsroom/supporting/2006/PSI.taxhavenabuses.080106.pdf
RELEASED IN CONJUNCTION WITH THE
PERMANENT SUBCOMMITTEE ON INVESTIGATIONS
AUGUST 1, 2006 HEARING
Greaves-Neal: Moving U.S. Business Income Offshore.
Anderson: Hiding Offshore Ownership.

POINT: Offshore Securities Portfolio. This case history examines a complex securities transaction used to shelter over $2 billion in capital gains from U.S. taxes, relying in part on offshore secrecy to shield its workings from U.S. law enforcement. In contrast to the
case histories examining offshore structures used over a period of years, this inquiry focuses on the use of offshore secrecy jurisdictions to facilitate one-time tax shelter transactions. The tax shelter was designed, promoted, and implemented by a Seattle-based securities firm, Quellos Group, LLC, (“Quellos”), with the assistance of lawyers, bankers, and other professionals. Quellos sold the shelter, called POINT (Personally Optimized INvestment Transaction), to five
wealthy clients in six separate transactions. Together, the tax shelters were used in an effort to erase over $2 billion in capital gains that would otherwise have been taxed, costing the U.S. Treasury lost revenue of about $300 million.

Wylys: 58 Offshore Trusts and Corporations.

#149 Mr. Plow on 01.25.11 at 3:00 pm

I am by no means a generic realtor basher. I feel like in any industry there will be good ones, bad ones, ethical ones, unethical ones etc…

But one thing that has always chapped me is that realtors want to be treated and branded as “real estate professionals”.

If that is truly the case they should start disciplining and enforcing that on their own. If other professions like doctors, lawyers, accountants, etc… can be held liable for grossly negligent or unethical behavior then realtors should follow suit.

Messages like this lady realtor provides should be punished, but unfortunately an industry that does not hold themselves to high standards, finds that these sorts of messages are more the norm than the exception.

#150 Mr. Plow on 01.25.11 at 3:05 pm

#26 Throwstone

My understanding is that the bank gets the mortgage amount returned from the insurer (CMHC in your question) and then the insurer goes after the person who is holding the mortgage.

In the case of a bankruptcy I believe a trustee will be appointed and assets will be distributed. If the insurer does not get their money back it goes down as a loss. And in the case of CMHC, a loss to them is a loss to the tax payer.

I am no pro, but that is my understanding of the system.

#151 a prairie dawg on 01.25.11 at 3:06 pm

@ #91 Moneta

“It takes 2 to tango.

Why is so easy for a 1st time bankrupt to get more debt?

I hope one of the jails they are building is for bankers and their white collar crime.”

Yeah I did miss the bankers culpability in all this. They are partly to blame as well. Maybe we will need 2 extra prisons…

#152 totalchaos on 01.25.11 at 3:13 pm

The tear-down across the street has been for sale for a couple of months without much activity. Current owners bough 2 or 3 years ago as an investment. I was on the MLS last night and noticed it wasn’t on anymore, but the sign is still up. I’m wondering if it is a marketing stratagy to push the place to the top of the new listings with the March “deadline” looming, without sacrificing the visibility of the signage.

Another house across the street was unable to sell at the desired price after the owners bought up, so renters moved in. The owners told me their agent said prices will be flat for TWO years (!) so they should be able to list and get their price after that. In the mean time, I figure they will be spending a minimum of $1000/mo to hold it for the 2 years. They currently owe $900,000 and when I went to look at their new place, I was told they were taking out a LOC to re-do the basement.

Then there is a friend who bought a townhouse on the Sunshine Coast for over $500K four years ago. It had an unfinished basement, so they forked out to finish it and put in another bathroom. Listed it 2 years ago for $750K and has slowly brought the price down to where it is today, $499K. That is bad enough, but between property taxes, strata fees and geothermal lease, it runs $900/mo. before any financing costs are added. Who the heck will buy it? There is another unit in the same complex that is 37 sq ft larger asking $599K. Good luck, buddy.

I am well aware that I need much help to invest well, but c’mon people, this is just crazy.

By the way, sold our investment house in September for 3x what we paid for it 9 years earlier. Couple who bought it are tearing it down to build their dream house (total cost I would guess at 1.2+ million) then will sell their current house. I almost felt bad taking their money, knowing the pain they will feel before the new house is finished… almost.

Yes, I do live in the Lower Mainland.

#153 refinow on 01.25.11 at 3:24 pm

C # 133

Your big discovery… Did you ever take into consideration that people wait until after the holidays before they list their homes… D’uh !!

Do you honestly belive that Flaherty has suddenly created the demand to sell your home.

The writing has been on the wall well before Flahrty’s last “2” announcements of changes…

Should have sold back in May of last year if you wanted to hit the peak of the market.

But if you can sleep better at night blaming him for the real estate situation in Canada, well good for you.

#154 David B on 01.25.11 at 3:34 pm

Obama to Call for Nonsecurity Spending Freeze, Nothing Changes, nothing changes!

Sound familiar

#155 David B on 01.25.11 at 3:41 pm

Vancouver is not central Vancouver Island. And don’t believe everything you see on the news. — Garth

Dat’s exactly my point …. Toronto is not Ontario and Alberta is not Canada … people take the extreme and exploit it.

#156 Fractional Reserve on 01.25.11 at 3:46 pm

#136 Bottoms Up

Nice to hear a panel of economists and Nobel laureates claiming we are in for period of long term economic growth… I prefer to listen to hedge fund managers with billions on the line and not “nothing to lose” economists. A hedge fund manager whose opinion I highly respect and has proven to be right more often than he is wrong over the past 40 years is saying quite the opposite.

#157 Sam on 01.25.11 at 3:48 pm

Another one I got in email today:

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

Dear friends,

Happy New Year!

Federal Finance Minister Jim Flaherty announced changes to mortgage insurance rules intended to ensure the stability of Canada’s housing market. These measures include:
• Amortization period capped at 30 years;
• Reduction of government backing for home equity lines of credit;
• Maximum refinancing reduced to 85% from 90% LTV .
There are no changes to down payment requirements as CAAMP recommended.
For additional details please click on our link ( Article 1).
Interest rates are still excellent! If you are thinking about downsizing, moving up or investing in Real Estate please give us a call!
It is time to jump in!
Cheers,
Manuela

Manuela Coelho, Sales Representative

Prudential Town Centre Realty Inc Brokerage

Team Alexx, a consistent Award Winning Team!

#158 jess on 01.25.11 at 3:50 pm

the cheerleaders at davos must be HFTer’s
Tuesday, January 25, 2011
High Frequency Trading Dominates UK Stock Market
http://www.washingtonsblog.com/

#159 refinow on 01.25.11 at 3:53 pm

Now for all you finger pointers out there waiting to nail the mortgage brokers to the cross, consider the following….

The problem is not in the middle man who is only taking the application, and submitting the deal to the Banks for approval.

The problem lies with the 30 year old mortgage application and credit policies that have never been updated to take in to account economic changes, or even individual demographics.

Size of the family is not even considered. So if you are OCTO – Mom applying for a mortgage with your 13 kids, your debt servicing ratios are the exact same as the Duel Income No Kids couple. (D.I.N.K.S)

Does that make an ounce of sense.

The following mortgage was approved today…. Now please keep in mind this was a refinance, not a purchase, client already had the debts, I only restructured the debts… So he might actually be able to afford his payments.

Income….. $66,500

Old Mortgage $248,000 Up for renewal Feb 2011
Credit card debts 60,000

Car Loan $19,000 397 per month
Personal Loan $12,000 349 per month
One remaining credit Card $5000 per month $150.00 per month

So this $309,000 new mortgage plus $896 per month in remaining debts fits CMHC and the Bank’s qualifying ratios… On only $66,500 per year income…

This is what’s wrong with Canadian Real Estate….Lending……. and the Economy

Dont point fingers at the mortgage brokers who are only submitting applicaitons, point your fingers at the Bank’s and CMHC for providing the rope to hang the Canadian Homebuyers…

It amazes me the back lash that the public has when the slightest pull back in lending is announced.

There needs to be way more pull back to stop someone with $66,500 in income qualifing for a $309,000 mortgage plus $36,000 in debts…

Lets alos point the fingers at the CAP 1 , MBNA, and CIBC who gave this person $60,000 in credit card limits to begin with.

And before I get chastized for even sending in this deal, client’s spouse was recently laid off, who was making $58000 per year.

But I think the public needs to see just how much debt the banks are willing to approve… on such a little amount of income. We are only following the rules the Banks want to enforce.

#160 Mikey the Realtor on 01.25.11 at 4:08 pm

“#70 Chris in Langley on 01.25.11 at 2:17 am

Mikey you rock!”

Yes sir I do, I will TAKE that as a compliment, thank you very much.

#161 Young Old Fart on 01.25.11 at 4:13 pm

#130 Blobby on 01.25.11 at 1:48 pm

@#100 Young Old Fart :

Bankrupcy is NOT easy, especially not in Canada. We’re talking complete asset stripping, and wage garnishing.

He wont be able to go “mess up again”, as he wont be allowed to take out another mortgage/loan for a LONG while. At least during the 2 years of bankrupcy – then when he’s finally let out of that – his credit rating will be screwed for much longer.

Bankrupcy is NOT the easy choice…

After the guy admits his own stupidity:

“…through my own stupidity, laziness and immaturity, I’ve managed to accumulate an enormous amount of debt – and recently found that due to my incompetence with managing my finances, I owe around $95K – over $50K of that to CRA…”

Also, did you miss this in his letter:

“…It would be my second bankruptcy…”

Then yes, for dumb shits like that, it is an easy choice!! And guess what? He like so many others will do it again because like a wise man once said:

“You can’t fix stupid”.

If it was his first bankruptcy, I may have more compassion but his SECOND????

How does the saying go? “Fool me once…..”

#162 Devore on 01.25.11 at 4:17 pm

#108 Moneta

Upward mobility is dead in the US and dying in Canada. The social contract is dead. Wake up and stop judging.

And what happened to it? The good times came here to stay, so we forgot about it. Don’t need it anymore. We showed just how important it was to uphold it by the people we elected and re-elected for decades.

#163 Another Albertan on 01.25.11 at 4:23 pm

Re: Calgary condo

FYI – The condo fees are $2197 per month.

Everyone else’s mileage may vary.

#164 Hoof - Hearted on 01.25.11 at 4:30 pm

Love Garth’s term ” REALTRESS” , can’t say I’ve ever heard that before.

However, when the market tanks, this Realtress can go back to her old career ( which is probably as a cougar S & M dominatrix spanking out- of -work bankers, mortgage brokers etc. as they watch BNN )

#165 Mr. Plow on 01.25.11 at 4:38 pm

#80 TheTruth…

“he WILL have to take the bank’s posted (not discounted) 5 year rate…”

Why would he have to do that? You have to get approved at the 5 year posted rate, but if he has been making his payments why he have to pay the posted rate with less than 15%? He didn’t have to pay that when he had 5% so why now?

#166 TheBestPlaceOnEarth on 01.25.11 at 4:42 pm

http://www.vancouversun.com/business/cities+world+class+their+lack+affordability/4161484/story.html?tab=PHOT
Great news Vancouver 3rd least affordable City in the World! We’re heading for number one folks. It’s different here.

#167 Moneta on 01.25.11 at 5:05 pm

Devore on 01.25.11 at 4:17 pm
———-
I’ve always believed we have to be more like Scandinavia if we want to survive.

But we keep on trying to emulate the US and I don’t think we can keep up with their short-termism. In fact, I don’t think most of the world can keep up with it.

We don’t have the climate and the economies of scale…

And keeping up with the US means gutting our social structures instead of fixing them.

#168 Young Old Fart on 01.25.11 at 5:06 pm

#137 Hoof – Hearted on 01.25.11 at 2:07 pm

Ethics… ETHICS? E-T-H-I-C-S ???

——————————————————–
Get off your high horse…..

Bought Union Carbide 6 days after the gas leak in 1984.

Sold it a year later and pretty much doubled my money.

Was I cheering? Of course not! Was I happy that all those people suffered? Of course not! Did I recognize unique opportunities? Damn straight!

and I was still in my early 20’s…… ;o)

Got the oil jump in 1991, figured that was a no brainer but missed the gold in 2001…

Did you buy BP when it went under 30 bucks? You should have…

Sure, I feel bad for the Gulf but where is the stock price today?

While people were emotionally dumping the evil stock, cooler heads were quietly picking it up…..

#169 Moneta on 01.25.11 at 5:08 pm

And keeping up with the US means gutting our social structures instead of fixing them.
——-
For example, the rich in the US spend in the US.

In Canada, as soon as somebody makes a little money it flows right out of the country.

#170 Pr on 01.25.11 at 5:14 pm

A moderate knowledge of economics allows an observer to detect large discrepancies in asset valuation and to act
accordingly. Presently, the Canadian housing prices exhibit a tremendous shift to extreme over-valuation. It is time
to reassess purchasing decisions and act accordingly. buyers should read the work on this blog frequently and a suggestion : the work of Alexandre pestov , The elusive canadian housing bubble.

#171 Rural Rick on 01.25.11 at 5:18 pm

Carpenter ants are the symptom not the problem. You have a water leak or rotting wood near or in the home. Look for rotting basement windows or ice damming on the roof or porch. They live in rotting wood they do not create it. Find the rot and remove it and no more ants. Spraying will just poison everyone and will not stop the problem. Too bad we couldn’t deal with those insects F and Harpo as easily. Though if we could spray for bad politicians I would go for it. Thanks for your insights Garth.

#172 rosie on 01.25.11 at 5:39 pm

Lot’s of blaming going on today. I wonder which of the 12 steps this is, or is it six steps? Realtwhores has always been my personal favorite.

#173 Chris in Langley on 01.25.11 at 5:53 pm

Mikey,

Where’s your boot lickin’ buddy today, Mr. Ethics?
You know…the guy who in one breath promotes integrity, and then in the next promotes the Stones “sympathy for the devil” song, as though it’s his theme song.
It seems he’s too thick to realize that being a “devil” and being a man of integrity aren’t congruent.

Anyways say hi to him when you talk to him…aka Sybil.

#174 Mr. Lee on 01.25.11 at 6:14 pm

Caveat Emptor

Regression to the mean

Fundamentals

These are words that any buyer of items should remember. It matters not what F does or C does or what the banks entice one to do. Look at the situation for yourselves and do not be taken in by emotion and marketing. Live with in your means and you will be fine.

Get over come by temptations and suffer the consiquences.

#175 Devore on 01.25.11 at 6:20 pm

#165 Moneta

I’ve always believed we have to be more like Scandinavia if we want to survive.

But we keep on trying to emulate the US and I don’t think we can keep up with their short-termism. In fact, I don’t think most of the world can keep up with it.

I don’t think Scandinavian countries are any better, in fact I don’t think anyone is doing it right, though some come pretty close. As long as you have a responsible and responsive governance, and government and individuals living within their means, saving and investing in capital projects, I don’t care who you compare it to. The rot has started with the idea of something for nothing, we owe it to ourselves now, and someone will pay for it later. If the country’s balance sheet is broken, everyone else just follows suit. If the government has no regard for its own laws and regulations, guess what, people will take the cue.

#176 VICTORIA TEA PARTY on 01.25.11 at 6:21 pm

TUNISIA, ALGERIA, EGYPT — ISLAMIC “HORDES” DEMANDING FREEDOM

Sure this issue, of demands for “freedom” and “democracy” in North Africa, does not directly impinge on horny house bunnies and jack rabbits in Canada, and underwater “home owners” in the US.

Or does it? Actually it does!

Geopolitical events, such as those going on in North Africa, have a way of coming home to roost…in your roost. An explanation:

The US “Raj”, as the highly respected American journalist Eric Margolis puts it, is in a spot of empirical difficulty right now in the so-called “Arab World.”

Things are unravelling just as they did once for the former Soviet Union in its Eastern European colonies. The results were amazing. Communism vanished from Eastern Europe and the Soviet Union evaporated!

Do events in the Mideast portend the same for American influence there? And if so how will that affect us?

Out of control oil prices? Hyperinflation? Strengthening of Islamic Fundamentalism? All of ’em, and a whole lot more. Read this:

‘BIG TROUBLE IN TUNISIA FOR AMERICA’S MIDEAST RAJ
January 17, 2011

Oops! Something has gone terribly wrong with Washington’s plans for regime change in the Mideast.

Wasn’t there supposed to be a US and British engineered revolution against Iran’s mullahs, followed by installation of a cooperative pro-western government and a bonanza for western oil companies?

The revolution came, all right, but in the wrong place. The explosion of popular fury in Tunisia that ousted its dictator of 23-years is sending shock waves across the Arab world and has alarm bells ringing in Washington.
…The US, France and their Arab satraps are deeply worried that Tunisia’s popular revolution could spark similar uprising against the dictatorships or monarchies in other members of America’s Mideast Raj, notably Egypt.

SPEAKING OF EGYPT…

OK now, on to Egypt which, as Margolis forecast, is now in the process of erupting with street protests. This from the BBC:

‘At least three people have been killed during a day of rare anti-government protests in Egypt, reports say.

In Cairo, where the biggest rallies were held, state TV said a policeman had died in clashes. Two protesters died in Suez, doctors there said.

Thousands joined the protests after an internet campaign inspired by the uprising in Tunisia.

In Cairo, police used tear gas and water cannon in an attempt to disperse the crowds.

Activists had called for a “day of revolt” in a web message. Protests are uncommon in Egypt, which President Hosni Mubarak has ruled since 1981, tolerating little dissent.’

…On its own, this is not going to threaten President Mubarak’s hold on power. But it must be a huge shock to him. And the protesters might just begin to think that anything is possible.

US Secretary of State Hillary Clinton said her administration supported “the fundamental right of expression and assembly” and urged all parties “to exercise restraint”.

The events in Cairo were co-ordinated on a Facebook page…’

What must Hillary be thinking? What if Mubarak loses power, and the fundamentalists take over (Egypt is the “birthplace” of the Muslim Brotherhood some of whose members helped to bring about 9/11, don’t forget).

So, if Mubarak goes down, what will happen to Egypt’s peace treaty with Israel? I’m sure there are other issues. There always are!

Egypt in terms of population, according to the CIA’s World Fact Book, is more than 80 million, the third largest in Africa, after Nigeria and Ethiopia.

Algeria is the second largest country in Africa with 30-million people.

Tunisia is a small tourist oriented country and a political football throughout history from the Romans to World War Two and the Cold War.

All three countries are endowed with various non-renewables that the West is always interested in, especially the oil.

One other resource is of the renewable type: millions of unemployed young men. Legions of ’em.

So, the worm turns yet again against another weakening empire.

The carpenter ants of history just keep chewing away as they did in Rome, Great Britain, the Soviet Union. You get the picture.

Those who fail to study their history are doomed to repeat it. Where have I heard that bromide before?

Oh, I know, while studying history!

#177 Rural Rick on 01.25.11 at 6:24 pm

Once you are discharged from bankruptcy, you will be released from the legal obligation to repay the debts you had at the date of bankruptcy, except for certain types of debts that are excluded.

The types of debts that are excluded from discharge include:

Alimony payments and child support.
Student loans, if it is less than seven years since you ceased to be a full- or part-time student. However, five years after your studies, you can make an application for release from your student loans on the basis of hardship.
A fine or penalty imposed by the Court.
Debt arising from fraud.

So if I am reading this right anyone who lied about income on a mortgage application would not be allowed to declare bankruptcy. Yow that’s gonna hurt.
More info here: Office of the Superintendent of Bankruptcy Canada http://tinyurl.com/6kwkmqz

#178 Sue on 01.25.11 at 6:38 pm

tng (68) Why would you sit tight with mould in your home??? Your daughter is suffering major health consequences. Get the H out of Vancouver and rent somewhere else! Why buy a depreciating asset?

#179 realpaul on 01.25.11 at 6:49 pm

Double Dip is here says Schiller report on US housing.

http://urbansurvival.com/week.htm

Apparently the ‘recovery’ is still a long way off.

#180 Hoof - Hearted on 01.25.11 at 6:53 pm

#166 Young Old Fart

I apologize:

I wasn’t aware that one could e-mail from HELL

======

Don’t get me wrong, I consider myself a capitalist.

The movie “The Corporation”had intriguing chapters, such as photos of IBM CEO sitting with Hitler . Apparently IBM had developed an automated system for the Nazis to help keep track of prisoners….

IMHO, if you have to lie, cheat, steal and take short-cuts….you are a cadillac socialist and use the capitalist moniker to disguise the wolf in sheeps clothing deep down.

#181 jess on 01.25.11 at 6:54 pm

http://www.theatlantic.com/business/archive/2011/01/e-mails-suggest-bear-stearns-cheated-clients-out-of-billions/70128/

ambac vs bear / jp

…the “sack of shit.”

#182 Hoof - Hearted on 01.25.11 at 6:59 pm

169 Rural Rick

Carpenter ants are the symptom not the problem. You have a water leak or rotting wood near or in the home.

========

Agreed:

However, while the wet wood initially attracts them, they will nest beyond the periphery of what’s wet and into some of the dry wood.

I prefer sprays….Nuke em…..they dissipate quickly. Powders get dragged lord knows where and may create latent problems.

#183 Hoof Hearted on 01.25.11 at 7:30 pm

#164 TheBestPlaceOnEarth

Great news Vancouver 3rd least affordable City in the World! We’re heading for number one folks. It’s different here.

———————————————

With Super Bowl still 10 days away…..We will be bombarded by articles and info-ads of such BS calibre.

They have a captive audience of people staying indoors.
Besides Garth’s free soft porn(free = no HST either…yet), they are ramping up an RE…RRSP etc. lust build up .

If Internet inventor Al ” Tipper=less” Gore’s Global Warming (cc) would be expedited, then Canada would become tropical and we could escape cabin fever, hunt squirrels 24/7/365 and avoid this annual mind programming BS .

If Scotty on Star Trek had built a teleportation device that could take Vancouver and move it to say..Saskatchewan…Vancouver RE would collapse…because of its changed proximity to Asia.

Conversely….If Detroit could be transported to Vancouver..Detroit RE would shoot up.

POINT: BC’s high RE values are an anomalisitic fluke based on geographical and chronological serendipity.

#184 Nostradamus Le Mad Vlad on 01.25.11 at 7:39 pm


#72 Utopia and #86 TheBigLebowski — “. . . only a few of us that are sane but the rest think we’re crazy.”

The saying on Dragon’s Den is “I’m Out”, which also applies to me. A curious observer now, that’s all.

#185 ballingsford on 01.25.11 at 8:08 pm

Jeff, Bloggers and fellow dawgs, Life lesson.

I think the divorce rate is close to 50% now. Don’t be charmed into a relationship with one who has a pretty smile,appears friendly and laughs alot early in the relationship, and wears high heels when its not appropriate.

Try to find a kind of down to earth gal who knows how to dress for the winter, knows how to bundle up without caring about how she looks, wears sensible boots for the weather, and then check her out in the summer and see if she’s sensible.

To me, it seems like you have to run her through all 4 seasons to see what’s she made of before you decide to marry her.

Nowadays, it is hard to find a good woman that doesn’t use you as a vehicle to advance themselves.

Wrong blog, dude. Dickhead.com is the two doors over. — Garth

#186 tired vulture on 01.25.11 at 8:11 pm

Well, houses are selling very fast. Houses in the market for 4 months, now are sold. I got tired…I am a tired vulture now. I dont think prices are going down any time soon.

#187 jess on 01.25.11 at 8:53 pm

combo fraud

That’s according to a series of federal charges—the latest coming just two weeks ago—filed by prosecutors in the Southern District of Florida following an FBI-led undercover investigation supported by our partners across the state.

But that’s just the beginning of the story. As it turns out, this was anything but your average white-collar case.

The investigation centered on a scam involving small business loans and lines of credit that worked more like a typical mortgage fraud scheme—loan recipients and/or straw buyers submitting fake documents to generate fast cash.

Key to the swindle were bank insiders who took bribes to push the bogus paperwork through the system. Several of the bankers even became involved in a separate money laundering scheme, agreeing (at the behest of our undercover agent) to set up fake accounts to launder what they thought were illegal drug proceeds, in return for a percentage.

And to top it off, in the process of uprooting these alleged acts investigators uncovered a separate set of crimes—a wave of identity theft targeting the same banks….

http://www.fbi.gov/news/stories/2011/january/a-case-of-florida-fraud/a-case-of-florida-fraud

#188 Junius on 01.25.11 at 8:58 pm

#164 BPOE,

You said, “Great news Vancouver 3rd least affordable City in the World! We’re heading for number one folks.”

Let’s hope so. With no Olympics this year watching this bubble burst is going to be the best sport of the year (unless the Canucks have a long play off run, of course).

#189 Terry on 01.25.11 at 9:00 pm

I just went to the ScotiaBank “rent to own calculator” and played around with it.

http://cgi.scotiabank.com/mortgage/rentown.html

No negatives are allowed, for asset deflation.

It does not give any numbers on the amount you save in rent if it is below the mortgage payments.

They do give numbers if the mortgage is less than the rent.

Equity is always shown.

Not geared to honesty.

#190 bridgepigeon on 01.25.11 at 9:06 pm

182Nostman
Enjoyed your postings…

#191 Mark on 01.25.11 at 9:13 pm

#175, “So if I am reading this right anyone who lied about income on a mortgage application would not be allowed to declare bankruptcy.”

They can still declare (or be petitioned into) bankruptcy, but a discharge from bankruptcy and its legal obligations will potentially take a long time. Payments into the Estate could continue for years.

#192 Mikey the Realtor on 01.25.11 at 9:13 pm

#171 Chris in Langley

Good evening Chrisy, DA has been on a strict agenda lately, he doubled up on his yoga class this morning and after that he went to the office as he had a few clients waiting on him. We also went out for a couple of hours to run the slopes, so it has been a productive day for the body, mind and bank account.

#193 HouseBuster on 01.25.11 at 9:21 pm

#134 C – Sellers want out!

#194 Behavioral Finance on 01.25.11 at 9:24 pm

I think we have just entered into the a new paradigm.

Credit is a human right. Time to amendment the Constitution.

:)

#195 buffates on 01.25.11 at 9:24 pm

Realtors offering free trips to vegas if you close a deal with them…wow what on earth does this mean?!

http://www.facebook.com/pages/Matthew-Rasmussen-REALTORR/114905178520207#!/pages/Matthew-Rasmussen-REALTORR/114905178520207?v=wall

Matthew Rasmussen REALTOR® If you or anyone you know uses my services for either the successful purchase of a home or sale of a current home this year you will receive a FREE Trip for 2 to LAS VEGAS for 3 Days! Trip includes airfare and accomidations and can be redeemed anytime in 2011. Trip is subject to Terms and Conditions. Contact me for more details
January 15 at 12:25pm · Like · Comment

#196 Devil's Advocate on 01.25.11 at 9:49 pm

#171 Chris in Langley on 01.25.11 at 5:53 pm
Mikey,
Where’s your boot lickin’ buddy today, Mr. Ethics?
You know…the guy who in one breath promotes integrity, and then in the next promotes the Stones “sympathy for the devil” song, as though it’s his theme song.
It seems he’s too thick to realize that being a “devil” and being a man of integrity aren’t congruent.
Anyways say hi to him when you talk to him…aka Sybil.
If you watch that video you will note that the “Devil” is within you. Read the lyrics; it is man’s own atrocities which are the fiendish acts. Watch the video; again it is humanities own inherent hypocrisy that is so evil. It is not he who is the Devil it is that which is within you that is the Devil. Entrapment? Maybe, if you believe in such external forces. But, in the end you must agree, that the Devil is nothing more than a physical manifestation of that which mortal man has difficulty reconciling of his own weakness just as so may be said of the opposite beliefs.

Integrity? If you have it nothing else matters and if you don’t… well nothing else matters then either.

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

#182 Nostradamus Le Mad Vlad on 01.25.11 at 7:39 pm

#72 Utopia and #86 TheBigLebowski — “. . . only a few of us that are sane but the rest think we’re crazy.”
The saying on Dragon’s Den is “I’m Out”, which also applies to me. A curious observer now, that’s all.

Ditto
Or as George says…
… well I can’t find it but there was this George Carlin routine toward the end of his life where he explains that he has checked out and is now enjoying being nothing more than an observer. He had at that point pretty much given up on humanity. Wish I could find it because he does explain it well… but then George was a no nonsense cut through the bullshit kinda guy.
http://www.youtube.com/watch?v=eScDfYzMEEw&feature=related

Chill out and enjoy life… it really isn’t supposed to be such a chore. Embrace each new day as the first day of the rest of your life that it is and cherish each moment of it as were it the last as it may very well be

#197 Timing is Everything on 01.25.11 at 9:49 pm

Well, somone hand to do a quick web check on “GTA-area realtress”

Hmmmm?

http://ca.linkedin.com/pub/michelle-alton/25/943/1b2

http://mylifeoutloud.com/

http://www.lifeinahouse.com/

#198 Devil's Advocate on 01.25.11 at 9:50 pm

#171 Chris in Langley on 01.25.11 at 5:53 pm
Mikey,
Where’s your boot lickin’ buddy today, Mr. Ethics?
You know…the guy who in one breath promotes integrity, and then in the next promotes the Stones “sympathy for the devil” song, as though it’s his theme song.
It seems he’s too thick to realize that being a “devil” and being a man of integrity aren’t congruent.
Anyways say hi to him when you talk to him…aka Sybil.

If you watch that video you will note that the “Devil” is within you. Read the lyrics; it is man’s own atrocities which are the fiendish acts. Watch the video; again it is humanities own inherent hypocrisy that is so evil. It is not he who is the Devil it is that which is within you that is the Devil. Entrapment? Maybe, if you believe in such external forces. But, in the end you must agree, that the Devil is nothing more than a physical manifestation of that which mortal man has difficulty reconciling of his own weakness just as so may be said of the opposite beliefs.

Integrity? If you have it nothing else matters and if you don’t… well nothing else matters then either.

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

#182 Nostradamus Le Mad Vlad on 01.25.11 at 7:39 pm

#72 Utopia and #86 TheBigLebowski — “. . . only a few of us that are sane but the rest think we’re crazy.”
The saying on Dragon’s Den is “I’m Out”, which also applies to me. A curious observer now, that’s all.

Ditto
Or as George says…
… well I can’t find it but there was this George Carlin routine toward the end of his life where he explains that he has checked out and is now enjoying being nothing more than an observer. He had at that point pretty much given up on humanity. Wish I could find it because he does explain it well… but then George was a no nonsense cut through the bullshit kinda guy.
http://www.youtube.com/watch?v=eScDfYzMEEw&feature=related

Chill out and enjoy life… it really isn’t supposed to be such a chore. Embrace each new day as the first day of the rest of your life that it is and cherish each moment of it as were it the last as it may very well be

#199 Devil's Advocate on 01.25.11 at 9:52 pm

182 Nostradamus Le Mad Vlad

“A curious observer now, that’s all.” – George Carlin; right?

#200 AG Sage on 01.25.11 at 10:19 pm

#68 tmg, Isn’t there a housing authority (or equivalent) you can report your landlord to for unsafe living conditions?

You could also post your requirements, #bedrooms, desired location, etc. so others might be able to help you search.

But dear baby lamb in a manger, do not buy a house right now.

#201 R on 01.25.11 at 10:27 pm

Qualify now or miss your chance to throw away your future forever!!!!!!!

#202 Devil's Advocate on 01.25.11 at 10:36 pm

here it is;

http://www.youtube.com/watch?v=7KPEJNGAlqw&feature=related

#203 Moneta on 01.25.11 at 10:40 pm

I don’t think Scandinavian countries are any better, in fact I don’t think anyone is doing it right, though some come pretty close.
——–
I guess it all depends what your wants are. Anything that is based on the British model is unsustainable long term. It’s based on exploiting resources and moving on once they are depleted. That’s what will happen to Canada.

The natives in Papua New Guinea probably have it right.

#204 realpaul on 01.25.11 at 10:41 pm

Global TV reports that ‘all measures of inflation’ are going up fast. Food shoppers are interviewed and surprise…….costs have been going up on mainstreet for several years. But….theres been no acknowledgement of this from ‘F’ and the goonshow in Ottawa.

News today that real estate is at its most unaffordable in history…..more than anywhere on the planet on a wage comp basis with other cities. Ya see people….its not only that money coming in from overseas has skewed the market higher than locals can afford….but it shows how much less the average person here makes than in those other locales. The news fools want you to think that people in Asia are poor and need our charity. The ‘shows’ fill the airwaves with child pervs and hookers…goes to show you what attracts the interest of a reporter eh?

In fact Asia is rich….far more wealthy on average than anything we see on the news. In Singapore for example…….wages are far higher than here…..the standard of living is officially 68% higher than Vancouver ( according to Mercers). They pay 14% income tax btw…….what do you think happens when they see Vancouver prices? But………they have tax free money….locals can’t compete when taxed at (indirect and direct) 80+%.

Without a level playing field the only people to benefit from the real estate boom are the foriegn buyers.

‘F’ wants to keep this ponzi scam going into the next election…even if it kills the local economy.

#205 Hoof - Hearted on 01.25.11 at 10:42 pm

#195 Timing is Everything

Nah…on closer observation its Dennis Rodman in drag.

#206 Dark Sad Monster Bunny on 01.25.11 at 11:00 pm

171 Chris – see what you did? Dont feed DA!

#207 Timing is Everything on 01.25.11 at 11:10 pm

#63 Utopia – said “….are these young newbie debtors who are “in deep” over their heads all prisoners for life with no escape?”

Ya well, we all are, aren’t we. Just a matter of degree. That’s the game. And everyone has to play, even if they think they are not. There is no ‘opting out’…so far!

http://www.nationalpost.com/news/Canada+freemen/3748349/story.html

http://thinkfree.ca/

#208 Devil's Advocate on 01.25.11 at 11:59 pm

#206 Dark Sad Monster Bunny on 01.25.11 at 11:00 pm
171 Chris – see what you did? Dont feed DA!

Don’t get your tits in a knot while I’m weaning myself Mama.

#209 S.B. on 01.26.11 at 12:33 am

Shopping for a 1.5 million house in Toronto…

http://www.torontolife.com/daily/informer/from-print-edition-informer/2010/12/13/the-chase-a-newlywed-searches-for-a-1-5-million-waterfront-home-to-remind-her-of-the-caribbean/

#210 Utopia on 01.26.11 at 9:46 am

#184 Nostradamus Le Mad Vlad

“The saying on Dragon’s Den is “I’m Out”, which also applies to me. A curious observer now, that’s all”
——————————————————–

I for one will miss you Nost. Hopefully you will be back.

To Devils Advocate:

That video of George Carlin was amazing! The guy really is a madman and a genius. His brain is firing on all cylinders at once and misfiring on a few more at once. Well worth watching.

#211 Industrial Guy on 01.26.11 at 12:43 pm

WHAT? You have not bought a house?
Mortgage rates are so cheap! Who could possibly care what rates will be tomorrow? Live for today, eh. So please, be a good Canadian Lemming. Throw care to the wind and jump off the ole economic cliff for our glorious Minister of Finance. He’s desperate for some good economic news. Even if it’s just show craft.

Pssssssst! It’s all in an attempt to help Stephen Harper reach his Valhalla …. a majority government you know..

Since optics are everything. This delay in implementing changes to mortgage rules will produce more early morning lines of panicked young families desperate to buy houses … The print and broadcast media will ratchet up the panic by reporting on how the housing market is bouncing back. Demand is up … Prices are up. Don’t get priced out of the market forever. Yeppers, the same media which reported a “balanced” or growing market over the last six months while sales numbers crashed. Not much credibility there.

Yes, I’m cynical. I don’t know anyone who isn’t. Honestly, if Canadian politics have not made you cynical by now, then please call your physician immediately. It’s an indication your Prozac dosage may be too high.

This “economic recovery” is built on unsustainable mountains of family and Government debt. Stampeding young families into the worst financial decision of their lives is indefensible. The problem Ottawa has is simply ….. the floundering US economy. The American economy didn’t zoom back as quickly as hoped, expected or prayed for …… Canadian productivity (it’s still falling) and innovation were never expected to drag us out of this hole. It was the US consumer. A quick review of US demand for housing will show why that plan didn’t work.

So, the Government went to plan “B”. Which was to hit the media. Talk about how much family debt is now a major concern of the Government and then take actions which will make it worse. It was fun to watching almost every economist employed by a Canadian Chartered bank come out and claim that this level of family debt was affordable and not for everyone to panic or worse … focus on paying it down.
All that interest …. all those bank profits.

Auto sales may be up from last year, but consider the situation in 2009 and 2010. Visit Robert DeRosier’s web site for real facts and figures. http://www.desrosiers.ca/
The monthly sales figures are suddenly not so great when compared to the previous nine years. Is the recession in the auto industry over? Sure …. and Transport Canada is reporting that flocks of flying pigs are delaying flights out of Pearson Airport this morning too.

Gasoline prices are up. Garth, Trade in your Hummer NOW!!! While it still has some value. The market is moving once again towards the small car segment. Cars the domestic automakers do not made in Canada. If the auto industry was indeed coming back, wouldn’t some of the closed factories in South Western Ontario be re-opening? I’m on the road 3 days a week visiting the smaller towns and cities in the region. I can report that those closed factories are safely locked up and the weeds which sprouted in their parking lots two years ago are now trees! There is one notable exception …. but that plant is now making wind turbine components. Which every tax payer in Ontario is subsidizing.