In case you missed it, the shoots are back. Yeah, the green ones.
More jobs were cranked out in Canada and the States last month. The jobless rate to the south fell to 9%, which was the lowest in 21 months. Government bond yields rose to the highest level since last Spring. Stocks advanced further. In fact, the S&P 500 has now risen 94% from the low it hit in 2009. The loonie climbed to the highest level in almost three years.
What does this mean?
Well, if you panicked two years ago when crisis hit, and sold your stocks or funds, you failed. If you understood most people are fools and bought what they were selling, you scored. It also means bonds are selling off and yields rising, which guarantees higher fixed-term mortgage rates. Mostly, however, it sets the scene for the eventual renaissance of America. This is bad news for those who loaded up on gold and hoarded pallets of toilet paper and oil-packed tuna.
And, bad for houses.
Face it, the tide has turned. Despite what nonsense Global or CTV cook up about a seller’s market in Vancouver or condomania in Toronto, this puppy’s cooked. While it’s good news more jobs are materializing, the shoots guarantee interest rates will be rising sooner than later – something fellow bog dog Mark Carney has been telling us for months his Bank of Canada is hot to unleash.
Why jack money? Because everybody you know has granite countertops, a line of credit the size of Aretha Franklin, houses that double as ATMs and mortgages from hell. We’ve pigged out on consumer credit and taken extreme risks on leveraged real estate. That’s exactly why F murdered the 35-year home loan, and why Carney is determined to turn off the tap of cheap money.
As you probably heard this week (and I referenced here yesterday), a new report speculates Canadian real estate could tumble 25% in price if exactly this happens. That had the house-pumpers in full frontal defence mode yesterday, claiming it was unfounded and extreme. But it’s not. It’s what this miserable, anti-social, anarchistic blog has been warning about since my puberty two years ago.
Say, what does a 25% decline mean? Well, it’s not as bad as death in the desert (some parts of Phoenix have lost 80%), or in the swamp (much of Florida is off 50%), but it’s enough to cream places like, oh, Milton. As brother dog Brian points out:
Some of my friends in Milton are doing some #’s. here is an example for you just so you can see how some of these people think.
Home value: 450,000
Mortgage: 325,000
25% drop= 112,500 lost.
In their mind they are still up by about $12,000. No biggie. What they don’t seem to get is how the 25% average works. This is where I fear for the people of Milton. This place has nothing but houses and big box stores. I would say the majority of Miltonites live there not out of choice but out of affordability and typical American dream trickery. If they could they would live in a town they truly loved.
When things go south Milton will be hit the hardest because people won’t necessarily see the value in living there anymore. The more desireable Oakville will be hit, but the value will still somewhat hold due to the cache of that area. If Oakville can drop 20% what stops Milton dropping 50%?
Nothin’, Brian. Which is why months ago I tagged Milton as the potential Stockton CA of Canada – that monotonous suburban appendage of San Francisco where ‘executive’ house prices were decimated when the USA real estate correction hit. In fact, I’d add Kelowna to the list, along with Surrey and Brampton, Airdrie and pretty much all of Winnipeg.
After all, aren’t the danger signs already there?
Yesterday the cartel in Toronto released the latest stats and, as forecast here, January was another loser month. Sales were down 13% from last year, making this the seventh in a row marked by increased sales of Tums and scotch. Values were up 4%, but that’s the phenomenon of a distressed market – fewer buyers, higher prices. Even on Vancouver Island, where it was 11 degrees on Friday, sellers are being slapped around. In Nanaimo, for example, the average price is off 6%, while in Victoria houses just got $50,000 cheaper.
Remember the pattern, kids. Sales fall first. Then listings rise. Then prices erode. Mix in some swelling bond yields or an itchy central banker, and you also get shock & awe.
This is why residential real estate should not comprise more than one-third of your net worth. It’s why you need investments in fixed income and growth assets. It’s why you should never bet against America, and why the world is not about to end.
Unless, of course, you bought Milton with a 5/35.
297 comments ↓
for sure, i’m first
Que sera?? ‘What will be’, (skipping the future perfect of the verb :-) Here are a couple of teasers,
which hint at the future, which you future Drs lawyers, algorithm chasers, butchers, bakers, and
candlestick makers will face:
Around the world are dozens of radio telescopes,
listening, every second (for decades now), for any
intelligent (ie of meaningful structure) communication. (the SETI project: google it.)
However, the universe is infinite right? (Recent theories advocate this -again) So the
variability of the signals could be assumed to be
infinite, right? So within this infinity one could find
the mathematical equivalent of an astronomical number of monkeys at typewriters,
who have (statistically) produced not only the entire
works of Shakespeare, but also the entire working proof of e=MC (squared), and several theses in
4th dimensional mathematics by Chinese scholars to be published sometime in 2088. However, this ‘intelligent communication’ would statistically exist for a nanonano…….n second Most of space is just ‘space’ Most of the ‘output’ is Noise.
——–Patience, this IS leading to a point.
–So logically any intelligent
structured communication could not be separated from innumerable ‘random’ creations.
—-At this point I will assure you that working in a gov research lab
is so dessicating that it would dry fresh cement in
minutes, – and the KoolAid would nauseate a hiphop street dancer in Mumbai.
Teaser #2: A CDN! company developed and presented the first (or coincidentally), Quantum Computer at a research sho n tell conference in Cal. about 2 yrs ago, however this device, like an MBS
(and all derivitives) is an unknown quantity. A quantum computer can theortically solve problems
in seconds for which IBM’s best would need 10 years.
So what do you ask this device to do, which will
Prove that it IS a quantum computer? Further,
in what form do you ask the question? in C++,
in parallel prog code? In a new type of code?
How long would it take to resolve these 2 requirements?? Ummmm… ABOUT 10 YEARS :-)
Among the ‘Collapse of the US Empire’ books are the
“Complexity Theory” authors (for whom I have great respect for doing the spade work in unearthing
the seeds of destruction within the somewhat Idealized accomplishments of ancient civilizations)
They propose that these great Empires choked and died from the Viral Suffocation of a Complexity which ~required a 12 digit password just to unroll some toilet paper. (did Mao have a point, in spite of
sociopathic massacres??)
Bill Gates went thru about 75 MS forms: requisition, request, acctg,confirmation, suggestion, reports &
reports, –and chopped, merged, and redesigned down to —17
Waitaminute Complexity Theorists! Could it be
that we do not have the education, skills,common sense, biz smarts, inititive or understanding to
SIMPLIFY the complexity?? Isnt that 99% of what managers are FOR?? Would not a 3 digit code be
enough to secure the toilet paper roll?!
S*** this feels like the good old MSDOS days:
We had bloggers who could evicerate a squad of
idiots in less than 20 unforgettable words in any of 3 languages. It was bloody, but it was as electric as
a surfing tutorial with a sensually obsessive compulsive Euro lit major.
Cheers: Ken S in La La – Van :-)
Garth can you please reference me a website that states 7 out of 10 canadiens own a home? For a friend of mine who doesn’t believe me.
GreaterFool.ca. — Garth
The USA’s sneaky tactic of devaluing the USD, having a splurge with that extra cash and then waking up poorer, but more competitive and with less to lose is paying off.
The countries that have treated the GFC as an opportunity and taken the long view are going to flog those other countries that tried to sit the GFC out. I fear for Australia as well as Canada in the next 2-10 years.
Unless, of course, you bought Milton with a 5/35.
Gee… 5/35… that’s only about what? 95% of the tens of thousand of Mattamy homeowners in Milton?
Remember the pattern, kids. Sales fall first. Then listings rise. Then prices erode.-Garth
I think you might have mentioned this would happen last year, and the year before. Eventually it will happen.
I did mention it last year, and sales fell six consecutive months. Do you have a disability? — Garth
The stuff on the front lawn I get, but why brutalize a mans fishing boat.
Definitely agree, rates are going up and to be honest its about time, with BOC rates at 1% our monetary system was dysfunctional. Bond rates are also set to soar.
I personally sold out all of my stocks a week or so ago (still hold some SIRI), the Bull run was great, but IMO the run can’t continue, missing the top by 10% is of no concern to me.
I believe that the markets can fall to a degree, and that rates will still increase.
Wow, it only took 2 years for this vagabond couch surfer to be right. I hope it rattles people so hard, that their grandkids still feel it. sorry, but they deserve it.
BTW Garth, I’m really liking this 1400 sq ft Miami rancher with 3 beds, 2 baths, and granite counters, stainless steel new appliances and my very own tiny swimming pool. Total porn, man. 70,000 US. I’ve got 0.00% of my net worth in real estate. Working in Ft Mac, and living in camp saving money diversifying in boring paper. We’ll have to talk about the TFSA/RRSPs which are maxed but not performing. And direct trading accounts outside of the tax shelters that are dividends/capital gains only. interest is in the RRSP’s, and TFSA is the crazy return fund, but mostly cash looking for a place to happen.
I’m gonna buy the miami place for 70k and will use 20% down only if I can find a bank to lend the other 80%. But I need your blessing. Whatdya say?
gonna rent it out.
A place on my street in Abbotsford just went on for $549,000. 4 bdr, 2 ba/2700 sq/ft, built in 1982. The place 6 doors down on the mkt 175 days, same size/condition $385,000. Now that’s good comedy.
Come on…Get with it! It was 13 degrees today. Jeezz.
http://www.theweathernetwork.com/index.php?product=obs24h&placecode=cabc0313&ref=qlink_obs_last24
January sales in the GTA might have been down 13% over January 2010, but February could be far worse YOY… February 2010 was when the market really started getting silly — a 46% jump in sales over January 2010, and 5.5% jump in average price (in 1 month!).
January 2010: 4986 Sales // $409,058 average price
February 2010: 7291 Sales // $431,509 average price
January 2011: 4337 Sales // $427,037 average price
February 2011: ????
Is this when prices start declining YOY?
Do you think ferry rate increases the size of aretha will affect re prices for vanisle etal or not ? anyone.
http://www.cbc.ca/canada/british-columbia/story/2011/02/04/bc-ferry-fares.html
25% is quite kind and gentle as a national average (if such a thing is calculable within any kind of meaningful accuracy). Bubblier will be poppier and crashier. I’m looking at you ‘Couv. ;-)
Might want to scratch a little deeper at those US unemployment numbers.
Hey if Calgary’s Airdrie bedroom City can make the list for a potential 50% hit, how about St. Albert which fills the same role for Edmonton?
I feel a bit insulted that we in St. Albert are not listed as potential Biggest Losers.
Milton….I’m speechless…
http://www.myvisuallistings.com/virtual-tours/14110/
http://en.wikipedia.org/wiki/File:Derry_and_Thompson.JPG
http://www.youtube.com/watch?v=ONEYGU_7EqU
Cmon Garth,
I want to rent out the Miami rancher. A simple yes or no.
Please.
I am so cocerned that Canada is going to join the US with this new border deal with the US. Can we trust Harper?
Many times it is not realized that for a house to go from 100K to 200K , it needs to go up by 100% , but for it come down from 200K to 100K, it needs only 50% on downside.
Yup.
With oil on the rise due to Mide-East insecurity and a certainty of inflationary pressures in just about everything we consume with the exception of domestic real estate, motorhomes, lake-side cabins and time-shares,… rates will be rising sooner than later.
This is a good time to remind readers that the time is fast approaching when US real estate will finally begin to stabilize and plateau.
That day is not yet quite here of course. Patience and a focussed mind will yield their rewards to those who pay attention though.
Try to ignore the ninnies who keep harping that prices will fall by another half yet again. Nonsense. It won’t happen. Not as the economy actually starts to heat up again.
The vultures out there who have been waiting for the biggest buying opportunity of their sorry lives are making a mistake by fixating on the Canadian market and waiting for the penny to drop here at home.
The real goods are all materializing down South across the line and despite fears that the market there could fall a bit further it should now be clear that when the vast majority of Americans are very fearful of buying homes that in fact represents a terrific buying opportunity.
Canadians would be foolish to ignore the eventual upside potential some years down the road.
Don’t try to time it when you already know a screaming good deal that is flashing neon orange and red “buy me you crazy fool” signals right in your face.
Hell, someone on this blog wrote just last week that they had seen a condo for sale in Hawaii marked at only 16k. !!!!!!!!!
Hawaii is a paradise next to Milton. Need I say more?
Garth said: “eventual renaissance of America”.
America: huge numbers of jobs sent to china et.al, never to return; daily exports of huge sums of wealth to buy Saudi oil, which is then frittered away in SUVs (and hummers too); a structural deficit which will only become more structural.
What do you think will drive this renaissance?
Homeowners in Nanaimo were telling me they would somehow benefit from the Olympics……and that Nanaimo would be a bedroom community of Vancouver because of the mainland price differentials.
So, after a private daily commuter passenger ferry went broke, and the cost of getting to Vancouver was either a $120(return) B.C. Ferry and 3 hours or a $150 return float plane ride (in good weather and in daylight) this bedroom community nonsense is a non starter.
A friend has a house still for sale in Nanaimo, now for $369k, started out at $459…….8 months ago.
Island living is fine if you want to stay on the island.
“Values were up 4%, but that’s the phenomenon of a distressed market – fewer buyers, higher prices.”
Garth, can you explain why higher prices would occur with fewer buyers? If there are fewer buyers (less competition), wouldn’t the sellers more likely drop the price to move the product?
#2 ken s
I love your posts ken. I hardly have the brain power to keep focussed on them though. Maybe I need to change my medication again (?).
Keep up the good work though, you have brilliance with word play and ideas that are pretty foreign to me.
Was it about housing by the way?
I am trying to understand what the data in this report….. http://www.bankofcanada.ca/pdf/annual_page1_page2_page3.pdfrepresents in today’s world. ……..The interest rates in WW1 were also quite low. Is that because there was less borrowing occurring? No credit cards? But in the 80’s things went crazy! So would it be more fair to take and average of the last 20 years for the bank rat, exclude the 80’s, and use the average rate to determine the average high for the future? Trying to determine what interest rates could look like throughout the next 10 years. Any thoughtS appreciated?
I only ask b/c I have friends about buy a $250,000 house. They can lock in for 5 years 3.99% OR 7 years 4.99% or 10 years 5.41% …Yes sadly with a 35 year amortization. Payments are $1500 ish for the 10 year. $1200 ish for the 5 year.
BLOG DOGS WHAT IS YOUR VOTE????
Sorry for the typos! Oh and they are buying the house regardless but yet listen to all my Garth talk… :-/
Well, I for one think it’s best not to bet against America long term. They innovate there.
But short term they have a few financial innovation that need to be clean up before the green shoots have a hope. These being: Structural deficits at every level of government, unsustainable debt at every level of government and personally too, and looming unfunded liabilities.
These will be dealt with either through deflation (default on debt), or inflation (default on currency), or quite possibly both, but they will be dealt with and probably sooner than we think. Maybe starting this year.
Then we have to deal with the structural adjustments that need to be made in light of peak oil. (The world hit peak light crude production in 2006 it seems. There is still lots of heavy and unconventional oil around, but it’s much more expensive to extract). This might not be a bad thing for everybody, heck, it might even start a new economic boom, if the required innovations arrive in time. Putting a solar panel on your roof is just a knee jerk reaction. Inventing a cheap solar shingle and then doing the whole sun facing roof with them might be one thing that helps a bit. And then also design houses so that one roof surface has the correct alignment and pitch to optimise those shingles. But we need hundreds of these innovations to really solve the problem. A cheap and lightweight way to store electricity for at least a few days would also help. Hydrogen or ethanol isn’t going to be it. They are grasping at straws with those ones, just desperate to keep the grid centralized so that it can operate on a fee basis. But I think the future lies with decentralizing the grid.
If everyone had my yet to be invented shingles, some sort of a capacitor that could get the power generated thereby from the day when the electric car isn’t home to the night when it is and can be charged, and said electric car, we might have something. But all 3 of these technologies are either poorly developed or in the case of the capacitor as yet to be proven it can actually work.
The range issue for electric cars isn’t really as much of a problem if you can charge it with your own free power every night. How many people fill their car up every day? I fill my commuter car about once every 5 days. But for long distance travel we may have to go to an electrified rail system like is common in Europe. And so on and so on.
Without the solar shingles and some sort of capacitor thingy, the electric car will actually run on coal or natural gas, which isn’t really helping.
But anyway, back to housing. Screwed, glued, and tattooed. And I don’t not by the argument that this is because the economy is going to over heat. Any green shoots we have are bought and paid for with Quantitative easing, which is a perverse way to run an economy. When QE ends (if it ever ends) we will get to see what we’ve really got the leg hold trap. I’m guessing it’s going to be a 1300 pound grizzly, and he’s going to be pissed.
A market correction is a process, not an event. The imbalances in the economy took 30 years to create. They didn’t fix them with TARP, QE light and QE2. These have been emergency measures to prevent a total collapse of the monetary system. All of the actual economic repair still lies ahead. Even the US housing market isn’t anywhere close to being “fixed”.
Don’t drink the Kool-Aid. The economic recovery is a hoax. This is a bear market rally. Of giant proportions, no doubt. But there has been up to 12 trillion dollars thrown at it by some accounts. That seems like enough money to buy a bounce to me. Soon rising commodity prices are about to knock the legs out from under that bounce.
I have access through work to some expensive forecasts that indicate inflation will be nice and tame on a go forward basis, but if you look at any of the historical information (which you can do yourself by going to the Fed’s own website and perusing the component indexes to the PPI), you’ll see that for the last 10 years inflation has been running closer to 5-8% inflation, and that’s including the crash! The 90’s weren’t a whole lot better. There are no signs this is letting up, despite the rosy forecasts and the heavy hedonic adjustments performed to the CPI components to always spit out a number equal to zero. There is inflation out there, lots of it, and it’s coming soon to a grocery store near you. It’s already hit the pump.
5-8% inflation implies a 50% devaluation of the currency in something around 10 years, depending whether you want to take the low end or the high end of the range.
Never before been a big decline in Canadian RE without a US recession.
Could happen, of course. But I`d bet something somewhere south has to pop before this thing here gets disorderly.
Long slow declines, partially hidden by inflation are just too boring to worry about.
#14 Debtfree
Ferries to the Islands of BC are actually an extension of the highway network. They should be financed through the taxes that are imposed on transportation. . If these taxes were used for the benefit of our transportation needs, there would not be a need for levy’s of any kind to cross the waters. Unfortunately fuel taxes etc. are always thrown into the general revenue sink hole.
Is there anyone in Canada that would have been able to run BC Ferries? Are we so stupid? Do we always have to hire Yanks to do the job for us? How hard is it to run an organization with a guaranteed source of revenue? Nice job if you can bullshit your way into it.
#14 Debtfree
Maybe…But I prefer airplanes…Straight to Hawaii/Mexico/California/Australia/Anywhere in Canada (except Milton and Weyburn)
Should keep the riffraff on the Big Island (Vancouver & the rest of Canada)
#13 T.O bubble boy
Yea, im actually suprised that Jan;s numbers were down that much, with F taking out the 35 year am, i expected more of a rush to buy.
Feb/mar/April/May will be a real downer, sales will be off at least 30-40% from last year. Yes the RE clowns will spin it as going against a record year etc… then the fun starts in July-Aug after we have 1 full year of decling sales, no more 35 year ammort and by that time rates will have risen.
The U.S. government is telling us that the unemployment rate fell all the way down to 9.0% in January. Should we all cheer? Is it now going to be a lot easier to find a job? Has the economy finally turned around? Are happy days here again? Well, it is a good thing to have a positive attitude, but the truth is that there is just not much to cheer about when you take a closer look at the recent unemployment numbers. First of all, the U.S. economy only added 36,000 jobs in January. Economists had been expecting an increase of about 145,000 jobs, and an increase of 150,000 jobs per month is necessary just to keep up with population growth. So why did the unemployment rate go down? Well, the government says that over half a million Americans suddenly dropped out of the labor force in January. That doesn’t make a lot of sense, but this is how the government calculates their numbers. So what happened to those 500,000 Americans? Did they all win the lottery? Have they all become independently wealthy? Did they all die? No, the vast majority of them are still around and the vast majority of them still desperately need jobs. It is just that the government does not count them as “looking for work” anymore.
It would be great if the employment situation in America actually was getting better. All the time people send me absolutely heartbreaking stories about what they have had to endure in this economy. Soon I hope to share some of those stories with you all. It is hard to try to describe the absolute horror that many Americans are going through right now.
People would like to believe that things are going to get better, but unfortunately that is just not going to be the case. The government can try to massage the numbers to make them look better, but the truth is that the tens of millions of American families that are deeply suffering right now are not fooled.
The following are 10 statistics that reveal that the latest unemployment numbers from the government are no reason to cheer….
#1 According to CNBC, economists were expecting the U.S. economy to add 145,000 jobs during January. Obviously the 36,000 figure was a huge disappointment.
#2 Approximately 150,000 jobs need to be added to the economy each month just to keep up with population growth.
#3 The government jobs report also indicated that 504,000 Americans “dropped out of the labor force” in January. That may make the unemployment numbers look better, but the truth is that the vast majority of those 500,000 Americans still need incomes and still need jobs.
#4 According to the latest numbers from Gallup, the unemployment rate actually increased to 9.8% at the end of January.
#5 Gallup’s measure of “underemployment” (those that are unemployed plus those that are working part-time but want full-time employment) was sitting at 18.9% at the end of January.
#6 As I reported yesterday, there are approximately 28 million Americans that would like full-time jobs but that don’t have full-time jobs.
#7 According to Zero Hedge, the number of Americans that are “not in the labor force” but that would like a job right now has hit an all-time record high. If you add all of those people into the official unemployment figure it would jump to 12.8%.
#8 According to Calculated Risk, this is the deepest and most brutal employment downturn that the United States has experienced since World War II. The current employment downturn started 37 months ago and there doesn’t seem to be any indication that we will return to pre-recession levels any time soon.
#9 The U.S. Labor Department has also announced that job growth during 2010 was much weaker than they had previously reported. The numbers for 8 months were revised down, and the numbers for 4 months were revised up. After all of the revisions are accounted for, it turns out that a total of 215,000 fewer jobs were created during 2010 than originally calculated.
#10 According to one brand new survey, 4 out of every 10 Americans are struggling “a lot” to pay the bills right now.
The situation is not pretty out there. The U.S. needs tens of millions more jobs than we have right now.
So where are all of our jobs going? The video posted below contains some very strong hints. The truth is that globalism is ripping our economic infrastructure apart, and all of the crazy rules and regulations we keep heaping on business are not helping either….
How low can you get… posting other people’s comments as your own? — Garth
Hi Garth. You got the interest rate thing right but if rates are rising, how will this bring America out of the ashes?
There may be an “eventual renaissance” in America, but maybe not in your lifetime.
The last two years we have seen great change, yet in your predictions, we have not. Are you following what’s going on out there? I used to read you daily but find myself coming around every month or two only to see the same old, same old. You are not keeping up with the times my friend.
Those who have bet on the demise of the US are the ones out of touch. It will take a years, of course, but this is an opportunity which comes alone rarely. Too bad you see it not. — Garth
In response to posting #16, agree fully. That 9% unemployment figure is the “official” rate, which doesn’t count everyone who is out of work. The real rate is higher, probably closer to 15%. Yes, the economy is improving but don’t expect anything too miraculous.
Still curious to know your thoughts on owning revenue producing real estate ie. Mobile home parks and apartment buildings in the USA as opposed to dividend paying ETF’s are we crazy ??? Realize they dont fit your 30% real estate at least for us,, but they do have a great return. looking for feedback
they have great Cap rates, but realize they do not (for us ) fit your 30% real estate portfolio!!!
Yes you are crazy. — Garth
#7 Squidly
Definitely agree, rates are going up and to be honest its about time, with BOC rates at 1% our monetary system was dysfunctional.
=======================================
I don’t understand why low central bank rates are ‘dysfunctional’.
They create money out of thin air (nothing), and lend it out to, ultimately, the public.
So using the example of the current rate of 1%, for every 1 billion the bank creates, out of nothing, it gets all of the original 1 billion back, plus 10 million.
But if the Central Banks create all of the money in existence to begin with, then that means all of the money in the economy can be no greater than the amount they created. Yet, they get more than they created back, which is impossible.
Isn’t this the design of a debt enslavement system?
Garth said:
“Mostly, however, it sets the scene for the eventual renaissance of America. This is bad news for those who loaded up on gold and hoarded pallets of toilet paper and oil-packed tuna.”
Oh Garth. I don’t comment here much, but I must speak out when the absurdity of the situation calls. The “upbeat” U.S. jobs report was not good at all. Only 36,000 private sector jobs were created in January versus the 146,000 expected. The lowering of unemployment to 9.0% from 9.4% was because more people dropped out of the labour pool, and more retirees are coming onstream. The Labour Participation force dropped to a 26-year low of 64.2%. This is ANEMIC job growth for this point in the recovery cycle, historically speaking.
I’m no gloomer, but America is in the complete opposite of a “renaissance”. Their is a slow train-wreck where the standard of living will drop for the intermidate to long term future. All these “green shoots” is because of the wreckless expansion of the money supply. The Treasury is selling bond to primary dealers, then buying back these bonds at inflated levels yielding banks with risk free capital. The banks then take this capital and chase yield in the stock market and commodity markets. It’s essentially a ponzi scheme, and the unsustainable debt loads are beyond the point of no return.
The ultimate endgame is interest rates that will go parabolic as the Fed will continue to run unsustainable deficits and be forced into more quantitative easing. If they don’t do more QE, the economy will collapse. The ultimate point is that corporate balance sheets look good but gov. balance sheets are completely beyond repair. The US will eventually have to devalue the dollar or default. Still a few years out IMO.
–
“Cooked.” — Rare, medium or well-done? It appears to be well into silly season and, more than anything else, the world has become a Python sketch sans the Pythons.
Information overload is happening on a moment to moment basis, a lot of which is disinfo. spewing forth from the m$m. I don’t even bother watching TV news anymore; Jerry Springer is far more entertaining. Not sure if he is still around, ‘tho but the fights are.
“. . . the tap of cheap money.” — DSP used to say that a monetary contraction was happening (deflation – correct), yet food prices and necessities are skyrocketing (inflation – correct), paycheques are roughly stagnant and union contracts are being torn up all around the continent, so what gives?
Stagflation? Sooner or later something is going to have to move, either up or down, but it will move.
*
#193 Utopia on 02.04.11 at 10:33 pm — Thanks for the info. More than anything else, the entire region has become a white-hot tinder box. The citizens have nothing left to lose, and Muslims are more than happy to die for their cause; this is where their strength lies, as it would be easy for a few to round up the many, and overwhelm armies.
BTW, did you see that the Gazans were feeding and helping Egyptian soldiers? Apparently, top brass forgot about them — where they were — so people had to look after them.
#207 jim on 02.04.11 at 10:05 pm — “Harper is selling out Canada to the USA with this new border deal.”
This is what Harper meant when he said “You won’t even recognize Canada by the time I’m through with it.”
May be worth while to have a Liberal minority in place after the next election, ‘tho they are no better than any of the others. Also — Interesting with Arizona supposedly seceding.
Two Chances — None and a lot less than that.
The question is: Why are the Rothschilds rebranding and / or moving out of this business? Forget the controlled m$m; they only report what they are told (see GW). Also here (deals).
MI6 + CIA — Brothers in arms and very good disinfo. agents. Plus this.
Walmart Destroying local economies, what is it good for?
Commercial RE Next mtge. defaults.
China dumps some US stuff (corporate).
Debt Prison? Not quite. This planet is a classroom ro learn in, but right now there’s a group of thugs who have put themselves in power.
Pareto Principle Interesting only because of all the charts which are clearly laid out and easy to understand.
GDP will be up in the U.S. probably between 3-4% annualized this year, which seems ok. But when you factor is real inflation rates, which accounts for food & energy prices the BLS strips from the numbers to make them look better, real inflation is probably around 6-8%. Growth in inflation adjusted terms is likely to be negative.
I went skiing today with the wife. Road conditions in the park were slippery with snow. I was nursing the 350 along at about the speed limit but reluctant to get on the gas because every time I did the back would “kick”. (I don’t run in 4×4 at high speeds. I want to know how much grip I’ve got.)
Some dude in a Jeep Patriot flew by me in the passing lane, got about 100 meters ahead, and then preceded to totally loose control of the vehicle. I am talking about spinning around, hitting the center line barricade, floating backwards across both lanes of traffic, spinning the other direction, a total wipe out. I was on the brakes, doing what I could to minimize how hard I was going to hit him if he came to a rest in my lane, but I didn’t want to put my own vehicle in a similar out of control spin so I wasn’t going to let antilock do all the work since we were on a corner. Miraculously, dude came to an almost stop in his own lane going the right way. I cruised by at about 30 kph, could have taken even more off if he had stopped across the road, maybe even not hitting him.
So as amazing as this all was, what happened next I could not believe. I proceeded back up to about the limit, and dude came flying by again! He didn’t even pull over to check out how much damage he’d done to the body panels! He then sailed out of view.
I think dude in the Patriot is a good analogy for the government and banking sectors of the economy at present, with 2008 being the first wipe out.
A few miles later we came upon a tow truck trying to extract a car from on top of a barricade! The car was perched right on top of a concrete barricade, being balance by the front end smushed into a rock face immediately on the other side of it. My wife commented that it looked like the borders driving the car (they were standing watching) tried to ride the barricade like a feature at a terrain park.
There was another dummy on his side on the way home. Super lucky he didn’t flip it all the way.
Slow down folks! And don’t trust the traction control all wheel drive. It can get you into trouble, but it can’t get you out. And antilock is great, but if you are going too fast all it means is that you will be able to steer while you rear-end someone. It can’t actually stop the car any faster than a professional driver could without it. And it works much better on clear asphalt than it does on snow, ice, or gravel.
I find a good way to be safe on icy roads is to follow a semi. Sure, they get messed up too when they barrel into changing conditions, but with uniform conditions here’s what they’ve got: 4 loaded axels and one more to steer. But of the loaded axels, only one drives (puts power to the road) at speed. So they naturally know when their drive wheels are slipping without loosing it. (RPM revs up with no increase in speed.) Bottom line: The semis know when they have limited traction. If they are going slow, so should you. But they still end up all over the ditch if traction is variable, because they get paid by the klick so they try to drive as fast as they can.
PS snow was awesome on the hill, but wind and visibility sucked at the top.
Oh Crap! I signed up for Wind Mobile over the holiday and now I am screwed! I knew those big three (bell/rogers/telus) would do something like this.
http://www.theglobeandmail.com/news/politics/telecom-ruling-a-warning-to-tory-cabinet-not-to-exceed-authority/article1895099/
@108 The Original Dave:
Tip’o the hat to you, Sir.
Can you please share the sources you use to educate yourself? It will be evry much appreciated.
Cheers!
————————————————–
No problem. I always mention Garth’s books. They’re well rounded and get people thinking the right way. He explains fundamentals and technicals in ‘Money Road’. There are many books that delve into this stuff, but Garth simplified it. Here are some other books:
One Up On Wall Street – Peter Lynch (one of the best investors around)
The Intelligent Investor – Ben Graham (the bible of investing)
The Art Of Contrary Thinking – Humphrey Neill (The best explanation for market and mass psychology. Published in the 1950’s. Can be ordered on amazon though).
Then there are some analysts I always pay attention to:
Bob Hoye – the best market historian in the world. Nobody understands credit markets better.
John Embry – gold and mining stocks
Mickey Fulp – rare earths, uraniums
John Kaiser – rare earths, scandium, uranium
jay taylor – gold stocks
read about these guys and learn from them. You’ll come across more geologists/analysts like them. If you believe there are certain commodities that will be moving much higher in the next few years, you ought to pay attention to people with geological backgrounds and good investing track records.
There’s a couple of names that I won’t mention publicly.
Mostly, however, it sets the scene for the eventual renaissance of America. It’s why you should never bet against America, and why the world is not about to end.
Garth; how can you ignore all the stories all over the internet about rising income tax rates in various states, eg; Illinois. States on the verge of bankruptcy, eg; California, NewJersey. The fed to print more funny money to enable their spending requirements? An American renaissance, when? The shit is hitting the fan and insiders are selling to get out of the equity markets before the cards hit the floor.
One more thing Garth:
If the U.S. economy was truly recovering, then why is the Treasury thinking about issuing 100 Year Maturing Bonds? Who is their right might would buy bonds with maturity dates well beyond the average life span? The reason they are doing this is obviously because they can’t raise enough money to support their enormous budget deficits (which are projected to be above $1 Trillion per year until at least 2020 – CBO projections) with regular bond issuance. The 100 year Bond is only something a banana republic would issue; the ponzi of all ponzis if you will.
Have any of the issues that created the crisis in 2008 been solved or mitigated? Nope, they’ve actually gotten worse. Have real incomes increased to support real economic growth? Zero. Just like Canadian consumers with 148% debt-to-income ratios taking on increasing debt to fuel the rise of 2000-2010 home prices, America is re-inflating their economy through the confines of the printing press and perpetual debt issuance. But we can expect the ravages of inflation to not only boost GDP, but to lower the disposable income of the North American populace.
I’m shocked that you took the lower Unemployment rate at face value Garth.
I know, I know. It’s all a conspiracy. — Garth
Do you think that the prices will fall below the assessment value in BC or will they cling to the assessment value for a while before dropping further.
Would it be a psychological milestone?? Just wondering
#3 – Google is broken?
http://www.statcan.gc.ca/pub/11f0019m/11f0019m2010325-eng.pdf
Page 23, Text Table 2. Compiled courtesy of your own tax dollars.
2006 Census: All ages = 68.9%
Everyone else’s mileage may vary.
#3 GoingGagaforGarth
Garth can you please reference me a website that states 7 out of 10 canadiens own a home? For a friend of mine who doesn’t believe me.
———–
Isn’t that stat 7 out of 10 f-a-m-i-l-i-e-s ?
Or is that 7 out of 10 Habs (” canadiens”)
okay, now we have prices rising across the board. I think this is a lot of speculation. Eventually the Mr. Margin will be coming and things will reverse.
Buying gold stocks (albeit at the right time) is sensible during deflationary times. If the price of gold holds up reasonably well, while other commodities and assets fall faster, gold stocks will likely be a good buy again.
I’m out of gold stocks for now for seasonality reasons. I will be back in in the next few months.
Wow the Friday evening pack of hounds is a particularly morose own ball licking one.
};-)
It’s really something all this angst and anguish over houses. Just another way to screw with people, that being bubbles, and those that create them. Must have been the same with tulip mania in the 1600’s, which would be equivalent to about a half million bucks for a bulb in today’s dollars at their peak. Life and talk seems to begin and end with home ownership, particularly in the bubble areas.
When we were shopping for our house in the early 1990’s the saying amongst realtors then is that the right time to buy is when you can afford it. Can any first time buyers making anywhere near an average household income (either way) truly afford a property in places like Greater Vancouver? There must be something in the water, or the air, or in the food that makes people think that everything goes up in perpetuity. It seems the majority rarely take profits from stocks or houses. That’s why we’re “the little people”, the foundation (bottom) of a wealth generating pyramid scheme where the vast majority of us are a day late and a dollar short, while the few are uber rich . We’ve been referred to as useless eaters, but obviously we’re useful for something.
And it is this same brainwashing or programming with house buying that makes people who can’t swim, jump into the deep end of the pool because they are being told if they wait another day the pool will dry up and they’ll have no water to jump into at all.
Recently spent time in the Denver area in Colorado. Being from the Vancouver area, it’s like a different world down there. Brand new subdivisions going up outside of Denver. Generous size (2000-2500 sq/ft) brand new homes from 170K to 225K in semi rural areas. Decent size lots, too. Average household income in some of the surrounding counties are in the 45K to 65K range. Food is 40% cheaper. Gas 30% cheaper. Big disparity in wages, though. Lots of low wage service oriented jobs mainly filled by Hispanics which brings the average income down. Seems with a decent paying job and there are a lot of good paying jobs in that area as well, people could truly afford a house and a new car every several years with a 3 to 4 affordability multiplier…and life goes on there. That’s probably one of the reasons why it has the highest outdoor activity rating of all the US states.
2 ken s – infinite or boundless?
3 GG for G – 7 out of 10 Canadians own a home? Seriously doubt that. What is more likely is that 7 out of 10 homes
are owner occupied.
9 Professor – don’t blog it, do it!
12 Timing – Yea baby!
@ #17 Timing
.PL version…Better than Pete… :)
http://www.youtube.com/watch?v=8Et3LmoqnzI&feature=related
Sorry Garth, had to be done.
My ears are bleeding. — Garth
3 GG for G – I hope this works (from statscan)
tinyurl.com/47qr79o
If not, from 2005 data there were 12.24M “household
income groups” of which 8.38M show as “owners” –
about 68.5%. From 2006 data we see 12.43 “occupied
dwellings” from a total pop of 31.6M so we see about a
27% full-share equivalent ownership rate. Has gone up since by a little for sure. Waiting for census update.
The way they calculate unemployment stats is more complicated than quantum mechanics. So side by side we have unemployment dropping .4% to 9%, while the economy has only added a net 36,000 jobs. This patient is still in intensive care so it’s a little early to admiring the green shoots.
The real estate agents don’t even bother getting their friends and family to pose as happy buyers in articles now, they just pose as buyers themselves.
http://tasmanianrealestatetrouble.blogspot.com/2011/02/yes-we-are-open.html
Jobs?! Jobs?! Jobs?! Are people bat shit insane? What bloody jobs? Part time Wally World greeter jobs, jobs at Burger King? Whatever. There is not a resurgence in jobs in the US, especially jobs which allow people to feed and cloth themselves let alone allow them to buy a home. The US is going to see house prices fall even more, they have no manufacturing base, they make nothing. The US is not in a “recovery,” good God.
The actual posted national debt of the US is $14.1 trillion. However, the US reports its finances on a cash basis while omitting its unfunded obligations in such items as Social Security, Medicare and Medicaid and various other entitlements. If the entitlements are included, the total national debt including unfunded obligations would be over $100 trillion. Add the messed up finances of states and municipalities/cities and you have a major meltdown in the making. The Yanks will either default or devalue their currency, inflate or die will be the mantra.
Official U6 in the USA is 16%. Even that is a partly manipulated number. 9% is a completely manipulated stat and the USA is only growing in fiat terns because (A) inflation is understated by the government- therefore real growth is overstated and (B) the growth that exists is a result of the sugar high of QE2 and even at that is about the same as population growth.
Which means there is no real per capita growth in the USA yet. None.
And silver closed the week at 29.13.
Junius: From Yesterday’s Blog:
The point that I’m making is that self delusion is rampant. I find it hilarious that Al Gore is your hero. And even more Hilarious that you think that James Hansen, who slices dices and cooks data even more than the CREA is your epitome of cool.
Both of those people have done more damage to the environmental movement and have been discredited by their peers. Nobody takes either of them seriously anymore. Anybody who espouses jailing others who disagree with you has no credibility. Oh, and add David Suzuki to that list. He’s another pumper.
a steady increase in interest rates requires strength in the economy to support it. I dont disagree that we will see a “small” increase in longer term fixed rates this week. we have seen many of these increases over the last 2 years. Then they go back down.
Why this week?….Simple crisis in Egypt is giving the oil companies an excuse to raise prices verified by the $1.15 price at the pumps. The increase oil prices have an immediate affect on increasing the cost of nearly everything we consume. Our government translates these increases in prices as an increase in inflation. The bond markets will on the short term basis rise, and interest rates increase.
But what is different now is the awareness of the falling housing market. The government knows that a significant spike in interest rates will be the “PIN” that bursts the bubble…
The Bank of Canada will not risk the entire housing market with a steady increase in rates.
So my predicition is that this is one of those small increases in fixed rates, .25% -.50% not the start of a full swing of the rate pendulum.
Why are people such extremist…
There is enough termoil already, so why throw gasoline on the fire…..
PS…..25% drop in prices maybe the soft landing option for Canada…
As I said (and you ignored) our growing credit binge is a greater long-term threat than a housing correction. That’s what central banks are for, not to feed a real estate bubble. Sheesh. — Garth
So It’s all over…woohoo!This profit based society is gonna work out after all!.I thought I would actually have to be a humanist and share this world with my fellow humans.Garth do you really think that this economic problem or the 1929 crash was brought on by coincidence?you are more naive than I thought you were,unless your in the “know”.That would explain your nihilistic contempt of humanity and your taking pleasure in It’s misery.I suggest you read ‘atlas shrugged’It’s a book disguised as a novel but is really about a world wide plan for the “new world order”written by the order of Phillipe Rothschilds(Banker king of the world).It goes on about how this all powerful family and organization will deconstruct the industrial base by sabotaging their own companies and when we are miserable and deceived enough they will propose to us the solution so we can acclaim them as saviors.Going to the root cause of the problem garth,would save you from bitching about this blog of your own creation cause then you would know the reason of all this bullshit and you could go on educating people,cause that is where real power lies “people” not money.A wise man once said “you can either thrust the good intention and the intellegence of your governement or you can thrust gold”.You seem to dismiss gold too easily Garth,don’t you know that modern states were unheard of before gold was dicovered and used by the egyptians.Since we abandonned the gold standard,nothing is holding the banker’s from skimming the system. They let us play with their monopoly money while they horde all the gold they can away.They must know something I don’t…
Tinfoil alert! Aisle 12! — Garth
Original Dave: You did not mention Harry Dent. Is he right? Great track record! Did Obama stimulus plans postpone his calls? We shall see.
Hello Garth,
Have a TFSA with 15K. Generally speaking would it be wise to allocate as you recommend (Fixed Income 40% / Equities 60%) through ETFs exclusively. It appears that you could adequately diversify across many sectors, growth assets, bonds, preferred shares and commodities. Thoughts.
Thank you
-P
Not with 15K. — Garth
Hi Garth:
I just spend 3 weeks in the states last month visiting various relatives. Are you sure the green shoots you are talking about aren’t last years weeds? The people that I talked to don’t seem to think things are turning around. Americans seem to be obsessed with which president to blame rather than how to get out of the mess they are in. Yes the houses are crazy cheap but there are just no jobs and unless you have special skills you don’t make enough to live on. Florida is unbelievable the mobile home park where my mother lives people don’t try and sell their place they just hand over the keys and head back up north. There are fields and fields of repossed motorhomes for sale at a fraction of the price of new ones. Restaurant meals seem more expensive than in Canada however. One thing I noticed down there is that no one seems to fill up their car, they buy 10 – 15 bucks and sometimes as low as 5 bucks worth of gas.
One thing that is definitely missing from your green shoots theory is confidence. Even my stepfather who is one of the biggest rah rap America says it is going to collapse. In Altanta suburb my nephews wife keeps her drapes closed all the time for safety reasons?? and they live in a good neighbourhood . Things aren’t turning around anytime fast and I think that what you are seeing is the latest stimulas money running through the economy on its way to China
With all due respect, there is more to America than mobile home parks in Florida or depressed hood in Atlanta. As I said, this is an opportunity. Most people will miss it. — Garth
#38 CREA Circle Jerk on 02.05.11 at 1:58 am
#40 CREA Circle Jerk on 02.05.11 at 2:05 am
#45 CREA Circle Jerk on 02.05.11 at 2:29 am
Hmmm … somebodfy who is obviously very current, well informed and researched. I for one appreciate the quality of the posts you’ve offered up. Well fit for consideration and of far greater content value than very many that populate this space.
Rather surprised and somewhat disappointed to see you get casually blown off as a “conspiracy” case (nut job).
The US job numbers just released are indeed quite questionable and open to debate, scrutiny, and interpretation. As well, it is entirely reasonable to debate the course of the US coindition and prospects going forward and particularly for the near to mid term … as is actually quite vigorously happening among a very large and credible cross section of credible analysts and commentators. There aren’t many of the “sunshine spin crowd” emoting trivializing dismissal of tough questions and playing hide the elephant with much success anymore.
Anyway, thanks for taking the time to offer up some good food for thought. Who knows … you might actually stimulate a few people to actually go out and check some numbers for themselves … and do a little homework.
Cheers
Yes, The Canadian Economy is cooked as the Cdn Govt LIED about their being a RECOVERY. There’s a weird sense of Deja Vu in this news, as though it’s the government’s fault for using the data that was before them in previous talking points. It’s typically Canadian probably.
Garth..I’m not so sure about your view on gold. Gold increased in value through the 2001-2007 economic boom. Why would it not increase going forward if there is a recovery? Especially with QE1,QE2,QE3…QEn.
Wait and see. — Garth
Garth, I rent in Markham do you see markham house prices droping alot as well?
Unless your house number is 888. — Garth
@43 The Origial Dave:
Then there are some analysts I always pay attention to:
….
John Kaiser – rare earths, scandium, uranium
———————————————–
Don’t tell me that old penny stock scam promoter is still around.
He’s not an analyst. Unless you consider his ability to analysis whether the owners of a shell company are going to fund it, latch onto some hot “story”, promote the story, run the stock price up, then distribute their shares to the public.
If that’s what you mean by analyst, then he’s the best.
#20 cool on 02.05.11 at 12:54 am
Many times it is not realized that for a house to go from 100K to 200K , it needs to go up by 100% , but for it come down from 200K to 100K, it needs only 50% on downside.
==========
This is one argument that gets a lot of people I’m arguing with speechless for a while. That their 50% gain is wiped out with “only” a 25% decline… same $ amounts.
Bankers are not stupid people. They may decide to inflate more , are to very slowly deflate the bubble. Its gonna be the way the master decide. The sheep’s will obey.
Cooked I totally agree. At the expense of the “younger generation”. This is why I am so mad at the boomers. I give you three senarios here.
1. In Edmonton, building a 2 million dollar house in a new community. Net worth is tied into the new house and the house he is currently living in at 800K. He has 2 university kids living with him and will face a reality shock when he has to sell his current house and see the equity erode on his new house. What happens to the nest egg for his children???
2. In Coquitlam BC, parents move back to the rental house and off load the investment house to the children and their spouse. The house is a renovation disaster where the children/spouse will have spend thousands and feeding a mortgage they cannot afford.
Parents win, children lose.
3. Parents encourage an accountant in Edmonton to buy a condo even though he has clear intentions of moving to Vancouver to join his lawyer wife who has moved there already. The accountant has now quit his job,so jobless, rented out his apartment and moving to Vancouver and considering buying a place. For now they are renting but you can see how his one will play out.
As Garth puts it, this will not end well.
For my further rants see:
http://www.creditcardscanada.ca/blog/personal-finance/how-to-cure-retirement-anxiety/#comment-8723
Personally i do not see any recovery and as far as “jobs” created i think its a fraud………….just one example is the 2011 census..which has created 35,000 jobs starting in early March –all temporary and all part time till the end of July………. All “H” and “F” propaganda I.M.O.
Sorry Garth it was late last night and was too lazy to post the link, plus I didn’t think you’d like the name of the link ;)
http://theeconomiccollapseblog.com/
Point is the US is far from turning a corner.
I said the foundation of an American renaissance is being laid. Sentiment like yours was behind people bailing out of equity holdings on March 9, 2009, crystallizing loses and missing a 94% market retrace. You are driving by looking in the rear view mirror. Good luck with that. — Garth
#56 Jody on 02.05.11 at 3:34 am
Jobs?! Jobs?! Jobs?! Are people bat shit insane? What bloody jobs? Part time Wally World greeter jobs, jobs at Burger King? Whatever. There is not a resurgence in jobs in the US, especially jobs which allow people to feed and cloth themselves let alone allow them to buy a home. The US is going to see house prices fall even more, they have no manufacturing base, they make nothing. The US is not in a “recovery,” good God.<<<<<<<<<<<<<< i agree on the "jobs" data jody..but i do think the U.S. will recover faster than we will and in actual fact the U.S. has the largest manufacturing base in the world and it is still 40% larger than China's.They have hit bottom we haven't yet but i think we will………?
Can house prices fall when a local economy is strong? I don’t think a real estate crash is going to happen in Winnipeg. Too many things have to fail… interest rates have to rise, immigration has to fall, supply has to increase dramatically and the economy has to tank. Many companies see Winnipeg as a money maker and are moving in as well.
Wrong. Only one thing moves real estate — consumer sentiment. — Garth
Wow – CMHC getting defensive with all of the recent articles calling for it to dissolve itself… they managed to get a fluff piece written in the Ottawa Citizen:
http://www.ottawacitizen.com/business/Passion+Karen+Kinsley/4228813/story.html
The headline pretty much says it all:
“The Passion of Karen Kinsley
The boss of the mammoth Canada Mortgage and Housing Corp. is a dynamo, who believes the roof over our heads is a home first, an investment second.”
… unfortunately, her “beliefs” aren’t trickling down to the rest of the housing industry.
I can’t, I just can’t do it. I’m sorry, really I truly am. I tried. I tried and tried and I tried and I just can not find a way. It’s beyond me. Please understand I just can’t do it. It is a pathetically futile effort. I tried, you know that. You can not say I did not try.
}:-(
Those who have bet on the demise of the US are the ones out of touch. It will take a years, of course, but this is an opportunity which comes alone rarely. Too bad you see it not. — Garth
I would posit that where the Yanquis are concerned, the empiricals/ground truth are more indicative of an impending Götterdämmerung than Renaissance…
Or, if you prefer, Cairene vs. Florentine outcomes…
Feeling lucky? ;)
In response to post #61 about Harry Dent. To give credit where it’s sue, he correctly predicted the boom (except the part about the Dow at 20,000 or more) and the subsequent crash. He even predicted a subsequent stock market rally followed by another crash by now, which is yet to come . Where he really has blown it is 1) The next stock market crash (so far, anyways) as he didn’t take into account economic stimulus money or quantitative easing and 2) predicting the time frame all of this activity would occur. Nobody’s crystal ball is perfectly clear when it comes to predicting the economy, which is quite complex, so accurately.
…It also means bonds are selling off and yields rising, which guarantees higher fixed-term mortgage rates. Mostly, however, it sets the scene for the eventual renaissance of America. This is bad news for those who loaded up on gold….
You really never learn anything while reading the front front page of the Globe and Mail.
-A renaissance in America? It should get a bounce if you send $100 montly or $1.4trillion yearly you don’t have.
-Higher rates? Ya, commodity prices are going to funnel price inflation. The bond guys are waking up.
-the metals. Silver spot prices > forward prices. The phsi market is tighter than a drum.
So I put 5k in my tfsa in 2009 and another 5k in 2010. Have not withdrawn any but my 2011 assessment says my contribution room is $9849.99. I’m voting for Harper.
Might you mean “getting”?
The tale of 2 condo markets in the GTA.
GTA (new) condo sales near record high
yet
Resale condo numbers down 12% over 2010
So, I wonder what happens when you 1163 resale condos in the GTA for January, but (from the Toronto Star article) there are 286 active projects in the GTA, representing 73,953 units — the most of any city in North America.
Given that a significant percentage of new units sold are intended to be flipped, it seems quite clear that listings will be surging (and prices falling) over the next couple of years.
Two words……
ENERGY CLIFF
We are now over the edge. We can no longer pump enough conventional crude oil to compensate for our pie- in- the- sky dream technologies. This FACT is completely misunderstood by those who think “never count america out…they innovate down there”
Innovate your way out of freefall energetics?
Wiley E Coyote and the Acme manufacturing company come to mind.
We are now entering several decades of unrelenting war and multiple episodes of hyperinflation in many nation state economies (including america).
I laugh at so called wise investors who think that they can now time the market stateside to make a killing when the renaissance occurs……same folks who say that gold purchases and oiled tuna were mistakes 2 years back……by my count gold has done better than all else (except silver of course) and we are about to see across the board breakneck food inflation…so the tuna sounds just about right.
“Those who have bet on the demise of the US are the ones out of touch. It will take years, of course, but this is an opportunity which comes alone rarely. Too bad you see it not. — Garth”
I see the US government holds more of its own debt. Even more than China; Ben is talking about QE3; Timmy is threatening US implosion if the debt ceiling is not lifted.
China buys real things and US dicks around with paper. The US will recover, however, they still have to clean house. At the moment it is all cheap parlour tricks.
Garth, if you just hit puberty a couple of years ago, and I’m guessing that you haven’t had your driver’s licence too long , why are mom and dad letting you drive the Hummer?
As much as I appreciate this website for its valuable financial advice and truth about the coming housing crisis, I am also aware of how the US employment statistics hide the truth, especially not taking into account the underemployed and those who have just given up looking. They are continually revising lower, and I don’t have much confidence in an improvement anytime soon.
Yes, the US will boom once again– but that is to far out for most to realize– talking 5-7 years out.
It is an opportunity for those with cash and lots of it.
Thats what the RE clowns here simply do not understand. With their stories of millionaire immigrants buying property in canada.
Hate to tell you folks but the rest of the world really does not differeniate that much between Canada/US–In Europe, they look at as almost being the same country.
Lets take immigrant A– has 3 million US funds. He can take his 3 millin, buy a MANSION pretty much in any nice city in the US for 500k, take the rest and invest it like Garth says and even with an 7% yield and still make 175K a year– give me 100k after taxes. Thats a pretty nice income that will more then cover all of his taxes/insurance/healthcare etc..
Or he can buy some crack shack in Van city, drop 1.2 million for the house, another 500k for reno’s- thats 1.7 million and live in a shitty house? droping his investment portfolio too 1.3 million– assuming the same return 91k gross– say thats 50k after take.
which one is a better choice???
#66 HouseBuster
…Especially with QE1,QE2,QE3…QEn….
That is right HB. QE means failure.
But lets say there is a recovery.
-Then mid bond rates go up.
-10yr bond yields are 3.6% now – so it could be easy 7%.
-So on $14Trillion US debt that is about $1Trillion in interest.
– And current tax revenues are $2 Trillion. Wow 50% of all gov payments go to interest!
– Add this; if there is a real recovery oil is up to $150 again. This is another “tax” to the consumer.
A recovery is all wishful thinking. The only retort or financial analysis on this site is “wait and see, or never bet against the US.”
As I said (and you ignored) our growing credit binge is a greater long-term threat than a housing correction. That’s what central banks are for, not to feed a real estate bubble. Sheesh. — Garth
I guess you didnt finish reading my post either…
I agree with the long term threat of the Canadian addiction to using credit to maintain their sense of entitlement.
I am just trying to throw water and not gasoline on the fire.
Rates will edge up, Bank of Canada may raise rates a small amount, but believing that this is the beginning of mortgage rate armagedon, is a crazy form of fear mongering..
I have to believe that even our government will not be that stupid to accentuate the correction by JACKING rates….
Variable rate mortgages will still be your best bet for all you mortgage holders out there…
And how dare you belittle the guy wanting investment advice on his $15K TFSA… Just becasue his life savings is less than your gas expense for you hummer!!!
Shame on you Garth!!!
No belittling. Useful advice. You cannot spread 15K over four or five asset classes without ending up with porridge. Investing 101. — Garth
The other point i wanted to make is inflation and interest rates.
Bond market yields are spreading and fast. With the insane ramp up of commodities this last few months, every thing will be going up in price. Corn (pretty much 90% of all processed food has corn in it) Cotton, Coffee etc…
Companies have 2 choices, its either pass on those costs or eat them and have profit margins collapse.
The 2% nonsense is going to be a hard sell to the public when they see their groceries going up in price on a weekly basis.
I can see that out here in Kitchener/Waterloo people are very price sensitve, just looking around when I shop i see people stocking up on sale items. And i mean every demographic- from the young to old etc..
We are at 150% income/debt, this takes a long time to get out off and once people get accustomed to coupon clipping and living frugally, they will not become mad spenders again
#58 Vancouver is a great town…..
That is now your third post in a row where instead of making arguments you have just slammed people with real credentials, worldwide respect and credibility. In response you offer up yourself. Must be nice to be omnipotent.
Jeremy Grantham (to you another pumper) has recently suggested that investing in sectors that will be impacted by Climate change is a good long term strategy. For example, we will face more droughts and floods so investing in more secure food sources is a good strategy.
Of course Grantham is relying on real scientists and people who actually understand these things. He does not have the benefits of your vision. However you have convinced me that this is an even better strategy than I first believed because clearly there are even more people out there (like you and BrianT) who will continue to live in a world of denial. Good luck with that.
#72 john m
..Personally i do not see any recovery, census…
John, watch the revisions in the months following census release, especially in the states. The sell job happens today, the downward revisions happen months later.
#26 Offgridder & #33 (Garth’s comment),
fixed links:
http://www.bankofcanada.ca/pdf/annual_page1_page2_page3.pdf
http://www.dailymarkets.com/economy/2011/02/05/10-reasons-why-the-latest-u-s-unemployment-numbers-are-no-reason-to-cheer/
Watching this newly minted condo near Yonge/Bloor in Toronto, with about 42 floors of units and on Sunday there were ~30 units listed. Now it’s up to 47 units listed, ranging from 1-2 bedrooms.
Priced from 315k-610k.
Do any of them have a chance of selling at list when there’s so much in competition??
http://tinyurl.com/6hm2y3l
a “friend of a friend” rushed to get this on the market as a flip:
http://www.realtor.ca/PropertyDetails.aspx?PropertyID=10253708&PidKey=1447272525
$400,000 for a house built in 1967 (yes they renovated it) in a not so great neighborhood. One street over there’s a similar reno’ed place as a FSBO for 330,000.
The difference in pricing is getting weird for sure in the Fraser Valley.
I think these flippers are delusional and are going to get hit hard. Marriages will likely suffer to because off the extra stress added when one spouse starts saying “I told you so!”
At Walmart I overheard 2 guys talking about how easy it was to make an extra 50,000-$75,000 a year by flipping. One of the guys was planning his next 5 years already and what he was going to do with all the money – and it was “buy their dream house”
yikes!
I hate to say it but it is like looking at an accident scene, I can’t help but watch it all.
Here in Victoria, the VREB always publishes it’s monthly report citing a healthy market as the average value is going up. All it takes is a few high end sales to skew the average. This month the sales are down, in particular with high end homes.
Oh guess what, they are showing the median as up a bit this month. No mention of the average!
“while in Victoria houses just got $50,000 cheaper”
Median in Victoria rose to 576,000 and the six month average is unchanged, doesn’t feel that cheap to me. Nice cherry picking, your just as bad as the Realtors.
I take my stats from the VREB. And you? — Garth
Back in Egypt meanwhile….
Members of the cabinet including Mubaraks son Gamal have now resigned. There is confusion in the minds of many people as to why Hosni has not yet stepped aside.
Try to understand that there is much work to be done behind the scenes before any official announcements are made of Hosni’s departure. The President will be making some statements and changes by edict to election rules.
Mr Mubarak has today ordered that banks and the stock market re-open. This is a very positive sign and tells us the end is almost here.
In order for Mr Mubarak, his family and friends to shift assets out of Egypt and to allow for a sell-off of shares they hold in Egyptian companies these acts are crucial.
They cannnot in fact proceed until the financial markets are open again. As such, you can expect further losses on the markets there as sales move ahead at a steady clip over the upcoming week.
I am not suggesting there will be a bloodbath of losses or anything like that but it is certain there will be both a flight of capital and profit taking by the current regime and family members.
This is the surest sign that an accord has been reached between Mubarak, his associates, the oppostion forces and outside governments in order to bring an end to the standoff and placate protesters.
Change will be swift and should occur within days of the financial system being opened. It should also present a bit of a buying oportunity for others as markets there hit new lows mid week (in my opinion).
69 Montreal – they are speechless because your math is so poor….
71 Z-queen – I’m sorry, I forgot you’re entitled
At#28, #33, and #38: Living in the U.S., I can assure you things are beginning to pick up. Slowly, but surely. The U.S. will undoubtedly rebound, despite the continual anti-American sentiments I often read in this blog (don’t really care about them actually). The U.S. encourages entrepreneurship and innovation, guards consumers against ruined credit for life (no debtors prisons), and continually re-invents itself (or not) by power of the vote. The globe snickers at our often unpopular policies and ups their noses, and then years later will follow the U.S. lead, often implementing much of the same policy. This is a fact. Am I proud of that? Absolutely – it demonstrates leadership. Am I happy where we’ve currently landed ourselves due to a lack of focus and poor leadership over the past decade? Not at all! However, we ARE, contrary to many people’s belief, getting back on track.
Garth is right, those who bet against the U.S. will be losing that bet. Folks, it comes down to basically two major economies… the U.S. and China. Europe is a whole other mess of a story for now. If the U.S. isn’t number 1, then that leaves China to be the world super power economy. Last time I checked, that isn’t probably in the best interest of the world with China’s falsely compressed currency valuation, unfair labor practices, horrific standards of production and quality control, severe lack of respect toward human rights, lack of transparency to the “books,” and overall government oversight and control of business operation. If the U.S. fails (and it certainly will not), this will be the alternative. So, let me know how that works out for you!
I’m not saying the U.S. isn’t without fault, because it is. What country’s government isn’t? I can spew vial toward just about any country involved with the economic mess and those who truly haven’t yet felt the melt (a.k.a. Canada, Australia). Yes, folks, Canada has not really FELT the effects at this point, regardless how you may see it. Americans sometimes find Canadians to be incredibly impatient/naive in general. For example, Canadians see a tick downward in prices for a couple months, and then a tick upward, and the refer to those couple months as a “housing recession” with a “recovery.” Are you serious? I’m referring to September and October 2008. Or, many Canadians are preparing for a significant housing downturn in which they believe a deal is to be had in a “month or two.” A recession is a process indeed. The Canadian recession has not yet truly taken hold. Trust me… no, no, really… TRUST ME. I’ve already experienced it.
What bothers me is hypocrisy. Canadian government and policy makers created “emergency rates” in 2008, and has kept them ever sense, which created perhaps the worst RE bubble in the G20, a falsely realized health of the Canadian banking system, and unhealthy exchange for the CAD (an overly strong CAD is NOT good for Canada, especially right now). This is not of the making of TARP, or QE1, or QE2. This is clearly the making of poor Canadian policy.
What I do not understand is why many Canadians perpetually blame the U.S. when Canada takes an eventual downfall while it is the Canadian policy makers that have perpetually followed U.S. footsteps, and Canadian policy makers pulling a few rabbits out of the hat of their own (ie. emergency rates). If the U.S. is so damn wrong all the time, then stop following every step the U.S. makes. One would believe this would have been an opportunity not to relive the same errors that were made in the U.S. Instead, Canada was handed an opportunity on a silver platter to do the right thing and not have a RE bubble to the degree realized in the U.S. This was a squandered opportunity that will be on the shoulders of the Canadian tax payer. How about blaming Canadian policy makers for a change for the downtown about to ensue in Canada? After all, it is these policy makers who represent the Canadian people – not U.S. Government. It is called taking some responsibility.
@ #39 Nostradamus Le Mad Vlad regarding Commercial RE Next mtge. defaults. post
as I said before and to Garth Commercial real estate always lags behind the residential market..
hey maybe I should write a book and claim I predict this.
There is no such proven principle. — Garth
to 69 Montrealer on 02.05.11 at 11:03 am
Not to quibble, but it would take a 33% correction to wipe out a 50% gain, not a 25% reduction. House goes from $400K to $600K (50%) then gets hit for 33% (200K). Back where one started.
I think we’re all in agreement that people overlook the % differences….just wanted to get the math straight.
************************************
#20 cool on 02.05.11 at 12:54 am
Many times it is not realized that for a house to go from 100K to 200K , it needs to go up by 100% , but for it come down from 200K to 100K, it needs only 50% on downside.
==========
This is one argument that gets a lot of people I’m arguing with speechless for a while. That their 50% gain is wiped out with “only” a 25% decline… same $ amounts.
My, our Forum Host is chatty today :)
This link posted earlier today:
http://www.myvisuallistings.com/virtual-tours/14110/
What is a house these days anyway, but a place in which to watch TV and play video games and stuff full of cheap Leons furniture, and park 2-3 cars in the driveway.
All the while feeding the always hungry property tax, utilities, gas, oil, insurance cartels??
This is living, this is culture? To never see or meet your neighbours, but instead to live in a virtual Iphone/blackberry/Ipod/TV/video game world?
This is worth fighing for, worth a two-hour daily round trip commmute?
All I am reading with Government spinning, media spin, the economy is getting better crap, etc…….it’s all a bunch of lies and a fraud!!!
What a bunch of bullshit form everywhere!!! The crap being fed to everyone from every source is incredible!!! The marketing lies and the pumpers…….people who want you to think they are an authority and you can trust them????? I just have this to say, you’re all full of it!!!!
T.
That was helpful. Now tell us why. — Garth
Just for fun… changing the way of our city. Seattle/Alaskan way viaduct.
http://www.youtube.com/watch?v=jwSPmJw8JxY&feature=player_embedded
http://www.youtube.com/watch?feature=player_embedded&v=OBHZP9VfcwE#
#64 BDG-YYC on 02.05.11 at 10:23 am
Why thank you very much.
I read incessantly about the economy because that is my interest. I consider myself very informed, and I am NOT a gloomer of any sort. The sun will rise and set tomorrow. All I’m try to do is glean the economic information I read and protect myself as much as possible.
And my take in this U.S. economic ‘recovery’ is that it’s mostly from piling into more debt. Until I see the fundamentals truly change, and not actually get worse, the foundations of sustainable growth are NOT taking hold. In fact, they’re still getting much worse. As I’ve mentioned, the Treasury is seriously contemplating issuing 100 Year Bond. This wouldn’t be done if the U.S. was in any sort of strong economic position. Insider selling in the stock market for the last year has been between 90 and 2500 to 1. Labour Participation is at 26 year lows and food stamp issuance continues to breach all time highs. If the economy is real self-sustaining, why did Bernanke implicitly suggest that QE3 is on the way this week?
I could go on and on, but the fact is the U.S. technological & innovation advantage it had historically held versus the rest of the world is pretty much dead. Innovations in technology and communication has allowed countries like China and India to be close to on par with the U.S., thus neutralizing the manufacturing base because labour is much cheaper overseas. Real productive job growth won’t be coming back anytime soon, and huge budgets deficits loom as far as the eye can see because there won’t be enough economic productive capacity to generate the tax receipts needed to pay off all their obligations. The economic recovery is all fueled by debt, just like the rise in CDN home prices by debt laden consumers. Heck, even Barack Obama in his State of the Union address said that what once required 12000 people to build cars at an Auto plant, only requires 2000 now because of changes in technology. And that yet another thing: technology will keep ramping up exponentially gradual eroding the need for workers in various industries.
The bottom line is that there is a confluence of factors from demographics to technology advance to the debt spiral etc. that will keep economic growth sanguine for the forseeable future in North America. That doesn’t mean that the stock market won’t do well as corporations sell to global market, and it doesn’t mean that U.S. home prices won’t find a bottom then appreciate in value. It just means that there will be no meaningful U.S. economic recovery until the fuindamentals change drastically, and that won’t happen until it’s foisted on government when they can no longer borrow and print money because the dollar starts to collapse.
Good post Mr. Turner, I aggree the US should not be bet against as it is the LARGEST ECONOMY IN THE WORLD…..
As for gold, bubble machine along with housing and tech. Wait unit gold goes pop. Remeber gold bugs…silver ratio …. one to sixteen.. do the math and guess what is over valued.
Today the cheer leader of record …aka Calgary Herald Home section was beating the drum of how 2011 will be a banner year.
CAPM (Capital Asset Pricing Model) , this in finace measures the rate of return to risk as rick is measure by standard deviation and beta ratios. To make a long story short, look at housing rate of return ( only realized when sold ) to the risks of price decreases over a period of 10 20 30 years and measure the risk on this investment. Now, will 2011 be a banner year?
And the SR520 bridge project in Seattle.
http://www.youtube.com/watch?feature=iv&annotation_id=annotation_756764&v=Gm2blJ4iVV8
Just a couple curious questions to readers: Are there ETFs out there that would allow to gain from a decline in housing prices? Or can you recommend a website where I could find information on decent Real Estate ETFs? Thanks for your replies in advance. A.
There is no such proven principle. — Garth
then I really have psychic powers,
I have been appraising commercial real estate for over 20+ years and market history shows that it does. Stop by my office any time Garth, I be glad to give you an eye opener.
As Penticton goes, so goes the globe? — Garth
#84 cynic with a long view…
a totally inconvenient truth for all business as usual folks (the majority)
the energy production per capita of the world has been falling since ’79 and is about to go over a cliff….and capital will follow.
The first and second Law of Thermodynamics is playing out naturally. Nature is cruel but honest.
Buckle up..it’s gonna be a bumpy ride..keep arms and legs in the vehicle at all times.
http://dieoff.org/
You do realize that VREB is a member board of CREA which you so condemn for manipulating and SPINNING the stats. Do you not see a problem in that?
>#166 VICTORIA TEA PARTY on 02.04.11 at 7:06 pm
#149 AG Sage
>It’s demographics. The average age of citizens in most Mideastern countries is in the high 20s. And unemployment is much too rampant in too many of those jurisdictions.
>So, those countries blessed with lots of hydrocarbons in the ground need to sell a percentage of the oil to help keep the Street subdued, with bread and circuses and such…
Yes, to pretty much all you said. That’s why I don’t see how any fresh new government, one that is worried about surviving the next month, rather than decade, continuing to sequester, instead of raising more cash, right now.
A new government cannot think long term; the people will not trust them to do that. Long term investment is a luxury of a stable government that can shape the hot will of the people into something like patience. I can’t see that happening.
I have figured out the problem. The Blog Dawgs are not getting laid.
Want to fix
DELETED. Go sell a house, will you? — Garth
And please remember too that we are, and continue to be in, a highly inflationary environment. My take is that ordinarily, if the markets were left to their own devices (i.e. the government would let the debt laden banks collapse and not institute things like TARP and perpetual QE), then we would be in a severe deflationary environment like Garth suggests. And we did get this deflationary spiral when the stock market collapsed in 2008 and oil went from $140 to $30 and other commodity prices similarly collapsed.
However, inflation is here to stay for a number of reasons; probably the biggest of which is that the mark-to-market rule of bad asset prices was relaxed and now U.S. banks use a mark-to-model rule which severely overestimates toxic debt prices in an accounting maneuver which keep true losses off the books. So while we should theoretically be in a severe deflationary environment similar to the 1930’s, this has been negated because of accounting gimmickery and the taking on of toxic assets on the government balance sheet. This is where people like DSP have it all wrong. They see the $600 trillion+ of outstanding non-performing derivatives and think that the government cannot possible print enough money to cover the shortfall of toxic derivatives. But if they are “locked” in pandora’s box and continue to be segregated from the corporate balance sheet, are the losses ever actually realized? It’s like the old saying: If the tree falls in the forest, does anybody hear?
Japan, EU, U.S. are all just running huge fiscal deficits to keep economic ‘growth’ at any sort of reasonable levels. Individual EU nations are now printing Euros with EU support. Again, the world’s corporate companies are doing well profit wise and have strong balance sheets, but government balance sheets are beyond repair and they will continue to pint and create a highly inflationary crack-up spiral.
Nostradamus Le Mad Vlad
WAL MART:
This should boggle your mind!! And Probably scare you as well!
1. At Wal-Mart, Americans spend $36,000,000 every hour of every day.
2. This works out to $20,928 profit every minute!
3.. Wal-Mart will sell more from January 1 to St. Patrick’s Day (March 17th) than Target sells all year.
4. Wal-Mart is bigger than Home Depot + Kroger + Target + Sears + Costco + K-Mart combined.
5. Wal-Mart employs 1.6 million people and is the largest private employer, and most can’t speak English.
6. Wal-Mart is the largest company in the history of the world.
7. Wal-Mart now sells more food than Kroger & Safeway combined, keep in mind they did this in only 15 years.
8. During this same period, 31 Supermarket chains sought bankruptcy.
9. Wal-Mart now sells more food than any other store in the world.
10. Wal-Mart has approx 3,900 stores in the USA of which 1,906 are Super Centers ; this is 1,000 more than it had 5 years ago.
11. This year, 7.2 billion different purchasing experiences will occur At a Wal-Mart store. (Earth’s population is approximately 6.5
billion.)
12. 90% of all Americans live within 15 miles of a Wal-Mart.
13. The value of product for Wal-Mart passing through the port of San Diego each year is a larger sum than 93% of ALL countries Gross National Product (GNP) …..and that is only ONE port …one way – that’s how Wal-Mart gets it’s stuff.
14. Of the 1.6 million employees, only 1.2% make a living above the poverty level.
15. Wal-Mart’s head office is located and centralized in Bentonville. Due to this fact, there are more millionaires per square mile there
than any place on Earth.
16. The official U.S. Government position is that Wal-Mart’s prices are no lower than anyone else’s when compared to a typical families weekly purchases. That’s the view of the statisticians at the Bureau Of Labor Statistics (BLS) responsible for calculating the Consumer
Price Index (CPI).
17. 92% of everything Wal-Mart sells, comes from China . Another 4% comes from Chinese owned companies in the U.S. or in 3rd world
Countries.
18. Wal-Mart and MOST large companies, take out life insurance on it’s employees, without their knowing. If an employee dies, ALL the
insurance moneys go to the companies. I.e. An employee making $18,000 per year, dies, and the company might make as much as $1 million. Most often these moneys, coming from what is commonly referred to as “Dead Peasant Life Insurance Policies”, is paid out to executives as bonuses. (A common practice, unknown by the average consumer).
19. Wal-Mart now averages a “profit” (not sales) of $36 billion per year.
20. Let Wal-Mart bail out Wall Street. If not, consider shopping someplace else.
====================================
When behemoths like Wal – Mart exist…a nasty dynamic occurs. Jobs(and production) are shipped overseas…and cheaper products sent back.
Gov’ts claim the cost of living is cheaper, even though everyone is either earning less, multiple jobs…but the Wal Marts help Gov’ts cover up the real economic numbers.
The more displaced continually gravitate to Wal Mart, other businesses close down, its ending up as a rather Stalineque option .
#74 john m on 02.05.11 at 11:33 am
#56 Jody on 02.05.11 at 3:34 am
Jesus, this myth drives me crazy.
http://investing.curiouscatblog.net/2011/01/04/top-15-manufacturing-countries-in-2009/
The U.S. is the top manufacturer in the world. (And those number from China are part of a massive bubble, so they will surpass us but there will be a 6-7 year delay from what it looks like on that chart.)
Stop whining and instead go make something and sell it. You live in a free country after all.
Your Comments to:
Hi Garth. You got the interest rate thing right but if rates are rising, how will this bring America out of the ashes?
There may be an “eventual renaissance” in America, but maybe not in your lifetime.
The last two years we have seen great change, yet in your predictions, we have not. Are you following what’s going on out there? I used to read you daily but find myself coming around every month or two only to see the same old, same old. You are not keeping up with the times my friend.
Those who have bet on the demise of the US are the ones out of touch. It will take a years, of course, but this is an opportunity which comes alone rarely. Too bad you see it not. — Garth
Care to explain how this opportunity will manifest itself or are you going to leave us with hanging Chads.
#21 Utopia said – “Don’t try to time it when you already know a screaming good deal that is flashing neon orange and red “buy me you crazy fool” signals right in your face.”
Just because something is ‘cheap’ is absolutely no reason to buy it. Kinda like a ‘free’ horse.
As Penticton goes, so goes the globe? — Garth
Like I said, drop by my office next time in town, I will show you stats that are locally and Canadian wide. It is the same across the board. Think about it, I can get a residential building permit in days, while it can take months even a year before I can get a commercial building permit. There is your lag in a boom market, I will show you the rest when you visit my office. While you are here, you can sign your book. :)
#23 Valkyrie F6 said “Island living is fine if you want to stay on the island.”
Give that man/woman a sno-cone.
BC-#30 BC Bring Cash
I hope you are implying that that Provincial Transport taxes should pay for the ferries? If not I completely disagree.
With the obvious lifestyle advantages of living in and around the mountains and waterways of B.C. comes many costs. One of those is paying for more expensive roadways, bridges, and the need for ferries to carry cars, trucks and SUV’s to Canucks games.
Even basic infrastructure (like water and sanitation) is far more expensive to build and maintain in mountainous places.
It does and SHOULD cost more to drive in B.C. than in many other parts of the country.
I call it “The best Place on Earth” tax, and it should be paid only those who decide it is worth the money!
#25 Utopia said – “Maybe I need to change my medication again (?).”
No. ‘ken s’ does.
#2 – Holy Verbal Diarrhea…get a life…
More signs of a market crash when Ozzie Jurrok has to make time on air to slag Garth.
Funny how Michael Campbell allows this slagging after his promoting some financial dude on there who will fly you to San Diego for free if you have over $100,000 cause “it’s too cold up here” to come up here to seek new investors ? Is he wanted at the border ? What a crock of bullshit.
Don’t miss out on Ozzie’s Best ShitHole in BC deal of the week for $92,000 special, just don’t mind the outhouse and the horseflies.
Beware of government statistics and headlines. Apparently they only release the good stuff to the media, who toe the line and repeat what the are told.
http://www.financialsense.com/contributors/lee-adler/employment-in-pictures-because-1000-words-were-dropped-from-labor-force
To counter government lies and MSM propaganda here is the truth about the job situation in The States. At this pace the renaissance will take 20 years, which is too late for most of the baby boomers. Besides with record debt level in Canada what will they be buying RE in the states with? Their house ATM? :
David Stockman knows what he is talking about.
http://market-ticker.org/cgi-ticker/akcs-www?post=179187
No job recovery without increasing debt levels, the only new source of buying power, by 100%. Who can carry this kind of load hands up.
http://market-ticker.org/cgi-ticker/akcs-www?post=179152
I miss Aussie Roy’s comments. Where are you?
I 100% agree with Garth regarding Winnipeg’s housing market….. its insane…. for years we were behind everyone and finally started catching up in the last 10 years…… no foundation for it just consumer confidence and lust for granite/stainless……
A house like this has an actual worth of maybe $55,000.00 in a sane market. Gang infested area right near downtown. One on numerous MLS examples in Winnipeg and across Canada.
We (Canada) are next to FALL!
http://www.realtor.ca/propertyDetails.aspx?propertyId=10255509&PidKey=1370139544
#23 Valkyrie F6
I hear ya. I was in BC last fall for a 7 day circle tour of Van and the Island.
Advise for anyone thinking about it – The roads just stop.
Plan on spending $350 for the goddamn ferries.
#28 Nasa… great post. You nailed down a lot of good points.
I would just add that cheap easy oil has peaked, as you say and the implications for the world’s economy are serious. EROEI, (energy return on energy invested) is the key here. Hard to get oil, such as the tar sands or deep sea oil, means that we are spending more energy to get energy. Which in turn means there is less fuel to drive the economy. The result is economic contraction. As major economies recover they demand more energy; prices spike and the economies tank again. Rinse, repeat.
#69 Montrealer on 02.05.11 at 11:03 am
This is one argument that gets a lot of people I’m arguing with speechless for a while. That their 50% gain is wiped out with “only” a 25% decline… same $ amounts.
______________
Your general point is fair, but your math is very wrong.
#63Cathy-Yes the USA is sliding very fast. Marc Faber called this one a while ago when he stated that the US equity markets could and would do very well while the overall economy crumbled. He went so far as to state that the worse the US economy got the better it would be for the markets as the justification for more taxpayer capital being funnelled would be increased. IMO most don’t even understand what the US equity markets are circa 2011-the vast majority of the volume is being generated by relatively few firms-it is in no way similar to the actual equity market of 20 yrs ago in this regard. Unless current trends change, the vast majority of US real estate is heading toward a value close to zero, as the median level of wealth and income is heading downward steadily. OTOH properties prized by foreign money or properties prized by those in the top 1% could do very well indeed. IMO a place like Phoenix is finished, but time will tell.
#37 Big Al
You have found the key to our money system that Henry Ford said would cause a revolution if people understood it.
The people can’t pay back the money lent to them PLUS interest, unless the money supply keeps expanding.
So the money supply does keep expanding, thats where the “grow or die” saying comes from. Problem is that it devalues the nations currency in the long run, so 50 cent bread becomes $1 bread.
A wise man once said – Gold is the currency of Kings, silver is the currency of gentlemen, barter is the currency of peasants, and debt is the currency of slaves.
Borrow and be a slave – the people don’t get it.
#110 On the sidelines from Calgary, I know of symbol IYR in the US, an ETF for real estate.
It seems to follow the market. 3 year chart:
http://tinyurl.com/4kba5f7
This is obviously a little off topic, but there is a longstanding debate on gold on this blog. I have a question for anyone with knowledge on the matter. As I get it, the American Dollar has been the currency generally recognized as a safe haven in the past for preserving wealth however the american fed has been pumping out new money for two rounds of quantitative easing, and talk of at least two more on the go. This could only be causing the value inherent in the american dollar to go down. This hedge therefore is losing its value. Where else would people go besides gold or precious metals? How could gold and precious metals only go anywhere but up in value. I am not pumping either side of the argument. It’s only logical as far as i can tell. I am hoping someone could explain to me how i am wrong, because i would very much like to know more on this matter. Especially while it seems that the value of gold has dropped somewhat as it generally does at this time of the year and, if it is to go up, would likely do so beginning march and at the latest August. Thanks for any answers on this.
Quick – get in on this one before 5%/35-yr is taken away:
http://www.realtor.ca/PropertyDetails.aspx?PropertyID=10316738&PidKey=704357116
Only $875,000 down and $65,000 a month for a 3/4 finished tribute to the Palace of Versailles!
#39 Nostradamus Le Mad Vlad – said “Stagflation? Sooner or later something is going to have to move, either up or down, but it will move.”
Stagflation? Maybe ‘constipation’ is a better term. Something will have to move, eventually. As in…. :)
[kon-stuh-pey-shuhn] informal . a state of slowing down, sluggishness, or inactivity. [dictionary.com]
Just did that and now finishing off some paperwork before taking the rest of this bright sunny Saturday in Kelowna off to spend with my girl; a nice winter walk along the beach and then a quiet dinner at her favourite bistro, home, hot tub, good music some Okanagan VQA wine… 30 years and she still puts up with me. I gotta be doin’ somethin’ right. Could it be that we don’t live in a rented basement suite? Nah.
Really… what is important? Is it the stainless, the granite and the hardwood? Or is it what you think that might bring to you?
Is it what’s in the mattress or whats on the mattress?
Did I mention she looks like that chick you posted the picture of on “The Survivalist” edition of your blog? And while yes I truly can be just that shallow, she is one smart woman – wickedly smart. So I’m off because clearly I do have better things to do with my time.
};-)
The Renaissance that Garth speaks of will be post-collapse when Americans (and Canadians) will be severely downsized into more sustainable communities.
This new life will be much smaller scale and lower energy, where a lot of our focus will be on producing our food and providing essential services and products (cottage industry) to each other.
http://www.kunstler.com/index.php
Hey Garth…..apparently the British PM also agrees with me.
http://www.nationalpost.com/news/world/British+Cameron+says+multiculturalism+failed/4230908/story.html
Why not publicly jerk your knee into your extremist Liberal face and call him a racist too?
Oh good, a little friend. You can burn crosses together. Say, aren’t you banned? — Garth
Well….at dinner yesterday, friends told us their aunt sold their house. Was listed, 2 offers immediately, one $20,000 over listing price, no subjects…….SOLD.
Actually bought by a neighbour
who lived a few doors down…..we are guessing just under $1 million for a 60 year old rancher on approx. 8000 sq.ft lot(Richmond BC)
Milton is disgusting. Let it burn. Anyone who bought a house there is an idiot.
As I said (and you ignored) our growing credit binge is a greater long-term threat than a housing correction. That’s what central banks are for, not to feed a real estate bubble. Sheesh. — Garth
=====================================
… and yet you say the US model (Canadian credit binge, squared) is building the foundation for a renaissance (of course you are right… for the top 2%… the rest, not so much)… these two opinions seem to be mutually exclusive to me (waiting to be corrected with the usual humble, respectful reply…lol).
… and, you’ve been bashing gold for years Garth, but it will continue to rise until the world’s credit binge policies change… my self directed, diversified PM portfolio has appreciated 150% over the last 18 months (isn’t yours aiming at 15%?)… but apparently, I’m just “Tin Hat” loon, so what do I know!
Oh well, I couldn’t agree more with your R/E views, and that’s why I enjoy your “pathetic little blog” posts so much!
Forbes list of 20 most miserable US Cities
http://www.vancouversun.com/business/business/4225116/story.html?tab=PHOT
Florida and California are home to 16 of the top 20 cities in terms of home foreclosure rates in 2010, with Miami topping the list with 171,704 last year.
Ron Pollina, president of site selection firm Pollina Corporate Real Estate, told Forbes.com the outlook for California’s corporate real estate market isn’t much brighter.
“If I even mention California, they throw me out of the office,” Pollina said. “Every company hates California.”
Chicago and Washington D.C. were two of the 10 largest cities to make the list, hurt by long commute times, taxes, weather and falling home prices. Detroit, which topped the list the first time it was run in 2008, was in 15th place this time, helped by the inclusion of housing.
New York was outside the top 20 having finished 16th in 2010.
Cleveland, last year’s most miserable city, finished 10th this year, losing the race to the bottom as unemployment increased at a relatively slower pace than elsewhere.
Not with 15K. — Garth
So 15k is the ante and x10 gets ya a seat at the table. ;)
Putting five asset classes in a TFSA is lame. — Garth
the only thing that is going to “pop” is poor Garth’s head as gold keeps going higher and higher … as US bond prices crater… and the american dollar keeps going lower and lower.
@ HH
21 today’s blog pic is from whitetrash repairs at
peopleofwalmart.com
great pic btw I laughed my ass off first time I saw it.
I like to think of it as ..The Greatwallmart.
Nostradamus Le Mad Vlad – thanks for your effort on the links Vlad. Now there’s a credit to the Blawg Dawgs, a guy who at least tries to draw your attention to something important, and provides the link. Whether you click on them or not, it’s value added. Thanks!
Hoof Hearted – thanks for the scary Mal-mart story, I think. Could give nightmares though.
The true brilliance of it is the way the money flows, AFAIK. The manufacturers of the products provide it to stores, and in many cases are also responsible for keeping the shelves stocked, and they pay for the shelf space too. The “store” just pays the cashier to take your payment, and they get paid instantly as you pay.
The vendor gets paid 60-90 days later or whatever. Imagine the interest alone you could make on that cashflow. That’s why they grew so big, the basic concept is so fiendishly brilliant. It’s just a cash machine.
Henry Ford was right to pay his workers well, back in the day when manufacturing was local. Nowadays China gets the jobs. Globalization at work.
When costs rise too high in China, many multi-nationals will move on to cheaper pastures for export production, I have no doubt. That’s how it got there, after all. The bottom line is the bottom line. I read Vietnam is booming now for that reason.
AG Sage – Interesting chart to ponder. The overall trend is clear, the rise of Asia.
I think they didn’t account for currency fluctuations, for one thing. The Euro has gone up and down vs the US $ recently more than the % declines in European production, and it always has a large effect.
Thank about this: if you factor the GDP output per population, Canada rocks, to be on that list at all, with our tiny population on the global scale. Western economies are so far ahead there from that perspective, the rest have a long time to catch up to that.
And the “developing world” has a really massive potential for growth ahead in the next few decades as they catch up. Like all things, we’ll probably meet somewhere in the middle, as we stagnate and they expand.
If you want to get really rich, invent something they will just have to buy all over Asia, the lower the price the better. Imagine the possibilities. Invent the new ‘Wonder Widget’ and you could be bigger than Bill Gates. If you made 1c on each unit. How do we do it? Vooooolume!
Personally, I think we could do almost as well as Japan or Germany, if we just re-aligned our headspace. They have no natural resources, for one large factor.That’s where you want to be in the long term – producing high value products that can’t be easily duplicated elsewhere. Whether that is oil, potash, or the Blackberry. We should be doing more of the value add here.
Go Canada! I’m still proud to live here. Even though it snows. A lot.
What is interesting is Wal Mart in Richmond BC..
Around 2004, Wal Mart announced it wanted to build a store on approx. 30 acres in an old residential neighbourhood(Alderbridge/Garden City) directly across from Lansdowne mall and othe commercial zoning.
The City was like deer in headlights, and the matter bounced around.
Then the City created a new OCP for the entire 140 acre neighbourhood which is mostly multi family housing yet directly under YVR flightpath. (What was interesting is they pulled an OCP from the same area due to YVR new runway and class actions suits due to noise.)
Zellers established a presence in the Old Eaton’s store at Lansdowne as a counter move, even though there was already a Zellers in another mall 1/2 mile away.
Just HBC sold Zellers out to Target stores….and Wal Mart is prepping the land yet nothing official yet.
However the City of Richmond has changed the zoning where many small commercial businesses exist immedaiately West of Wal Mart site into hi density residential ( with many closing , demolished and hi rises going up as we speak).
IMHO , connecting the dots…rather than Wal Mart dropping in like expedited cargo from the Enola Gay, this is an insidious plot whereby Wal Mart knew no Commercial Zoning was planned for where they staked out….it is now, but their competitors will be nuked via the new OCP. Wal Mart will then find easy pickings and has been seen elsewhere, vacancies all over as small businesses implode.
Devil’s Advocate you are such a douche words escape me.
Putting five asset classes in a TFSA is lame. — Garth
Agreed, but for ‘P’…
…lame is better than dead.
“while in Victoria houses just got $50,000 cheaper”
Median in Victoria rose to 576,000 and the six month average is unchanged, doesn’t feel that cheap to me. Nice cherry picking, your just as bad as the Realtors.
I take my stats from the VREB. And you? — Garth
My stats are from VREB also.
Big front page new front the Times Colonist in Victoria today….I sh!t you not. This is ‘as good as gets’ in BC’s capital…
http://www.timescolonist.com/Bizarre+Craigslist+Victoria+used+panties+found/4228440/story.html
http://victoria.en.craigslist.ca/laf/2194437301.html
Obviously, there is nothing more ‘pressing’ than dirty panties.
i couldnt agree more with Garth….those poor buggers who loaded up with gold….that 10 yr bull market is going to disappear any day now….HA
Calgary update….average price up $30K and sales strong, seems to be quickly moving to a sellers market…hummm
#29 BeeBee
Something has to pop??? Where have you been the last 3 years, in a cave? Does the US look particularly prosperous to you right now?
hey DA I suspect you could add shs to your list of symptoms … that’s shallow Hal syndrome .
I heard a wise man once say ” a man who marries a beautiful woman has no imagination ” but that doesn’t apply to me , mine is beautiful .
btw are the natives still planning to build those few thousands of condos and houses on the rez in west bank ? I bet they are going go like a fat chick on smarties.
Sorry blog dogs, but over the last week it’s gotten ridiculous how many posts by DA, aka Devil’s Advocate and now aka };-) have to be scrolled past.
He’s really hijacked the comment section — which I used to enjoy. The good info and anecdotes are getting too hard to find. I’ll just be reading Garth’s posts from now on. Good luck fighting for space against him.
Garth:
I read about how the economy in the U.S., as well as Canada, is improving and the job market is starting to show that. However, the economy in both countries has received a lot of stimulus money in the last 2 years. As that stimulus winds down, won’t it put a damper on the recovery, with the job market flattening out or worsening at least slightly?
I’ve been playing around plugging #’s into the mortgage calculator from ratesupermarket.ca which is available as a link from this blog. I got it to calculate monthly payments on $500,000 mortgage. At rate of 5.19% a 35 yr amort. the monthly payment is $2,566.57 Plugged in an int. rate of 10% the payment increases to an eye popping $4,2221.16 per month.
I remember a time in the early 1980’s a 10% rate mortgage was a bargain. If you had a 5 year locked in rate you were big winner when rates went up. If your mortgage was transferable to a new owner you could sell when rates went higher and higher. Term deposits were earning 17%. I’m not suggesting rates will go that high but it did happen and is possible once again. Don’t forget a 10% rate historically is not out of the ordinary.
That $500,000 mortgage 20 years down the road still has an outstanding balance of $397,368 owing. Thats a generation later. OUCH!!!!
Do you ever think there will be rapid raise in interest rates in spite of rapidly rising inflation? If so then how on earth will US service their HUGE debt?
Also approximately 80% of mortgage loans issued to subprime borrowers over the past decade were Adjustable Rate Mortgages (ARM), meaning 80% of mortgages in the U.S. have reset or are ready to reset at much higher interest rates. There were approximately 1.4 million bankruptcy filings in 2009, and 1.5 million in 2010. One in every 45 homes in America received a foreclosure filing in 2010. All this happened in a scenario of record low interest rates.
Real growth (GDP or whatever they call) in US is negative, when you consider the $2 T or so pumped by Ben Bernanke and his minions. US has too many troubles to get out from even with some great help from the “gloomers” in the media.
Govt stats on employment in Canada and the US are manipulated as are stocks and bond markets. Listen up folks about 3 min into the video below:
http://www.cnbc.com/id/15840232?video=1780974568&play=1
@43 The Original Dave:
once again, thank you for sharing with me and the dawgs your sources of inspiration. If you’d agree to share the names that you didn’t want to mention publicly – please do it to “mike” underscore “trifan” at yahoo dot com. I owe you a nice lunch – if/when you’re in Toronto I’d like to honour my promise. Seriously.
@ others who attacked/doubted the sources that TOD shared:
hey, it’s a personal suggestion – there is no need to criticize TOD’s sources. He didn’t suggest that others follow them – he just shared the sources that he follows. It’s everyone’s duty to check them before deciding to follow what they advise.
Utopia: Oh my! a response from the
subtle section! Im getting lucky here.
Yes, it was about housing, but not obviously.
Your ‘medication’ is probably same as mine: CC +
ice. And probably in a similar enviroment: Joe’s
bar and grill and therapy and meetup and…..
Utopia, I write for fun. All the wonky stuff is
for contrast and an occasional informed cynicism.
There are smart cookies here, but they occasionaly need a thinking persons comic relief to remind them that “Its Only Money”
Thanks for the comment: I was fishing…for whatever works. —Ideas?? KS
My apologies to the commenter who “asked” if
the ‘Infinity’ referred to was really a —‘boundless’— entity. Wooo! You Noticed!
—A nuance beyond simple communication.
‘boundless entity’ vs ‘infinite entity–‘ sheesh
I live for days like this. Apology?
-yes, I cant find your comment, and name and it is close to ‘Best Before’ comment cutoff. Thanks again.
-Cheers KenS :-)
Can anyone tell me how much the BC homeowner grant costs taxpayers? My estimate is close to $1b / year but I can’t find anything to back that up.
http://www.solidaritycenter.org/files/pubs_egypt_wr.pdf
A new workers movement is starting to take root.
A little over a year ago,municipal real estate tax collectors staged a nationwide strike and a 12-day, 10,000 people sit-in in front of the prime minister’s office in Cairo. Its success has inspired Egypt’s postal workers and education administrators to mobilize as well….read more
Eight Workers Stand Military Trial for Protesting Poor Safety Conditions
Daily News Egypt, August 23, 2010
In July 2004 President Hosni Mubarak appointed a
new cabinet headed by Dr. Ahmad Nazif.The Nazif
government accelerated the sell-off of the public sector, privatizing a record 17 enterprises during its first year in office. This policy was identified with the western educated Ph.D.s and businessmen in the cabinet close to the president’s son, Gamal Mubarak.
#140 -DA To summarize: “I can’t be bothered , I’ve got a better life, and better things to do with my time.”
That’s pretty rich sarcasm for someone who can’t manage to stop typing crud every 5 minutes (you must be exceptionally satisfying in the sack with that kind of hang time, eh!?). How many posts do you make here, and how tdoes that reality square with your immensely exciting and fulfilling life, Senor Don Equis?
Stay childish, my friend.
Timingiseverything : Sorry you dont get it. Add it to the list.
From an article by Michael Lewis
“real-estate bubbles never end with soft landings. A bubble is inflated by nothing firmer than expectations. The moment people cease to believe that house prices will rise forever, they will notice what a terrible long-term investment real estate has become and flee the market, and the market will crash.
so then what does one put in a 15K tfsa.
And here are some reasons for leaving B.C.
http://www.cbc.ca/canada/british-columbia/story/2011/02/04/bc-unemployment-hansen-ndp.html
#53 “…Waiting for census update”
Not going to happen, a (single) consverative voter complained so Stevie pulled the plug.
Take advantage of this pull back you won’t see it again this year:
“Gold is money, everything else is just credit” JP Morgan
This is not a gold blog. — Garth
#26
The question is how much more does the 10yr rate cost in interest? And is it possible to take the ten year rate, pay extra each month and this not pay any more in interest while enjoying the security of a ten year term?
Short answer? No.
The interest difference after 5years is over 17,000. (That 35 yr term is a killer by the way. IN 5 years they still owe 236k!)
In order to avoid paying that extra interest they need to aggressively pay down the principal. How aggressively? Try $3434/mo! Yikes. The good news is in 5yrs at that pace they only owe 94k :)
My vote: take the 5yr term, but make the ten year term payments. Don’t sign up for any pre-payment plans crap. Just make sure they can prepay without penalty extra, and send in more than the payment due each month. Send in the ten year rate. If they do that in 5 years they’ll owe 217k, almost 20k better for not much more per month.
With all due respect, there is more to America than mobile home parks in Florida or depressed hood in Atlanta. As I said, this is an opportunity. Most people will miss it. — Garth
Probably the worst advice ever given on US real estate. So far, had you bought on Garth’s advice a few months ago, since there are over 12 million VACANT homes in the US, you would be down approx 5%. Now with the lack of tax revenue in ALL STATES, the new milk and meat tax possibly coming, the fact that the US takes in 2 trillion and spends 4 trillion.. your lousy new home in the US will be going down another 20% over the next few years. Great advice, buy high and sell lower. Another NORTEL in the making. Study the 50 greatest bubbles you won’t tough ANY real estate for 20 years.
Actually that comment was not about real estate. Even so, hard to get too fussed over a property that’s lost 60% of its value falling another 5%. That depression must have you on a budget. — Garth
Definition of insanity: Harper’s “Conservatives” gear up to spend $6.5 million to promote their tax cuts.
Are corporate tax cuts the sharp tooth that will finally puncture the Teflon hide of the Harper government, letting an ugly illusion bleed out?
The opposition is threatening an election unless the upcoming budget puts an end to the cutting. If there’s any question on which society as a whole should say “enough,” this is it.
Properly translated, the government’s official nonsense about stimulating the economy would read like this: We will deepen the deficit and deprive the country of infrastructure and social spending in order to advance the worldwide cult of billionaires ascendant, in the hope that they’ll leave us a few crumbs.
The nonsense runs deep and persists despite being thoroughly debunked. One of the debunking forces is the government’s own Finance Department, whose figure show that cutting taxes is one of the poorest ways to create jobs, giving 20 cents growth for every dollar of taxes cut. Spending on infrastructure, on the other hand, gives $1.40 per dollar spent, and supports for the unemployed and the poor also around $1.40.
http://www.thechronicleherald.ca/Opinion/1226094.html
So should we be buying a condo in the GVRD area, now that there seems to be a lot to choose from? Or wait until later in the year?
If we decide now. .thinking tha twe wil lbe bidding low with so much stock to choose from.
Thanks,
M
Garth,
I think you’ll enjoy this Toronto Life article, if you haven’t seen it already.
http://www.torontolife.com/daily/informer/from-print-edition-informer/2011/02/02/the-unaffordable-city-how-did-toronto-get-so-expenisve%E2%80%94and-is-it-worth-it/
It is sad to see what could be a genuinely productive discussion get hijacked by a small yet vocal group of imbeciles.
Every single day.
Poor old Devil’s Advocate. His chick can’t be that hot as he is always on this blog.
I think he believes his own hype!
#163 vprophet on 02.05.11 at 6:18 pm
Govt stats on employment in Canada and the US are manipulated as are stocks and bond markets….<<<<<<<<<<<< i agree and anyone I.M.O. who sees prosperity in a dwindling economy with a political leadership that has never told the truth about anything is living a dream. …Time will tell..and a booming stock market can not exist in the long term without a booming economy………surprise me! :-)
Our auction clearance rate in Sydney is down to 48%.
There’s still the odd moron buying crack shacks and paying yuppy prices for them.
http://www.news.com.au/money/property/for-termite-dump-with-no-floor/story-e6frfmd0-1226000821408
“Lol”.
CONCESSIONMAN: Pleez dont lick your fingers after flinging dung: It really upsets the kids. KenS
He’s really hijacked the comment section
That’s been his intention all along, and I must say he has done a good job of it so far.
You will notice up to about comment 40 he stays mute, after that point he bullies his way in and takes the comment section in 15 different directions all at once, wouldn’t surprise me if CREA was paying his bills.
#113 Devil’s Advocate
They spin their news releases to hilite whatever the most favorable metrics are (this month they focus on the median for the first time in forever, because the average is down).
If you have reason to believe they manipulate the actual published stats, then you will have to back that up with something more substantial than your usual heavy dose of innuendo.
#126 wetcoaster
Ha!, Campbell’s show is quite the joke lately. Ozzie is bad enough, but that ‘snake-oil’ salesmen he had on today was Campbell’s ‘best of the worst’ so far. The gold pumpers he has on too….wow!
To be fair, some of his ‘guest’ are good, but Campbell
himself acts like a right wing religious nutbar at times (IMO)…
Along the lines of Stockwell Day.
More greater fools! in Calgary. 194 sales in 4 days, averaging 48 sales / day.
In all of January, total of 791 sales in 31 days, averaging 25 sales / day.
What’s wrong with people? Real estate agents are SO MANIPULATIVE!!! “Buy before the rules change from 35 years to 30 years!” “Buy now or else you won’t make your mortgage payments as they will be a hundred dollars more!”
F has already said he is doing this for a reason, but fools rush in. Decreased amortization years = lower prices to come = more savings = more money in your pockets!
Carney has already said too much debt! Be prepared for interest rates to increase! Increased interest rates = higher monthly payments Do real estate agents discuss the effect of 1%, 2%, or 3% increase???
Most real estate agents = MANIPULATIVE sales people
I think the only major thing I disagree with Garth on is how little he estimates the impact the expansion in the oil industry will have on real estate in Alberta.
I’ve got friends at Suncor who say they are flying out east to hire the engineers they need.
Encana last week announced they are going ahead with the second Bow tower. The million new square feet of office space was absorbed in Calgary WAY faster than any anyalyst projected.
With a growing population and strong incomes I think most of Calgary’s price declines have occured (just my opinion)
Garth should know Canadian economic history, our entire country was developped through expansion of resources, first was fish, then fur, then timber, then wheat, and now oil.
Other than that I think Garth is bang on. He’s absolutely right about outskirts of cities falling hardest. For instance townhouses just outside Calgary in Chestermere (which is actually very nice, with great views of the mountains) looks like they’ve fallen 30% from 2007 to today.
Also I agree fully with gold prices being overvalued. I think a great trade is to short the gld (or buy puts to minimize downside) I think gold prices drop 20-30% this year as the US recovery continues and bond yields rise.
Beyond that most of what Garth says makes sense. He’s incredibly negative mind you and that bias permeates his analysis in my opinion.
Toronto with 17,000 new condos coming on the market (wow if that’s true their screwed), Vancouver is ridiculously overpriced, can’t say much about Montreal or Saskatchewan. Calgary… I think he’s wrong, I see the economy getting stronger, migration picking up steam, rents tightening up, vacancy rates coming down and prices being stable.
We will see!
Milton ended up not for me but most people I know who live here love the town … Good schools low crime and big houses at a low cost …
#3 GoingGagaforGarth on 02.05.11 at 12:04 am
————————————————-
Garth reads it, he just doesn’t bookmark it. Over 67% ownership as of 2006:
http://www12.statcan.ca/census-recensement/2006/as-sa/97-554/p4-eng.cfm
If Oakville falls 20%, Milton will definitely fall 50%.
I think what’s most likely to happen is Oakville will fall 5%, and Milton 15%.
#25 Investx on 02.05.11 at 1:01 am
—————————————–
The thinking is that with fewer sales, a sale of a higher-end home impacts (skews) the average price higher.
–
#2 ken s — Great post! Didn’t understand a word of it!
#63 cathy — “Americans seem to be obsessed with which president to blame rather than how to get out of the mess they are in.”
Always the same. Pas the buck, red is better than blue etc. Until politics are either cleaned up (fat chance) or turfed entirely (world wide revolutions), nothing of any substance will change, but the rhetoric will continue to repeat ad infinitum. Don’t listen anymore — it’s not worth it.
#65 Lee Steve — Good link and so true. Pull the wool over our eyes and bleat along in unison, but there are excellent investment opportunities in North America as companies are sitting on trillions and / or investing offshore (not here).
“Unless your house number is 888. — Garth” — Funny. Those #’s are in my TFSA, all making billions. Next year I’ll put $5K in tin-foil hats!
#77 };-) — “It’s beyond me.” — Me too. What are we talking about?
#102 AACI-Okanagan — Thanks for the feedback. I noted Garth’s response and he is (possibly) right, but as there doesn’t seem to be any historical data to support it, that allows for the simple fact there is always a first time for everything, a Commercial RE downturn as well.
#117 Hoof Hearted — Wal Mart serves its purpose, just as everything / one does here. What I don’t care for is the nearby small economies and thus, the jobs, they have removed. Much of NAmerica is now a service-based economy only, which means lower wages.
However, one has to keep up with the constant changes in life. We very rarely shop there, preferring to spend a little more on local economies.
#139 Timing is Everything — There is a direct, scientifically-proven link between stagconflastiptionation and life. What it is, no one has ever lived to tell!
#150 Got A Watch — Anytime!
*
3:36 clip Nature at play. Many times, animals are much smarter than humans.
Silver Gone Nuts For conspiracy theorists only, and Bernie Wal Mart.
Egypt Divided military. A house divided against itself will not stand. Egypt – Israel gas pipeline ruptured.
Middle East Superbowl Nice map here which covers hot spots.
Politics See headline to fully understand Obama is a lap dog, nothing more. He serves his masters well, as it leads to this.
Two Ways to survive a system collapse.
Iran Turkey says Iran has a right to peaceful nuke purposes, which everyone does. Use technology which is better than coal or oil.
Switzerland Now why would there be protests there? Is it because of the lies re: Sadaam’s WMD?
#154 beagle
Good post…I noticed too. Fair comment.
#45 Pablo on 02.05.11 at 2:28 am
————————————————
Dude: the time to sell a house in the USA was 2005. The time to buy is NOW.
Sell when others are greedy. Buy when others are fearful. All we see on a daily basis is how BAD housing is in the USA and how it’s likely to continue INDEFINITELY. What’s happening now is the inverse of the subprime crash in 2006. Think about it.
Isn’t the object lesson presented by Walmart (Wal-Mart?) amazing? Thank you, Hoof Hearted and Got A Watch.
Here we have a company grown to giant proportions by selling mainly the cheap stuff they can afford to people who can’t afford to shop anywhere else. And they pile on the profits not only by the usual small margin/high volume, but by minimal employee wages and rock-bottom sourcing from wherever. Incidentally, Walmart tried to expand into Germany, but found that local labour laws required wage levels and employment conditions that made Germany an unprofitable Walmart market. Germany’s loss?
So Walmart explodes, puts other chains and stores out of business and buys most of its wares off shore, with the inexorable loss of manufacturing and retail jobs. And with the loss of jobs and lower wages for surviving ones, there are more poorer people who can afford to shop only at Walmart, and Walmart gets even more customers and greater demand for cheap goods, completing and impelling the cycle.
How to break it? Well, you can master the Walmart Gulliver with restrictions the way Germany did, ensure everyone enough in wages to afford being able to shop somewhere else, or look to Walmart shares (preferred?) as your chance at perpetual income.
The first two don’t count given the North-American business and political climate.
Proffessor: I have a very nice home on 5 acres in the panhandle area of Florida. Rental is a nightmare for an absentee landlord. DON’T DO IT!!!
#62 nano-thermite comedy on 02.05.11 at 9:23 am
———————————————-
You mention Egyptians and gold in the same post. Funny how those in Egypt right now are scurrying to find MONEY from ATM machines, and not GOLD BARS.
Da Monsta bunny apologizes to those bloggers annoyed by Ken S, who I have apparently encouraged with the
infinite vs boundless thing. But there is a real estate
theorem here somewhere. Let’s see…..
Ken S! The surface of a sphere (or if you prefer, an
ellipsoid) is boundless, correct? A person walking on it
finds no start, no end, no edge. Yet it has a finite area.
Which means of course we are running out of earth surface! Prices can only go up!
Now Ken, to keep you busy, add a couple of dimensions to that surface and find a way to that parallel universe!
Oh wait, you already live in Vancouver……
Wrong. Only one thing moves real estate — consumer sentiment. — Garth
——————————————–
Exactly! How else can one explain house prices rising in Winnipeg?!
Climate. — Garth
#171 jwkimba
Thanks you for your response! :) I was thinking that it may be safer to take the 10 year due to the fact that 5.1% is a pretty good rate compared to the norm over the past 20 years.
One problem is they are taking advantage of the HST free homebuyers tax thing and it makes it so they cannot make any lump sum payments for 3 years. They seem to believe they would be able to pay off this place in 5 years….is there a program for working out the payment numbers you quoted?
As for the rest. I shall put up a new vote on next post. I would love to hear more responses. Surprised DA never responded…. :-/
#78 T.O. Bubble Boy on 02.05.11 at 11:37 am
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Looks like we can weather a significant drop:
“On average, Canadians using CMHC-backed mortgages, had built up equity of 45 per cent of the value of their home. These are Canadians who did not have a traditional 20-per-cent down payment, but instead had five or 10 per cent down and legally had to turn to CMHC to be approved for bank financing. CMHC’s mortgage portfolio is huge at $473 billion, covering millions of Canadians, usually buying their first home.”
Source? This statement is certainly not representative of new mortgages in the past two years, which have been overwhelmingly 5/35s. — Garth
#90 kitchener1 on 02.05.11 at 12:23 pm
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Dude, the foreigners come here for the health care, EI benefits and safe streets. Although I do agree with you, I have worked in many a lab with the Chinese and they admit their first choices are Britain, the USA and/or Australia.
#92 refinow on 02.05.11 at 12:28 pm
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Buy China: FXI.to
An ETF surely to double/triple over the next few years…
Garth this totally doesn’t look good for US bonds. Next week will be an indicator if the breakdown will be progressive:
http://jsmineset.com/2011/02/05/long-bonds-break-to-the-downside/
“With today’s breakdown of the 5 year on out to the long end, interest rates are headed in a direction completely opposite than what the Fed has been intending!”
After the events of September 11th 2001, President Bush said the following about terrorist “ They hate our freedoms – our freedom of religion, our freedom of speech, our freedom to vote and assemble and disagree with each other.” When I sit and think about it, I can say the same thing about Corporations when it comes to their views of unions. They (the corporations) hate the freedoms rights that unions have. They hate our freedom of speech, our freedom to vote and assemble, our sick days, our benefits, our breaks our knowledge and our quest for better working conditions. They hate our vacation days, maternity leave, refusals and our questions. For this is the reason why unions are the enemy to mother corporation, and mother corporation is doing everything in her power to stomp out all freedoms that workers have. Think in the BIG picture !!!
Ugh. 1/2 million in Milton?? This house is so good, the professional Realtor(r) used Google map street view photos…really earning his commission huh. And no photos of the interior.
http://toronto.kijiji.ca/c-housing-housing-for-sale-Gorgeous-2400-Sq-Ft-4-Bedroom-5-Years-old-in-Milton-W0QQAdIdZ257179699
To #161 DM in C on 02.05.11 at 6:01 pm
What I now do to read comments is use ctrl-f (aka find function) and just search for “garth”. This way I only read the comments where Garth replied… usually the only ones worth reading. I got really sick of some posters and also gold pushers.
#142 Devil’s Advocate
What’s your point….
You are probably an example of the classic cartoon of a guy phoning a porn line, listening to dirty talk by a sexy female voice, which ends up being a 99 year old lady trying to make ends meet.
You are either
—full of shite
—bored
—never been laid
—all of the above
OK, boys. Fun’s over. — Garth
#207 Paul
It’s those rotten Unions and the inefficiencies they promote, thats the problem the red necks that work 60 hour weeks for maybe 40 hours pay cry out. They gotta go those lazy bums. Well I happen to agree with ya. It was workers generations ago that died for and spilled their blood for the 8 hour day and the 40 hour work week. Thats why Corporations are selling out and locating from China to Vietnam. The Chinese are getting too expensive. The Chinese worker demands more pay, more tolerable working conditions and oh my, a little bit of time to spend with his or her family. What crime it is to demand humane treatment.
# 2 ken s….
Yeah…and a door never closes under the premise it must pass infinitesmal number of subdividable increments/ measurements. ie 1/2 of a 1/3 of a 1/4 of 1/5 ………to infinity
Try this simple test:
Put Harpers’, Carneys’ or Flaherty’s Head /Johnson in the door opening and under this premise their head should feel nothing when you SLAM the door SHUT .
Logical……. right?
#191:
You might consider re-checking your facts and sources.
The Bow is 1.7M sqft, taken entirely by Encana and Cenovus. That was the entire intention of the building in the first place! The second tower is essentially a cultural centre and conference centre with minor office space. A whole 12 storeys. By moving in to the Bow, Encana and Cenovus will be abandoning a whole lot of TD, Banker’s Hall, and the old Pan-Canadian building.
There are entire empty floors in buildings in downtown Calgary. I can see one building with 4 empty floors from my office window alone. My company has a lease on an entire floor plate of a noted Calgary office tower for _zero_ rent. Ops costs only. Any leases signed in the past 18 months have been from anywhere from 65 to 80% off their former rates.
Suncor heading east for hiring? Because the hundreds of engineers on temporary layoff from the major EPCs aren’t available? I can guarantee that they aren’t going to find anyone with Thermal Heavy Oil experience outside of Western Canada. Seems pretty ironic that they might be looking for people, especially after the blood letting from the Petro-Canada side of the house in the last 12 months, including the bulk of the Fort Hills engineering team.
If anything, the cost-push inflation that is going to occur in the next 18 months in Alberta is going to be heavily due to 800-pound gorillas like Suncor spending like drunken sailors again. Unfortunately, the lessons in management and budgeting that should have been learned in the 2005-08 window are going to be wholly repeated… even more so since with their new best friend, Total, they aren’t exactly creating the new paragon of efficiency.
Everyone else’s mileage may vary.
@ #205 Bottoms_Up:
“On average, Canadians using CMHC-backed mortgages, had built up equity of 45 per cent of the value of their home. These are Canadians who did not have a traditional 20-per-cent down payment, but instead had five or 10 per cent down and legally had to turn to CMHC to be approved for bank financing. CMHC’s mortgage portfolio is huge at $473 billion, covering millions of Canadians, usually buying their first home.”
Source? This statement is certainly not representative of new mortgages in the past two years, which have been overwhelmingly 5/35s. — Garth
Garth/Bottoms_Up — this is simply taken from the Ottawa Citizen piece (that is a shameless plug for CMHC).
I believe what the “average” is based on would be all $500B in mortgage insurance on the books, which includes about 45%-50% ($245B) from pre-2005 (before the lending standards dropped signifcantly in 2006).
So, if you have say 50% of the mortgages from pre-2006, many of those people likely have 30%-100% equity gains over the last 5 years… AND – they needed a real downpayment and a max 25-year amortization (so, it’s pretty much guaranteed that they have a good chunk of equity). Then, average that out with the < 20% equity crowd from 2006-2011 and you get your 45% "average".
100 bucks DA cuts his date short tonight and posts…
@139 Question
Money in the US system comes from two places – the fed and the banks. Both of them create it out of thin air – they just write it into existence. The fed can buy stuff with their money, but the banks can only loan it out. Regardless of the source, the new money is then deposited into the banking system where it is multiplied by the miracle of fractional reserve banking. Conversly, when a quantity of money is somehow destroyed (a bond that the Fed holds matures or a bank loan is written off), a much larger quantity of money in the system simply evaporates by the same multiplier effect. Money is being destroyed at such a phenomenal rate through mortgage default that the QE is just barely keeping up in creating replacement money. Hence, any hope for a large run-up in gold supported by fundamentals is vain. Gold is a highly-speculative assett and subject to enormous volatility related to market sentiment. If you wish to project short- to mid-term gold prices, you would be well advised to look at measures of market sentiment, technical analysis and the like.
#84 };-)
I smirked out loud.
Of course, there will be an American renascence, as Gath says. But as a politician (former), he cannot admit that it will not come until after we’ve cleaned up what the political class has done to us over the last 30 -50 years.
It’s John Law all over again, with more psychology. So it’s been a longer, more all encompassing thing. But the mistake the powers that be made was to think being able to alter what people think would change the outcome. It won’t. Sooner or later the facts hit the ground no matter how long you are able to keep the folks concentrated on the assistant’s tight fitting suit rather than the magician.
Remember folks, all those amazing things the magician did, were slights of hand preformed while you were looking at his assistant’s breast. Which is where the real magic is I might add.
#93 kitchener1
Garth isn’t being fair with his answers for people who have $15,000 to invest. If that’s all you have, by far your largest asset is your labour, so keep working, work hard, work better, and try and get ahead. But your labour is hopefully low risk, so gamble like a mad man with an idea with 15,000. Even start your own business (the ultimate start up) with the money if your profession allows.
#122 Timing is Everything
“Free horse”. I love it.
#158 cjlizzard
You, and Garth, need to realize the gold market is not crashing in US$ terms until they stop printing excess money and trying to devalue the currency for competitive advantage. The buyers are not local. The local gold rush never happened and won’t. It’s the Chinese and Indians buying the gold, as well as Russia and some Gulf States. They are worried, rightly, about US$ devaluation.
It’s a stated goal of the US administration that the Yuan must appreciate. But the Chinese know the Yuan for what it is, a piece of $hit, so they know the US intends to devalue the dollar. That is why they are buying gold.
#122 Timing is Everything
“Free horse”. I love it.
I might further add “free house”, like the Canadian government is currently giving out and has been for some time. Eventually we will wish we never got a free horse (or house).
Cheers Monster Bunny you win a zillion Sears points,
please send me $275 processing fee and you get the points pronto.
And (seriously) thanks for the comment. This was my
intent: To instigate a bit of humour into this doom,
gloom, fear and greed. It could be anarchistic I realize,
but maybe the idea that “Its Only Money” will be given more consideration.
With all the brains floating around here, there are
probably some excellent ideas that are never expressed. I like to write, period.
Good comment: -especially the ‘…….but you live in Vancouver’ Yeah, the ‘parallel universe’ is option 2 here. A lot of serious comedy, some of it conscious.
Thx KS
Thought some of your legion would get a chuckle out of this Hitler Rant Parody.
http://www.youtube.com/watch?v=bNmcf4Y3lGM&feature=related
#103
“The U.S. encourages entrepreneurship and innovation”
Hahahahahhaahahaaa! Oh Gawd, I’m gonna die. The US does not enourage anything, they kill entreprenurship and innovation with their assinine rules and regulations. Kids can’t even sell lemonde in that police state nazi shithole of a country anymore:
http://blogs.sfweekly.com/thesnitch/2010/07/sf_cops_lemonade_stand.php
Encourage entrepreneurship? No, more like encourage the creation of neighbourhood statsi, I guess they thought that girl was a terrorist selling lemonade bombs. I’m surprised they didn’t lock up her parents for encouraging their daughter to work hard and think for herself instead of kissing the governments ass and asking for their permission, fuck me, we can’t have that now, the plebs might revolt and realize they don’t need the cocksuckers sitting in offices.
Its cheaper to do stuff abroad because the rules abroad are less onerous. The world is shifting away from the US and don’t tell me about how things are recovering, anyone I know from the US is leaving and/or doing everything abroad in order to make money. All the emerging markets are emerging because the US empire has regulated itself to death, or at least they have stopped new blood in their own country from competing with the old tired corporate theocracy by imposing stupid rules. The US is done for, unless they can do what Egypt is doing and get rid of their useless, blood sucking, parasitic federal government they will go down, and go down hard. I got rid of my US dollar accounts long ago, I hold Renminbi (RMB) and Brazilian Real accounts now.
Garth,Please ditch DA, it really is becoming a real chore to scroll through his posts. I appreciate your posts and the responses from most of the blog dogs but DA is really tiresome and does not contribute any value to this conversation. Please either limit or elimate his posts
Thanks
Thanks Hoof Hearted: You expressed the awesome Obliquities which can mutate into a personal survival
humour just ‘Outside the Box’. All is not cold and
harsh here, one adapts to curve balls, reverse psychology, and destructive healing quickly, when
option 2 is the D stamp, recorded in the great hall of the sheeple. Time for your Random Walk now where
are your bunny slippers………:-)
Seriously, thx for the comment, cheers
–
#199 Herb — “. . . but found that local labour laws required wage levels and employment conditions that made Germany an unprofitable Walmart market. Germany’s loss?”
Au contraire, if Germany had been able to keep Wal Mart outside its borders, they would have been infinitely better off.
What existed before Wal Mart? Sears, K-Mart, Kresge’s, etc. Yet people were quite happy with them. Now it’s an assembly line of cheap junk. Good post.
*
New Party A while back, a link said a new political party would be created, being neither Dems. or Repubs., but run by the elite. Here it is.
Rolling Blackouts Obama is deliberately shutting down coal plants and not replacing them with anything. If the WH chooses to go nuke-powered, which is what Pakistan and Iran are doing, then it makes America look hypocritical.
Kuwait George H.W. Bush — another conspiracy theory proven. The US okayed it!
Hmmmm. “So let me see if I have this right. The US Government gives Mubarak a billion and a half of YOUR tax money so that Mubarak will sell Egypt’s natural gas to Israel at way below market prices (shades of Batista and United Fruit) while Americans in New Mexico are running out of natural gas even when they can afford the skyrocketing price? Is that what the US Government has been doing?” wrh.com. Most here already know who controls Congress, the WH and the Cdn. parties.
UK Pensions ObamaCare would probably have been used for the same purposes in the US.
Potemkin America “As wages stagnate and unemployment booms, U.S. prosperity appears as illusory as that of the old Soviet Union.”
HCC and Carbonshit. It is possible the giant snow storm has something to do with this.
17:51 clip Print and be damnedd! Plus — Mubarak’s Fortune Not as much as Wal Mart, but not bad.
11:10 clip Seems sound advice.
#194 Bottoms_Up – I think what’s most likely to happen is Oakville will fall 5%, and Milton 15%.
————————————————-
Oakville is already falling 5%.
#217 bridgepigeon on 02.06.11 at 12:33 am
100 bucks DA cuts his date short tonight and posts…
=================================
DA has never paid more than 50 bucks…its cheaper in Kelowna, and the women much older.
#167 ken s
Utopia: Oh my! a response from the
subtle section! Im getting lucky here.
Yes, it was about housing, but not obviously.
———————————————————
Actually Ken my comments were genuine. I did appreciate your unusual commentary and was just having a little fun at the same time.
No problems.
@43 The Origial Dave:
Then there are some analysts I always pay attention to:
….
John Kaiser – rare earths, scandium, uranium
———————————————–
Don’t tell me that old penny stock scam promoter is still around.
He’s not an analyst. Unless you consider his ability to analysis whether the owners of a shell company are going to fund it, latch onto some hot “story”, promote the story, run the stock price up, then distribute their shares to the public.
If that’s what you mean by analyst, then he’s the best.
—————————————————
@43 The Original Dave:
once again, thank you for sharing with me and the dawgs your sources of inspiration. If you’d agree to share the names that you didn’t want to mention publicly – please do it to “mike” underscore “trifan” at yahoo dot com. I owe you a nice lunch – if/when you’re in Toronto I’d like to honour my promise. Seriously.
@ others who attacked/doubted the sources that TOD shared:
hey, it’s a personal suggestion – there is no need to criticize TOD’s sources. He didn’t suggest that others follow them – he just shared the sources that he follows. It’s everyone’s duty to check them before deciding to follow what they advise.
——————————————-
John Kaiser is a scam? Okay, well he was the first analyst/geologist in the world that was publicly calling a bull market in rare earths. He’s not that influential and loud, so most people who are in that space are unaware of him. I’ve researched like a mad man, and I know he was first. Yeah, now you read about rare earth shortages on the New York Times and the people on BNN who don’t understand those metals talk about them, but make no mistake, Kaiser was first. There have been astronomical gains in that space.
He recommended Quest Rare Metals (stock of the year for 2010) at .04 cents. It’s over $6.00. When their Strange Lake incredible drill results surfaced, this guy let people know that they had a breath taking discovery…while the stock sat in the .45-.80 cent range. He did the same with avalon rare metals, and rare element resources. He’s had a lot of good gold junior calls. He was very early in the uranium bull market. The guy does his work. He knows where there are shortages and knows where there’s a chance to make some big bucks that the market is unaware of.
His word isn’t gospel. He has a geological background. I don’t know, when commodities are doing well, you want to pay attention to someone who understands market psychology etc. but having someone who understands drill results and the complexity that comes with building a mine etc. is just as valuable.
Hey Mike, you’re welcome. I sent you an email.
#103 The American
“……..and unhealthy exchange for the CAD (an overly strong CAD is NOT good for Canada, especially right now). This is not of the making of TARP, or QE1, or QE2. This is clearly the making of poor Canadian policy”.
———————————————————-
You sound a little peeved today. Fair enough. There are a few people on this site that make inflammatory comments from time to time. Free speech and all that jazz is OK with me though. Most of us here love America. Don’t get all in a knot over it.
Just thought I might point out that Canada is now the 7th largest holder of Treasuries (as of December 2010) which is quite a significant jump from only a few short years ago.
We hold in excess of 135 Billion in your debt which is massively out of proportion for a country of our size and population while the Chinese are holders of less than 900 Billion.
Think about that for a second.
China with 1.3 billion people = 900 billion Treasuries
Canada with a population of 34 million = 135 billion
So we have an outsized risk here by size compared to the biggest holder of all. Actually we are in a class all our own when it comes to punching above our weight. There are good reasons though when it comes to managing the value of our own currency versus the greenback
You mentioned poor policy and why a strong Canadian dollar is bad for this country. There is always more to the story than meets the eye.
I want to encourage people mostly to PAY ATTENTION TO GARTH. I don’t understand a fraction of things compared to Garth. He does things the right way. He simplifies things and removes volatility. He knows things about taxes that I’ll never know (plus many other things).
We are very, very lucky to have a maverick like Garth Turner. A lot of people don’t understand this, that’s fine. I’ve mentioned that I research high and low. Guys that put their neck out like Garth does are the ones you embrace. Use your own judgement. If you’re the type of person that has trouble trusting people, well, issues will always surface for you.
The G man comes with an honest opinion and he’s friggin smart!! I’m sorry if this sounds like a take away, but take in his info, read his books, heck meet with him if you can. Someone who really knows his stuff and is honest is giving free info that can really set you up financially. Sometimes in life things come in snapshots. We wish to think the good things are indefinite but they aren’t. The guy keeps everyone that visits this blog current. No one else does that in Canada with so much depth.
What a beaut!! “A perfect home” as described by the realtor
http://www.realtor.ca/propertyDetails.aspx?propertyId=10268732&PidKey=-8033176
Another WTF moment in the Vancouver RE saga…
Somebody asked for Aussie Roy before, and although I am not him, have a look at a house that sold recently in Sydney, our most expensive city: http://www.news.com.au/money/property/for-termite-dump-with-no-floor/story-e6frfmd0-1226000821408
By the way, the Aussie dollar is very similar to the loonie.
Here you go Garth, Vanilla Ice is now flipping houses like a pound of bacon – the DIY network Canada
http://www.calgaryherald.com/life/Around+House/4229027/story.html
Surely this means the top is in.
Falling unemployment rates don’t mean much when the 9% US rate doesn’t include people who are no longer eligible for EI but did not find a job in time before it ran out. Gov’t numbers are always cooked like the inflation rate. 2% inflation? Maybe on Wal-Mart clothing, but all the things I need like food, energy etc…. come on, more like 20 to 30%
When a condo in my building in Victoria costs $349K and a comparable condo can be snapped up for $60K in Phoenix, who’d be crazy enough to spend the extra $290K to watch the cloud-obscured sun go down at 3 in the afternoon?
I’m grateful that our weather is better than the rest of Canada’s, but once you escape south you realize that only a terminal depressive would choose Victoria (or worse, Vancouver) if sunnier climes were on offer at 75% off.
#94 Junius
I didn’t say climate change wasn’t real. It has been since this planet condensed out of a mass of flaming gases and climate will continue to change. Always has and always will.
The problem is that the physics of CO2 do not support the premise that the changes that are occurring now are anything out of the ordinary. It has been experimentally shown that is impossible for CO2 to affect the temperature on any meaningful scale all by itself. It just isn’t that powerful. But global temperatures are rising (somewhat) aren’t they? (well, yes, because we are still coming out of an Ice Age.)
What do you do about the discrepancy between what CO2 is capable of doing and what is happening in the real world?
Think about it logically; there are two possible paths:
1. CO2 isn’t responsible and you need to look at some other cause (like maybe the Sun?)
2. CO2 is responsible but you need some amplifying feedback look for the CO2 data to match the real world data.
The Fear Mongers chose #2 and shout down and belittle anyone who dares to suggest that #1 may be possible.
Not good science.
The problem is that there are NO REAL WORLD EXAMPLES OF A FEEDBACK LOOP. None, not even one. The only place that this whole CO2 thing works is in a computer simulation. In the real world, it falls flat on it’s keester.
Why? Because by changing even very slightly a couple of the thousands of assumptions that go into the model, the CO2 effect disappears completely, can produce and Ice Age or turns Earth into Planet Hell. It is like chasing a ghost in a machine.
And there’s no real world way to test their computer models, so they just say “IT IS AND ACCEPT IT”. This is faith and religion, but not science.
Yeah, I’ll get right on that one.
The first real thermometers capable of measuring the temperature changes most people like Gore, Suzuki Hansen, Mann etc. are using to promote fear were only invented a couple of hundred years ago. They were EXTREMELY expensive and only a handful of European scientists had them. Inexpensive, good quality thermometers only became widely available in about the past 100 years or so.
But yet, these same fear mongers tell everyone that tree ring data from 1000 or 2000 years ago is every bit or even more accurate than these thermometers. Huh?
And to make matters worse, where SOME tree ring data and shows warming (other tree ring data doesn’t) but the thermometer data doesn’t, we should throw out the thermometer data (and the tree ring data we don’t like) and use only the tree ring data that they like. Double Huh??
So what does all this have to do with investing?
As to your “green guru” touting investments in food commodities agriculture, etc. I believe that he is right, but right for the wrong reasons. Climate change will not be a big deal, but the rising cost of oil and energy will be a massive driver in the cost of production of food.
You don’t have to be right for the right reasons to make $$. Being right for the wrong reasons works too!
The place where the fear-mongering on climate change will make matters worse is on the bio-fuel side. Millions of acres of farm land will need to be taken out of food production and put over to fuel production, driving up the cost of food. This is already occurring.
So by being climate fear mongers, these gentlemen are creating exactly the types of problems they claim to seek to avoid. And they are considered prophets? Sounds like they are the cause of the problems to me.
The fixation on man made climate change and halting any and all of it (as opposed to recognizing, accepting, and adapting to natural cycles) is an unbelievable waste of time effort and $$$. These resources need to be re-directed into something like GEN-IV nuclear reactors which are capable of using nuclear waste for fuel, are inherently safe and can be set up on every street corner to provide cheap easily accessible energy anywhere in the world. OPEC and the Middle East will become largely irrelevant . This stuff is a game changer.
China already has a massive lead on everyone in the GEN-IV sweepstakes.
And Barack Obama’s plan is to build more windmills.
Geist: The real reason we pay so much for Internet
http://www.thestar.com/business/article/933854–geist-the-real-reason-we-pay-so-much-for-internet?bn=1
Well worth a read.
Garth,
do me a favour and call up the man who did not want you as a Liberal candidate, and congratulate him on the late wisdom he could have had from you a year ago.
http://www.calgaryherald.com/business/Housing+market+poised+tumble+Grit+leader/4232370/story.html
And a memo to the Liberal Party: don’t bother looking for another “star” as leader; just find someone – anyone – who can analyze the state of the nation, come up with a convincing plan to improve it, and can articulate both without turning off voters.
Brooklin ON seems a lot like Milton except the economy out here is all muscle thanks to GM and the Camaro. I am sure Garth gets my drift. In my opinion Whitby has some of the ugliest house designs on the planet and yet for $450K you can own a shoe box design on a postage stamp lot. However, people eat this crap as the economy for some reason seems to bounce back out here like a weeble. I thought housing prices should have started to fall in Whitby two years ago out but they have not. There is a glimmer of hope as most MLS listing in Whitby are just not turning over. Damn it I want a deal, and I am going to wait. What a lot of home owners thinking to relocate to Whitby fail to acknowledge is the 407 is very expensive. It cost me $350 per month to sit in 407 traffic plus $0.50/km. Do the math, home owners who commute have two mortgages. Garth any thoughts on Brooklin or Whitby would be most entertaining. We have more real estate agents out here than houses for sale. Are we in worse or better shape than say Milton?
I’m involved in the construction industry in Kelowna. After years of population growth, Kelowna now is experiencing a net drop in population. As of January 2011, there are some 4200 homes listed for sale. 208 sold last month, meaning there is 20 months inventory at the current sales rate. While this is an astonishingly bad number, it surely understates the problem, because of the large number of developments that market ‘in house’, and thus are not reflected in mls stats. The latest population stats for Kamloops, Vernon, and Penticton, also show declines. In spite of this, and in spite of a glut of unsold new inventory, the developers are still building. A classic sign of a bubble if there ever was one…….
I thought the max contribution for the TFSA was 5k per year starting from 2009? This is why I have 15K in it. Are there ways to contribute more?
– P
To #181 Toronto Life on 02.05.11 at 8:34 pm…
Thanks T.L for pointing out that essay. The basic premise is likely correct, but the bigger question is: how many people in this city are as silly as the author, with his 6$ bread and free range eggs etc, on a tiny income. The following quote was telling…
“Then I booked a flight to New York on Porter … There’s also what I spend on my mortgage, property taxes, insurance, utilities, cellphone, Internet, YMCA membership, charitable donations and credit card debt”
Hang on there, back up!… “Credit card debt”???. What are you doing flying to NYC, owning a home, club memberships, donating etc, if you can’t even pay off your credit card?? (He later mentions that he is essentially insovent, with negative cash flow). If he has negative cash flow when the Bank of Canada rate is 1%, god help him!
Side note, took my wife to the Leafs game on Thursday, bought us each a beer, plus we split a bag of popcorn. Total bill: $35! Add in the tickets (too embarassed to say how much I spent on those!), it was not a cheap date!
But the Leafs won, which makes it all OK!
In response to posting #176, quote: “Gold is money, everything else is just credit”. That’s what most people thought in 1980 when gold was $800 per ounce, the equivalent of about $2300 in today’s dollars. I wonder why there wasn’t more preaching about the advantages of gold in 1999 ($230/ounce) when it was so dirt cheap.
Yes, I know this blog is about real estate rather than gold, but bubbles in either one follow the same rules. When it’s expensive most people think it will go higher, and when it’s cheap most say it will go lower. Say, aren’t you supposed to buy low and sell high?
Hello Garth.
These modest drops in real estate prices you wrote of are only the beginning. It is along way down to the realistic prices that are 5 to 10 percent of the peak prices you have wrote of in the past.
Facing reality will be very painfull for bankers, realtors and home owners.
Steven
#238..Vancouver…
Thoughtful post on climate change. Thank you. My neighbour for 10 years was a expert in the field. Really bright, really dedicated, a genuinely lovely person. The only disagreement we ever had was over my suggestion that time will tell whether or not climate change is man-made or natural. He stomped back over to his motorcycle, cleaning rag in hand, thoroughly disgusted with my ‘uninformed’ little self. No matter, I still thought the world of him and his little family.
My ‘control’ group of friends who all tried selling their houses the last six months of 2010 have all re-listed. I hope they sell quickly this time as we all know the relentless slide down has begun. As an aside, what a little smoke and mirrors trick it is to indicate listings as ‘new’ when they were simply not sold the first time(s) on mls.
Garth – You’re a trippy read most every day and damn it, “I just can’t quit you’.
#238 Vancouver is a great town,
I do not agree with you on the Science. However I do agree on the need for increase in Nuclear Power. Particularly as a replacement for coal. So does Hansen by the way.
@ #238 Vancouver is a great town to be from…
So we have an atmospheric scientist posting? Lucky us. Could you please provide some evidence (not youtube videos) to back up the following statement:
“It has been experimentally shown that is impossible for CO2 to affect the temperature on any meaningful scale all by itself. It just isn’t that powerful.”
Because this statement implies that the greenhouse effect is a lie. The greenhouse effect, discovered in the early 1800’s, proven as far back as 1858 and quantified as early as the late 1800’s. Without the warming effects of CO2 in our atmosphere, the earth would be covered in ice and snow. But you seem to have proof that this is all bunk and there just MUST be other factors (like, uh the sun?) although you aren’t sure which ones, of course.
I guess its just too inconvenient to believe that burning fossil fuels and treating the atmosphere like a gaseous garbage can is destructive on a global scale.
You don’t happen to work in oil and gas, do you?
Climate change will not be a ‘big deal’? Tell that to the residents of the island nations seeing their homes slowly get swallowed up by the ocean that its not a big deal. What about the people whose lives and livelihoods are devastated by flooding (Saskatchewan and Australia) or other extreme weather (Europe and Australia).
Unless you are a member of the Koch family, even the most powerful leaders in the petroleum industry admit that burning fossil fuels is changing the chemistry of the atmosphere. Gaseous waste, although invisible, is still waste. The atmosphere is finite. The more greenhouse gas, the warmer the oceans, the higher the energy in the atmosphere, the stronger the storms, the more extreme the weather. Its all connected. Despite the youtube video “proof”.
Just because you don’t understand the physics and chemistry (admittedly it is complex) and just because the predictive models are imperfect and incomplete (the earth systems are also complex) it does not then follow that the greenhouse effect is not real. Its very real. We see changes happening on an unprecedented scale. Shifts that took hundreds of years are happening within ten. Wildlife is changing habits (thankfully) to adapt. Arctic sea ice is receding rapidly. There are massive changes taking place in Northern Canada if you care to observe. But I suppose if its not in your immediate line of vision it doesn’t exist to you, like Bangladesh or Queensland. Who cares as long as Canada is OK, right?
Regardless of what you believe, climate change will continue to be a priority for progressive governments around the world. Gaseous waste is still waste and we cannot continue to change the chemistry of the atmosphere without putting in place mechanisms to assist in mitigating and adapting to the changing climate. Its a HUGE deal with the most profound consequences. Nobody wants to create a problem where there isn’t one. Climate change is no different.
Oh, and its a myth that biofuels put pressure on the food supply. Biofuels are made from livestock grade oilseeds and can also be made from the starchy stems and leaves of the plant. The seeds are fermented to create the biofuel and the waste is a high protein substance that can be fed to livestock, with a volume about 1/3 of the original volume. It was a convenient scapegoat to confuse the great unwashed masses when speculation caused food prices to rise. People are so gullible, especially when they WANT to believe something.
#239 Live within your means,
Thanks for posting this. Geist is spot on.
People in Canada fail to understand just how little competition we have in the Internet, mobile and telephone industries. The massive vertical integration that has been allowed by the major players has left us with an uncompetitive landscape.
This lack of competition will bring us higher prices, poorer services and a tyranny of control from 3 or 4 major players. It will hurt Canadian new media start-ups and hurt our overall competitiveness as a society at a time when we can least afford it.
We lag considerably behind most of Western Europe and significantly behind much of the developed countries in Asia.
These policies are shockingly stupid.
Thankfully we have a strong real estate market that will save everything.
Hello,
My bf has finally decided to sell his house (yes we got back together) but wants to wait until the spring. He knows about the March 18th deadline but believes the party starts in the spring…sigh Regardless, does anyone have any experience with http://www.realtysellers.ca? It’s supposed to be a 0.5% full service agent. Will this blackball the house bc the greedy buyer’s agent won’t show the house? Can you put in the ad something to the effect of “don’t worry greedy one…you’ll get your commish” Any suggestions?
Should he just bite the bullet and go with ReMax? (makes me throw up a little in my mouth just thinking about it…)
Soylent:
tax lobbyists
Single Sales Factor (SSF).
…”Corporations generally pay state corporate income tax based on a formula that takes into account the size of their payroll, the value of their assets and the volume of their sales in the state. Large, multi-state companies prefer a situation in which the tax is calculated on sales alone. This results in a windfall savings for a firm that may have lots of property and employees in a given state but whose sales are spread out across the country.
http://www.goodjobsfirst.org/corporate-subsidy-watch/tax-break-lobbyists
Wrong. Only one thing moves real estate — consumer sentiment. — Garth
Ok, what will cause consumer sentiment to change in Winnipeg?
Have you not been reading this blog? — Garth
#191 While it sounds good, the economic backbone of the west (oil production) will not save us. At best it will buy us wild economic volatility…which is better than starving to death in some western economies (if you don’t believe that…just try to pay for $50.00 per loaf bread stateside in a year or so).
The hard fact remains that the tar sands are wildly inefficient from a EROEI viewpoint. The ratios there are on the order of 3.5:1…compared to west texas crude in 1900 of 100:1…..it will not compute into a driver of ANY modern economic system.
People just do not get it (Fear, ignorance, religious belief). These combine to blind humans who are not psychologically, en masse, capable of grasping what has happened.
You will not see any return to normal..this time around it is different…..
This does not mean the world is ending….but it does mean that the modern human enterprise is.
Full scale massive contraction is now going on in the worldwide economic engine (and no, chinindia is not contradicting this trend). On the whole we are seeing a pull back in economic activity based on real physical world manifestations.
It does not matter if you wish it, want it, hate it, desire it….it matters not one whit. We have hit the energy cliff and the mathematics are now showing that Malthus was never wrong and that Erlich was simply premature……
Food, heating, cooking, prices will now soar as the world wakes up to the utter folly of 7 billion souls in a world with no cheap energy…….the 7 billion number will now start a very rapid descent….along with the required wars, disease, famines etc that always accompanies such events.
The world is not ending because the world does not care….it was here long before humans and will be here long after we are gone……but we have front row seats to the greatest single crash of a human civilization that has ever occurred……it is just that so much of it will not be televised or on the net…..
I’m quite sure they do…
Obviously a fat chick with issues… BTW those $200 designer jeans… they’re not doing it for ya. Your ass still looks fat in them. Lose the weight or dawn a pair of sweats like the rest of the trailer trash. And as far as the “a man who marries a beautiful woman has no imagination” goes… WTF? No really WTF? You keep telling yourself that while you scarf down that Big Mac with your diet coke.
Hey man I gotta make up for the lack of bulls on these blogs… gotta keep my fan (Mikey) entertained. You bears outnumber me by at least 20 to 1 by my count… and believe it or not some of you rival my posting volumes at their best.
“Hang time”? I like it. I’ve got it covered David, don’t worry ‘bout me. “Childish”? forever man… forever. You have to grow old but that doesn’t mean you have to grow up.
Oh and thanks for asking how the rest of my day went. Suffice it to say “Splendid”.
};-)
S.H.S.A.D.D.D.A.
#249 prairie gal
Sorry Prairie gal. Everything I said about CO2 is iron clad. Many atmospheric gases get together to make up the greenhouse effect; CO2 is not the only one. And of all the gasses, it just isn’t that powerful. I’m not denying the greenhouse effect, of course it exists, luckily for us, but CO2 is a merely a minor two-bit player. Water vapour is far and away more powerful.
And yes, actually the Sun is a far more likely culprit. The correlation between sunspots and the historical temperature record is many, many times better than that of CO2. And predictive. Right now we are in a sunspot minimum, have been for a number of years. And it is cooling off, which is what the sunspot theory predicts. CO2 on the other hand predicts increasingly warm temperatures, and now the CO2 supporters are touting the perverse and laughable position “Well colder temperatures are exactly what you would expect from Man Made Gobal Warming” Triple Huh????
Much recent research is supporting the Sun as the key driver. But, you can’t make $$$ off of saying it’s sunspots, so the CO2 hysteria gets louder more incredulous and as we saw last year with the Climategate emails, if finally jumped the shark and lost all credibility. Even the UN is now looking at the Sun as the climate change driver climate change.
In two or three years we’ll look back and wonder what the hell we were all thinking that CO2 had anything to do with anything.
Does this mean we should pollute? No of course not. But it does mean that pursuing ineffective ideas such as windmills and solar power will decrease our chances of getting the world out of the economic problems we’re in right now. We need to invest in projects that are real and have a net positive impact in the long run and don’t just service the next election cycle.
Oh, and Garth, my signed copy of “The Money Road” arrived today. Thanks!
#250 Junius on 02.06.11 at 12:12 pm
#239 Live within your means,
We lag considerably behind most of Western Europe and significantly behind much of the developed countries in Asia.
Thankfully we have a strong real estate market that will save everything.
………….
Agree Junius that we lag behind most countries.
LOL’d re your last sentence.
What surprised me is: “While addressing the CRTC decision is a good start, Canadians will be disappointed — some even surprised — to learn that Internet “metering” is already almost uniformly in place. The “caps” are the existing and common provider limits on usage, above which you are billed extra. They are unlikely to disappear anytime soon, what ever the CRTC decides after its review.”
…………..
AFAIK we don’t have a cap, but maybe that’s because we fall under our provider’s cap. My BIL in PQ does have a cap and he monitors his step son’s useage. I’m not really aware about cell phone useage as I don’t have one. My hubby has one, paid by his employer. Many in Europe no longer have land lines. We do because, IIRC, we chat on speaker with family in the EU and it wouldn’t be possible with a cell phone. Am I confused?
#237 Pining for Phoenix
I double-dog dare ya…Go ‘snap one up’.
It’s sunny in Mexico.
AMERICA…IT WILL CONTINUE..NO DOUBT…WILL IT?
“… It’s why you should never bet against America, and why the world is not about to end.”
All true what Garth writes. Yes, America should not be sold short. History assures us of that in spades.
On the other hand its empire is a different issue. Bloated, militarized and in hock up to its balding head, the empire is in a bit of a pickle these days.
Egypt, two wars, offshoring its major industries to a potential deadly enemy, China. The list goes on, and the question that arises: What were they thinking? Profit and “just in time delivery for everything” is part of then answer. The rest of the answer is hubris.
Why? Because the technologies the Americans had invented allowed them to “move forward” and clear the decks, presumably, to invented bigger and better things and to permit more Amricans to join the middle class.
They did, in large measure, through real estate, kidding themselves with mirror-fogging mortgage loan deals. However, the resulting real estate bubble-burst can STILL bring the empire to its knees.
Unless, of course, the great American aptitude, for rescuing itself at the last minute, kicks in.
Some examples from the past:
-Roosevelt-through the Great Depression and into WW2;
-Truman-into the Cold War;
-Eisenhower-the ’50s and the military/industrial complex;
-JFK-space race to the moon;
-Ford/Reagan-post-Watergate, post-Vietnam, post-Iranian revolution;
-Clinton-post-Cold War.
Yes the American genius is buried somewhere in that mucky financial disaster and needs desperately to be freed so that Americans can re-gather themselves and move on and up into their next chapter, a chapter filled with optimism and prosperity.
When will it happen? Many American bloggers say it’s too late. Is it? Haven’t a clue.
So I continue to comment on what I see. And if that “thousand points of light” or that “shining city” on a hill shows up, that’ll be good for us and them.
It’s too late in the day for me to take mandarin lessons.
Dear #258,
No need to apologize. You are still wrong. Even though you admit the greenhouse effect exists you won’t concede that GHG emissions need to be curtailed. Sunspots have short term effects, as does water vapour. Long term, the GHGs (CO2, N20, CH4, SF6, HFCs and PFCs) have a much more profound impact. CO2 is just the common unit (as in ‘carbon dioxide equivalent’ or CO2e).
Besides, we cannot control the sun or volcanoes (which have a short term cooling effect) so no sense in focusing on what you cannot control. What we can control is our gaseous waste. And waste is what it is and it needs to be curtailed.
Nobody is getting rich watching natural disasters unfold one after another. There is no conspiracy. Just good old-fashioned scientists wanting to improve the state of the world for the benefit of future generations. Sorry you can’t get behind that.
#242 Form Man on 02.06.11 at 10:28 am
But our very own professional Kelownial realtor(r) did not tell us these facts? How can this be?
How can this be? Realtors(r) care.
}:-(
At #223: Jody, there is no reasoning with people of your blind gnorance. Honestly, you should stop reading the conspiracy theorists’ b.s., but please stay exactly where you are. Your hatred makes you sound somewhat obsessive and jealous, in fact. Please, by all means, keep your Renminbi and Brazilian Real too (now THERE’s something to laugh about).
Jody, sure the little girl was just trying to sell some lemon aid. But, rules and regulation exist for a reason to protect the consumer from potential harm. What applies to one, applies to all. She can sell her lemon aid, but just needs to acquire a permit to operate street side within city limits (takes about $15 and 20 minutes of time). I sincerely doubt I could do anything like that without a permit if I were to open a stand on the streets of Vancouver. So, get real and stop the fear mongering b.s.
The U.S. provides aid and a path that produces more patents, new businesses, and has more immigration than all other countries combined every year. There’s a reason for it. Cheers!
Just wondering how long you have been predicating the bubble to burst? In the USA it did. But now a writer in the NYT says it is over and unlikely to experience them again: “Add the new policy restraints, and a new national housing bubble looks even less likely anytime soon.”
Of course the US bubble is over. It will not reflate for a generation. We can look south and contemplate what is likely ahead. — Garth
@ #216
The most recent published data I can find showing a breakdown of CMHC’s exposure to low equity loans is in the 2009 annual report which shows 29% of outstanding insurance are to loans with less than 20% equity (pg 91)
http://www.cmhc-schl.gc.ca/en/corp/about/anrecopl/anrecopl_001.cfm
#249 prairie gal on 02.06.11 at 12:08 pm
“What about the people whose lives and livelihoods are devastated by flooding (Saskatchewan and Australia) … There are massive changes taking place in Northern Canada if you care to observe.”
– Interestingly … Australia and Canada rank 8th and 9th respectively in the world for per-capita emissions at about 1600 tons per capita annually. Between them however they account for about 4% of global output. Saskatchewan ? Perhaps less than a tenth of Canadian Emissions. Conclusion … hmmm … if we tuned off Canada and Australia completely to material effect! Good to try though. And … what exactly are Canada, Saskatchewan and Australia really doing again ?
“climate change will continue to be a priority for progressive governments around the world”
Really? … which ones (that matter) so far ?
China ? 22% of total world CO2 Emissions
USA ? 20% of total world CO2 Emissions
Europe? 14% of total world CO2 Emissions
Russia ? 5% of total world CO2 Emissions
Japan ? 4% of total world CO2 Emissions
That’s about 70% of total so far
Rest of world x-Canada … 28%
Canada? 2%
And the responsible governments you speak of would be?
And the worst CO2 generators on a per-capata basis ?
The highest per capita emitters ? Interestingly middle east oil producers head the list (top 4) followed by the USA, then Luxembourg, Trinidad, Australia, Canada, and Singapour to round our the top 10.
Doesn’t look like there’s much prospect of “change” on the climate change front any time soon eh?
Any of you every check out the RE pumpers blog, BC Real Estate Talks? You should see the insanity of the “arguments” of the pumpers on that board (and yes, they are getting lonley, the board is spammed by its 6-8 pumpers about 5,000 times a day…) anyways, for your entertainment value I am posting a quote from one of their village idiots, who bought a crackshack on the East side of Van in around 2008 for roughly $800K… and has been on the RE talks oard ever since trying to prop up RE in Van. This post was in response to someone suggesting that the taxpayers, via CMHC should not be guaranteeing high risk (i.e., low/no equity) mortgages). Here is the gem, have at ‘er:
“bank lending would be easier to qualify for than CMHC. But so long as the government is insuring the highest risk loans (however safe they may actually be) why not get them off the books and have the gov’t back them. Getting rid of CMHC will ensure more loans are approved, not less”
OY VEY
GET ON BOARD NOW!!….JOIN THE MOVEMENT!!
http://openhamilton.ca/article/open-government-principles
Come on folks, its super bowl Sunday!!! Not like I’ll be watching as I have a couple of transactions closing tomorrow and I’ll need to finish up the paperwork.
Good to see you make it in today DA, the pups are getting a little too anxious, they were definitely missing your ankles this morning, nothing to chew on and the anxiety set in. I’m just glad it’s not my ankles; some of them are quite vicious.
Is this something interesting? Opposition leader of a federal party is talking about bubble bursst?
http://www.calgaryherald.com/business/Housing+market+poised+tumble+Grit+leader/4232370/story.html
I totally agree that the inpact of consumer sentiments (on either direction) is much more than any data analysis… Same reason for stock market collapse and quicker bounse back…
We used houses for the gamble… !!!
#250 Junius
People in Canada fail to understand just how little competition we have in the Internet, mobile and telephone industries. The massive vertical integration that has been allowed by the major players has left us with an uncompetitive landscape.
======================
Exactly:
In a huge country like Canada, where the vast majority of the sparse population lives in cities….its almost Darwinian that we will have less competition in such sectors….as its also much more convenient for Gov’t to allow a very small number of big players to give the veneer of competition.
Also:
I signed an on-line petition from some group called OpenMedia.ca fighting the higher internet charges…THEN a few days later I receive a thank-you e-mail from Micheal Ignatieff for filling out the on-line petition.
WTF?
I held my nose ,and temper……..but this should be non partisan/a-political….I don’t want to be on the LIEberals e-mail list.
#237Pining-this thing is continuing to deteriorate. A few years ago the media stories were that foreign investors would buy Detroit property because it was dirt cheap. Who would now want Detroit property when Phoenix property is almost free? Who is going to touch Phoenix RE when Miami is almost free? The progression is for an increasingly higher % of USA RE to move toward an eventual value of zero.
#211 Montrealer
Thanks.
Everyone should read the link posted earlier:
#250 Junius on 02.06.11 at 12:12 pm
#239 Live within your means <— Thanks for the link!
http://www.thestar.com/business/article/933854–geist-the-real-reason-we-pay-so-much-for-internet?bn=1
Every word is the gospel truth. A sad tale of incompetence, corruption and crony bureaucracy run amok.
Post it on your Blog, make a poster and put it on streetlamps. Shout it from the rooftops. Send to everyone.
Every Canadian should be up in arms. If you want Canada, and your Province, and your local community, to succeed and have an economy, we need better, cheaper and faster internet access. Period.
Other nations are ridiculously far ahead of us now. The current situation endangers our economic health.
But a typical debacle here in Canada, isn't it? Ottawa, always able to waste the most time and money on the worst possible outcome, while ignoring most hard issues altogether.
Or how about the current radio silence in our MSM about the massive deficits at every level? In every direction, I see deficit people.
If you added the total Federal, Provincial, Municipal, County, local and Provincial utility and 'Authority' debt etc – the debt that we, the taxpayers 'back', one way or another – we are going the way of Greece and Ireland.
So any serious discussion of our current Budget issues would have to include some form of cuts to spending, and some form of tax raises. If anyone has any other ideas, please step forward.
But of course these concepts are radioactive to our politicians. We seem to have a 'don't ask, don't tell' policy about the whole issue, including the MSM. Everyone is in favor of balancing the Budget, but nobody wants to cut anything.
So we stagger on, for now in a typical Canadian muddle. None of our leaders could lead you out of a wet paper bag, but there they are on TV everyday.
A classic comment from http://caracommunity.com/content/bill-caras-week-review-6-2011-2
"Canada’s Prime Minister Harper met Pres. Obama this week, and at the mind-dumbing press conference, Obama said he wanted Americans to check out Harper’s youtube “rockstar” videos, and Harper responded speaking minute after minute -– I left the room after six minutes — in French – returning a few minutes later to hear Obama say he really liked the French language.
Peace. Love. :-) Everything cool.
Incredible.
Have these people passed laws to say it is illegal to speak about debt and deficits and what they plan to do about that crisis?
Maybe they have agreed in private to keep hiring Goldman Sachs and JP Morgan people to steer their nations in the same direction. The truth wouldn’t shock us, so I don’t know why they go to great lengths to keep it out of sight, out of mind."
Thanks, Bill. Our 'leaders' are like reality TV stars. There is no 'there' there. I blame daytime soap operas. Or flouride.
So, the Egyptian Stock Market (EGX) will not reopen after all. Seems there are quite a few concerns about the stability of the market that are well justified under the current circumstances.
The vultures are circling for an easy kill, but they will have to wait. Some investors are desperate to get out due to all the trauma in the country and the many fears of the unknowns about the future.
Insiders too will be anxious to bail due to so much future uncertainty. And of course many of the biggest holders of stocks are in fact members of the regime, close family and friends, the military and an assortment of people who are now at odds with a populist uprising against them.
These are some of the same people who have already fled Egypt or plan to do so as the old regime comes to an end. They do not want to see their investments frozen or interests seized by an angry incoming government.
There will be legitimate questions asked about what a new government might do to change the rules after the fact as the accusations of corruption in the nations business and in its publicly traded companies grow louder.
I have not even mentioned foreign investors who will be feeling a little blind-sided by the sudden events in Egypt over the last weeks and wondering how big losses might become.
For the moment we can be pretty sure that there will be many more sellers than buyers when the exchange finally reopens. Under such emotionally charged circumstances it is just as well that the EGX stays shutttered.
Even as calm finally arrives there will be a rollercoaster of activity. Some already see that good buying opportunites may arise as a result of the sell-off of others. Buy when others are fearful..right?
But when so many of the business elite are also amongst the group of those that hold the reigns of power in the country and so are also the same ones who populate the boards of each others companies and interests then you can see how deep the issue really goes.
Nationalization of some business is not out of the question and this could amount to a total loss for those now accused of corruption. We have already heard that three members of the past government have had their passports seized, bank assets frozen and been ordered not to leave the country. Ominous signs indeed.
This is why we all seek an “orderly” transition of power and all the stakeholders will need to hold their noses as they sign on to agreements designed to protect the integrity of the markets and protect all participants (including those who are now on the wrong side of the current protests).
I would not be surprised at all though to see exceptional controls imposed to ensure that no massive market swings take place. Nor would it surprise me to see caps placed on funds transfers out of the country as there have been on daily withdrawals from banks (Currently set at 50,000 Egytian pounds daily, roughly 8500 US dollars)
The sooner a transitional government can be established the better in order to quell fears of further instability.
The darker side of open revolts is that they can wreak havoc on an economy in ways most people cannot conceive of until it actually occurs. Until after it is too late.
The harshest consequences invariably revolve around the investment, banking and financial sectors where the real activity is now taking place.
Far from the confusion and mayhem of a rubble strewn Tahrir Square, decisions are being taken already. There is a lot of money on the line. A lot of futures at stake.
While I agree that Mubarak as an individual is now a thorn in everyones side as he is the focus of the rage and has become an international liability, I would not condone nationalization of assets.
The government in waiting must resist at all costs any latent desires they might have to take economic revenge against him and others in the business elite.
This may not be a popular sentiment but to do otherwise would be a disaster for Egypt at this time and could wreak havoc on the economy for many years to come. Stability and accords are sought, not mayhem.
An agreement is urgently needed to head off any threat that might see capital flight and see further damage to the business climate that might impoverish future hopes in this nation.
Forgiveness can be a good thing too. Just hold your nose and sign on the dotted line. It is in everyones best interests right now.
—————————————-
Bloombergs EGX 30 chart
http://www.bloomberg.com/apps/quote?ticker=EGX30:IND
DA I’m playing with you .which seems too easy .
so are you going to answer my question ?
Is the project on the rez going ahead ?
Summerland shit canned their big project.
Btw I’m a man . I haven’t eaten pork or beef in close to 15 years and will never again .Also I never drink sodas. I have never lived in a trailer . And I could easily buy a place in the ok but that would be as retarded as buying $ 200 jeans .
“Lenders made loans that they knew borrowers could not afford and that could cause massive losses to investors in mortgage securities,” the Financial Crisis Inquiry Commission wrote in its report on the causes of the collapse. About $1 trillion worth of home loans made from 2005 to 2007 were “fraudulent,” the commission said, citing testimony from experts. The Illinois Attorney General, Lisa Madigan, told the commission that she defined fraud to include lenders’ “sale of unaffordable or structurally-unfair mortgage products to borrowers.”
–
1:26 clip Suggestive scenes from Hale & Pace’s “Billy and Johnny”.
Not for the politically correct, squeamish or spontaneously combustible. Helps if you understand English slang.
One for fun — One skin, two skin . . . 2:58 clip.
A delightfully snow-filled day here in K-Town, but now back to this boring old planet . . .
Obama’s Gradual Transition and 0:47 clip Remember those US Navy ships? ” ‘Gradual Transition’ means that the demonstrators will get nothing, and we and Israel will have Omar Sulieman who is worse than Mubarak,as the new president of Egypt’.” wrh.com.
Upsetting the apple cart It would certainly have a major effect on the preceding. “Maybe not raising the debt ceiling.”
Labor force plunges “One cannot look at numbers like these, and use the work “recovery” with a straight face.”
#255 DA – ‘Child-like’ can be taken as a compliment if one chooses to do so…but you are ‘childish’, and that is not up for revisionist definition.
But I can’t say that I’m surprised you lack fundamental education….you’re a realtor.
S.S.S.S.A.A.A.A.A.D.D.D.D.D.D.D.
#261 S.B. on 02.06.11 at 2:30 pm
Because form man is better in”form”ed that I?
Form Man is an interesting moniker… is his vocation renting foundation forms to the construction industry?
Does that give him a better understanding of the foundational issues of the real estate industry?
};-)
P.S. I was showing high end condos the other day. When we were in the underground parkade it was facinating to see all the luxury imports parked with 4 or so months dust on them. Every third or fourth parking spot it seemed, many with Alberta tags on them. I’m just pointing out an interesting observation make of it what you will.
#224 Bigboy pleaded…..!!!
“Garth, Please ditch DA”
———————————————————
Yeah great idea Bigboy. Let’s put some damn limits on free speech and isolate all the ideas we don’t agree with. Then maybe we (normals?) can all stew together in a great big fat negative funk about all the crud in the world and commiserate with one another without hearing the influence of people like Devil who is usually pretty optimistic.
We need the real names of the irritating people too. Addresses will help. Hey, why stop there? Blood samples and DNA might be collected when the hoods drop by to visit the guys who offend your sensibilities.
Maybe you are you a dictator at heart buddy. Ever hear of just scrolling past the comments you don’t want to read?
It’s easy. Just hold down the little arrow key.
No DNA required.
#241 House Horny:
“I thought housing prices should have started to fall in Whitby two years ago out but they have not. There is a glimmer of hope as most MLS listing in Whitby are just not turning over. Damn it I want a deal, and I am going to wait.”
Give it up. The decline will be long, slow and painful. The bottom will be difficult to spot. In the meantime, put your money somewhere useful. Is that not the core message of this blog?
#253 Kevin in Winnipeg
Winnipeg?
Home of the mighty ASPER Empire…
That went well….
#211 Montrealer To #161 DM in C
What I now do to read comments is use ctrl-f (aka find function) and just search for “garth”. This way I only read the comments where Garth replied.
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I tried it. Hey thanks, that is a great function. I used it to read every comment that mentions Egypt and Mubarak.
Then I read most of DA’s comments and todays unusual rage against him. Fascinating. It’s just like the Middle East on this site lately.
Don’t step in the Camel droppings.
S.B
Realtors have some interesting ideas. The latest press release from the Kelowna Association declares that ‘increasing listings this spring will broaden the choice for buyers’. They also recommend buying now as both interest rates and prices will begin rising by summer………whatever they are smoking, I would like some…….
Job Growth ??????? What a crok !!!!! The only growth in ’employment’ has been the conservatives pandering to the civil service unions
DELETED.
I think 15K is kind of a pathetic amount to invest and I can say so because that is all I have to invest!
I had some good responses to this same question on a previous post of Garth’s check out:
http://www.greaterfool.ca/2011/01/31/everybody-wants-it/
BDG-YYC wrote:
Doesn’t look like there’s much prospect of “change” on the climate change front any time soon eh?
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There’s a lot of work underway within governments to establish and improve GHG regulations in every country you mention. Just because you don’t see it doesn’t mean it isn’t happening.
Utopia @ 279
Maybe explain the diffrence between your post @ 279 and Bigboys post @ 224.
Are you asking about the one at Shelter Bay Marina or the one which Troika is undertaking at the old ferry docks (West Bay)? The Shelter Bay one is toast. The Troika one is a go – so far anyway. But I do not deal in native leased lands – too unstable. Last to go up in value and first to come down. Native leased land goes against the “buy quality” thing I promote with respect to real estate. You understand right?
I don’t believe West Bay will be as successful as they are hoping. It could even flop although I think they are in too deep to back out now. Don’t know about Troika, almost appears as though someone playing with family money as I can’t imagine investors would back some of their shit, like Yale Town next door to the city dump??? Or an office tower in Okanagan Mission??? But they are getting the glue from somewhere and it ain’t past successes from what I see because they are generally not so much.
Why do you ask?
Talked to one of my construction buddies on Friday night, he runs larger multi million dollar shows.
Said that the amount of guys showing up on the sites looking for work has increased dramatically since the beginning of the year.
Lots of old gray haired guys looking for “ANYTHING”
My buisness phone has had a marked increase in job seekers.
I bid a job last week, 4800 materials, 3500 labour.
Lost it by 1500 bucks.
100 hours labour. (Pay for your gas, compo, tools outa that.)
So we’ve got a young fellow desperate for the work, I don’t begrudge him one bit, been there myself.
Only thing is that now a more desperate fellow will bid it even cheaper.
Here we go……..
#256 Vancouver is a great town,
As I said in an earlier post this is probably not the best blog to debate climate change. People like myself and PG find your arguments entirely unpersuasive. Making your posts longer isn’t going to change that if the substance doesn’t change.
#266 rentersrule,
You quoted, “bank lending would be easier to qualify for than CMHC.”
If there was no CMHC the Canadian banks would require at least 25% down and probably shorten the terms to 25 years. As Walter Stewart once characterized them, “Towers of Gold, Feet of Clay.” The market would drop like a rock.
Man, those realtors blogs make DA and the gang look positively balanced. They are really funny to read.
Check out the “Sunday Funny” on Mish’s blog…
http://globaleconomicanalysis.blogspot.com/2011/02/phoenix-property-scam-targets.html
I don’t think that Canadian RE is quite as high on the “sucker scale” as Australia these days (well, aside from Vancouver), but still a very appropriate cartoon.
#254 arctodus
Excellent post arctodus. I imagine you’re aware of Dmitri Orlov author of Reinventing Collapse. He has a link to his recent interview with the Nation Inst. as well as a transcript–so listen or read.
Dmitri makes your points and more. As he says when people say what should we do about this or that, they are simply deluded. There is nothing to do or that can be done at this point and as you say though, we have a ringside seat to the greatest collapse of a species in geological history. Of course people don’t/can’t accept that it is just too staggering.
Dmitri makes the point that in the first stages we may not recognize what is happening–or that most won’t. He says that the former CCCP experienced a mini-dieoff but most were not aware of it. Life expectancy fell from about 70+ years to 47 during the Soviet collapse and its aftermath.
Innovation (on this blog and elsewhere) is frequently bruited as a savior for our problems. But innovation is an artifact of energy surplus so the rate of innovation has been falling and little of it addresses our Malthusian future.
So I’m not betting against America; I’m betting against homo colossus. After all the bigger they are the harder they fall.
Dmitri Orlov
http://cluborlov.blogspot.com/
da wow you can shoot straight . The reason I ask is I have a sisterinlaw and mother inlaw in west kelowna in condos both under water sadly because they just wouldn’t listen . Their listening now but sadly to late and I don’t relish bailing them out again . I want a new sailboat . More dilution of the market won’t help them or us.
#251 sue
I was… cough, ahem, a realtor in another life and another country–LA/USA.
By all means go with the .05%, here’s why: the IMPORTANT thing is to get on the MLS. Most buyers do their own looking. That is why realtors are trying to get people to sign exclusive buying contracts (which I highly doubt would survive in court–but I digress).
Being on MLS exposes your property to 90% of the buyers. After that pricing is what counts and will count heavily in this spring’s market. Btw you are right, sooner is better. Price far enough below the comparables that it will get noticed. If you’re lucky you might even have competing bids. That is the hardest part for most sellers because they don’t want to face that their property is worth only what someone else will pay for it.
Good luck!
The two places that being Brampton and Mississagua will without a shadow of a doubt be hit hardest. Why? Everyone bought with zero down and a 40 year mortgage in these two cities. This didn’t happen in other cities just Brampton and Mississagua. Both cities could become ghost towns like Georgetown did in the mid 1980’s. A whole lot of people are going to be homeless soon.