Cairo

Last year half the houses that were listed in the Vancouver area failed to find buyers. There are townhouses in the suburban fringes which are selling for less than people paid five years ago. And in some neighbourhoods where the TV cameras and knots of rich Asian investors never go, it takes six to eight months to get rid of a house.

But this post is not about Vancouver.

I use it as the country’s best-known example of a property market on fire, where bidding wars for million-dollar shacks attract global attention and citizens are supposedly happy to commit 70% of their gross income to feeding a house. But, of course, this is false. Even in the Lower Mainland, the actual story of real estate is one of growing fear, tinged with desperation – of people starting to realize they’ve put far too much of their wealth in a single thing, whose value can wobble and fade along with every other asset.

Worth remembering this as Cairo burns. Could be way more significant than it seems. Markets thought so on Friday, with stocks tanking, oil surging $3.70 a barrel and the US dollar bounding higher. Suddenly optimism about new little American green shoots was swept away on worries a populist Islamic revolutionary spirit is scorching its way across that part of the world most Canadians can’t finger on a map.

So what? So this could be the catalyst that jumps oil through $100, sets gas prices soaring, hobbles Europe and kindles a new debt crisis, just as seriously austere budgets in places like Britain are tanking economic growth and kicking the equity out of homeowners.

That’ll mean more falling financial markets and a generally crappy spring housing season in Brampton and Surrey. Oh yeah, and everywhere else.

For way too long on this pathetic blog I’ve been telling you that the greatest enemy house prices and previously-functioning marriages have is debt. Canadians have been gorging on it since emergency interest rates were invoked two years ago. That mass of borrowed money is the only reason real estate values have soared at a time when unemployment sucked and salaries flatlined.

Hardly a day goes by I don’t talk to another couple trashed by their own financial gluttony. Seduced by house porn and pimped by cheap money, they’ve pumped everything into a piece of inflated real estate and now realize their chances of escaping are slim. Facing certain losses if they sell, people in Calgary, Edmonton, suburban Toronto and Port Moody now wish they had bailed last June.

That, as history will tell, was the peak of our real estate market. Le gros bubble. The Royal Canadian Gasbag. F’s folly.

So when an Egypt comes along, surprising things can happen to accelerate the inevitable. Markets stumble. Bond yields (and mortgage rates) go up. Companies pull back. Energy prices jump. Costs pop. And everyone feels a little less confident. Mix in Ottawa’s murder of 35-year mortgages, surging electricity bills in Ontario, political mayhem in BC and a massively over-extended consumer, and you have every reason to doubt the spring housing market.

Of course, it’s only real estate. Just finances. House lust.

I heard in Cairo, amid the rioting, shooting and tear gas, citizens rushed to the Egyptian Museum and formed a human chain around it, in order to keep out looters.

“I’m standing here to defend and to protect our national treasure,” said Farid Saad, a 40-year-old engineer.

Kinda makes you wonder what the hell you did with your Friday.

241 comments ↓

#1 T.O. Bubble Boy on 01.28.11 at 11:35 pm

What are the odds that tomorrow morning, on the front page of the Vancouver Sun, there is an article about rich Egyptians coming to buy all of the million dollar homes in West Vancouver?

I can see it now: “Egyptians start bidding war with Chinese for Vancouver homes.”

#2 Mean Gene on 01.28.11 at 11:38 pm

I’ve been to Egypt a couple times, the news about the people protecting their museum doesn’t surprise me a bit and makes me smile.

#3 Mark on 01.28.11 at 11:38 pm

When your town crumbles around you – after being sucked into a credit fuelled bubble, how can you escape? When you were once paying barely 3x income for a house, now it’s nearly 6, who will step into buy your house at the elevated levels – it kinda screws up your mobility.

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

#4 LB on 01.28.11 at 11:39 pm

Black swan?

#5 Mandible on 01.28.11 at 11:40 pm

Whats causing the Riots? Quantitative easing.Rising commodity prices cause the price of food to rise. Poor people can no longer afford to eat. So they riot, but the underlying cause is inflation caused by central banking. Indeed, In countries with relatively high standards of living and deflating housing and credit bubbles, that has led to heated but controlled social strife and political rhetoric.

Internet turned off in Egypt.

#6 squidly77 on 01.28.11 at 11:43 pm

Powerful picture. A picture with a purpose.

#7 honest weights on 01.28.11 at 11:45 pm

Thanks Garth. Nice to hear truth and common sense in a Canada gone nuts on debt. When people start to worship a false god (in this case real estate) it eventually turns on them and kicks them in the face.

#8 nibs on 01.28.11 at 11:50 pm

“So when an Egypt comes along, surprising things can happen to accelerate the inevitable. Markets stumble. Bond yields (and mortgage rates) go up.”

Bond yields down today. Any black swan event and accompanying flight from risk assets would buoy bonds. Bond yields will stay low for some time as deflation takes grip. But it won’t be enough to save real estate.

Yields on Egypt bonds due in 2020 surged 22 basis points to 6.51%. — Garth

#9 Victor on 01.28.11 at 11:51 pm

Garth, you didn’t mention precious metals. Is it fair to say that global mayhem a la Egypt has a bullish effect on Gold, as evidenced by today’s spike in prices? If this global uncertainty continues, will that mean gold prices will continue to rise?

In your book, you suggest investors should hold small positions in precious metals for protection, so wanted to get your input on this. Thanks.

#10 T.O. Bubble Boy on 01.28.11 at 11:58 pm

Show your support: EGPT ETF!
http://www.google.com/finance?q=NYSE%3AEGPT

#11 Dexter on 01.29.11 at 12:07 am

$100 dollar oil will get things moving again in Alberta and the cycle continues.

Unbelievable. — Garth

#12 LJ on 01.29.11 at 12:15 am

The riots in North Africa (Tunisia, Egypt) are due to inflation in the necessities (food in particular). The US Fed has unleashed the inflation Kraken and if it spreads through the middle east, which is a distinct possibility, there is no telling what will happen.

What will the leveraged, property owning Canadians do when there is nothing left to leverage, no credit available and no food on the table because 70% goes to the bricks and mortar (and the bank)? Will they just watch American Idol and be happy? Or, take to the streets? Time will tell.

Another point: The Calgary and Edmonton peaks are waaaay back in the rear view mirror (2007), although there was a decent point to get out earlier last year, also known as a bear trap. Did anyone heed the advice? Nope, they are still buying $4.1 million dollar condos. There still seem to be greater fools coming out of the woodwork daily.

“It is better to get out too early than not be able to get out at all.”

#13 Andrew Jackson on 01.29.11 at 12:15 am

Hi Garth,

What is your view on investments in retirement homes? I know you’re sour on residential real estate in general, but what about those 100 unit buildings serving the aged? With Canada’s aging population wouldn’t this area of real estate be safe? Or does this also face a downtrend over the next few years?

Thanks

Regulatory nightmare. Own the real estate. Hire an operator. — Garth

#14 Bill Grable on 01.29.11 at 12:24 am

Make no mistake – the ARMY in the streets – live rounds.

This spreads – Suez closes, Oil goes to the moon – the whole world economy could collapse.

Live rounds on unarmed civilians – women and children beaten without mercy.

Egyptian Police are as corrupt as Mexico, and many of them have fled. The cops were detested by Egyptians.

The Army is the last bastion. Plain clothes thugs have run amok.

Not one Police Station is manned, they have all been destroyed. The cops have fled.

Mubarek and the upper crust live like kings and the people starve.

Obama must be going nuts. Not great when the tear gas says “Made in USA”.

This is incredibly dangerous.

Mr. Turner nailed it again – and yes, dear bloggies, this is just what the world economy didn’t need, just at the wrong time.

The world runs on Oil.

We are already paying 4 bucks a gallon in Maui and today, no one was by our pool, we were all glued to CNN.

This will be a weekend to remember, and for all the wrong reasons. Sunrise in minutes, in Egypt.
It is quiet, so far.

Israel must be on high alert. The Saudis? Can you imagine?

Yemen, Algeria, Tunisia, all up in smoke.

What comes next?

When people have nothing left to lose – they go nuts.

Ben Wedeman from CNN literally got into a fight with the cops.

A human chain around the Antiquities Museum to protect the treasures on the Pharaoh.

This is incredible.

Upsetting.

Mubarek’s son has fled to England.

Mubarek’s speech was taped. Has he fled too>?

#15 Shawn Petriw on 01.29.11 at 12:34 am

Quick video worth watching and sharing:

Egypt: A Nation Forced Offline (January 25th, 2011 Protests)
http://www.youtube.com/watch?v=6M-Xz9fIPx8

#16 Guy_in_Regina on 01.29.11 at 12:38 am

#5 Mandible,

No; the underlying cause is suffocating and humiliating oppression. Food inflation contributes to unrest; but largely triggers more powerful latent forces.

I see that dispicable geezer Mubarak dismissed his cabinet.

Drastic regime change in Egypt is inevitable. I just hope the wacko MB’s don’t take power.

#17 Elmer on 01.29.11 at 12:44 am

Gas is already over 3 bucks a gallon. I was in Detroit last week and filled up for $3.19. Still a lot cheaper than the $1.13 a litre we’re paying in Toronto. By the way there are thousands of houses in Detroit for sale for under $1000.

#18 Dan on 01.29.11 at 1:04 am

Realtors are getting real worried as there has been NO RUSH to buying overvalued RE. Realtors have even been blowing sunshine of lies for the past two weeks and NOTHING has happened. Many people have come out to sell there homes but NO ONE IS BUYING. The housing ponzi is falling down and all the realtors/mortgage brokers who post daily on garths blog knows it. Now you add this world wide problem/black swan in the mix and you have a perfect RE crashing storm that will sweep across Canada and CRASH HOUSING back to 2001.

POP………………

Realtors……We can’t sell anything and even I face losing my own home if I can not find a greaterfools. I might have to find a REAL JOB!

Greaterfools……..My home is now a power of sale.

Mortgage broker……All these people came in to waste my time since NO ONE is buying anything.

#19 Devil's Advocate on 01.29.11 at 1:11 am

Black Swans are unpredictable bitches…

Timing has a lot to do with the good outcome of a Rain Dance.

Dance long enough and it will eventually rain. Whether a torrent or a trickle remains to be seen.

#20 nonplused on 01.29.11 at 1:14 am

When the Horizon caught fire in the gulf I posted a link and got some “ya, ya whatever, get back on topic” replies. 6 months later BP was effectively pulling out of Canada. (They still have some trading and oil sands.)

When the dollar went to parity Garth said “this is bad for manufacturing”, and it was, and everyone said “ya, ya, whatever”. To this day gas production in Alberta is still declining because it isn’t worth drilling for and Big Oil is quietly laying off anyone they can in Alberta and moving the job to Houston, where they save 30% in wages and benefits. (Not such a big deal when the dollar is $0.80, but a big deal at parity.)

When F drops an F-bomb lots of responders tell Garth “ya, ya, so what?”

But this thing in Egypt has the potential to be bigger than a burning rig, parity, and an F-bomb combined. Already the police have been defeated by the mob and all of their equipment burned. The army has been called in and so far seems reluctant to take any aggressive action. Cairo is on fire. My guess is the political class is getting extremely nervous. Frightened perhaps. Frightened people sometimes do irrational things. With the army in the city now, this thing could blow.

Only 10% or so of the world’s oil goes through the Suez Canal, but I think it’s something like 25% of the LNG and that is mostly headed for Europe. If necessary it could go around the southern tip of Africa, but that takes many days longer. I read it was 6000 miles so if they are clipping along at 30 miles per hour, it’s an extra 8 or 9 days. And another 8 or 9 days back again. Longer freight times result in reduced supply unless you increase the number of boats, and I don’t think there is spare capacity available to compensate. So imagine a Europe in the middle of a debt crisis and a cold winter suddenly short on fuel.

If you are having trouble thinking through how longer transit times equal less total fuel, imagine this: You are tasked with getting 8 jugs of milk home from the store, but the rule is you can only bring home one at a time. In situation 1 you are allowed to buy the milk at the store right around the corner. In situation 2, your store doesn’t have any milk left so you have to buy them from a store located in another city. You may only bring home 1 at a time because that’s all your car can carry. How much longer does it take to get 8 jugs home in situation 2, despite the fact the store in another city has lots of milk. Bringing more than 1 jug at a time is not an option, the tankers run full.

If the Suez closes for any length of time, Europe is in trouble. And we will share their pain, as some US bound shipments will no doubt be diverted. Probably from Nigeria and Venezuela, but I’m not sure I don’t know my shipping routes that well. (Nigerian crude lands in Texas, Venezuelan crude in California.)

So why would the Suez close? Well, let’s say the army does start shooting. And then say someone gets pissed and drives a truck bomb into a lock…. Or worse yet does something to an LNG or oil tanker transiting the canal. Or let’s say the shipping companies start going around “just to be safe”.

How the fire spreads is anyone’s guess but the spark has hit the straw. Let’s hope somebody has a bucket of water.

#21 Bruce on 01.29.11 at 1:15 am

*sigh* Must I keep repeating myself…

There is *NO* genuine recovery. It’s been all a smokescreen and mirrors sideshow, a phony economy propped up with funny money that has no value in the first place. The fact that this shell game is going on in plain sight and no one “sees it” is astounding to me. As Garth attests, the masses continue to swallow the “feel-good” stories peddled everyday by corporate owned media, the CMHC, and government “statisticians” who, IMO, have ZERO credibility left.

Personally I’ve reached the point where I DO NOT believe a word people tell me anymore… Deceit and deception is the name of the game. Fraud, incompetence, stupidity, greed, immorality and irresponsibility have all replaced common sense and good ethics. I can’t believe the BS that I see and DEAL with on a daily basis, even from(supposedly)well educated individuals…

The delusion some people have of a world in which life is not unlike some 24/7 Disneyland where lollipops and candy canes sprout up from the ground frankly needs to stop. This is not reality and has only served to bring us to the brink in the first place. My entire point being(as it’s been all along): you’ve been had folks. Enjoy the sequel to this game. It ain’t gonna be pretty…

#22 John on 01.29.11 at 1:21 am

North Africa in Chaos. Middle-East waiting for its day to come. Looks like next few months are critical for the rulers of the region. All the backlash will result in oil spiking and PMs surging.

All those who do not have even a bit of precious metals/PM stocks in your portfolio (at least 5%) need to invest some of their money. Diversification is the key message. Commodity prices are also going spike, so get ready for the next round due to stagflation in US and turmoil in the ME.

Stagflation – High Unemployment, High Inflation.

#23 City Slicker on 01.29.11 at 1:25 am

I know we’ve passed around videos of Peter Schiff on Fox but don’t think anyone is posted this one. This is the best laugh aloud at Mr Schiff I’ve seen. Bringing into the argument of rising interest rates and how everyone thought it can’t happen, and the unemployment numbers were too strong. Well we know how that one ended. Worth a watch, enjoy:

http://www.youtube.com/watch?v=_HFNJw7xGSA&feature=related

#24 Mike on 01.29.11 at 1:30 am

What’s the long term effect on unemployment when the inevitable inflection point is hit in housing?

Not a bust even, just a major slowdown in new homes built and flat prices or slow melt over many years.

what i’m asking is – Garth do you know the % of GDP and %gdp growth that the housing industry has in Canada?

In the US it accounted for 2% on UE in lost manuf. jobs (and way higher hit on local tax revenue when you consider many of the workers for undocumented so not in the stats).

It’s going to be a tough spot when we do our slow melt in 2012- 2017??? while other economies are on the rebound …… the B.O.C. may have less options available b/c of outside factors.

#25 Heinz Skitzvelvett on 01.29.11 at 1:33 am

Garth, as the risk of sounding like a suck, well written as always. For those of us free of debt and full of liquidity, these are interesting and potentially profitable times.

I noticed the melt up in the markets on little volume in the past month, along with frothy commodity prices, and took the necessary steps – 1/4 short 30Y US (short yield, not price), 1/4 VIX, 1/4 short TSX, 1/4 cash.

See you on the other side.

#26 Heinz Skitzvelvett on 01.29.11 at 1:35 am

meant short 30Y price, not yield

#27 Patz on 01.29.11 at 1:36 am

What did I do on Friday? I went to work as usual, earning less than I did a few years ago and a lot less than I did a couple of decades ago. Life is a struggle but if I say that, what does a poor Egyptian say. F*ck you! might be one thing he/she would say. Because the sad truth of all of our lives over here is that we’ve lived large on the arbitrage of lives over there.

Egypt is a bulwark against true democracy in the Middle East. It is a staunch ally of the US. But that isn’t how the vast majority of its population feels. It is incredible to see/hear the mealy–mouth Hilary C. admonishing the Egyptian government to observe the people’s right to communicate. Fodder for the home crowd.

FWIW I hope the Egyptians throw off the yoke of their barbaric government no matter what it means for us. But I also hope for them that they don’t trade one tyranny for another. As for the Muslim Brotherhood, don’t believe everything you get from the MSM about them.

#28 bridgepigeon on 01.29.11 at 1:38 am

What’s happening in Egypt used to be one of the most basic American ideals, the struggle for freedom. Not only is the tear gas American. Egypt receives the second most foreign aid yearly from the US, second only to Israel, most of their hardware is American. Naturally, the Egyptians are kind enough to let the Americans ship and torture their suspected terrorists here. The last thing wanted is a real democracy. Next door’s Gaza, 800,000 children here want a life too.
These are interesting times. The empire cannot be sustained and controlled forever. It’s a time of downsizing. If not this, it’ll be blowback somewhere else, another 911, to cripple the economy.

#29 Devil's Advocate on 01.29.11 at 1:39 am

#17 Elmer on 01.29.11 at 12:44 am
…there are thousands of houses in Detroit for sale for under $1000

You should move there, buy one to live in and a few others to rent out in order to earn a handsome living.

Oh wait… and where is that sarcasm font again?

#30 Nostradamus Le Mad Vlad on 01.29.11 at 1:39 am


Re: the latest post, “Cairo”.

Seems the US is following the same path as the USSR, following Lech Walensa’s Solidarity movement in Poland. The US was also responsible for Tunisia’s riots.

US – USSR

#31 kitchener1 on 01.29.11 at 1:41 am

This is a big deal and just shows us all how a tiny, unknown country– Tunsia could start a domino effect across the middle east.

Syria already shut down its internet, the Saudi;s must be crapping bricks right about now.

Serious stuff folks, when people start to mobilze and actually take to the streets, govts fall.

On a lighter note, here is the pic Garth should have used

http://www.zerohedge.com/article/quantitative-looting

Its from Tunisa, want to be that the forklift is stolen too. LOL

#32 Tiffa on 01.29.11 at 1:46 am

http://www.ipsnews.net/news.asp?idnews=54274

speculative food bubble.

#33 Chaos on 01.29.11 at 1:46 am

The stars are telling us something…

And let me interpret it for you.

“You ain’t seen nothin’ yet.”

The next 8 weeks are the warm up to a complete melt down that begins April 1st, give or take a day or two.

If you run on a “just in time” budget, well, you’re out of time.

#34 Devil's Advocate on 01.29.11 at 1:54 am

#1 T.O. Bubble Boy on 01.28.11 at 11:35 pm

What are the odds that tomorrow morning, on the front page of the Vancouver Sun, there is an article about rich Egyptians coming to buy all of the million dollar homes in West Vancouver?

I can see it now: “Egyptians start bidding war with Chinese for Vancouver homes.”

Good one T.O. Bubble Boy . The Vancouver Men laugh. Again where is that sarcasm key.

So you don’t think there is any truth in the Chinese influence? Wait a few years. But before that, as the Chinese government takes measures to cool their overheating economy, you will believe yourself of accurate prediction. You might just find you are setting yourself up for a sucker punch though.

Things are SHIFTING. Watch your step… ;-)

#35 Bailing in BC on 01.29.11 at 1:57 am

Bailed last June.

Yeah baby!

#36 dd on 01.29.11 at 2:08 am

Prices up? No … this is price inflation not asset inflation. It is different. Whatever.

It is a loss in purchasing power. Period.

#37 Utopia on 01.29.11 at 2:08 am

I think I said I would take a short holiday from this site but tonight I will bite my tongue on that point and speak out a little about what is now transpiring in Egypt from my personal perspective.

I apologize if this post is a little too long for some. If you hate politics, then just skip it and move on to the next.

Just a few short years ago I lived in a hotel just a stones throw from Taalat Harb in downtown Cairo; one of the hotspots in todays riots. Tonight, it is hard to imagine that roundabout barricaded by the military and filled with protesters as tear gas cannisters are being lobbed nearby.

Egypt is an amazing country of contrasts and contradictions that challlenge our views of the Arab world and one that often leaves more questions than answers for those who have not travelled and only have the popular medias perspective of that nations storied past to guide them.

I believe it is a bit of a shock to some people that there could be civil strife in that tourist destination at this time. I am not so surprised though and after having spent the better part of six months in that country and travelled extensively throughout the country I would like to tell you a little of what I learned and offer my thoughts.

I move a lot you see, even in Egypt I rarely stayed anywhere longer than a week or so. I trust very few people (pretty much zero actually) but thus have been afforded the opportunity due to my nature to meet thousands over a short period of time while making no lasting friendships or connections to bind me. Too bad for me I suppose but that is a personality failure I have to live with alone.

Anyway, I tend to agree that events in the Middle East and North Africa could have a bearing on housing here if only from the perspective of our sense of security and stability in the world at large. That is where it stops though.

Those damn exogenous shocks are sure to bite us on the ass eventually but in this case I think we are pretty safe as mere outside observers where our own housing prices are concerned. In other words, don’t worry. Egypts problems won’t concern us in a very big way just yet.

For Mr Mubarak however, as the leading figure in Egyptian politics, life is getting downright difficult. We can all see that reform is coming and there does not appear to be weakness showing on the parts of the demonstrators nor a stomach for this kind of fight on the part of the military.

I see it as very unlikely that the Mubarak regime will survive this uprising.

Public sentiment is strongly biased towards change and there are demands for open, fair and free elections. Lets all hope that when change does arrive it is beneficial to the interests and needs of the majority of Egyptians and not just those who seek to hold power.

I do worry that the very stability of the Mid-East region may be at stake. The current Egyptian revolt is not a surprise to me though and in fact has been anticipated for quite some time by many who closely follow politics in Egypt and North Africa.

This uprising is no “Black Swan” event. Rather it is an outcome of years of social repression, nepotism and political favoritism.

Trouble has been nipping at the heels of this otherwise most benign of tourist destinations for many years now. Below the surface there has been a growing threat and a latent challenge to the Mubarak government. There is even hatred in some quarters.

The sources of the discontent range all the way from a well established corruption of both the judiciary and legal professions to an absence of established property law that could be fairly relied upon by all citizens.

Persistent poverty and anger amongst a huge part of the countries growing population who feel estranged and disenfranchised within their own country is endemic.

While many are apathetic and have long been resigned to life under the status quo for most of the past three decades, many others have been waiting for a moment of opportunity to take a stand against what they believe is patent unfairness and inequality.

There has been disenchantment and distrust of both the police forces and an inept and cowed public service that did not, or could not, defend equality of citizen rights against state excesses and corrupt practices.

Much of this is self evident to anyone who attempts to compare the growth and relative wealth effects that have taken place in most parts of Asia and then superimpose them on countries of Africa.

There are very different dynamics at work here though and capital does not willingly flow to sources of risk. The absence of well established banking and electronic and transactional infrastructure are central to the weaknesses of many African countries, for one.

Ease of access to credit, debit protocols and even investment funds represent barriers and impediments to growth despite the best efforts of the business class who see themselves every bit as competent and capable as competitors in Asia.

Attracting foreign investment is a chore for Egyptians in many cases while money flows easily by the hundreds of billions into China and her other neighbors in the region.

Do not think for a second that the citizens of Egypt have not looked on in dismay as other countries nearby have gone through a renaissance of growth and development leading to an improved standard of living while Egyptians have steadily fallen behind (at least in relative terms).

Do not think that they have not blamed their own government for a failure to capture a fair share of the markets and opportunities that the West has handed out so liberally to those “other” countries that play ball by the rules that everyone else follows.

There is plenty of blame to go around and it is clear to the citizenry there that the country has been held back by a political structure that is not open, transparent or flexible.

This needs to change for Egypt to become an option to the world as more than just a watering hole for thirsty travelers and a warm vacation spot for European tourists. Egyptians want good jobs and opportunities too; where their entrepeneurialism is rewarded, not co-opted by the state.

It is clear that investors have not been anamoured of the investment opportunities presented by the current government in power. Stability is always a concern where one man and his array of captains dictate the policy and rules for a nation on whim alone. The very thin veneer and pretense of responsible electoral process is all the more discouraging to outsiders.

Given that backdrop, all that this African tinder box really needed to set it afire was a light. The fuel has been in place for many years already.

And that fire was lit when commodity prices began to rapidly spiral higher leaving many in Egypt at wits end as their meager wages were eroded by spiking food, utility and transportation costs.

With incomes ranging from little more than two or three dollars daily for more than half the population, the prospect of vegetables, grains and other staples almost doubling overnight was the flashpoint at the end of a long litany of complaints Egyptians have harbored against their governing party for many years now.

It (rising food prices) are the so-called straw that is now breaking the camels back. Indeed, I have tried to warn investors of a coming storm of discord that was anticipated to arise there.

As recently as December 14th I wrote about the advent of food price shocks in the Third world and put Egypt and Ethiopia at the top of the list of major African nations at risk. The events there have materialized even sooner than might originally have been anticipated.

Please see: http://www.rickackerman.com/2010/12/a-world-in-upheaval/

Meanwhile, expect the troubles there to worsen if Mr Mubarak cannot see his way to strike an accord with a very unhappy and emboldened populace.

Although it seems a low probability he can continue in power over the next year we will not discount attempts to fracture the opposition through policies that mute the loudest opposition while placating those who favor peace to even passive resistance.

It will not work though. Not this time around.

#38 realpaul on 01.29.11 at 2:09 am

Lets not forget that a lot of Canadian wealth comes from the chaos revolving through the third world. Every time something like Cairo happens we are inundated with the scum of the old regime carrying steamer trunks full of diamonds and stolen loot from the countries banks and museums….all escorted through customs without a second look.

Theres the famous case of one of the ex Shah of Irans cronies landing in Vancouver with a mass of suitcases full of booty…like a scene out of Ali Baba’a cave. There were thousands of ex military Iranians , bankers , politicians all laden down with stolen cash flooding into Canada with their ill gotten gains.

It happened again in Iraq and Afghanistan, in Africa, the Caucusas, Croatia, Bosnia and Asia. The dictators bloody hands seem to be easily washed by the Canadian governments spin cycle. It is easy to loot your home country’s bank, galleries and stock exchange and them flee to Canada without question…we’ve seen it time and time again. What a boon it is to find ones country in the midst of a revolution and finding yourself in the vault eh?

We have a swarm of the children of the old revolutionary guard coming to Canada. The old communists made their families extremely rich…and they come to Canada with clean hands acting as if God had shat them out as pure as the driven snow.

Behind the story of the successful ‘foriegn’ business man there is frequently a great crime that has been condoned by the government.

meanwhile we can’t walk through airport customs with more than $35 bucks and a used Timex without being attacked by customs nazi’s with dogs. I find this all a bit strange…don’t you?

#39 City Slicker on 01.29.11 at 2:15 am

Check out the riots in Cairo, wow never seen anything of this magnitude before. Very interesting times in deed:

http://theeconomiccollapseblog.com/archives/the-riots-in-egypt-and-the-price-of-oil

#40 TheBestPlaceOnEarth on 01.29.11 at 2:19 am

Just another example of the chaos in our world and why the rich from every single Country are beating down the doors to get here. Safe and Stable a great place to park your wealth and money earned overseas is in Vancouver. Why do you think Eckhart Tolle bought here. It’s about the NOW. Cairo is happening NOW. Money is moving to Vancouver NOW. Vancouver Real Estate is going UP NOW. $100 oil has zero effect on Vancouver as you can walk everywhere is this beautiful paradise. Other Canadians buried in the snow do not have this luxury. How many industries does Vancouver have? Answer not many. How many great paying jobs are in Vancouver? Answer not many. Why are Real Estate prices so high with no industry and no great paying jobs? Because the World PERCEIVES it as TheBEST and in the end a Thing is Only Worth What Someone Is Willing To Pay!!!

#41 Sasquatch on 01.29.11 at 2:23 am

Today I continued to learn the art of welding, bought supplies to paint my welding helmet in custom colors, and saw a documentary about how wall street destroyed the middle class & America itself.

Had there been anything close to a national treasure, I would have considered protecting that too. Too bad I am unable to think of a single one. Anything Canada could have as an national treasure would be sold out before the blink of an eye.

#42 debtified on 01.29.11 at 2:25 am

This must have been posted it here before but just in case…

Here’s a video aptly titled – Overdose: The Next Financial Crisis (47mins)

http://www.youtube.com/watch?v=4ECi6WJpbzE

It’s about the US but it will sure affect us (if it happens).

Lastly, I work for an oil sands company and, personally, I think too high an oil price is not good for the industry. I prefer a more sustainable price – currently between $75 to $100 (with bias on the lower end). A sustainable price help avoids booms and busts cycles.

Have a great weekend!

#43 cornstars on 01.29.11 at 2:25 am

Garth get rid of the hummer now ! park it at a gas station and leave the keys in it !

13 moons !

#44 realityguy on 01.29.11 at 2:29 am

Garth don’t forget inflation for food around the world.
with the chinese so busy converting their farm land into ghost town. Now it come back to bite them in the butt.

Inflation on food starting to hit India and China, don’t worry its will probably hit Canada and the USA soon.
Now Us canadian BeaverHeads can chew on the wood from our house frames.

Who need the bare essentials when we have our real estate. Let the kids starve.

http://www.businessweek.com/news/2011-01-27/india-food-inflation-stays-above-15-for-fourth-straight-week.html

#45 VMT on 01.29.11 at 2:34 am

@T.O. Bubble Boy

What are the odds that tomorrow morning, on the front page of the Vancouver Sun, there is an article about rich Egyptians coming to buy all of the million dollar homes in West Vancouver?

I can see it now: “Egyptians start bidding war with Chinese for Vancouver homes.”

You know – this may work ;-) After all everyone in the world wants to buy a Vancouver house. I wonder though why the people of Germany are not hot about their (excellent quality) houses? Why the house prices in Germany have been going down for the last few years? The Germans are missing something?

#46 Western Canadian on 01.29.11 at 2:41 am

“Facing certain losses if they sell, people in Calgary, Edmonton, suburban Toronto and Port Moody now wish they had bailed last June.

That, as history will tell, was the peak of our real estate market. ”

Hey Garth, how is last june going to be Calgary’s peak when Calgary prices were 10-15% higher in 2007??

Is it ignorance or are you just lazy when you group the whole country together?

(a) Calgary’s received lots of attention and analysis here, (b) that was the peak in the post-crash bubble. I’ll leave the ignorance for you. — Garth

#47 smartalox on 01.29.11 at 2:42 am

My wife and I visited Cairo in October 2010. The picture is typical of what we witnessed on the Friday that we were there: the government sends riot police to force the mosques to close 15 minutes after prayers conclude. They stay closed until 15 minutes before prayers begin.

The riot police do this at the government’s request so that they can be seen to be cracking down on radical Islam in the eyes of the Americans.The public doesn’t much like it, but the riot cops all have shiny new Chevy pickups.

The Egyptians we met seemed peaceful, sophisticated and proud of what their country represented to the world, but each bore an air of resignation, a palpable sense of repression.

What devastates me most is the thought that at the moment that the long suffeing Egyptian people taste freedom, they won’t have the political tools, a strong democratic tradition to assume the role of Government, so that the radicals, criminals and extremists will rush to fill the vacuum.
The commonwealth of democratic nations cannot allow this to happen.

#48 Jeannie on 01.29.11 at 3:00 am

This uprising doesn’t surprise me, just wonder why it took so long. After making the trip to Cairo from Qatar in 2008, I found the contrast startling; squalor and poverty
amid revered treasures of antiquity.

#49 McLovin on 01.29.11 at 3:04 am

“now it’s nearly 6, who will step into buy your house at the elevated levels – it kinda screws up your mobility.”

Come to Vancouver its 9.2X’s! Its different here!

#50 Jody on 01.29.11 at 3:10 am

All this started in Tunisia and it started when a food seller was told he could not sell food by government filth.

http://www.lewrockwell.com/kwiatkowski/kwiatkowski261.html

He decided to set himself on fire. You see, all this crap started because of government, because of the stupid rules and regulations government imposes upon us, because some asshole sitting in an office knows how to “protect,” you better than you do. Bullshit. That’s what government is, bullshit. People in the middle east are realizing this, and it will eventually happen in North America, once we begin to go hungry and feel uncomfortable like people in the middle east feel.

Oil is going to skyrocket, either from utter chaos and unrest or from people taking back their governments from US controlled stooges and then tell the US to go F itself. Real estate should be the least of our worries, right now we’re seeing history unfold, hopefully people will accept peaceful transistions but my money is on the bloody yanks putting thier noses in it and getting millions killed.

#51 a prairie dawg on 01.29.11 at 6:26 am

It makes you wonder how many of the house horny HGTV-ers lusted after stainless and granite, blissfully unaware of world events?

It also reminds me of Denial, and a river in Egypt.

#52 LH on 01.29.11 at 7:54 am

Hi Garth,

Althouse, Cody, Crawford and Lewis
Which one? Just curious…

LH

Cody. — Garth

#53 Tripp on 01.29.11 at 8:03 am

#14 Bill Grable

Interesting parallel. Indeed, many of the Egyptians are in the streets because they have nothing to lose. Having enough food on the table is a major daily struggle for millions if people there.

Having a significant part of one’s income directed towards a depreciating asset, combined with higher interest rates, fewer fools and all the other variables could mean that soon enough many of us will have everything to lose.

#54 David B on 01.29.11 at 8:48 am

Easy partners …. most if not all people do not like leaving their home let alone their home land .. so to say rich people will just move to Canada a la Vancouver forget it!

If you are so correct in your thinking ….”THEN” all those who sell in Vancouver/Calgary would take their cash and move to Nova Scotia and live the good life.

I remember once watching an interview after some 30 plus straight days of rain/dampness in Vancouver and the people in park said they hated it! “But” would not want to live anywhere else.

We here my be defeatist people in the eyes of Mr. Harper but most would not want to live anywhere else and many across this land would love to come home.

#55 Moneta on 01.29.11 at 9:20 am

Every single country that managed to borrow at 4% over the past decade when they used to deserve 6-10% credit spreads is going to go throguh the wringer one by one.

#56 Moneta on 01.29.11 at 9:22 am

Black swan?
———-
Soon there will be more ugly ducklings than white swans.

#57 Moneta on 01.29.11 at 9:29 am

The US Fed has unleashed the inflation Kraken and if it spreads through the middle east, which is a distinct possibility, there is no telling what will happen.
———-
People are going to realize that the emerging markets are not yet ready to pick up the consumer spending baton. Many growing pains still lay ahead.

The US is forcing a shakeout. Its dollar will prevail and give them another bout of free spending. This series of events will occur over and over until the trade equilibrium is in place.

Americans over time will lose purchasing power but in the short term will still be seen as the safer haven.

#58 Mikey the Realtor on 01.29.11 at 9:44 am

“As for the Muslim Brotherhood, don’t believe everything you get from the MSM about them.”

well said, the U.S uses the same propaganda againts the muslims as Hitler used againts the Jews. most of it BS, yeah there are bad apples in every culture but when you occupy their space what do you think they are going to do, fight like they should.

#59 Jeff Smith on 01.29.11 at 9:45 am

definitely different here!

http://news.ca.msn.com/top-stories/cbc-article.aspx?cp-documentid=27447979

#60 Moneta on 01.29.11 at 9:46 am

But this thing in Egypt has the potential to be bigger than a burning rig, parity, and an F-bomb combined.
——–
The low rates have pushed investors to reach for yield and incredibly risky countries have been able to finance themsleves at ridiculously low rates over the last decade. This investment gave them amazing growth and everybody jumped onto the globalization bandwagon.

The problem was that they were not ready to growth this fast. Heck, we in the developed world could not even manage 5-10% growth in real estate loans per year. Our systems were not equipped to deal with it and the valuations don’t make sense in the long term either. Now imagine 10-20% growth in countries with dictators, no experience in free markets and business and a general lack of education.

And now they’ve had a decade to experience prosperity and the American dream probably never felt in such close reach.

It’s being taken away. And it’s not only Egypt, it’s all emerging markets. It started with Iceland, Greece, Ireland….

#61 Moneta on 01.29.11 at 9:56 am

Our oil dependance is creating an inflow of money into the Petro world. Money usually leads to population growth. Have you seen the population explosion in the Petro world over the last decade?

Imagine the flow of hormones when millions of 20 year old uneducated men come into the workforce in 10 to 20 years.

#62 Moneta on 01.29.11 at 10:11 am

And now they’ve had a decade to experience prosperity and the American dream probably never felt in such close reach.

It’s being taken away. And it’s not only Egypt, it’s all emerging markets. It started with Iceland, Greece, Ireland….
———-
Utopia has brought up many good points.

Some emerging markets have had an easier time attracting capital than others and this has generated a lot of anger.

And now, countries which never truly participated in the growth are suffering the repercussions of the bursting bubble and money printing.

It won’t be pretty.

#63 Cow Man on 01.29.11 at 10:33 am

Will the U.S. come to the “resue” of Eygpt just like they did in Iraq? Will they bomb the hell out of the Museum, just like they did in Tehran? God Bless America? Poor Eygpt.

#64 Medic on 01.29.11 at 10:39 am

I love those Peter Schiff videos from 2006-07. They are so prescient that you would think they were made several years after the fact just to make himself look good. One of the great calls of all time.

#65 Dodged-A-Bullit-in Alberta on 01.29.11 at 10:45 am

Greetings: When the Americans invaded Iraq, there was no provision made for security of the existing infrastructure, the museums were looted. Just possible that when the people themselves decide to punt their home grown tyrants, things function differently. I will bet that in Canada we do not manufacture tear gas. Can’t beat that good old “Made in the USA”.

#66 Dan on 01.29.11 at 10:49 am

City Slicker on 01.29.11 at 1:25 amI know we’ve passed around videos of Peter Schiff on Fox but don’t think anyone is posted this one. This is the best laugh aloud at Mr Schiff I’ve seen. Bringing into the argument of rising interest rates and how everyone thought it can’t happen, and the unemployment numbers were too strong. Well we know how that one ended. Worth a watch, enjoy:

http://www.youtube.com/watch?v=_HFNJw7xGSA&feature=related

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

This is a MUST WATCH as you will see the EXACT same BS the realtards of Canada are saying here. Think of Peter Schiff and then turn him into Garth in your head. We have the future of what is going to happen in Canada played out in the US and people are still fooled by realtor/banker cons who IMO should be charged with financial crimes against Canada. Realtors should be BOUND by law if they predict higher price and then prices fall realtors should be sued for the losses. Then you will see real predictions.

POP…………….

Realtors…….I see prices in the US going Higher in 2008.

CONadian realtors…….I see prices going higher in 2011.

We all know how the movie ends.

#67 T.O. Bubble Boy on 01.29.11 at 10:54 am

@ #34 Devil’s Advocate:

Good one T.O. Bubble Boy . The Vancouver Men laugh. Again where is that sarcasm key.

So you don’t think there is any truth in the Chinese influence? Wait a few years. But before that, as the Chinese government takes measures to cool their overheating economy, you will believe yourself of accurate prediction. You might just find you are setting yourself up for a sucker punch though.

Things are SHIFTING. Watch your step

Of course there is Chinese *influence* in Vancouver… percentage-wise, immigration to Vancouver definitely has a higher proportion from China.

What I’m poking fun at here is the ridiculous (almost cult-like) belief that everything about Vancouver RE can be explained by wealthy foreigners.

New York and London have far more wealthy foreigners living there, and the housing markets still declined. The constant view that houses only go up, and every dump in Vancouver proper is worth $1M+ is so ingrained in the culture that it becomes laughable.

At the end of the day, no one can deny that there are some rich foreigners living in Vancouver (a good number of those from China). However, this doesn’t mean that every Chinese-Canadian is a millionaire, and doesn’t mean that thousands of normal burbs-style houses in Richmond can justify a $1M price tag.

Markham (Toronto’s equivalent to Richmond, with more than 50% of the population of Chinese descent) probably has more wealthy Chinese residents than Richmond, yet the same burbs house is half the price.

#68 BDG-YYC - All "dots" connect to oil ... Ontario, and Quebec on 01.29.11 at 11:15 am

This “unrest” is by no means a black swan event – the Middle East and North Africa has been smoldering for years. Tunisia, and Egypt are simply the current hotspots that are in the news. There are others and with potentially far greater implications for sleepy Canadians … who naievely shed a few cranky words about the inconvenient price of fuel based on the reassuring knowledge that “gasoline comes from a pump at the station – just like ‘tricity comes from a plug”.

Below are a few more stories of places that are only remotely of interest to Canadians. But … then what the hell is an “Algeria” anyway?

Well … if you live in Ontario half of the oil you consume comes from offshore and if you live in Quebec almost all of the oil you consume comes from offshore. And guess where almost 2/3 of all that offshore oil is imported from … ALGERIA !! Yup … about half of Canada’s population sleeps comfortably without the slightest clue that the supply of about half of the oil they depend on and take entirely for granted depends on the stability of … well … there’s no Plan-B … actually no “Plan” at all. We’re Canada … we don’t need one … or a strategic reserve …

Algeria has seen three days of unrest over the rising costs of living and unemployment, which government figures show standing at about 10 per cent, but which independent organisations put closer to 25 per cent.
http://english.aljazeera.net/news/africa/2011/01/201118135821794812.html

Yemenis took to the streets Thursday demanding an end to the government of President Ali Abdullah Saleh, who has ruled this impoverished Middle Eastern nation for more than three decades
http://www.washingtonpost.com/wp-dyn/content/article/2011/01/27/AR2011012702082.html

Saudi authorities detained hundreds of demonstrators on Friday in Jeddah who gathered to protest
http://freerepublic.com/focus/f-news/2665220/posts

An Iranian opposition leader said executions are on the rise in the Islamic republic because of fears of a revolution similar to one in Tunisia.
http://www.upi.com/Top_News/Special/2011/01/26/Opposition-says-Iran-fears-Tunisian-unrest/UPI-54661296056956/#ixzz1CQuNvmZY

#69 young & foolish on 01.29.11 at 11:27 am

“…there are thousands of houses in Detroit for sale for under $1000”

Although Detroit possesses some trully remarkable architectual treasures, they have not been saved. Note the pictorial essay circulating on Facebook

Exactly. Garth’s argument is that the true cost of shelter really does depend on the economy, and that houses in and of themselves have little intrinsic value.

#70 Devil's Advocate on 01.29.11 at 11:37 am

Last year half the houses that were listed in the Vancouver area failed to find buyers. – Garth

BTW… it is very typical that half the houses which are listed in any given year will not sell during the term of their initial listing. That does not mean they never sell.

What is more relavent is that of all the listings taken in any given year half of all those which do meet a successfull sale were previously listed under an MLS contract the term of which came and went without a successful sale.

The news is not that half the listings expire. The news is that half the listings are taken by REALTORS who agree to a price at which the home will never sell. They subsequently piss away thousands of dollars marketing them which they must recover through the successful sellers.

This is why contingency fees are coming to Canada as they have started in the States. Unrealistic sellers are going to put up a norefundable retainer that in the event their home does not sell the agents expenses are covered that they need not be passed along to the successful sellers. Thus, at the end of the day, the real estate industry will be able to reduce fees to the consumer.

Did I mention that in British Columbia the more common fee structure is currently 7.0% on the first $100,000 and 3.0% on the balance of the purchase and sale amount? What do you folks pay in Ontario 6.0% across the board?

The math on a $500,000 house

B.C. = ((.07 x $100,000) + (.03 x ($500,000 – $100,000))) = $19,000

Ont. = .06 x $500,000 = $30,000 which is 57% Higher than in B.C.

Hell even if it is 5.0% = .05 x $500,000 = $25,000 it’s still over 31% higher than in B.C.

The average current commission in Ontario is closer to 4%, which is roughly equal to that in BC. The Ontario land transfer tax is $6,475, while in BC it is $8,000, on a $500K house. What point were you trying to make? — Garth

#71 Devil's Advocate on 01.29.11 at 11:41 am

RE: My previous post and RE Fees…

But you would have to pay me 30 to 50% more to live in Ontario anyway. ;-)

#72 Devil's Advocate on 01.29.11 at 11:43 am

Sorry I meant “retainer” not “contingency fee”…

#73 dd on 01.29.11 at 11:55 am

It was said on this web site that QE (quantitative easing) or money printing has not effect on markets. Well look at food prices. Look at commodity prices.

It is about Cairo.

That is a ridiculous statement. — Garth

#74 Jerry on 01.29.11 at 12:27 pm

#71…. pretty much the most impotent response we have seen to anything and the reason people skip your posts.

Incidentally, this post may reveal your solitary resemblance to Dr. Johnson, of whom it was said “there is no arguing with the Doctor, if his pistol misses fire he knocks you down with butt end of it”.

#75 Devil's Advocate on 01.29.11 at 12:30 pm

The average current commission in Ontario is closer to 4%, which is roughly equal to that in BC. The Ontario land transfer tax is $6,475, while in BC it is $8,000, on a $500K house. What point were you trying to make? — Garth

Initially Garth, I was merely pointing out that unsuccessful sellers are hardly uncommon in any market. I then digressed into the reasons why unsuccessful listings are so prevalent, in any market. And then I digressed further into the competitiveness of the industry which leads to grave inefficiencies in that market despite the predominant public opinion that it is a very collusive industry. Were that, in fact, true it would be a whole lot more efficient.

I then digressed further in offering the backhanded consolation to your readers that real estate fees, in any event, are too high because too many in the competitive field of real estate services are pressed to take on overpriced listings in the hopes that maybe they will sell that they can recoup some of their expenses from prior failed listings (vicious circle).

If we want lower fees and a more reliable successful sales process we, both agent and seller, must get tough and real on those aggregate costs we expect the buyer to pick up the tab for. I don’t think anyone will argue that obvious fact.

The market though is not measurable so much in the prevalence of listings as many of those listings, by virtue of their unrealistic expectations, are clearly not so motivated to sell. Actual sales, on the other hand, are an accurate reflection of what is going on in the market, be they up or down from the prior period to which they are compared.

In short though Garth; I was merely point out that your comment “Last year half the houses that were listed in the Vancouver area failed to find buyers” was sensationalist bling of no real consequence other than to mislead they who know no better. Now maybe they do.

Sorry for the digression. I post on the fly for the most part. Sorry for the digression. I post on the fly for the most part. And someone as respected as you can do a lot of damage with a few careless, or carefully selected, words which take someone of less respected pedigree as me a great many more to repair.

#76 Devil's Advocate on 01.29.11 at 12:40 pm

#67 T.O. Bubble Boy on 01.29.11 at 10:54 am

All I am doing is warning that there is a reason for that “ridiculous (almost cult-like) belief that everything about Vancouver RE can be explained by wealthy foreigners.”

I’m not saying they are so right but I will go out on a limb and suggest that they who say they are so wrong might find themselves with egg on their face in the not too distant future.

The world economy is SHIFTING watch your feet.

#77 Dodged-A-Bullit-in Alberta on 01.29.11 at 12:46 pm

Greetings: ” Kinda makes you wonder what the hell you did with your Friday”–Garth

I did the same as I have the three Fridays since Jan 1. Am working on a kitchen renovation, new countertops, adding cabinets, new appliance, some wiring. Doing all the work myself, no LoC money. The last two properties the wife and I sold had the same treatment. The logic I use is that even a “depreciating asset” needs treatment to compete with other homes on the market, more so in times of decline. In both previous cases the properties showed extremely well and easily sold for asking price. I also believe that we are losing a generation [mine], of homeowners who have the willingness to learn, and the desire to do-it-yourself. Every buck I have spent on power and hand tools over 40 years has paid off well, and the fringe benefits are nothing to sneeze at either. I have talked to young new homeowners, and they havn’t got a clue, don’t know what MDF or OSB is, or what a compound mitre saw can be made to do. They can text, twitter, blackberry, skype, etc. but are baffled with a water leak under the dishwasher. They can program all the shit on a new car but replacing the furnace filter stumps them. Don’t even know if the car has a block heater or where the cord might be. I asked a young homeowner where the manual for the automatic garage door opener was, and the book for the door installation, he had no idea. He was however going to turn the new garage into a “man cave” whatever the f**k that is. New born in the family, and an expensive motorcycle sitting in the garage, refused to move it outside and tarp it for the winter, so as to make more room while doing the drywalling. Un-believeable!!! It is mind boggling that eastern Canadians pay for imported heating fuel and we ship Alberta energy south into Montana, on to Texas etc. Sheer stupidity driven by greed. A previous blogger posted on the lack of a Canadian strategic petroleum reserve. Exactly, another example of the failure of our government to provide leadership and foresight. What a bunch of dick-heads!!!

#78 Devil's Advocate on 01.29.11 at 12:53 pm

#66 Dan on 01.29.11 at 10:49 am

Similar to my response to T.O. Bubble Boy Dan, REALTORS are not saying prices are going up so much as that is what you are hearing, because what they are saying is not what you want to hear. REALTORS are warning that prices are not going down as much as you think, or are being misinformed that, they are.

You too may wake to find egg on your face. The real estate industry may help you avoid that. More to the point… the real estate industry is trying to offer you an alternative prediction. That prediction they offer, from all I have seen and I have seen a good many, is not nearly so radical to the contrary as the sentiment on these blogs would have you believe.

If you wake up in a year or two to find that your suppositions were all incorrect and you have wasted away a good part of your most productive years circling in a holding pattern only to find you have now run out of fuel while all those real estate carcasses you hoped to vulch on have either been picked to the bone or never existed in the first place… well you get my point… don’t you?

#79 goldenfox on 01.29.11 at 12:59 pm

Gibbs: You Listening To Yourself, Jackass?

http://market-ticker.org/akcs-www?post=178581

#80 jess on 01.29.11 at 12:59 pm

khobzistas

Just How LOW can one go and still be called human. Man made historical hazards are easy to see coming.
Okay “experts”How does could one create “best health/safety practices ” in manufacturing this product. If you consider human health this is no longer “cheap.” I recommend shorting and buy the globalized class action law suit data base. Where hopefully the paper files are held with it.

“Health experts in Canada and abroad say exporting the potentially deadly substance to developing countries is immoral because safety practices there are inadequate.”
..” One study by two New Delhi researchers suggests that by 2020 deaths from asbestos-related cancers could reach 1 million in developing nations. “The industry is using its economic and political power in a way that’s allowing it totally unrestrained growth,” says Barry Castleman, a U.S. environmental consultant who advises the World Health Organization on asbestos. “We can only expect untold numbers of preventable deaths to occur as a result.”
======================

…”But Chadha has said that Balcorp has been exporting Quebec chrysotile asbestos to developing countries for over 15 years.
===============
…”Nicodemus refused to divulge details on the ACPMA’s funding. But senior government sources say it has received $50 million since its founding in 1985. A. Modi, president of an asbestos manufacturing company affiliated with the association, told ICIJ that ACPMA member companies contribute 2 to 3 percent of their revenue to the lobby group for “promotional activities in India that revolve around advertising promotions to counter baseless allegations by Ban Asbestos Network India [and] legal and promotional activities that [are] mostly in rural India.” This means that at current exchange rates, the ACPMA receives the equivalent of $8 million to $13 million per year.

The group spends some of this money on advertorials, costing up to $34,000 apiece, in mass-circulation Indian dailies, ostensibly to counter what it terms disinformation about the effects of asbestos. Sources say it also spends significant amounts on lobbying and training — mostly in Canada and Russia — for its staffers. Its already sizable budget is expected to increase as industry output grows — possibly to 600,000 metric tons a year — to meet demand for asbestos-sheet roofing in India’s villages”.

http://www.publicintegrity.org/investigations/asbestos/articles/entry/2240/

Libby isn’t the only asbestos-laden place
By Carly Flandro, Local CorrespondentTue, Apr 07 2009 at 4:45 PM EST
Libby asbestos contamination
The W.R. Grace plant in Libby, Mont., spewed asbestos over the small town for decades, sickening more than 1,000 people and killing more than 200. Smoke from the factory coated the town in tremolite asbestos, a particularly toxic form linked to numerous diseases including mesothelioma.

#81 S.B. on 01.29.11 at 1:10 pm

The people in the picture are “just following orders”, protecting El Presidente from the serfs and peasants. We have the same type of rule and system in Canada; witness the G20 where 1000 largely lower class protestors and passers-by were rounded up en mass and then released without charge, sweeping them out of sight for El Presidente and his cadre of elites.

For true revolution they need to put down their weapons and join in – think: Berlin Wall falling.

#82 GregW, Oakville on 01.29.11 at 1:14 pm

Hi #37 Utopia, Thanks for your point of view.

Hi #38 realpaul, Yes, ‘a bit strange’.

Hi #42, debtified, thanks for the link. I email it to myself, I’ll watch it later.
Have your see the new ‘ZEITGEIST: MOVING FORWARD’ movie?
You might find this audio interview interesting.
The Corbett Report. 36min
http://www.corbettreport.com/interview-280-dr-paul-connett/

Hi #68 BDG-YYC, Thanks for the reminder of were are energy/oil is coming from and info on Algeria. Why we don’t have a “there’s no Plan-B … actually no “Plan” at all. We’re Canada … we don’t need one … or a strategic reserve”, is an excellent question!!!

You might have seen this show, it’s interesting.
“Arithmetic Population and Energy” YouTube 8 parts
http://www.youtube.com/watch?v=F-QA2rkpBSY
(LNG seems to be delaying the ramifications of ‘peak oil’ for now, also glade we have EC6-CANDU power reactors to help meet our energy needs.)

I hope the ‘People of Egypt’ can get to a better place without more People getting shot!

#83 Soylent Green is People on 01.29.11 at 1:16 pm

يفعل في هاربر

What a crock Harper is giving advice about democracy over there when we don’t even have it here in Canada.

snip snip: A police oversight body is probing the comments of a police officer who was caught on YouTube telling a man who refused to be searched during the G20 summit, “This ain’t Canada right now.”

http://www.cbc.ca/canada/story/2011/01/21/g20-police-officer-youtube.html

“I was actually responding to him, saying, ‘OK, well, I’m not going to open my backpack so I’m going to leave and that’s actually when he assaulted me and said you don’t get a choice.”

.
.
.
.

#84 Got A Watch on 01.29.11 at 1:20 pm

kitchener1 posted:

“In Ontario

As of 2010-1 there are 588 557 mortgages in Ontario
As of 2010-12 there are 596 874 mortgages in Ontario

So for the entire year of 2010, there have only been
8 317 mortgages added? And thats for all Ontario?

But in the GTA there were 86 170 home sales for 2010 and thats just the GTA.”

Quite interesting. Those numbers all seem wrong to me. The number of mortgages seems way too small. How many mortgageable properties are there in Ontario? I would think there are more than 600K within Toronto alone. 8 million+ population in the Toronto GTA alone, plus the rest of this vast Province of 13.2 million people. Remember, Ontario is bigger than all of Europe.

I don’t know where to find the correct answers, off hand. Can anyone clarify this?

(and not a scumbag moron like DA, please. Someone who has half a brain, at least)

#85 Devil's Advocate on 01.29.11 at 1:24 pm

Pleased to meet you
Hope you guess my name
But what’s puzzling you
Is the nature of my game ;-)

http://www.youtube.com/watch?v=H9Vl8ygka98&feature=related

#86 dd on 01.29.11 at 1:27 pm

#73 dd

”’It was said on this web site that QE (quantitative easing) or money printing has no effect on markets. Well look at food prices. Look at commodity prices. It is about Cairo.

That is a ridiculous statement. — Garth”’

Thats what I thought when it was first said on this site!

#87 Spiltbongwater on 01.29.11 at 1:35 pm

Those who make peaceful revolution impossible will make violent revolution inevitable. -John F. Kennedy

#88 Mr. Lee on 01.29.11 at 1:36 pm

Great piece Mr. Turner:

Another example of how we here in Canada do not live in a vaccum. Current events form futrue trends as Mr. Celente would say. So, with families over leveraged and the price of fuel and food and money to go up…….what might happen with house prices?

#89 Cellar Dwellar on 01.29.11 at 1:39 pm

An interesting article in The Economist about a month ago noted 3 studies that statistically showed that “poor” people were less likely to become terrorists that “rich” people.
This article also made mention that the most educated terrorists were from countries with no political rights or priviledges.
So we have Tunisia and Egypt currently clubbing,gassing and shooting protesters that want a say in their political masters ( Can you imagine how angry you would be if Harper or Cretien or Trudeau were in power for 30 years and wanted their children to succeed them).
Toss in the rising food prices, religious fundamentalism and a vibrant internet that circumvents State run tv and radio……..
….. And over in China this morning comes news that the winter snows have failed for another year. 10 years of drought. Food riots in China this year ?
Hope you like $4.00 loaves of bread because in a year they could easily be $6.00 loaves.
Any spare bedrooms in the bunker Garth? I’ll bring deoderant…….

#90 vreaa on 01.29.11 at 1:43 pm

David Dodge – “Look mister borrower, you’ve gotta have an equity stake in this as well… so that if things go really bad, it’s not all on the Canadian taxpayer, part of it is on you.”

Transcription of DDs recent interview on BNN

http://wp.me/pcq1o-1Nd

#91 Stevermt on 01.29.11 at 1:43 pm

Thanks Garth for a great post..if you are correct on last June being the pinnacle of our RE bubbleliscousness, then we pegged it just right..we sold our house in north burlington on June 25. I was beginning to wonder if we could have lasted longer and tweeked another 20-30 k out of the deal..but then you question whether the right buyer would have come along at the right time..just too risky.I’m just so happy and I know that we did the right thing, now looking in the rear view mirror with your insight as well. Its so hard to hit with accuracy the end of a bubble to not miss the boat..thanks

#92 Steven Rowlandson on 01.29.11 at 1:43 pm

Hello Garth.
One of the things I keep hearing about the political unrest in places like the middle east is that young people have no future even if they are educated and generally they are mad as hell at the political and economic leadership of their countries. I suspect this is a universal problem. Crappy pay, high real estate and cost of food and fuel is a motivator of discontent.
Frankly the mayhem has just begun and it won’t be confined to the moslem world. It will come to a country near you. Just wait untill the malcontents find out about the georgia guide stones and that the elite want a better world through killing 13 out of 14 people.
Its just a wild guess but I don’t think the majority are going to approve of that plan.

Steven

#93 Cellar Dwellar on 01.29.11 at 1:56 pm

@#38 Realpaul
I agree. Canada’s Foreign Affairs/Customs Dept. “blind eye” to the obscene process of corrupt leaders or their families fleeing to Canada is an international embarrassment. The arrival last week in Montreal of the Tunisian family of the overthrown leader was just another black eye in our tarnished prestige as a multicultural nation. It took Tunisian ex-pats living in Montreal to raise the alarm….
Seize their assets, then offer them two choices . Leave now( saves us the taxpayers expense on a ridiculously long immigration process…7 years, 10?)
Or sit in jail(house arrest) until the World Court in the Hague figures it out……
THAT will never happen in this milquetoast country.

#94 Dark Sad Monster Bunny on 01.29.11 at 2:27 pm

77 DABIA – you sound grouchy. You definitely need a man cave

http://en.wikipedia.org/wiki/Man_cave

84 Watch/Kitchener1

Heres some five year old data. Hope they update soon.

http://www12.statcan.gc.ca/census-recensement/2006/dp-pd/tbt/Rp-eng.cfm?TABID=1&LANG=E&APATH=3&DETAIL=0&DIM=0&FL=A&FREE=0&GC=0&GK=0&GRP=1&PID=96272&PRID=0&PTYPE=88971,97154&S=0&SHOWALL=0&SUB=0&Temporal=2006&THEME=81&VID=0&VNAMEE=&VNAMEF=

#95 race against time on 01.29.11 at 2:28 pm

Reading a book titled “Why Your World is About to Get a Whole Lot Smaller” by Jeff Rubin, former Chief Economist with CIBC World Markets.

He lays it all out, and it is all about oil.

All of it, every aspect of the economy; credit availability and interest rates, housing prices, food prices, global political stability and on and on.

And the reality is, the easy oil has been depleted. Hence deepwater drilling and the oil sands.

The only direction oil prices can go is up. As they do economies falter, (of course, this will cycle, but the cycle will get shorted and more vicious).

This is going to effect everything. The world has and is changing rapidly. We are never going to return to the heady days of cheap oil and endless growth, (Unless of course we find a new source of energy).

It is hard to see exactly how this will all play out. but Jeff suggests that we are all going to live work, produce, and consume a lot closer to home. Life will be more expensive. People will be able to afford less.

So, does this mean that house prices will increase, because everything will be more expensive, or that house prices will be lower because there will be less demand?

It seems to me, regardless of price, housing will only become less affordability for the majority of people.

Discuss.

#96 John on 01.29.11 at 2:28 pm

It was said on this web site that QE (quantitative easing) or money printing has not effect on markets. Well look at food prices. Look at commodity prices.

It is about Cairo.

That is a ridiculous statement. — Garth

Nothing ridiculous about the statement, Garth. Egypt is burning not only because of 30 years of Mubarak ruthless rule but also because of the recent spike in food prices. Every regime change has a trigger. For Tunisia and Egypt it is was food prices. Wheat prices rising 40% in the past 2-3 months was the real trigger. Kuwaiti Govt. is handing out $5000 to every citizen (not expats) in Kuwait to tackle rising prices and a preemptive strike on any protests. Not all Kuwaitis are rich.

Food and energy prices in emerging countries have been spiking at unprecedented rate. The FED exported inflation through QE to countries in Asia. Now this is a byproduct of that. This is not the end.

Revolutions are three-square meals away.

The Fed didn’t do it. — Garth

#97 Junius on 01.29.11 at 2:35 pm

Great article from Simon Johnson on the cognitive dissonance the ruling bankster and CEO class has at DAVOS. Having been saved by our gov’ts from their own incompetence and greed they see no responsibility now to society. Makes me ill.

http://www.huffingtonpost.com/simon-johnson/davos-two-worlds-ready-or_b_815762.html

#98 Canayjun on 01.29.11 at 2:35 pm

It’s seems to me the French Revolution and the American Revolution were both successfully organized without the benefit of the internet. So…is Syria shutting down the internet really going to prevent anything?

#99 LB on 01.29.11 at 2:39 pm

This isn’t confined to just the Arab world.

We are witnessing global civil discontent due to declining (or nonexistent) standards of living that is being expressed to ALL world governments, of all political stripes, as public awareness grows of their misrepresentation by all existing political systems,who are being exposed as beholden instead to corporate and financial interests,rather than to their citizens. There is not a government in the world that is not at risk, as well as the global markets which are now reflecting this as a direct threat.

Iceland,Greece,Ireland,Britain, Spain,Portugal,Italy, Tunisia and now Egypt are just the beginning of this domino effect.

#100 Junius on 01.29.11 at 2:39 pm

#78 DA,

You said, “The real estate industry is trying to offer you an alternative prediction.”

With respect, the RE industry is trying to manipulate people for its own selfish, narrow purposes. We have seen so much of this the past few years we can read the writing on the wall. They have zero credibility.

#101 Dark Sad Monster Bunny on 01.29.11 at 2:39 pm

kitchener1 – further to above think you mixed Ontario and
BC

#102 KindaDifferent on 01.29.11 at 2:40 pm

REAL PAUL, Every time I come back to Canada as a citizen waiting to get through customs I feel like a hostage. 45 minutes waiting in line is ridiculous. Now that I hear Canada welcomes foreign corrupt leaders, I am totally justified in believing Canada is a corrupt country on many levels.

Here’s a solution: leave again. — Garth

#103 Patz on 01.29.11 at 2:46 pm

In times of great portent I, haplessly, seem drawn to the trivial.
Take this, #38 realpaul,
and they come to Canada with clean hands acting as if God had shat them out as pure as the driven snow.

That will be the sterling example of mixed metaphor I use when I next meet with my Eng. comp. 101 class.
Oh, wait a minute, I don’t have an Eng. class!

And #40 TBPOE, you are a shining example of some kind of twisted ethnocentrism, making it always about you and TBPOE. Do we really want the moral dregs of despotism coming here with their bags of money to buy ugly McMansions? Or do we want to see them get fair trials and be shot at sunrise–with the money staying where it belongs?

#104 CS on 01.29.11 at 3:05 pm

“Kinda makes you wonder what the hell you did with your Friday.”

Thanks for putting things into perspective Garth.

#105 bill on 01.29.11 at 3:09 pm

looks like a black swan to me and I reckon its found a place to land.
Hope the radicals muslims dont burn the museum or otherwise deface the ancient works like the taliban in afghanistan.
cant see a happy ending here.

#106 Realitycheck on 01.29.11 at 3:13 pm

“Yields on Egypt bonds due in 2020 surged 22 basis points to 6.51%.” — Garth

And we’ve ALL got those in our RRSPS, TFSA’S and IRA’S right.

LOL.

#107 Seen this in the US and now it's here in Canada on 01.29.11 at 3:19 pm

According to the Bank of Canada’s report on the economy released January, 2011 – Contributions to average annual real GDP growth- housing will contribute negatively in 2011 (as in it’s going down) and non-existent 2012. Here’s the report, it doesn’t paint a pretty picture for housing in the coming years:

http://bankofcanada.ca/en/mpr/pdf/2011/mprjan11.pdf

#108 TheBigLebowski on 01.29.11 at 3:29 pm

#9 Victor
If you want information on that venue research John Embry and Eric Sprott of Sprott asset. Also Rob McEwen former Ceo of Goldcorp and Jim Dines. all have called this market correct since 2001. Coming on here and asking advice on that topic is like asking a realtor if its a good time to buy a house. You will not get a fair and accurate opinion.

#109 realpaul on 01.29.11 at 3:29 pm

Be extremely careful of what you wish for. We need more islamists moving to Canada like we need rabid bats breeding in the belfry. Would you want to watch your neighbours stoning your daughter? Keep the Egyptians in Egypt. Just look at the social problems in the EU after governments there mistakenly let a population of islamo killers into their countries.

Yes, Egyptians = Islamists = rabid bats = stoners. Realpaul = racist loser. Good bye. — Garth

#110 TheBigLebowski on 01.29.11 at 3:36 pm

Bernanke along with the other central bakers have created food inflation globally. As currency devalues food prices rise. Wait til Egypt is replaced with California or Illinois. Then the real fun begins. The attempt and damage control on this blog and a turn around in housing and the economy in the States is starting to wear thin. Even the average loyal sheep on here is occasionally looking up from their grazing with a puzzled look on their face. Soon even the most lobotomized t.v die hard will start to feel the uneasiness growing globally

#111 Dorf on 01.29.11 at 3:43 pm

Here is a story about Haphazard Harry….

All of his life, Haphazard Harry believed it was his right to fling his car door open into passing traffic, when parallel parking on downtown streets.

Every time he parked downtown, Harry would immediately fling the car door open as fast as he could, and marvel in watching all the traffic scramble to avoid hitting his door. This scrambling action further reinforced Harry’s belief that he was right.

One day, Harry flung his car door open as usual and a passing motorist peeled it right off the hinges.

Believing he is right, Harry immediately secured a lawyer and filed suit against the other driver for damages.

At court, the judge decided against Harry, awarding him 100% liability for the incident and the damages, citing the Motor Vehicle Act section that states not to open your door into traffic, and wait for it to be clear.

Not only does Harry still believe he was right, but now he believes that the system screwed him over and everybody cheated him, but he doesn’t open his car door into traffic any more.

Moral of the Story:

People who are heavily invested in real estate believe that they are about to become filthy rich. They will not believe anything Garth says, not even after they lose all of their money to a house that won’t sell at ANY price, but they will not rush out to buy a house they cannot afford any more.

#112 i.see.debt.people on 01.29.11 at 3:44 pm

somewhere in Mexico a monarch butterfly dies and a Vancouver housing plummets 50% in by summer 2011. coincidence????…chaos theory.

#113 HouseBuster on 01.29.11 at 3:44 pm

Saudi Arabia slammed protesters in Egypt on Saturday as “infiltrators” who seek to destabilize their country, while a a top Palestinian official affirmed “solidarity” with Egypt.

http://www.cnn.com/2011/WORLD/meast/01/29/egypt.middle.east.reaction/index.html?hpt=T2

#114 Dorothy on 01.29.11 at 3:55 pm

Real Estate is both a cause and a symptom of the state of a country’s economy. The two feed on each other. If the economy weakens, so does the Real Estate market, and vice versa. The weakening of the economy caused the recent softening in Real Estate prices, and if that softening turns into a crash, the economy will follow.

Media hype does have an effect on both the Real Estate Market and the economy in general, and right now the powers that be are using the Media to try to generate a positive outlook for both. But if you look beyond the hype, all you see is bad news these days. In my little world here in south central BC I see house prices softening (not crashing, at least not yet), gas prices soaring, food prices increasing, wages fairly stagnant, and lots of unemployment. In the larger world, outside of Canada’s boundaries, things appear to be even worse. In some countries, it’s got so bad there are riots in the streets. Could it get that bad here? Common sense tells me that it is a definite possibility if things get bad enough. And I believe governments think so as well. It is my opinion that governments have seen this coming for a while, and have prepared for the potential of it leading to civil unrest by slowly eroding many of our civil liberties under the guise of “protecting us from terrorism”.

We are heading into a very uncertain future, one that is very different from the life we have known in the past. And, in this “Brave New World” of ours, the price of Real Estate may be the least of our worries.

#115 Devil's Advocate on 01.29.11 at 3:55 pm

Don’t you people ever have any fun?

You know most of what a person worries about never comes to fruition.

#116 Stevermt on 01.29.11 at 3:56 pm

#4 LB
I think that Tunisia could eventually be called the Black swan event that is triggering subsequent events in Egypt and who knows where else. this story may not be over yet. we’ll just have to see where it goes. It won’t be seen as a Black swan event maybe for some time.
A black swan is an event that nobody predicted, is very shocking and people exclaim after that we should have seen coming.

#117 HouseBuster on 01.29.11 at 3:57 pm

Bernanke: There’s No Housing Bubble to Go Bust
Fed Nominee Has Said ‘Cooling’ Won’t Hurt

http://www.washingtonpost.com/wp-dyn/content/article/2005/10/26/AR2005102602255.html

Fast forward to 2011.

#118 VICTORIA TEA PARTY on 01.29.11 at 3:58 pm

#92

I fear you may be on to something. Discontent among the world’s malcontents can lead to big things; really big things.

Events in Egypt are immensely alarming, for the West, because this is brand new ground that is being broken in an apparent drive to democracy. Is it? Who knows at this point.

Political watchers’ compasses are spinning around by now. They must think they’re all gathered at the Magnetic North Pole! The only reference they have for this is the old Cold War.

If there was a similar such uprising back then it was generally considered to be some sort of “client war” dust-up sparked either by the US or the USSR and their respective “agents provocateurs”.

Such types staged the coup of the elected president Mossadegh in Iran in 1953 (a CIA plot to be certain) and the subsequent installation of US puppet, the Shah of Iran and his Peacock Throne.

Then, in 1979 that all changed with the arrival of the Ayatollah Khomeni who was then based in exile in Paris. He arrived at Tehran Airport aboard an Air France Boeing 747 and promptly, in front of a freaked-out world, established a brutal Islamic dictatorship that has caused the Yanks and the rest of the West a giant headache ever since.

That so-called “revolution” was probably not a “client” conflict but an anomally, a confluence of local rage against a dictator and a demand for local autonomy, and relief, that only a religious zealot claimed that he could provide in opposition to American Hegemony in the Middle East, back then. The CIA had no clue that event could have happened. None. (Remember, also, the American hostages from the US embassy held by the revolutionaries for more than a year and Canada’s ambassador to Iran who spirited a number of American diplomats out.)

What followed that “revolution” was an eight year war between Iraq (Saddam Hussein) and Iran (the Ayatollah) with the US giving support to Iraq. (During that time the Soviet Union invaded Afghanistan, another geopolitical move that ended in disaster for Moscow and that could have been precipitated by Iranian events.)

Flash forward to this day in Egypt, a client state of the US.
Relying on American war technology to stay in power, and keep the folks down on the farm so to speak, this is another “revolution” whose outcome is not obvious at this point.

Like Iran’s revolution, the stakes are high; that is they’re underpinned by oil and another element, the Suez Canal. That canal runs right though northeastern Egypt and is a transit point for US warships heading out into the Arabian Gulf to prosecute the war in Afghanistan and to the Persian Gulf to protect Saudi Arabia’s oil from Iran.

Middle Eastern conflicts in this age are predicated on two elements: real estate and non-renewable energy resources.

Egypt also has a peace treaty with Israel which the “Arab Street” says is an abomination against all that it stands for.

What’s the outcome? We’ll find out soon.

Iran today issued some kind words towards the protestors who continue to rage throughout downtown Cairo, Alexandria and Suez. I believe the outcome will be something like what happened in Iran.

It won’t be democracy, but when you and your family live in a stinking garbage dump outside downtown Cairo, all you need is some snotty casually-dressed Yank coming along to nag you about “freedom” and “democracy” when all you ACTUALLY want is food for your family.

The American elite’s boy in Cairo, Mubarak, has proven to be a bit of a screw-up. As in 1979’s Iran, and their boy the Shah, the Yanks also didn’t see this latest one coming.

Inflation in the West. It’s in the wind. Can feel it already. What will the “Western Street” think? We’ll find out. Soon.

#119 Stevermt on 01.29.11 at 4:01 pm

#92 Steven R
just curious about the georgia guide stones. do you have any links for that? thanks.

#120 Timing is Everything on 01.29.11 at 4:09 pm

Kinda makes you wonder what the hell you did with your Friday.

I went to WORK.

note – I enjoy my work.

#121 BC is even better than ten best place on earth on 01.29.11 at 4:28 pm

Guys you must buy here, prices ip 100% overnight, ants on bidding wars with roaches for 3 sq in McDonald’s wrapper. Buy a wrapper and flip it making a killing.

Prices driven up by all the wealth ofthe scum of the earth who thinks Canada is more stable than Switzerland.

Every Tuesday is free BJ day by eddy local lovely who can’t afford a home!!!

Doesn’t get better folks, the snow melts before it falls, all air pollution is filtered through Mercedes, BMW, Ferrari or bentley engines, cleanest in the world.

All the realturds are bones and up standing members, no, pillars of society, will maximise your profits all the while getting the buyer the lowest prices. They all have reserved seats in heaven for the next life.

It doesn’t get better, shit doesn’t even stick to shoes!

#122 Jeff Smith on 01.29.11 at 4:38 pm

It’s good to know F is taking care of Canada

http://money.ca.msn.com/banking/bankrate/article.aspx?cp-documentid=27448660&page=2

#123 Jeff Smith on 01.29.11 at 4:44 pm

What??!! The 35year thingy is removed and Canada no longer leads the world’s economy recovery? Shame on freakin’ us!

http://www.theglobeandmail.com/report-on-business/economy/jobs/canada-no-longer-leads-recovery-standings/article1886140/

#124 Julie on 01.29.11 at 4:46 pm

Garth, you write in the beginning of Money Road that the Canadian government will no longer give tax breaks/raise taxes. Yet F is are going ahead with a huge corporate tax break in the run-up to an election and, if they win, plan to give away even more of the store.

What gives?

#125 45north on 01.29.11 at 4:52 pm

SB: The people in the picture are “just following orders”, protecting El Presidente from the serfs and peasants. We have the same type of rule and system in Canada;

how many people in Canada actually vote? how many spend any time on any kind of political activity which they can do in complete safety?

case in point is Garth Turner who actually shows up

a lot of Canadians are MIA (missing in action)

#126 John on 01.29.11 at 5:04 pm

Interesting development in the Middle East.

Amman in Jordan and Jeddah in Saudi Arabia see protests in response to sky rocketing food prices and blatant corruption.

Wish I was in Kuwait – On the other hand, we expect more news such as those from yeserday that Kuwait is paying its citizens $3,500 plus free food for a year to keep calm.

The geo-political situation in all US backed countries in ME is very volatile right now. Any untoward development in Saudi can spike up oil prices by more than 10% in no time.

#127 Hoof Hearted on 01.29.11 at 5:07 pm

More Vancouver RE Porn

Little House Big Ticket

http://www.vancouversun.com/Little+house+ticket/4189229/story.html

As an example of a Vancouver real estate market that can induce gasps, consider 4541 Belmont.

It is a detached house on a 60-by-95-foot lot.

The house is 720 square feet in size. It is for sale.

It has one bedroom, size small, one bathroom, size smaller, a living room an optimist might describe as “cosy” and a kitchen decorated in the latest turn-of-the-century style, and by that I mean the 19th century.

The walls are painted in a colour best described as Custard Gone Bad, and permeating the interior is a funky smell of — what exactly? — mildew fighting it out with Clorox? Its basement, reached by stairs steep enough that one properly should rappel down them, has a bunker’s charm. The house has gutters but, oddly, no drainpipes. Its age? Unknown. They’re still waiting for the carbon-dating results.

Price?

The owner is asking $2,199,000.

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

What’s further interesting is the author of the story is generally a columnist, not reporter per se.

Still seems lie RE pumping.

#128 goldenfox on 01.29.11 at 5:14 pm

Proof that markets are not free any more.

Then the gods of the market tumbled,
And their smooth-tongued wizards withdrew
And the hearts of the meanest were humbled
And began to believe it was true
That all is not gold that glitters,
And two and two make four,
And the gods of the copybook headings
Limped up to explain it once more.
As it will be in the future,
It was at the birth of man.
There are only four things certain
Since social progress began:
That the dog returns to his vomit
And the sow returns to her mire,
And the burnt fool’s bandaged finger
Goes wabbling back to the fire;
And that after this is accomplished,
And the brave new world begins,
When all men are paid for existing
And no man must pay for his sins,
As surely as water will wet us,
As surely as fire will burn,
The gods of the copybook headings
With terror and slaughter return.

http://www.zerohedge.com/article/tracking-gold-conspiracy-gatas-must-read-presentation-cheviot-asset-management-sound-money-c

#129 tmg on 01.29.11 at 5:18 pm

Why did you leave Vancouver out?

#130 Timing is Everything on 01.29.11 at 5:23 pm

Yes, Egyptians = Islamists = rabid bats = stoners. Realpaul = racist loser. Good bye. — Garth

Schnook…Loud-mouthed, that is.

realpaul was my #2 pick…My apologies DA, I put you #1. ;)

#131 Hoof Hearted on 01.29.11 at 5:36 pm

Prediction:

Home renovation stores will start going bankrupt.

Renovations are the result of the 2X4 porn network, ie Mike Holmes in place of John Holmes.

People will start to see the $50,000 + reno as a waste of money, not only does it NOT increase sales on a soon to be glutted market…., a depreciation factor will kick in
on the reno inventory.

Lot price plus “average” improvement value ($ X PSF)will be the sales price, no profit in reno aspect.

Sell(or short) you Home Despot stock….

#132 Hoof Hearted on 01.29.11 at 5:48 pm

For those unfamiliar with Vancouver RE porn.

When in Vancouver….drive in the Shaughnessy area ….
You will see a strange assortment of old mansions and spartan post war homes.

As I have stated, the CPR, with its land grants, developed much of Shaughnessy . However when the Depression hit,…this caused a literal extinction of mansions. However, the land must have gone cheaply after the boom, as one can notice very plain -Jane homes ie post war rancher bungalows less than 3000 sq.ft on 1/2 acres rubbing shoulders with beautiful old 6000 sq.ft. mansions.

One can see this example repeated in other “wealthy” areas of Vancouver, such as the example I cited earlier .

It is more an indication that if it happened once it can happen again….

#133 AG Sage on 01.29.11 at 5:52 pm

>#110 TheBigLebowski on 01.29.11 at 3:36 pm
Bernanke along with the other central bakers have created food inflation globally.

Your logic for this would be what, exactly?

Here’s a related article that provides a much better explanation. Unlike much of the magazine, no subscription is required for this one.
http://www.newyorker.com/talk/financial/2008/11/24/081124ta_talk_surowiecki

#134 John on 01.29.11 at 5:58 pm

The FED and developed economies’ central banks created the wrong kind of inflation, Garth.

The continued expansionary monetary policy in advanced economies posed the risk, that strongly performing “Emerging Asia” countries have imported inappropriately loose monetary conditions, in turn risking higher inflation and volatility in local asset markets (wheat, corn, rice, crude, vegetables).

Thus, import prices in developed economies have already increased somewhat, and anecdotal evidence suggests that the prices for imports from China and other emerging economies are poised to increase further due to higher local inflation. In short, having imported inflation from developed economies through the monetary channel, the emerging economies are now re-exporting inflation to the developed economies through more expensive goods shipments.

The global inflation merry-go-round continues. The central banks created the monster, controlling this is gonna be a bitch.

#135 debtified on 01.29.11 at 6:04 pm

#115 Devil’s Advocate on 01.29.11 at 3:55 pm

Don’t you people ever have any fun?

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

Hey DA,

Doom and Gloomer here. I can personally attest that there’s a lot of fun to be had while being concern about how bad our society has gotten with the growing dependence on debt.

We are just having a lively discussion of current events here – including your own opinions. The topic is simply inherently depressing.

With the risk of sounding like you, I just want to give examples of what sort of fun I have been having:

I’ve been to 26 countries since 2004, travelling for pleasure – learning from different cultures and their experiences (yeah, I saw Spain at its real estate peak). I purchased 5.6 hectares of ocean front property in 2007 (with 220 meters white beach) in a tropical country where I could go as Garth heads to his bunker (fresh fish is better than canned goods). I am able to save 50% of my NET income these days. I will soon buy a float plane so I can fly to isolated pristine lakes everywhere instead of buying a cottage I only intend to use a few days a year. I have real friends who I value a lot.

Oh, yeah, I have been renting since 2004.

I sleep well at night also because my conscience is clear – knowing that I have not “helped” any one buy a house they could not afford which will eventually get them in all sorts of trouble in the future (if they’re not in it already). We all know here, including yourself (and your wife), you can’t say the same.

You’re one of those people who make themselves feel better by being convinced that everybody else is more miserable than them. You actually sound pathetic to me (trophy wife included).

#136 Hoof Hearted on 01.29.11 at 6:06 pm

# 37 Utopia

This uprising is no “Black Swan” event. Rather it is an outcome of years of social repression, nepotism and political favoritism.

========

Politely disagree.

Black Swan events are what the powers that be would have you believe” we never saw it coming ” as they fill their diapers.

The apropos model would be much like forest fire suppression….the fuel build up in forests exceeds the capacity for the forest to decay and re-use. Once the right conditions are in place ie hot dry summer…R-U-N !!!

Revolutions are no different, there is an underbelly of the given grassroots that have seen a clusterf*ck via their oppressors aka Go’vt , it simply needs a catalyst to ignite the long simmering and building critical mass.

#137 S.B. on 01.29.11 at 6:13 pm

There is talk of Egyptian banks being shut down at least in the short term
We saw what occured in the markets when mere brokers went under (Lehman, Bear Stearns – banksters eat their own kind), what about an entire country’s banking sytem going down?

Given the leveraged and connected global banking system, can it afford even one link failure in the chain?
Ripple effects?
CIBC had Enron exposure and took a bath at the time. Who has country exposure?

#138 Milhous Plumbers on 01.29.11 at 6:17 pm

No easy & quick fix in Cairo, whoever takes over is going to have to be another iron fist clad to a new face.

#139 Western Canadian on 01.29.11 at 6:47 pm

“(a) Calgary’s received lots of attention and analysis here, (b) that was the peak in the post-crash bubble. I’ll leave the ignorance for you. — Garth”

That is such BS. You said in the post about last June: “That, as history will tell, was the peak of our real estate market”.

Second, how do you justify saying “I’ll leave the ignorance to you”. You don’t know me, where am I displaying any ignorance at all.

You said history will show last June was the peak in the market, while in actuality April-May-June 2007 is the peak in Calgary.

You’re wrong, admit it, or maybe you were just sloppy in your writting. Clean up your posts, and don’t just call people ignorant because they point out your mistakes.

Learn to read cowboy. June was the apex of the post-crash bubble. — Garth

#140 Mean Gene on 01.29.11 at 6:57 pm

Maybe it’s time to get a NEXUS card.

#102 KindaDifferent on 01.29.11 at 2:40 pm

REAL PAUL, Every time I come back to Canada as a citizen waiting to get through customs I feel like a hostage. 45 minutes waiting in line is ridiculous

#141 realpaul on 01.29.11 at 7:07 pm

Garth…may I remind you that Egypt is

DELETED

#142 SAD on 01.29.11 at 7:08 pm

#120 BC is even better than ten best place on earth on 01.29.11 at 4:28 pm
I love how shallow people measure their community based on house values, Mercedes, BMW’s et all.
I believe that is similar to the thinking and belief system of Egyptian President Hosni Mubarak.
I would be careful of using this as a measurement if I was you. Not real healthy. Apparently there are repercussions.
Did you graduate with a degree in Social Darwinism by chance?
H and F could use people like you in the upcoming Federal campaign.

#143 kitchener1 on 01.29.11 at 7:12 pm

# 101 Dark Sad Monster Bunny

Thanks, you are indeed correct. I did misplace Ontario vs BC. The link you provided comes back not found.

Here are the Ontario numbers from

http://www.cba.ca/contents/files/statistics/stat_mortgage_db050_en.pdf

In Ontario

2010-1 there were 1 745 471
2010-11 there were 1 782 597

In the 11 months of 2011 according there were 37 126 mortgages added.

Still suspect as in GTA alone some 84K properties sold in 2010, never mind the rest of Ontario. Still trending at only 1 mortgage for ever 3 sales. Seems low

#144 Coho on 01.29.11 at 7:13 pm

#47 Smartalox,

The commonwealth of democratic nations cannot allow this to happen.

I agreed with your post until the last sentence. The power behind the commonwealth of democratic nations is what supports these tyrants and their regimes. Do we really think the power behind world affairs leaves the wealth and resources of a sovereign nation to be enjoyed and equitably distributed by its own people? Not on this planet.

Sell-out tyrants who disenfranchise their own people are supported by seen and unseen hands, yet true patriots are often marginalized, demonized, ousted or worse.

#145 Cow Man on 01.29.11 at 7:26 pm

Georgia Guidestones:
http://www.associatedcontent.com/article/736871/the_guidestones_of_georgia_conspiracy.html

#146 KindaDifferent on 01.29.11 at 7:30 pm

I’m talking about flying back into Canada as a Canadian Citizen. One time it was just me and my son and the border guards gave us a hard time (we’re dual citizens). Garth, if I leave Canada, Canada will lose three Canadian children and the taxes our business generates for Canada would be lost. But, hey, I’d love to move back the the US with my Canadian born husband and kids as soon as someone buys our business.

#147 jess on 01.29.11 at 8:30 pm

And by the way the countries rioting had lower scores than the usa!

The Lorenz curve
42 United States gini – 45.0 as of 2007

Country Comparison :: Distribution of family income – Gini index
This index measures the degree of inequality in the distribution of family income in a country. The index is calculated from the Lorenz curve, in which cumulative family income is plotted against the number of families arranged from the poorest to the richest. The index is the ratio of (a) the area between a country’s Lorenz curve and the 45 degree helping line to (b) the entire triangular area under the 45 degree line. The more nearly equal a country’s income distribution, the closer its Lorenz curve to the 45 degree line and the lower its Gini index, e.g., a Scandinavian country with an index of 25. The more unequal a country’s income distribution, the farther its Lorenz curve from the 45 degree line and the higher its Gini index, e.g., a Sub-Saharan country with an index of 50. If income were distributed with perfect equality, the Lorenz curve would coincide with the 45 degree line and the index would be zero; if income were distributed with perfect inequality, the Lorenz curve would coincide with the horizontal axis and the right vertical axis and the index would be 100.

#148 Victor on 01.29.11 at 8:34 pm

#108 TheBigLebowski

I regularly do read the articles posted on Sprott’s site, including the pieces by Embry. They have certainly been proven right in recent years.

Sprott’s last personal update was in November, so I’m eagerly waiting to read his first posting of the year.

#149 S.B. on 01.29.11 at 9:13 pm

Quote: in WW1 the soliders quit fighting during Christmas and crossed the trench lines to celebrate their religious holiday with each other. They shared laughter, food, drink, song.

And then returned to the insanity of killing each other, by the millions…

Are we to call them religous fanatics? No. Just ordinary men dying for rich evil people, led into a false war.

No different from the police and citizens in Egypt who may stop and pray together.
I commend their unity and deep beliefs even though I do not share their religion.

#150 bridgepigeon on 01.29.11 at 9:30 pm

145 dual citizen
You are actually trying to assert that the Canadian border
guards give more of a hard time to people than the American ones?

#151 Dark Sad Monster Bunny on 01.29.11 at 9:51 pm

142 Kitchener1 – sorry about the link, must be too long and I’m too computer dumb to to that tinyurl trick, if that would work. If you go to the statscan site and search “household tenure mortgage status” it should be the first of 20 items listed. It’s 2005 data, so I hope to see the 2010 version later this year.

When I compared to the cbc data, stascan shows 10-20% more mortgages but I notice the cbc data is from the bankers, so perhaps they don’t include some of the other lenders.

As far as the number of new mortgages, old ones can be retired even if no houses are being sold, so I think it is just that net effect. (I did my part almost two years ago!)

#152 OttawaMike on 01.29.11 at 10:35 pm

#37 Utopia
Good summary Thanks.

#117 Vic Tea Party
Yeah to your points to.

Last Thursday I was called to a regular customer, an Islamic community center to repair some broken pipes that froze in last Monday’s cold snap.
It’s not really relevant where these new Canadians arrived from(not Egypt) but a couple of the senior members of the center spoke to me as I worked on the ladder.
I brought up the uprising in Egypt and we all agreed on the hegemony created by the British and US and other western nations through artificial, arbitrary and divisive borders is one curse of many Islamic nations.
What really surprised me is the lack of support these elders had for the uprising and the supposed instilling of democracy. As one fellow put it: “some countries are just not ready for democracy”.

The only remotely viable opposition in Egypt these days is the Muslim Brotherhood who are aligned with the Hamas movement. Can anybody recall the Algerian elections back in the late 80’s? These were the only fair democratic elections in the entire region and when the Islamic fundamentalist party won over the governing western puppets, the election was immediately annulled and voided with a nod from France and America.

In short, it is a complex situation in much of the Arab world but the longer it stews with dictators and kleptocracies the angrier the citizens become.

Swans can be pretty nasty creatures sometimes.

#153 OttawaMike on 01.29.11 at 10:54 pm

Read more about Egypt and Obama here:
http://www.economist.com/blogs/lexington/2011/01/obama_and_cairo?fsrc=scn%2Ffb%2Fwl%2Fbl%2Fcoulditbeworse

#154 InvestorsFriend (Shawn Allen) on 01.29.11 at 10:55 pm

Kitchener 1 said at 142

In the 11 months of 2011 according there were 37 126 mortgages added.

Still suspect as in GTA alone some 84K properties sold in 2010, never mind the rest of Ontario. Still trending at only 1 mortgage for ever 3 sales. Seems low

Most house sales (except for new houses) involve the creation of a new mortgage for the buyer and the extinguishment of the sellers mortgage.

So you can’t expect the mortgage count to go up with the number of real estate sales. Rather it should go up at some number less than the number of new homes built (as some existing houses get their mortages paid off each year) and have no particular relationship at all to the sales of existing houses. Granted some sales will involve a mortage free existing house sold to a new buyer with a mortgage.

#155 InvestorsFriend (Shawn Allen) on 01.29.11 at 11:04 pm

Have you heard the rumor (which I am hereby starting) that the United States is so broke it may consider selling off some States?

Russia could buy back Alaska. Canada might also put a bid in for Alaska.

Mexico would love to buy back some of the territory it lost to the United States many years ago.

The Native Indians might buy back Manhattan, if not all of New York State.

The French will presumably be interested to buy back Louisiana.

And China, which has boat loads of U.S. dollars and U.S bonds and could use some space for all its people might be interested in a number of States.

The Palestinians could start a new country in some State or other.

Lots of possibilities.

The existing residents of the States sold could keep dual citizenship. The new owners would own all State and Federal property and would get the right to govern and to tax and make laws.

By sacrificing a few States the remaining U.S. would be debt free in no time.

Just like if you own four houses and owe too much money and the income is insufficient. Ya gotta sell something.

#156 AM at LHR on 01.29.11 at 11:25 pm

Spot on #143

Some 30 years in power but he is NOT a dictator, according to the VP no less. Go figure

http://tinyurl.com/4bx3uvy

#157 S.B. on 01.29.11 at 11:53 pm

LONDON (Dow Jones)–Several major European banks Friday said they have little financial exposure to Egypt as growing anti-government protests in the country continued to threaten the 30-year rule of President Hosni Mubarak.

Two U.K.-based banking giants, HSBC Holdings PLC (HBC) and Standard Chartered PLC (STAN.LN), are seen as the most globally exposed among banks, with a strong focus on emerging markets.

But HSBC said it has a “fairly small” business in Egypt, with around 75-79 offices, which includes bank branches. Its half-year results last year showed that the Egypt operations had pretax profit of $78 million, or under a quarter of the Middle East pretax profit of $346 million, which in turn is just 3.1% of group pretax profit.

An HSBC spokesman declined to comment on how the political situation could affect the bank’s business in the country.

http://online.wsj.com/article/BT-CO-20110128-709766.html

#158 S.B. on 01.29.11 at 11:58 pm

I have heard, be careful with what the media chooses to show us. The people did not depose a dictator; he did not just step down because of a few protests after all these decades. He does not take his marching orders from the citizens.
Some say, every world leader who is not on course with the “new world order” is being removed, one after the other.

Meet the new boss, same as the old boss.

#159 Bobby on 01.30.11 at 12:23 am

For Devil’s Advocate,
The sad reality, and I’m sure you already know, is that many lesser realtors than you will suggest higher selling prices just to secure the listing. I gave up counting the number of times I’ve heard of realtors suggesting dropping the price just after securing the listing.

I remember interviewing one realtor who suggested a selling price significantly above the level suggested by other worthy realtors. When I suggested that his fees would be reduced by the same amount if the home sold for less he quickly changed his tune.

I see a time, coming very soon, when buyers will pay on an hourly basis for the services of an agent. That way if the buyers don’t purchase, at least the agent will get paid for their time. In turn, agents will bill sellers for their time to ensure the sellers are realistic in their expectations.

This will put a lot of useless agents out on the street and will raise the bar of the so called realty profession.

#160 Bobby on 01.30.11 at 12:31 am

The real story here is that people everywhere are losing faith in Governments of any stripes.

Just look to the States and you will see that many cities and states are broke. They will have to raise taxes significantly to meet the pensions and benefits of government workers. Imagine you’re losing everything and the government wants more from you to fund those who seemingly are untouched by the recession. That is why there is a whisper campaign of massive municipal layover coming down south.

Up here in Canada, there are many in Govenment that are benefactors of lofty pay and benefits not enjoyed by the public sector. In turn, government has expanded whilst the private sector has faced significant layoffs.

Just today in the Globe, the financial facelift spoke of a teacher and government employee in their late 30’s with not a lot, looking at early retirement. Imagine someone in the private sector with the same assets proposing the same thing. I suggest not.

I read that the posture ate thinking of striking. Does anyone care. The only mail everyone gets now is bills.

Cairo is a lot more telling than I expect people think.

#161 Crow on 01.30.11 at 1:03 am

It was the event without which not only the atomic theory would have never emerged, but our lives today wouldn’t have been really different from the lives of Arab camel herders during any era throughout history. That event was the Industrial Revolution.

Most of us are not history students and take the world around us for granted. It’s hard for us to fully appreciate the importance of the Industrial Revolution. The fact is our world was, essentially, created by it. Since wealth breeds wealth, that made democracy not only possible, but also beneficial for the entire society. Now, this is extremely important: democracy, the way we define it today, could not, even in theory, emerge without the Industrial Revolution.

Democracy, in our modern understanding, is impossible in Egypt for the same reason Democritus, despite all his incredible brilliance, could not possibly discover atoms: due to the lack of the necessary economic conditions, technology, societal organization, and mentality that took millennia to develop. Suppose we had a time machine. Would it help? Let’s see. A newborn baby stolen from ancient Greece and raised in the 21st century Canada would grow to be a normal 21st century Canadian with absolutely no trace of ancient Greece in his or her personality. But an adult person, even as brilliant as Democritus, snatched from his home and transported to modern times, would never be able to function among us on an equal basis. There is too much in our social environment we take for granted, although a lot of it is neither universal nor even historically necessary. The Industrial Revolution itself, by the way, was neither universal nor inevitable. It was a result of a unique combination of factors that the majority of humankind has never experienced.

But what if our time machine was powerful enough to maintain a permanent, stable tunnel through time between the two worlds? What if we could freely travel back and forth and bring goods with us? Would we be able to help the Fourth-World Greeks join our glorious civilization? You betcha, especially if they allowed us access to something they had absolutely no need for — their untapped oil fields. What would we give them? Books and antibiotics seem like a good beginning, but how would you distribute them among the locals? Every time we send billions of dollars worth of food and medicine to some disaster-stricken country, most of it either rots uselessly or gets stolen by local crooks. If you think ancient Greeks were any better in that respect than modern-day Somalis, you must be a very naïve racist.

And yet, our civilization has managed to produce some goods even savages can use. Think about the M-16, the AK-47, and all other easy-to-handle murderous toys. There would be no distribution problems, and the learning curve would be minimal. What do you think would be easier: to train a few bright, healthy kids from 5th century B.C.E. to pilot the F-16 or to explain to them why the United States, after the first terrifying success, never used its nuclear arsenal? Our ability to destroy is a matter of a few inventions. Our reluctance to destroy is the product of two thousand years of painful progress. Do you think anyone can sit down and learn our ethics? Or do you believe that our imperfect democracy and our imperfect ethics can survive without each other?

By the way, such a tunnel in time does not exist in my imagination only. Each of the several civilizations that share our planet today lives in its own time-frame. Having accepted its homegrown version of Hitler as the ultimate prophet, the Arab world has forever frozen itself in the 7th century. There has never been an Industrial Revolution there, and judging by the historic record of Arab achievements in every area of human endeavor, never will be. But their oil, mixed with the suicidal dishonesty of Western politicians, gave them access to some of our most murderous inventions long before they had a chance to develop a reluctance to kill. We are about to learn that Sharia and democracy do not mix, that honor killings and democracy are incompatible, that genital mutilation and democracy are mutually exclusive, that religious intolerance and democracy can’t coexist, that Islam and democracy are antithetical. Thanks to the cowardice of our leadership, we are going to pay for these lessons with our blood.

#162 Kevin on 01.30.11 at 1:03 am

From November 2009 to November 2010, Saskatchewan gained 1000 jobs. This was actually the slowest growth ( 0.2%) of jobs by all the provinces. Saskatoon did drag the numbers down as Saskatoon lost about 4,300 jobs in that same time period.

http://saskatoonhousingbubble.blogspot.com/2011/01/is-02-growth-rate-in-saskatchewan-jobs.html

Is a 0.2% growth rate in Saskatchewan jobs a boom?

#163 BionicMan on 01.30.11 at 1:13 am

Is there an ETF for shorting the canadian housing market. How about UltraShort Canada Housing Bubble?

#164 nonplused on 01.30.11 at 1:52 am

Garth on #96 – “The Fed didn’t do it.”

That’s true. But they did launch QE2, which a lot of speculators believe will cause inflation (rightly or wrongly).

Myself, I am not sure yet whether QE2, QE3, QE to infinity, or any of the other unusual measures the Fed has undertaken will cause inflation or just hasten the day of reckoning for the US deficit, which would be deflationary. But it’s going to do something.

If QE were a good thing, why not always do it? The government needs to borrow money? Why pay 5% when the Fed can lend it at 1%? And it’s supposed to stimulate the economy too!

In the end it does not stimulate the economy. For that you need tangible capital investments. All QE or any form of money printing does is increase the number of claims there are on the existing capital stock and resulting production. Oh sure, it could cause some new capital projects, but likely based on artificial price signals.

The proper rate of inflation is zero. Not +2%, not -2%, but zero. There is no need for the average price of all goods and services to always either increase or decrease. It serves no purpose, other than to either bail out borrowers (if positive) or punish them (if negative). Oh and to pump up capital gains taxes, which are not inflation adjusted.

This doesn’t mean we won’t need new money; as the economy grows we need more money or we get deflation. And it also doesn’t mean we need a gold standard; gold production is too slow to respond to economic growth.

I’m not sure the Fed can be blamed for the price of oil, but since oil is a major input cost to every single product we grow and build and then deliver in the modern world, the oil price is also having an impact. Farmers need a lot of fertilizer and diesel to do their jobs. You cannot raise oil to $90/bbl without an effect on food prices.

Responders who don’t think Egypt can affect Canada:

Egypt might affect oil prices. Oil prices affect everybody. If oil decides to retest $140 and blows through it as a down the line several other events happen result of the protests, well, it’s 2008 all over again. Another financial collapse follows as people cannot afford to eat, drive to the grocery store, and pay their mortgage. Something will have to give, as it always does.

#124 45north

I don’t vote much anymore, unless I really buy the story of my local politician. Why? 2 reasons:

1. Your vote doesn’t matter unless the election is close. So if it looks via polling to be close and I care I will vote.

2. If you vote for the party and not the candidate, you are really just adding your hand to the blood they will spill. Since we have a long unbroken string of official after official just making things worse, I am not going to offer them my support. This stuff about “if you don’t vote, you can’t bitch” is bull$hit. I can bitch, because I cannot vote “none of the above”. When you can vote “none of the above”, I will be out for every election. When “none of the above” wins the election, we will have no politicians and things won’t get worse for 4 whole years because there won’t be 4 more years of more fatally flawed new laws enacted by people who didn’t know a thing about what they were doing but had “the vote”, so they must be right.

When a party arises with the sole purpose of reducing the number of unnecessary laws and unnecessary government agencies I will not only vote but campaign and maybe run!

Something like what some companies do every several years. Declare a “no report” month, where nobody is allowed to send out a report, and if nobody asks for it, the report is not to be written again. We should do that with all laws. If we can do just as well without the law or better as we do with it, no law.

I’ll use driver’s licences as an example. We already have a law that says you must have insurance. So why not let the insurance companies decide who they will insure? They already do. The license is redundant once you have the insurance card. So the whole driver’s licence thing is about fees and ID. But if Sunshine Village can put my picture on my direct to lift card, I think my insurance company could figure it out
too.

#165 Hoof Hearted on 01.30.11 at 2:05 am

#155 Memories on 01.29.11 at 11:05 pm

On Fri I slept in, ate good food, and spent a nice time with the family without having to worry about a thing. That is why Canada is the best!

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

Politely disagree

There really isn’t much difference between Cairo and Canada.

Since Keith Davies (post Lester Pearson ) advised Trudeau to ” go green ” and not waste resources acquiring a trans Canada electoral mandate, but instead focus on (ass-kissing)Eastern Canada…..we have had a dictatorship re Parliament Hell. Please recall Comrade Trudeau-sky invoked the War Measures Act, with a ” Just Watch Me ” dare.

Any/all civil liberties are at the discretion of Gov’t and the Crown….

Western democracies have slowly tightened the noose/shackles of their own citizens, whether it be the Patriot Act, Bill C -68, or the absolute worst oppression..enslavement via debt under guises of “false freedom” via the promotion of ” ownership “.

In hindsight….This was simply a tap dance through a minefield by our sell-out savvy politicians waving the white flag and delaying the inevitable epiphany of how useless they are.

At least the citizens of these other countries have the cajones to take charge, not like the sheeple here.

Churchill had a saying about democracy…but an UPdated and amended version may be that it is the worst form of Gov’t, at least re: representation of the people’s best and better interests.

#166 Hoof Hearted on 01.30.11 at 2:25 am

Gee……

Wow……

Hmmm?

Gas Prices in Metro Van are North of $1.20 per liter and still rising.

Afghanistan = Canadian pullout?

Maybe the vested interests have “manufactured” a “justification” to ratchet up Oil prices (and CA$$$$$ H in ) since RE is tanking. License to PIMP.

Duly note the convenient coincidence….turmoil masks hidden agendas..the best camouflage. aka commodity traders as the uber whores.

#167 Edmontonian on 01.30.11 at 2:31 am

The Condo & Housing market here in Edmonton seems to be going further in the shitter this past week. Condo prices have plunged to a median of $207,500 the lowest we’ve seen in almost 5 years! Very scary guys!

http://www.bobtruman.com/Edmonton_Condo_stats/page_1918040.html

#168 ralph on 01.30.11 at 2:48 am

My daughter and her friend were able to leave Egypt just four days ago and are in a nearby country. They had flights booked with Egypt Air for Feb 6th. That won’t happen now because the airline has been suspended.

Things can happen fast in the world and we need to pay attention.

#169 Repeat Post on 01.30.11 at 3:24 am

Hey Garth, can I make a request?

I did this a few months ago, and it seemed like you eased off for a bit, but I feel compelled to repeat the request.

Can you just cut people some slack and stop acting like such a blowhard? I think you have a lot to offer and you’ve “been there done that”. I want to keep visiting and reading and learning.

but it seems like you’re compelled to insult everyone; the people who write in for advice, the bloggers, etc. Like it’s “your thing”.

Go ahead and rip me a new one. Wouldn’t surprise me.

You come across as holier than thou and talk pretty snotty. Which makes you seem weak. Your words would have more weight if you gave more respect.

That is all.

Would you like your money back? — Garth

#170 prollywrong on 01.30.11 at 3:46 am

it’s trendy to knock the Western world, and yes, we have made many poor choices over the last few centuries. but there are also things we have developed and exported internationally and should be very proud of. these include:

democratic rights
labour rights
civil rights
gender equality rights
sexual rights

now may be a good time to pause and remember that every single one of these progressive, universal human rights were fought for in the streets. they were hard gained and can be easily lost if neglected. nothing was given freely by those who stood to lose personal power and wealth to universal human equality.

garth, kudos for banning the bigots and other assorted nut-jobs who occasionally pop up here; this pathetic little blog is much better for it.

#171 tiger_baby on 01.30.11 at 4:47 am

#116 Stevermt on 01.29.11 at 3:56 pm

Niall Ferguson was talking about this a couple of years ago …

http://www.theglobeandmail.com/report-on-business/article973785.ece

“There will be blood, in the sense that a crisis of this magnitude is bound to increase political as well as economic [conflict]. It is bound to destabilize some countries. It will cause civil wars to break out, that have been dormant. It will topple governments that were moderate and bring in governments that are extreme. These things are pretty predictable …”

#172 Melissa on 01.30.11 at 6:45 am

Here’s an article exposing the dirty tricks used by both the banks and Australia’s central bank to artificially inflate household incomes and thereby reduce Australia’s dwelling price-to-income ratio.

http://macrobusiness.com.au/2011/01/misusing-house-price-to-income-multiples/

#173 David B on 01.30.11 at 10:04 am

hmmmm Cander next?

http://www.theglobeandmail.com/report-on-business/rob-magazine/the-irish-arent-rioting-over-austerityyet/article1879098/

#174 Zaza on 01.30.11 at 11:30 am

This junkhouse has just appeared for sale. It’s close to where we like 20 meters from terrible apartment building with custom wild parties in summer. There was a shooting in this house a couple of years ago. http://www.century21.ca/Search?Q=Atlas_Ave&Prov=ON

#175 Dodged-A-Bullit-in Alberta on 01.30.11 at 11:44 am

Greetings: Re-#161 [Bobby]—“The only mail everyone gets now is bills.”

I disagree. Couple days ago, I received 3 letters from different banks informing me I had been “pre-approved” for a new credit card. I cut them all into small pieces and mailed them back in the pre stamped return envelope. Bullshit will always keep coming, and Canada Post will always deliver, impossible to stop this mail. I am going to start collecting these and sending them back to different banks. A TD solicitation will be returned to CIBC etc. At the least, the postal workers will not lack for work!!!

#176 jess on 01.30.11 at 12:09 pm

The Pressure to solve crimes faster with the use of torture

… to conduct murder investigations, police will round up 40 to 50 suspects from a neighborhood and hang them by their arms from the ceiling for weeks until someone confesses. ”

XXXXXXXXXXX was pessimistic that the GOE would pass significant political legislation, other than the human trafficking law, before the 2011 presidential elections. GOE discussions about lifting the State of Emergency and passing a counterterrorism law “are just a distraction,” he maintained. XXXXXXXXXXX asserted that MFA and NDP officials, as well as some journalists in the pro-government press,
are embarrassed over the extensive use of torture, and want to see improvements. He believed that a discreet order from the Interior Ministry to stop torture would have a powerful effect, and would be more effective than the passage of legislation expanding the
definition of torture and increasing penalties, which the
quasi-government National Council for Human Rights and independent
NGOs have urged. (Note: A contact confirmed that on February 15 a parliamentary committee rejected legislation proposed by a Muslim Brotherhood-affiliated MP to increase prison terms for torture from
the current 3-10 years to 25 years, and extend the definition to cover senior officers who order torture. End note.)

http://wikileaks.ch/cable/2010/02/10CAIRO213.html

#177 bridgepigeon on 01.30.11 at 12:22 pm

Crow,
Wow! I couldn’t disagree with you more. Where are you studying history?

#178 The Truth on 01.30.11 at 12:25 pm

prollywrong sorry to burt your bubble but the Europeans were the ones who advanced the world to where we are today. Europeans were inventing democracy,science, art etc with minds like Leonardo da Vinci when the world was living in caves. As a European I feel those in NA are a backward braninwashed clueless people who have no idea about democracy . The greeks understand democracy(they invented it) and you see it in their real protests and not the “peaceful” protest which you NA’s have been “brainwashed” in corporate/elite schooling. Europeans will always be light years ahead. I love when I here NA’s talk about Freedom of speech but hate it when people use this freedom ( once again brainwashed by corporate/elite propaganda).

#179 Dark Sad Monster Bunny on 01.30.11 at 12:30 pm

143 Kitchener. Hope I did this right.

http://tinyurl.com/4d66aer

#180 Utopia on 01.30.11 at 12:47 pm

#164 nonplused wrote:

“Responders who don’t think Egypt can affect Canada:

Egypt might affect oil prices. Oil prices affect everybody. If oil decides to retest $140 and blows through it as down the line several other events happen as a result of the protests, well, it’s 2008 all over again. Another financial collapse follows as people cannot afford to eat, drive to the grocery store, and pay their mortgage. Something will have to give, as it always does”

———————————————————-

Nonplused, I just want to repeat that the current crisis in Egypt is not necessarily a negative for the rest of the world. Nor should energy prices spike strictly as a result of Egypts strife. This will certainly not bring on a financial collapse as you suggest.

You need to understand that the country has not turned to extremism nor is it inviting fundamentalism.

Try to keep that in mind as you watch the evening news images. Your senses might tell you that the country is out of control and headed for anarchy and disaster but that is not the direction this protest movement is headed in. Not even close.

This uprising has evolved from a populist sentiment amongst the people who are demanding greater freedoms, more job opportunities, an end to state corruption and the opportunity to vote in fair elections.

Egypt is not headed down the road that other countries in the region have gone where fundamentalist or extremist factions were openly embraced or where extreme religeous conservatism took root.

Quite the contrary. We should view the current events as an uprising for what it really represents. The will of Egyptians is to become more meaningfully engaged as as active participants in the global economy. Should a more repressive regime arise then there will indeed be a revolution, a major backlash and plenty more blood in the streets.

At this time though, Egyptians seek meaningful opportunity and greater personal freedom while throwing off the shackles of an overly rigid state bureaucracy that has been enforced (sometimes harshly) by the much hated police forces.

Egyptians themselves are keenly aware of their countries economic vulnerabilities and the risks that have been engaged by the process that is currently underway.

There are really only three major sources of revenues for that country. The first is revenues derived from shipping and the suez canal. The second and most at risk under the current circumstances is earnings from the tourism industry and visits from abroad.

Third, income support and contributions from the US in excess of two billion dollars annually are very significant to the overall economy there. Egyptians understand that US support could be at risk depending on how the Mubarak regime handles the current crisis.

They also understand that the most significant income stream in the form of tourism and visits from abroad has been all but demolished over the last few days. This will correct itself once peace is reestablished.

Do you actually think that Egyptians will deliberately harm the third major leg of their economy and damage their own best interests by impeding traffic through the Suez Canal though? This is of course how oil prices could be affected is it not?

That is nonsense of course. The revolt is not one directed against sanity and common sense and it is not economic suicide that is now in play. Please consider that Egyptians are in the process of throwing off the old guard and seeking an opportunity to emulate the more successful economies in the region, particularly those great success stories in India, China and other parts of Asia.

There is not a hint of extremism in the current rallies, just a host of legitimate complaints against an inflexible government that has not responded to the changes taking place in the world and has held this country back from participating in the benefits that globalization has to offer.

In short, the people are not trying to destroy their own country, strangle off their major revenue sources and bring on a more repressive regime. They are simply demanding democratic reform and a chance to fully participate on the world stage and engage more fully with the growth that other countries are experiencing.

We should not greet the current uprising with fear or concerns that greater instability is forthcoming. It is therefore now incumbent on Hosni Mubarak to enable a smooth transition of power to a democratically elected body chosen by the citizens of Egypt.

The people there have taken a huge risk by standing against a stagnant, out of touch government but there is a genuine belief that rewards will follow democratic reforms and bring about a more open and prosperous society.

I wish them all the best and am quite optimistic they will succeed in bringing about positive change.

In the meantime, Mubarak had better learn quickly that this is not a negotiation. He is advised to take immediate steps to open the political process as public discontent will sweep his regime away in short order.

Indeed, he may be within hours or days of being deposed.

#181 It's a riot on 01.30.11 at 12:49 pm

Ahhhhh……it’s the end of the world. Riot in Egypt – time to get online and post holier-than-thou comments that nobody reads…

#182 The Truth on 01.30.11 at 1:07 pm

It’s obvious to the world the Egyptian people do not want this dictator to remain in power and yet the US is silent in the issure. If this were the people of Venezuela and they were protesting like the Egyptian people the US would not be so quit. It’s funny how the people of Venezuela love Hugo and the US screams the elections are fixed and yet the people in Egypt have been sreaming fixed and now have taken to the street and the US is quit. I think we know what the US stands for.

#183 a prairie dawg on 01.30.11 at 1:17 pm

SNL satirized the Egyptian meltdown, last night.

It was all Time Warner’s fault. (aka Internet provider)

http://www.youtube.com/watch?v=uQ3aYCANTK8

#184 Got A Watch on 01.30.11 at 1:26 pm

“In Ontario

2010-1 there were 1 745 471
2010-11 there were 1 782 597

In the 11 months of 2011 according there were 37 126 mortgages added.

Still suspect as in GTA alone some 84K properties sold in 2010, never mind the rest of Ontario. Still trending at only 1 mortgage for ever 3 sales. Seems low”

Thanks for that, those numbers look better.

I think the 37, 126 would be all of the new buyers minus those who paid off their mortgage that year and didn’t re-fi (no idea how many of those there are, but there must be some). Anyone else would be some sort of move-up buyer who would be getting a new mortgage to replace the old one. If you paid all cash for the house, it wouldn’t show in those stats, and might be a subtraction as the old owner would pay off their old mortgage at closing. Then you have immigration and emigration as some people move in as new buyers and others leave, mortgages that are not replaced in Ontario. Probably pretty close, all in all. Close enough for Government work.

How many properties are there, total, and how many have a mortgage? The % of home ownership in the USA peaked at around 70% or so IIRC, above the historic average of 62%, then the market crashed – too many had bought houses. Just like the stock market get’s overbought, it just takes longer. What is our rate of ‘home ownership’ in Canada, and Ontario? I’m guessing it’s around 65%, maybe 70%, no idea. We’re overbought on real estate here for about 3 years now.

What seems clear from recent history in many other Western nations is that when real estate goes bad, prices go back to levels of 7-10 years ago, and maybe more. Which places every buyer since ’03 in danger of going underwater, unless they have paid down a lot of mortgage balance.

Glub, glub, glub.

#185 Veej on 01.30.11 at 1:36 pm

Hey Garth,

Oil jumped $3.70 and the US dollar surged on Friday, what did gold and silver do? I did’nt see an mention of precious metals in your commentary. I am curious to see what happens when state and muni debt collapses in the US perhaps later this year and the stark realization that QE1 through infinity has failed hits the general public. I wonder where people will put their money? US dollar? Euro? Yen? Assets that can be created through thin air at will may not do so well. Assets that cannot be created at will and that are priced in Charmin Ultra debt notes just might prove valuable. Just sayin…

#186 Valyrian Steel on 01.30.11 at 1:50 pm

This blog has really been attracting the “crazies” of late… predictable perhaps, but regrettable all the same.

#187 jess on 01.30.11 at 1:55 pm

I don’t understand how politicans are allowed to say such false and misleading things, for example:

“Michele Bachmann is in a class by herself, as far as political fact-checkers are concerned. The outspoken, and often inaccurate, Republican congresswoman from Minnesota has made more than a dozen assertions that either were false or really false, according to PolitiFact.com, the Pulitzer Prize-winning feature of the St. Petersburg Times that checks whether statements made by politicians are true.

We have checked her 13 times, and seven of her claims [proved] to be false and six have been found to be ridiculously false,” PolitiFact editor Bill Adair told Minnesota Public Radio. “I don’t know anyone else that we have checked, more than a couple times, that has never earned anything above a false. She is unusual in that regard that she has never gotten a rating higher than false.”

Bachmann’s falsehoods include claims that:

-Former House Speaker Nancy Pelosi racked up bar tabs of $100,000 for alcohol on military jets she flew on. (The $100,000 figure actually included such non-alcohol-related expenses as “baggage fees, meeting room rentals and refreshments, and, frequently, good-will lapel pins—as well as meals, ground transportation and lodging in U.S. territory.”)

-President Barack Obama’s trip to India last year cost $200 million a day. (This myth came from one dubious source in India and has no basis in fact.)

-The Constitution only requires Americans to tell census takers how many people live in a household. (The Constitution doesn’t even address the issue of what the census asks; Congress makes that decision. Bachmann was encouraging people to break the law by not answering simple census questions.)

-Treasury Secretary Timothy Geithner has considered getting rid of the U.S. dollar in favor of a fictional multinational currency. (Geithner discussed Chinese attempts to create an international reserve currency. He never came close to proposing that the dollar be eliminated. In fact, he didn’t even support the Chinese proposal.)

#188 LB on 01.30.11 at 2:00 pm

#171 Prollywrong

Yours is an incorrect assumption.

It is not physically fighting for rights that successfully brings them about or maintains them. This is an unnecessary step that we witness only impedes and delays the process.

It is in individuals and populations speaking out and in their non-compliance and circumvention of existing rules/laws, while at the same time engaging in the proposed alternative actions,and in spite of the risks involved (including death), which effectively evolves and brings about any rights. Once obtained,these rights can only be successfully maintained through constant and vigilant civilian oversight of judicial and government implementation.

#189 John on 01.30.11 at 2:19 pm

Garth, I presume these events have much higher implications on our lives than house price decrease. I know your blog is dedicated to real estate by events like these deserve due attention.

I would appreciate if the few of the next postings would reflect the effect on the Canadian economy or international relations.

My gut feeling says, if this protest in Egypt is not ended by the next week, the whole of Middle East will be in trouble. People have shown that they can topple the rulers (Egypt, Tunisia) and the rest (Saudi, Syria, Jordan, Yemen) are vulnerable.

#190 Utopia on 01.30.11 at 2:23 pm

#182 It’s a riot….

“Ahhhhh……it’s the end of the world. Riot in Egypt – time to get online and post holier-than-thou comments that nobody reads……”

———————————————————

Hunh??? Are you an idiot? (That is a serious question).

Did you actually read all the comments before (slowly) thinking to yourself,….”Hey,everyone is more stupid than me” and then adding nothing of any value to the conversation except a cryptic criticism that nobody understands anyway?

Back of the bus for you buddy. Now get lost.

#191 a prairie dawg on 01.30.11 at 2:25 pm

interesting…

Official: 19 private jets, carrying families of Egyptian businessmen, leave Cairo

capress

Saturday January 29, 2011, 7:04 pm EST

By Tarek El-Tablawy, The Associated Press

CAIRO – An official at Cairo airport says 19 private jets carrying families of wealthy Egyptian and Arab businessmen have flown out of the capital.

The official said the jets left Saturday carrying dozens of family members of Egypt’s business elite. He said most of the planes were headed for Dubai.

The passengers included the families of telecom mogul Naguib Sawiris, the executive chairman of Orascom Telecom, and Hussein Salem, a hotel tycoon and close confidant of President Hosni Mubarak.

The exodus of the families comes as Egypt enters its sixth day of mass unrest directed against Mubarak and what they say have been policies that further enrich the wealthy at the average citizen’s expense.

The official spoke on condition of anonymity because he was not authorized to brief the media.

http://ca.finance.yahoo.com/news/Official-19-private-jets-capress-3095719408.html;_ylt=A0PDkxKJpEVNDMUAKylyzJpG;_ylu=X3oDMTE4aHB1cGZ2BHBvcwM1BHNlYwN5ZmlUb3BTdG9yaWVzBHNsawNvZmZpY2lhbDE5cHI-?x=0

#192 Tony on 01.30.11 at 2:27 pm

You really don’t understand how stock markets and commodities work. Oil went up because the people who bought put contracts or sold call contracts at the start of the month were covering their short positions. Oil is grossly overpriced right now and you should see the selling continue for some time. The same held true for the metals and gold and siliver. The same thing happened to stocks. Conversely natural gas saw a sharp sell-off as it was bought at the start of the month meaning they were long and were buying puts or selling the calls to offset their long positions from the start of the month.

Partly true. Equally important is concern over the security of supplies to Europe through the Suez, which carries 10% of the world’s crude. The key concern is what oil prices do to economic growth and asset values. I disagree that oil is grossly overvalued, by the way, unlike gold. — Garth

#193 An Cat Dubh on 01.30.11 at 2:28 pm

I read a letter in a Chilliwack newspaper last year from someone who is involved in Vancouver real estate. He said he knows of a a wife of an Eastern European country who has a large amount of $$$ invested in commercial real estate in Vancouver. I thought politicians in those countries were not as well paid. Apparentley this country is in somewhat of a debt crisis.

#194 An Cat Dubh on 01.30.11 at 2:29 pm

I meant to say wife of an Eastern Eurpean president of a former communist country.

#195 Hoof Hearted on 01.30.11 at 2:40 pm

Instant democracy on demand ?

That went over well in Russia when Communism collapsed..right?.

The problem is the messy transition. Often the void is filled by even more corrupt parties.

As per usual, the US is at the ready to jump in. Then what ?

#196 Stevermt on 01.30.11 at 3:13 pm

#172 tiger…
thanks very much..yes I had read that piece when it first came out..very good article, addressing many possible root causes of the financial crisis and also how the situation ebbs and flows from being lulled into a feeling of bau and then back to panics. James Howard Kunstler writes about these future trends in his excellent book, the Long Emergency. this will accelerate as world energy production (capital) declines.

#197 S.B. on 01.30.11 at 3:16 pm

For the gold bugs/nuts here’s more evidence that gold is just another speculative commodity, driven up by fumes:

http://online.wsj.com/article/SB10001424052748703399204576108463818702014.html?KEYWORDS=Small+Gold+Trader+Makes+Big+Splash

A huge trade by a tiny hedge fund has sent shudders through the gold market.

Thanks to the nature of futures trading, Daniel Shak’s $10 million hedge fund held gold contracts valued at more than $850 million, more than 10% of the main U.S. futures market, and the equivalent of South Africa’s annual gold production.

But as gold prices started falling this year, the trade, which was a combination of being long and short gold contracts—bets that prices will both rise and fall—started going bad. Monday, he liquidated his position, and is returning money to clients.

As a result, the number of gold contracts on CME Group Inc.’s (NYSE: CME – News) Comex division plunged more than 81,000, to about 500,000, the biggest single reduction ever. While his trade didn’t account for all of the contracts, an average daily move is about 3,000 to 5,000 contracts.

#198 Oasis on 01.30.11 at 3:17 pm

#187 Veej on 01.30.11 at 1:36 pm

Garth doesn’t mention gold and silver because he just told people to get out. in fact, you are quite correct. it’s slowly dawning on people that their governments are nothing more than crooks and can’t be trusted any more than 3rd world dictators.

This is clearly a repeat of the 70’s, massive monetary stimulus, commodity price shocks, high unemployment.. inflation is going to seriously get out of control.

I don’t mention it because less than a half of one per cent of the population owns it. I’d rather discuss issues and assets that matter fundamentally to people’s lives. — Garth

#199 GregW, Oakville on 01.30.11 at 3:32 pm

Hi #159 S.B., re: your “be careful with what the media chooses to show us.”

BBC TV news this morning is showing stock footage of live fire military exercises in the desert when specking about Egypt. Not sure what that’s all about? Trying to instill fear maybe? And why are military fighter jets buzzing around over the cities of Egypt at all?

I’m glade to here the “People of Egypt” are organizing at the neighborhood street level to protect there neighbors live and property.

#200 Hoof Hearted on 01.30.11 at 3:39 pm

Gwynne Dyer: The Egyptian revolution?

http://www.straight.com/article-370642/vancouver/gwynne-dyer-egyptian-revolution

By 3 p.m. on Friday afternoon (January 28), the protesters in central Cairo were chanting: “Where is the army? Come and see what the police are doing to us. We want the army.” And that is the main question, really: where is the Egyptian army in all this?

Like armies everywhere, even in dictatorships, the Egyptian army does not like to use violence against its own people. It would much rather leave that sort of thing to the police, who are generally quite willing to do it. But in Alexandria, by mid-afternoon on Friday, the police had stopped fighting the protesters and started talking to them. This is how regimes end.

First of all the police realize that they face a genuine popular movement involving all classes and all walks of life, rather than the extremist agitators that the regime’s propaganda says they are fighting. They realize that it would be wrong—and also very unwise—to go on bashing heads in the service of a regime that is likely to disappear quite soon. Best change sides before it is too late.

ALSO:

The likely winner of a genuinely free Egyptian election, according to most opinion polls, would be the Muslim Brotherhood. The Brothers are not particularly radical as Islamists go, but the first thing they have promised to do if they win power is to hold a referendum on Egypt’s peace treaty with Israel. And most Egyptians, according to the same polls, would vote to cancel it.

That would end the flow of official U.S. aid and private foreign investment that currently keeps the Egyptian economy more or less afloat, even though it would probably not lead to an actual war. And there is no reason to believe that an Islamic government could make the Egyptian economy grow any faster, although it would distribute the poverty more fairly.

————————————

So….Looks like Mubarak is toast, someone needs to fill the void….and the US is in another pickle re Mid East stability.

#201 Timing is Everything on 01.30.11 at 3:44 pm

#160 Bobby

Agreed…But remember…

You get what you pay for.
Time is money.
Commission is fine, as long it is a CHOICE both the realtor and the seller agree.
I have used the same realtor three times. We worked out a ‘commission’ we both agreed. I got a ‘kick-back’
off the books after the sale(s). I group realtors, mortgage brokers, financial advisers, lawyers all in the same boat. Everyone loathes them, but when you need one…get a good one.

The good, the bad, and the ugly…comes to mind. Be careful out there.

#202 John on 01.30.11 at 3:55 pm

Garth, Do you truly believe that gold is overvalued in spite of more than $3 T created by US, Euro and China in the last 2 years alone. Fiat currency backed by nothing other than the hope that this will stop deflation and improve consumer sentiments?

The near 0% of interest rate itself is a form on stimulus. The trillions of dollars in derivatives and bond markets should itself cause someone to go ballistic. US, Euro and Japan are close to bankruptcy/default unless they print more money (QE) to run short term obligations. Long term obligations are totally irrelevant at this point.

What do you think gold’s real value (in dollar terms) is and why?

Wait and see. I advise if you have secured gains, to harvest them. — Garth

#203 Pr on 01.30.11 at 4:00 pm

With those event in Cairo and around the world, I went to read, the French revolution in 1789, Ouch! When the ordinary men and women are push to far it looks like it doesn’t end well!

#204 realpaul on 01.30.11 at 4:40 pm

Not quite big enough to admit

DELETED. Don`t you have a cross to burn somewhere? — Garth

#205 Nostradamus Le Mad Vlad on 01.30.11 at 4:40 pm


As Garth has alluded to, and in conjunction with #169 ralph — “Things can happen fast in the world and we need to pay attention.”

It seems unlikely the Suez Canal will be closed, however, things that are not expected to happen do take place when least expected.

Not too long ago, a link said that a combination of 34 US warships and carriers were headed toward the Gulf of Aden, but no official announcement was ever made.

Presumably, they would have been setting up shop to take away Iran’s rights under the NNPT to provide cheap electricity (via nuclear power) to their citizens, for heat during winter.

Maybe it was just a ploy, forgotten by most as the western world’s fiscal situation continues to slide downhill.

Tunisia and Egypt, along with the ME could be used as major distractions by TPTB to take sheeple’s attention spans away from what really needs to be looked after — ourselves, as charity begins at home.

With Lebanon closing in on inner turmoil, the whole region is set to explode.

Sudan and Albania are included, but does anyone remember where this all started?

Iceland, where citizens were fleeced by evil, money-grubbing banxters. But those sheeple fought back (as is the case now), had the banxters charged and shipped off to jail and now enjoy a better way of life, sans banxters.

Clearer look and understanding of stag (or spew) -flation.

#206 45north on 01.30.11 at 5:03 pm

real estate in Phoenix Arizona has gone down hard, some areas are not coming back

http://mcaf.ee/5ce0b

(I got this from thehousingbubbleblog.com)

I can just imagine some saying “this has nothing to do with Canada”

To them I say “you better pray it doesn’t”

Perhaps the most troubling long-term prediction is that certain pockets of less-desirable residential development simply will not recover.

Read more: http://www.azcentral.com/business/realestate/articles/2011/01/30/20110130az-real-estate-market-outlook.html#ixzz1CYKxjSIa

what Phoenix and Canada have in common is people are at the limit of their ability to pay monthly expenses.

#207 Moneta on 01.30.11 at 5:07 pm

It is not physically fighting for rights that successfully brings them about or maintains them. This is an unnecessary step that we witness only impedes and delays the process.

It is in individuals and populations speaking out and in their non-compliance and circumvention of existing rules/laws, while at the same time engaging in the proposed alternative actions,and in spite of the risks involved (including death), which effectively evolves and brings about any rights.
————–
I would argue that the non-compliance and circumvention of laws and rules is only possible because authorities are putting all their energy in stopping the ones physcially fighting and making noise.

We’re all interconnected. We all impact eachother in some way.

#208 Cellar Dwellar on 01.30.11 at 5:25 pm

hmmmmmm, all these “uprisings” in Arab countries almost make me think the NeoCons might actually have been on to something when they expected democracy to blossom in the Middle east after Suddam fell…….
Perhaps they should have invested the Billions of $ that went into bombs into free laptops and cellphones for every person in the Middle East.
Democracys Next internet stop…… China?

#209 BC Bring Cash on 01.30.11 at 5:57 pm

Question. How do you become a Millionaire in Kelowna? Answer. You bring 2 million.
If you plan on moving to the Brokekanagan, or any where in BC, plan on bringing lots of cash. Lowest min. wage in Canada. $6.00 per hour training wage. Best Place On Earth? Yea right….

#210 Dan on 01.30.11 at 6:04 pm

CONadian realtors/mortgage brokers and other vested interest liars are in fear of the fact Canada’s housing crash will be WORSE then the US housing crash. FACT is Canadians are in MORE debt then the tip top of the US housing bubble. Canada is the BIGGEST HOUSING PONZI in the WORLD . Realtors do not care if they ruin lives since they make money if they sell. This would explain why “it’s a good time to buy” which American realtors have said all the way through their housing crash. Guess what Realtors in the US continue to say “its a good time to buy”. The housing crash in Canada is getting worse by the month and the new rules will make the situation worse as the Canadian housing ponzi crashes under it’s own weight.

POP……………Coming soon to Canada?

Seattle eyes plan for permanent tent city

http://www.theglobeandmail.com/news/national/british-columbia/seattle-eyes-plan-for-permanent-tent-city/article1887221/

#211 Hoof Hearted on 01.30.11 at 7:03 pm

Walked around Vancouver Olympic Village last Friday…

What a ghost town….worse than what I imagined.

The architecture is hideous very 50’s style utililarian.

They have a great liquor store…huge, but we were the only customers….

The other businesses haven’t opened yet ie neither Urban Fare or London Drugs…..Almost all the main floor retail spaces on all the buildings sit empty.

Only action was the landscaping company pressure washing the sidewalks.

#212 jess on 01.30.11 at 7:34 pm

Egyptian Muslim Brotherhood leader Essam el-Eryan said today that Egyptian opposition groups have agreed to back former IAEA head Mohamed ElBaradei to negotiate with the government, Al Jazeera reports: Egypt’s opposition groups have agreed to support opposition figure Mohamed ElBaradei to negotiate with the government, a leading member of the Muslim Brotherhood said on Sunday. “Political groups support ElBaradei to negotiate with the regime,
http://www.truth-out.org/

http://www.cbc.ca/world/story/2011/01/28/f-profile-mohamed-elbaradei.html

#213 veej on 01.30.11 at 7:40 pm

Tony,

If you are referring to me as “not understanding how the markets and commodities work” you may want to check a graph of the gold price since 2001. Is that what “not understanding” something looks like to you?
What exactly is going to cause this to change anytime soon Mr. Buffet, care to share? Because suddenly a mental giant like you decided to chime in on a blog on a Sunday?

Please, tell us how overvalued gold is currently, what exactly is the fair market price is and where you see it trading over the next 5 years. This should be good… Awaiting you’re response Mr. Expert.

#214 Timing is Everything on 01.30.11 at 8:50 pm

#209 Moneta – said “We’re all interconnected. We all impact eachother in some way.”

When someone pees in the pool….The shallow-end and the deep-end are affected, eventually.

#215 Timing is Everything on 01.30.11 at 8:54 pm

#212 Dan

Why are there no tents pitched in Regina or Winterpeg
or Edmonchuck or Minneapolis right now?
Or Weyburn, even?

#216 Roial1 on 01.30.11 at 8:56 pm

Civil Rights.
Once obtained,these rights can only be successfully maintained through constant and vigilant civilian oversight of judicial and government implementation.

A step that has been quietly destroyed since 9/11 by the “Homeland Security” laws.

To protect us from “THEM”. (In Canada too.)

Can you say “George Orwell”??????

#217 GregW, Oakville on 01.30.11 at 8:58 pm

Hi #210 Cellar Dwellar, the TV news has reported that China has blocked the news regarding Egypt on there internet.

#218 Oasis on 01.30.11 at 8:58 pm

I don’t mention it because less than a half of one per cent of the population owns it. I’d rather discuss issues and assets that matter fundamentally to people’s lives. — Garth
__________________________________

and you think gold is OVERvalued? with 1/2 of 1% of the population ownign gold? sounds UNDERvalued to me. maybe you should be telling people people to BUY gold … not harvest gains. will certainly make a fundamental difference in peoples lives when inflation spirals out of control soon.

People need money, not gold. This site is about how to manage life in the currency we live in. Move on. — Garth

#219 AG Sage on 01.30.11 at 9:15 pm

>#205 Pr on 01.30.11 at 4:00 pm
>With those event in Cairo and around the world, I went to read, the French revolution in 1789, Ouch! When the ordinary men and women are push to far it looks like it doesn’t end well!

Oh, and an excellent demonstration of overshoot as well. They didn’t overthrow the aristocracy to become a sane and civilized society based on social justice. That took just a wee bit *cough* longer.

The day after your dictator is run off is when the hard part starts. I hope that we have reached the globalization level where countries that have sent a lot of young people abroad for schooling over the last 20 years, when the overthrow comes, they can install something viable based on that enculturation. Fingers crossed.

#220 Cory on 01.30.11 at 9:22 pm

.#11 Dexter on 01.29.11 at 12:07 am
$100 dollar oil will get things moving again in Alberta and the cycle continues.

Unbelievable. — Garth
.
—————-
Dexter, you are deluisonal. high oil prices will cause another recession. Nobody, including me who has worked in o&g for over 20 years, wants to see high oil prices. At ~$90 bbl, this will be just fine. Even that is pushing it. And besides, I highly doubt Goldman Sachs will drive up the oil price this time since the last time they did it and oill went to ~$+140/bbl, they bankrupted one of their clients on a margin call for being short….but then that was part of the plan.

http://www.forbes.com/forbes/2009/0413/096-sachs-semgroup-goldman-goose-oil.html

Then GS shorted it and drove it down to ~$35/bbl…..too many eyes on the ball this time for it to happen again. Not yet anyway.

#221 Onemorething on 01.30.11 at 9:37 pm

#212 Dan, good to see you are in fine form my friend.

Chinese New Year is already upon us, what happens after should be interesting!

The left coast bulls are counting on an asian invasion to BC if China stumbles propping up as you say the biggest RE bubble in the world even further.

Little do these people know that it’s the reverse in Chinese Culture, the family always returns home in support of any misfortunes.

Either way, this has nothing to do with the eventual demise of RE in Canada. Patience making good liquid decisions and sideline sitting will have it’s day.

#222 Edmontonian on 01.30.11 at 9:38 pm

Had a great dinner out with a few old friends who’ve moved to the ‘Burbs, but still work DT. You’d think they’d be happy the price of oil was floating around $90 a barrel since our Alberta provincial Government is still running a 5 BILLION Dollar Deficit AGAIN this year. But no, they are so in debt that the price of gas going from .90 to $1.00 a litre has them tightening their budgets to the point of painful. See my friends had to have a full-size BMW/Lexus to drive downtown to work every day, after all it can be an hour drive when the roads are bad. One couple spends $500-$600 on gas per month and has a $2200 mortgage. Since they decided they didn’t want kids I asked them why they don’t move back DT close to work. They could even rent for awhile- (there are probably close to a thousand rental choices in DT EDmonton alone). They don’t want to move at all and are going to stick things out, they told me, they just bought the house because it is such a good investment! LOL

#223 EdmontonGuyHere on 01.30.11 at 9:47 pm

#217
We had a tent city in Edmonton in 2007& 2008. Rent went super high do to a media fueled Zeitgeist about how there was no place to live and rental prices has doubled in a few buildings overnight (what the MSM left out was the rentals buildings that wanted to quickly flip into condos were the only ones who doubled rent to get people to leave so they could sell the place). Hence rent soared and realestate went up about 50% in 2007.
Now so many people have left Edmonton, and they’ve overbuilt too much that vacancy rates have soared & rent has come down 30-40%. Realestate is down close to 20% but it looks like we
ll see another 20% or more as foreclosures & Bankcruptcies have soared past historical highs of the 80’s when interest rates were as high as 20%!

#224 smartalox on 01.30.11 at 9:49 pm

@ Coho,
As much as the definition of democracy has become confused with ‘friendly to American interests’ in the last decade, I was referring to the traditional definition of the word.

#225 HouseBuster on 01.30.11 at 9:52 pm

People need money, not gold. – Garth
——————————————-
Leila Trabelsi, the first lady of Tunisia, fled with £35 million worth of gold, in a cut-and-run reminiscent of the most famous of this ilk, Imelda Marcos.

http://www.telegraph.co.uk/news/worldnews/africaandindianocean/tunisia/8267722/Leila-Trabelsi-Imelda-Marcos-of-the-Arab-world.html

I’m sure that’s very useful information tonight in, say, Winnipeg. — Garth

#226 Edmonton Bank GENT on 01.30.11 at 9:58 pm

Just a note to everyone that is in dire due to the Housing Bubble popping. You can KEEP your RRSPs if you declare Bankruptcy! So if you plan on resetting your finances that include a house with an upside down mortgage don’t forget to put most of you money in RRSPs before you declare Bankruptcy! Hope this helps someone as I know there are a lot of people starting to go under!

#227 a prairie dawg on 01.30.11 at 10:03 pm

@ 219 gregw

And for ‘good’ reason. Imagine the damage 800 or 900 million peasants could inflict if they were to revolt.

Best not to be giving them any ideas.

#228 bridgepigeon on 01.30.11 at 10:08 pm

228 Edmonton,
What about TFSA’s?

#229 Jeff Smith on 01.30.11 at 10:15 pm

See, told you so. another election is brewing.

http://www.theglobeandmail.com/news/politics/corporate-tax-cuts-may-bring-down-government/article1887996/

#230 rental monkey on 01.30.11 at 10:36 pm

re:Edmonton Bank GENT @ 228

Are you sure about this because I know someone that claimed bankruptcy in 2002 and they scooped her then 9 year old daughter’s RESP. Please provide link to show how this is, infact, true.
Thanks & all those on the edge will thank you too.

#231 prairie gal on 01.30.11 at 10:41 pm

@ #217 Timing is Everything:

There were lots of tents around Regina this past summer, particularly in Wascana Park, which is big enough to camp in if you know where to go. However, not possible in -30 degrees and 6 feet of snow.

A bigger problem here is substandard housing – trashed rentals, no heat, no water, 10 people crammed into a 3 bedroom.

#232 Blacksheep on 01.30.11 at 10:42 pm

Garth keeps repeating the official fed line:

QE has not/does not create inflation.

In my opinion,

-It pushes rates down, to promote borrowing, creating more dollars into the system, equalling competion for
commodities/equities. (overlay a QE spending/buying
graph onto the DOW index)

-Forces investment capital from the banks, into the market seeking return, again more competition for the above.
(GICs are for losers? sound familliar?)

-Gives brokerage banks zero cost dollars to play with,again more competition for the above.
(Sept 21 2008 Goldman sachs and Morgan stanley
became holding banks, accessing the discount rates)

Supply and demand applies to ALL things.

take care
BS

#233 Dark Sad Monster Bunny on 01.30.11 at 10:44 pm

215 Veej 220 Oasis – you might find this interesting

http://www.financialsensearchive.com/fsu/editorials/dollardaze/2009/0126.html

Article on money supply and the value of gold.

#234 WebBoy on 01.30.11 at 10:49 pm

#228
You CAN keep ALL your RRSPs except the ones you may have gotten 12 months before the Bankruptcy!

#235 RickOShea on 01.30.11 at 10:50 pm

What was I doing on Friday? Not protecting the National Treasure that’s for sure… My life is much more mundane than that – I was working, doing my job, the same job I’ve had for nearly 20 years now… I am a very small cog in a very large wheel – I have no illusions..

If the ‘powers that be’ hold up their end of the bargain – run the government and the economy fairly and competently, do not erode my civil liberties and rights (the trappings of democracy). If they look after the ‘big ticket items’ which includes the environment, if they abstain from doing really stupid crap that prevents others from enjoying a decent life — then I don’t have to leave my job to riot in the streets or form a human chain around the National Treasure. Right now tho, I’m rating the ‘powers that be’ about a 3 out of 10.

#236 Hoof - Hearted on 01.30.11 at 10:50 pm

#216 Timing is Everything on 01.30.11 at 8:50 pm#209 Moneta – said “We’re all interconnected. We all impact eachother in some way.”

When someone pees in the pool….The shallow-end and the deep-end are affected, eventually.

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

WRONG!!!!

http://www.youtube.com/watch?v=Th_aBzrV37M&feature=related

#237 An Cat Dubh on 01.30.11 at 10:51 pm

Bring Cash on 01.30.11 at 5:57 pm
Question. How do you become a Millionaire in Kelowna? Answer. You bring 2 million.
If you plan on moving to the Brokekanagan, or any where in BC, plan on bringing lots of cash. Lowest min. wage in Canada. $6.00 per hour training wage. Best Place On Earth? Yea right….
.
This reminds me of a woman I was talking to and she was complaining in the late 90s about B.C.’s “high” minimum wage, then a split second later, she talks about how her husband and her have a place in Arizona and they love going there in the winter cruising around in their purple metallic 1957 Ford Thunderbird?!?!.
My BIL and sister bought outside of Phoenix during the peek, but fortuantely, they had a large downpayment and he makes around $120K per year. They bought the house for a place to live. BIL drives and Prius and my sister drives a 98 Corolla. No SUVs, large trucks.
Sign on a dump truck. God made asphalt so yuppies can go off roading.

#238 It’s a riot on 01.30.11 at 10:52 pm

#182 It’s a riot….

“Ahhhhh……it’s the end of the world. Riot in Egypt – time to get online and post holier-than-thou comments that nobody reads……”

———————————————————

Hunh??? Are you an idiot? (That is a serious question).

Did you actually read all the comments before (slowly) thinking to yourself,….”Hey,everyone is more stupid than me” and then adding nothing of any value to the conversation except a cryptic criticism that nobody understands anyway?

Back of the bus for you buddy. Now get lost.
=====

Here is the “holier-than-thou comments”…

#239 Utopia on 01.30.11 at 11:17 pm

#219 GregW, Oakville

“…TV news has reported that China has blocked the news regarding Egypt on there internet”

———————————————————-

Not a good sign, Greg. Not auspicious at all especially as Chinese New Year has arrived. I guess it all makes sense though. The Chinese do not want their citizens to witness a popular peoples revolt that leads to a change of government.

Maybe Garth is right, this event could have much wider implications for everyone else. I sure hope not. The last damn thing the world needs right now is an uprising in China on the heels of this current revolt.

It has been quite a while since we had a big down Monday on the stock markets by the way. Tomorrow might just be a blowoff day given all that has taken place over the weekend and the corrections overseas.

#240 jess on 01.30.11 at 11:20 pm

So Does Mr. Beck get his script from this Canadian?

Charles Coughlin (1891-1979) was born on October 25, 1891, in Hamilton, Ontario, Canada.

CHRISTIAN FRONT
In a 1938 broadcast, Coughlin helped inspire and publicize the creation of the Christian Front, a militia-like organization that excluded Jews and promised to defend the country from communists and Jews.

The Front organized “Buy Christian” rallies throughout the country….

Throughout the 1930s, Coughlin was one of the most influential men in the United States. A new post office was constructed in Royal Oak just to process the letters that he received each week — 80,000 on average. Furthermore, the audience of his weekly radio broadcasts was in the tens of millions, presaging modern talk radio and televangelism

http://www.ushmm.org/wlc/en/article.php?ModuleId=10005516
=======================

From the Guardian

…”Frances Fox Piven is not going into hiding. Not yet.

The 78-year-old leftwing academic is the latest hate figure for Fox News host Glenn Beck and his legion of fans. While she has decided to shrug off the inevitable death threats that have followed, she is well aware of the problem. “I don’t know if I am scared, but I am worried,” she told the Observer as she sat in a bar on Manhattan’s Upper West Side….

It is typical of Piven. The spry, twinkle-eyed academic pulls no punches when talking of Beck. “He is a very neurotic and peculiar type of person. I don’t think he is capable of sane discussion,” she said. And his supporters? “They creep me out.”

Piven joins a select group on the list of Beck’s enemies that includes billionaire financier George Soros, green activist Van Jones and long-dead President Woodrow Wilson. Piven likens Beck to a 21st-century version of
, the 1930s rightwing priest and radio broadcaster who many saw as advocating a US version of fascism. “It is very dangerous. Father Coughlin founded a third political party. Glenn Beck has the Tea Party. We should be worried,” she said.

“At the start I thought it was funny, but now I know that is dangerous… their paranoia works better when they can imagine a devil. Now that devil is me.”

http://www.guardian.co.uk/media/2011/jan/30/frances-fox-piven-glenn-beck

#241 Bill Grable on 01.30.11 at 11:22 pm

House of Representatives Speaker John Boehner on Sunday said that the United States must continue meeting its obligations to fund government debt or risk a global financial disaster.
With the Treasury Department rapidly coming closer to bumping up against its statutory borrowing limit of $14.3 trillion, some of Boehner’s fellow Republicans in Congress have suggested that no further borrowing should be authorized until deep cuts are made in federal spending.
Boehner, interviewed on “Fox News Sunday,” was asked about the impact of a government default if the limit on its borrowing authority was not raised in a timely way.

“That would be a financial disaster not only for our country, but for the worldwide economy,” Boehner responded. He added, “Remember, the American people on Election Day said we want to cut spending and we want to create jobs. You can’t create jobs if you default on the federal debt.”

Treasury Secretary Timothy Geithner has estimated that unless Congress acts to increase the debt ceiling, his agency will run out of borrowing authority sometime between March 31 and May 16.

Link: http://tinyurl.com/5uwb5l8

> Meanwhile, Flaps and the clowns partied with Carney and the elite at Davos. One of the Bloomberg columnists said he is “terrified”.
Sovereign defaults – and the Banks are starting to chase yield.
OK – now I am really stumped. Sold my RE and if banks are in trouble, and getting caught up in chasing yield in emerging economies and commodities – what do I do?

Oh, and one last note – FHA limits have finished high end RE in places like here on Maui.
Even the vultures are staying away from the carrion.

In Phoenix, some houses have gone to ZERO!! (*true).

Link: http://tinyurl.com/6b2ktjp

This is starting to get weird.

Can we get a mulligan?