In the middle of the financial crisis, with car companies going broke and car salesguys throwing themselves from hoists, I bought a new car. Cheap. So was gas. It cost about forty bucks to fill. I brimmed it again yesterday, for $75.80.
Some smart people, like Jeff Rubin – defrocked chief economist at CIBC – swear it was not the US housing crisis, scummy loans, greedy bankers or house-horny subprimate credit-suckers that caused the financial panic. Instead, it was $147 oil. The world couldn’t take it. His argument is a sound one. Soon you’ll see why.
As oil peaked in the summer of 2008, inflation roared higher as we all paid huge amounts for energy. To curb rising prices, central banks jacked rates. The Fed did it. So did the Bank of Canada. By the autumn of 2008, a five-year mortgage was 7.2%. VRMs were above 5%. House prices started to wilt.
In the States, it was a disaster. Higher oil prices, energy inflation and rising rates came as the real estate market was deflating after hitting its bubbly apex two years earlier. Shock enough to start a recession and send housing hurtling lower. A few months later we were sharing squirrel recipes and staring at a neo-depression.
Airlines grounded planes. Consumer spending evaporated. Layoffs mounted. Markets tanked. And the people who never saw it coming, saddled with crazy-expensive houses, big debts and scant liquid assets, were creamed.
I mention this in case you were unaware that oil prices have now tripled in 24 months. In February of 2009, when I bought my new Jeep, a barrel was $31. Monday night it was $94. And it’s probably not stopping there.
The Egyptian Revolution now sweeps through Libya, after infecting most of the Arab world. The country’s despotic, shades-wearing, camel-hip leader dispatched the military to mow down civilians, which also sent oil workers scrambling and shot prices even higher. Brent crude passed $108 and US contracts jumped 5% during the day, then pounced to $94. Libya is the first major oil producer to get the revolutionary fever, and Saudi Arabia may not be far behind. Then $200 oil is coming.
Could this happen at a worse time? Hard to imagine. Governments in much of the world are drowning in debt after the financial collapse and desperately trying to kindle growth. Here in Canada, thanks to real estate, families have never before owed so much, saved so little or been so dumbass stupid. A modest rise in interest rates, following an energy shock and spurt of inflation, would crater personal finances.
For some months now this miserable outcast, oversexed blog has warned you about asset deflation and price inflation occurring simultaneously. It’s not cool. For people with the bulk of their net worth in real estate, for example, it means falling equity and rising costs. The value of your house plops but mortgage rates rise. Salaries flatline or decline along with corporate profits, but everything costs more. Inflation eats into monthly cash flow, so you’ve less to spend on iPads, Chablis and all-natural dog chow. Consumer spending drops. Bingo. New recession.
This is more likely than you may think. It’s one hell of a lot closer than 99% of the population imagines. Poor suckers. They were shocked in the autumn of 2008 when the world ended. Why hadn’t the babe on Global TV warned them?
As you know, most people have spent the last two years not saving, building up liquid assets, paying down debt or preparing in case things hit the fan again. Instead, they’ve borrowed their brains out at rock-bottom rates bound to reset, buying houses at historic high values destined to fall. That interest rates would climb and real estate moderate was a given. Now imagine how this plays out with Gaddafi’s tail on fire, $2-a-litre gasoline or a return to 7% home loans.
I called yesterday’s post “Be afraid” for a good reason. Toronto SFH prices rising four times the rate of inflation last year. Average detached prices in Vancouver over $1 million. Mortgage debt at a trillion. Unbuilt Burnaby condos snapped at $700K a pop. Virgins desperate to over-borrow and bid at the worst moment. Speckers and flippers to the right and the left.
Yet stare into the eyes of the person beside you at work today. Tell me what you see.
Now do something about it.
241 comments ↓
Rental houses in downtown Toronto can still yield over 6% net (for example in the neighborhood of Garth’s high school). Carney is unlikely to hike much further with USDCAD at 0.9842. There may be gnashing of teeth in the suburbs, but I think central areas will be safe.
Inflation? Why should I be worried about inflation, I’ve got silver bars.
Hope you enjoy the taste. — Garth
By the way, 6% is after expenses (but pre-tax), for houses in certain areas. It’s still possible to get them for <$300 per square foot (above grade). New condos are a sham, unless you want to pay up for the new car smell; they don't do nearly as well in the resale / rental market.
So… pile into XEG?
The foundation for the next collapse is being set right now…although it looks and feels inflationary now and will be for the next 3-4 months…we are sliding into the next recession..by July – August, we should start seeing the econ statistics get worse…as long as the sp500 holds 1100, i still think we have one more explosive move up to 1400 or more from early April till June…but the wheels can come off at anytime..
Hopefully Carney raises rates on march 1…and lets see what the bond market does…time to put an end to this disastrous Ponzi scheme which has made my shelter unaffordable…housing ought to drop 15 % in the next 18 months…after that, another 10-15 % drop for 4-5 yrs longer…Lets hope the bloodshed stops…gold should hit 1600 with an outside chance at 1800, after which we should come down hard to the 1300 area after May….gold stocks will create fortunes…but you will need to get off the rocket ship at the right time….USD could have a semi panic drop between now and May…CAD at 1.08-1.10 would be a great buy…but hedge the USD with gold bullion. Be careful out there.
JO
When oil hit $140, I bought a brand new Tacoma complete with a 20% discount, funny that.
I think we’ll hit demand destruction as we did in 2008. Although I don’t truly believe that oil is abiotic and came from dinosaurs, we haven’t seen evidence of the contrary yet. Things will get worse in the middle east, especially if Saudi Arabia has overestimated it’s reserves by 40%. That place is going to explode when the tap runs dry and the sheiks and princes were living like rock stars for all of those years and everyone else was in the gutter. The middle east deserves democracy and if that comes at the expense of more expensive oil to us, then so be it. One day they will hopefully be more stable. I’d like to think that as more people become productive and useful to the human race, the less challenging the problems that face us will be. But until then, 200$ oil for sure. Better look at the fiat 500 or fiesta if you want a car, V-8’s will be the new chic coffee table.
you know every building in history have turn into a pile of rubble at the end. caves on the other hand have been a reliable human dwelling for millennia, and cannot be created en mass out of thin air to decrease the value of existing homes. In addition history shows that caves made up almost 100% of human shelter where as now it makes up less than 1%. I better ditch my home and get myself a couple of caves before the masses realize what’s going on!!
Peuple
People
Of northAmerico
Believes in Number
Cherish da Number
Forget da neighbor
Forgot da starving
Maybe a thought
Donations or garbage ??
Fill m’y cup or cul
Go get walk by da dog……
0 0.
V
Emily Dee has been doing a great deal of research over the long weekend of Jim Flaherty’s evil link to Goldman Sach’s.
She did this quick little video to get started; this is video one of how many more we don’t know yet.
Monday, February 21, 2011
Jim Flaherty and the Goldman Sachs Capers on Film
http://pushedleft.blogspot.com/2011/02/jim-flaherty-and-goldman-sachs-capers.html
……………………………………
Jim Flaherty, Goldman Sachs and the Foxes in the Henhouse
http://pushedleft.blogspot.com/2011/02/jim-flaherty-goldman-sachs-and-foxes-in.html
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Polls skewed towards the elderly, less educated and rural Canadians
“The dirty little secret of the polling business . . . is our ability to yield results accurately from samples that reflect the total population has probably never been worse in the 30 to 35 years that the discipline has been active in Canada,” says veteran pollster Allan Gregg, chairman of Harris-Decima which provides political polling for The Canadian Press.
For a poll to be considered an accurate random sample of the population, everyone must have an equal chance to participate in it. Telephone surveys used to provide that but, with more and more people giving up land lines for cell phones, screening their calls or just hanging up, response rates have plummeted to as little as 15 per cent.
Gregg says that means phone polls are skewing disproportionately towards the elderly, less educated and rural Canadians. Pollsters will weight their samples to compensate but that inevitably means “messing around with random probability theory” on which the entire discipline is based.
http://www.winnipegfreepress.com/canada/breakingnews/pollsters-advise-voters-to-be-wary-of-polls-ahead-of-possible-spring-vote-116112554.html
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what about shiller’s comments (few weeks ago in NY) that $140 oil during financial crisis saved Canada’s ass ?
could it save us (shudder) again ?
That is not what he said. — Garth
re-post from a few months ago for new comers …
since Garth does not have a FAQ, here is a quick glossary:
when Garth says deflation, it’s “asset deflation”, as in reducing value of assets
when Garth says inflation, it’s “living cost inflation”, such as paying more for grocery
the whole issue can be easily understood from a global wage arbitrage perspective:
there is no reason why north americans should get paid 5 times more doing the same thing that other people can do. For most people, there are five Chinese and five Indians lining up to do their job for 20 cents on their dollar.
Our standard of living would move to equalize with China and India, except that for the last couple of decades we have been able to maintain the standard of living advantage by …. borrowing from the bank.
This cannot go on forever, and eventually we will have to compete on a more equal footing with the 2.5 billion Chinese and Indians for the essentials like food, energy … etc. this is the “living cost inflation” part.
The corollary of this is for most people, there will be less money left over for the “assets” such as real estate and precious metals.
Condos in the Surrey City Centre area have been stagnant since at least right before HST kicked in in BC last year. My parents were considering selling off a (paid off) rental unit. no showings in 4-5 months.
The real estate agent pointed out that at least several other units in the same building were being listed, and literal dozens of speculators trying to sell off poor investments in the nearby Infinity building – none of which were selling because they couldn’t afford to lower the price.
A quick check on MLS still shows many of the units still listed. Oops.
You said Garth “Yet stare into the eyes of the person beside you at work today. Tell me what you see.”
Deer in the headlights…..
I tried to tell them so, even sending some of them links to your blog… I have encouraged them to buy your books Garth…..
Several of these deer have told me that they will be listing in the spring ( anytime now) but have held off listing in anticipation of improving markets, just as the girl ( and guy) at Global said. However I believe that they too have been defrauded once again..
Nice post Garth. Seems to have attracted a few more nut-jobs than usual.
Buy oil ETFs I guess.
When oil jumps, what happens to the equities market?
Will it also rise or fall?
Both. — Garth
If real-estate was a religion then Garth would be my god :o
Keep up the good work, I admire your foresight and wish our current leaders of Canada were like you
@ #7 Just a Tech
Saudi oil reserves are a state secret. Most experts believe they will see a steady decline in their reserves over the next 2 -5 YEARS.
Why? China is sucking up the same amount as the US now and more over the next 5 years.
$200.00 bbl….count on it.
Toss declining oil reserves on top of a population that is mostly under 30 and ridiculously “under” employed and wait for the next wave of Billionaire “Refugees” to hit Canada like the Iranians did when the Shah fell in’79 and all his corrupt cronys scurried out with him.
West Van “Iran” has never been the same……..
http://market-ticker.org/akcs-www?singlepost=2424703
The third of Newton’s laws of motion of classical mechanics states that forces always occur in pairs. Every action is accompanied by a reaction of equal magnitude but opposite direction. This principle is commonly known in the Latin language as actio et reactio. The attribution of which of the two forces is action or reaction is arbitrary. Each of the two forces can be considered the action, the other force is its associated reaction.
Asia down 2% plus and counting.
a good repost from Ted: One commentator indicated yesterday the civil service buzz around Ottawa as one of “we’ve had enough”. If this is true, then, Harper’s Waterloo is at hand. The public service “mandarins” are incredible strategists. Harper will not know what hit him.
Protecting Canadian Whistleblowers Who Protect The Public Interest
FAIR (Federal Accountability Initiative for Reform) promotes integrity and accountability within government by empowering employees to speak out without fear of reprisal when they encounter wrongdoing. Our aim is to support legislation and management practices that will provide effective protection for whistleblowers and hence occupational free speech in the workplace.
David Hutton, Executive Director
Federal Accountability Initiative for Reform (FAIR)
82 Strathcona Ave, Ottawa, Ontario K1S 1X6
Phone: 613-567-1511
[email protected]
http://fairwhistleblower.ca/fair/about_us.html
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It’s funny you talk about people losing money in housing but you have no problem with buying a new car which loses a quarter of its value as soon as you drive it off the lot and is worth maybe 50% of what you paid in just 4 years. Only a sucker buys a new car.
I only buy used cars and pay for them in cash. Bought my 4 year old Lincoln Zephyr for probably about 40% of what the first owner paid for it, and it had only just over 50,000 kms and still had new car smell.
I’ll be channeling all my extra money into my energy mutual fund. 2% MER but still better than an ETF since I contribute monthly and trades cost me $20.
I should take advice from a guy who bought a Zephyr? — Garth
isn’t it?
http://www.financialpost.com/Canada+random+success+story+Shiller/4246526/story.html
“It’s a major export for Canada and it went to US$140 a barrel in 2008, right when Canada needed it,” Prof. Shiller said
That was pre-crash. Months later oil was $32 and Northern Alberta emptied. — Garth
Greetings: #7 [Just a Tech]
“V8s’ will be the new chic coffee table”.
Already happening!
http://www.flickr.com/photos/cialowicz/3330079814/
So Garth I guess you’re in XEG. I went with ZEO for the little better yield. Too bad RE bulls don’t have enough liquidity leftover to speculate on a energy ETF because the RE sucks up all of it. Sorry about all those in Libya tonight but Tuesday morning I’m in the money.
I’ve owned a few Jeeps. None have cost $40 to fill, even at $0.75 per litre. I’m betting your closer to $100.
It may be time to put this blog out of its misery. — Garth
David Rosenberg has a similar take on things… He did a graph showing two year increases in oil prices on a percentage basis… I can’t remember the exact percentage but everytime there is a 2X to 2.5X increase in oil prices over that period, it always precedes a recession by about 6 months.
We are well into that danger zone.
The grinning idiots who happily indulge in this debt-fueled orgy will soon have the smiled wiped off their face.
$200 oil is SHTF stuff, it will be all over. No joke
Rates will move higher and faster then most people think is possible.
If oil moves up, i would say all bets are off at $150.
Double dip and we are not coming back, no more stimuls cash this time.
Forgot about RE, that will be the least of peoples worries if oil goes to and stays above $150. Food/heating/survival will be number 1
>> Now do something about it.
1. Dump your credit card(s).
2. Take out everything you have in the bank and in “investments”.
3. Buy food, some more food, and a bit more food.
4. Optional: buy precious metals – physical, not paper.
5. Mandatory: stop paying taxes – as of today, your taxes are only buying all of the above for those who are running the show.
It may be time to put this blog out of its misery. — Garth
YUP
“It’s a major export for Canada and it went to US$140 a barrel in 2008, right when Canada needed it,” Prof. Shiller said
That was pre-crash. Months later oil was $32 and Northern Alberta emptied. — Garth
—————-
So are you now saying that oil will go to new all-time highs and then crash?
Just trying to follow your predictions.
How is correcting historic facts a prediction? Sheesh. — Garth
The world economy is still wobbly and the Fed will do everything to keep rates low. So they’ll raise them a few points- this will still be below the historical average. They have too much debt to raise them substantially. Lybia only accounts for 2 percent of the oil. Despite what happens in many of these countries, they know they have to keep the taps on if they don’t want to starve. Furthermore, most of the protests have been driven, not by raving Muslims, but by young Arabs who want a better deal, so though they’re in for a rocky time, their countries will probably eventually change for the better. Even if oil spiked, Western Canada would do really well. You should have bought a Prius Garth…
It may be time to put this blog out of its misery. — Garth
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You can always run for office again.
Hey Carlyle!—Gas price going up, up, up!!
Do you have a bicycle?…Don’t worry about the parking spot…..and put your tie around your ankle instead of your neck….
….Could this happen at a worse time…
% percent Fed rate, massive debt, and supply constraints will make little problems explode.
Some people think QE doesn’t effect the world economy. Well look at what is happening. Money printing is inflation. Commodity price rise is the effect. Turn on the news – the riots are about food. When people can’t eat because high food prices they march against government.
No realistic soluction has been tabled to date.
“Yet stare into the eyes of the person beside you at work today. Tell me what you see.”
Mostly calm contentedness, cheerfulness and optimism. But then again, I work for Exxon…
Ah, Egypt.
OK, so, there is a lot of unrest in the world right now. We have strikes in Greece, protests in Ireland, and now, teachers storming the capital building in Wisconsin, of all places. But these protests are primarily civil servants taking action to prevent any, and I mean any, perceived threat to their perceived entitlements, regardless how absurd those entitlements seem compared to what the rest of us are currently experiencing. It amounts to a bunch of baby boomers threatening to shut down the (insert institution here) they work for if they don’t get their way.
What is going on in the Middle East is something entirely different. There, you have a large majority of young people who have bleak job prospects and due to rising prices can no longer afford the basic necessities of life. As Gerald Celente is fond of saying, when people loose everything, they loose it. They are going wild and protesting the grave inequalities they see around them.
Those commentators on the MSM who are trying to see a color revolution leading to democracy in all this are smoking something. These are the sorts of revolutions that lead to people like Hugo Chavez, or in times of even more turmoil Hitler or Lenin. Could wide spread democracy and joy be spreading in the Middle East? Well maybe, I suppose anything can happen. But revolutions in that part of the world have a history of ending in civil war or dictatorship (out with the old boss, in with the new boss).
Anyone see Kaddafi’s son on TV today? He basically threatened Libya with a full scale military assault, the loss of oil revenues, and no food for the population as a result if the protesters did not stop their actions. But the threats are meaningless because the young cannot afford to eat now.
There is no reason to think this will end well. Some bloggers are liking what’s happening in the Middle East to the fall of the “Iron Curtain”. Only in this case, it’s the US backed “Oil Curtain” that is falling. The “Oil Curtain” keeps the world well lubricated and Garth’s Jeep full of affordable gasoline. If it falls, sure I will allow that something even more benign might replace it. But I predict at the very least the new regimes will gain power by promising “food for oil”, raising the cost of both food and oil for everyone else.
Jeff Rubin is right. It’s all about oil and has been for many years.
Investment advice: stay overweight commodities and companies that produce commodities. XEG, XGD, CEF, general commodities, actually the TSE is probably a good bet as a whole as our banks will do ok as the rising commodities tide lifts the majority of their corporate customers, Canadian dollar and good farmland.
Residential real estate is still doomed as the only way to save paper currency in the face of rising oil prices is the same way Volker did it in the 80’s. High, I mean really high, interest rates.
Ethanol is probably a short. Not the ethanol itself, but companies who make it from corn. We just don’t have the spare resources right now to be playing around with feel good projects that have a negative return on energy invested.
#29 Joe Sixpack
…5. Mandatory: stop paying taxes…
Even in the darkest days of the war they locked up people for not following the law.
Yet stare into the eyes of the person beside you at work today. Tell me what you see.
Now do something about it.
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Nice post, Garth.
By now, most Vancouverites have done what they can and are tired of being called bitter losers or party poopers.
Could this happen at a worse time?
well if you’re Carlyle it’s a good time. He cut his commute from 200 km a day to 60 km a day (I would say 80). Its still costs a lot in terms of time and car costs but the point is he can survive. Also he sold within half an hour of the peak in Milton. There will be a lot of days when he’s going to come home pretty stressed out from the commute but at least his wife won’t be.
This could be a helluva week. We’ve flattered ourselves for years about how wonderful it is that everything is connected in this world – the Tom Friedman fantasy about the eternal sunshine of the global economy.
http://kunstler.com/blog/2011/02/white-is-the-new-black.html
Brampton and Libya are connected by the price of oil.
It has all been planned out by the USA for all the Arab countries to go into turmoil and the dictators to be overthrown. This will increase inflation and a way for the USA to get out of its massive debt. Those that have over leveraged will gain in these increasingly inflationary times.
Vancouver? The #1 livable city, not by a long shot it is a boring dog patch. They call it No Fun Vancouver for a reason. Have the Vancouver Realtors be paying off the Economist. Hey its you again Bob.
How can you compare Vancouver livability to places like Paris and Rome. Mind blowing. This will not end well, inflation may make it tolerable.
“It may be time to put this blog out of its misery. — Garth”
Garth don’t talk like that, it scares me! You’re blog is my refuge from the insanity that the MSM has become.
The world is coming to an end… again and again and again…
#17 Spazmogen on 02.21.11 at 11:27 pm
When oil jumps, what happens to the equities market?
Will it also rise or fall?
Both. — Garth
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or either or neither – (Garth squared)
Commodity-fueled markets higher, consumer-sensitive ones lower. Where are the crayons? — Garth
His name was Mohammed Bouazizi.He made $10 a day
selling fruit from a cart in a country most of us could not
find on a map.The government took his cart.He could no
longer support his family.He set himself on fire,a few days later he died.So began a revolution,metastizing
daily,and their world,and ours,will never be the same.
#22 Elmer on 02.21.11 at 11:46 pm
Bought my 4 year old Lincoln Zephyr……
====================================
Oh that is some funny shit right there……. LOL
Get off the advice train Elmer….you lost all credibility now…..
#27
Stephen Leeb has a similar theory, book called the “Oil Factor”. He did another version a couple of years ago. Something like, when the price of oil doubles within a year, the stock market has issues. Read it a few years back. Has sample stock portfolios depending on what the price of oil is doing. Been pretty accurate. Impossible to grow our western society on $100 a barrel oil. Growth has been possible because of cheap oil.
#16, be careful buying now. The smart money bought at $31 a barrel. Many people will be buying now, this is called speculating. I guess the newer term is momentum investing. Easy way to get burned.
#26 Hang in there Garth! Some of us are actually getting the message and looking at the bigger picture.
>> Now do something about it.
1. Dump your credit card(s).
but i live off my credit cards that is my only source of income.
2. Take out everything you have in the bank and in “investments”.
No money in the bank Joe.
3. Buy food, some more food, and a bit more food.
I buy food Joe no problem.
4. Optional: buy precious metals – physical, not paper.
No money for precious metals certainly no space to handle physical precious metals.
5. Mandatory: stop paying taxes – as of today, your taxes are only buying all of the above for those who are running the show.
Joe, I haven’t been paying taxes for a while as don’t make any enough money!
This isn’t going to end well Joe.
Lybia only represents 2 percent of the world’s oil. Though there will be rough patches, the unrest in the Middle East is a positive sign, in that it is not just rabid Muslims wanting to call the shots, but mostly young Arabs who just want a better deal. The Fed can’t raise the rates too high, they have too much debt. I can’t see them raising them to the long term average of 6 percent. The world economy isn’t exactly humming, so there hasn’t been a dramatic increase in demand for oil. Even if it spikes, Western Canada will do quite well. You should have bought a Prius Garth
#13 chanman
Surrey is a shitehole and will take years to up its image.
Surrey is basically a hick-city made up of of small hick areas.
Anybody that bought a Surrey Condo as an investment is $%&* in the head. They would have been better off going to the wreckers and renting out the car .
w00t! good one. so funny i spilt my beer!
Anyone know that the 5yr Mortgage Rates have been over the past 24 months?
#29 Joe Sixpack on 02.22.11 at 12:16 am
Are you for real? I mean seriously, get a grip.
Optional: Get psychiatric help.
Mandatory: Get your head out of your ass.
Lets try that again-metastasizing.
“It may be time to put this blog out of its misery. — Garth”
Don’t you dare man. Your country will need a leader when Squirrel prices hit new highs.
To take a run into the foil-lined baseball hat territory, if oil spikes again, could increased oil prices lead to a crash of inflated home prices in China this time around? Like the US, China imports more than half their oil supply and the proportion of imported oil is rising http://www.eia.doe.gov/emeu/cabs/China/Oil.html
The US is well into the inflated asset deleveraging mode, but with the record deficits, this will hurt. Austerity bites.
As for Canada, maybe NEP version 2012?
89 Octane sells in the lower mainland for $1.24/L today. Oil is trading at about $94 a barrel. I seem to recall the all time high price at the pump occured around the time we had $146 oil prices. At that time it was about $1.25/L. Talk about corruption.
Staring into the eyes of the co workers today I see pig bliss.
The barn’s burning but the “owners” piped in such beautiful music it would be just plain rude to leave the building.
And after you peel the face paint off their exuberant faces you just see hypnotized zombies.
Lost people taken in by the false govt, media and realtors.
People who firmly believe & programmed that they are doing the right things.
People have given up thinking and as Garth so aptly put are “dumbass stupid”
Short of an alien intervention this planet is scre__d
#8 tiger baby
I’ve got a ‘man cave’. Does that count?
http://en.wikipedia.org/wiki/Man_cave
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“Buckle — Markets tanked.” — Best time to buy into markets is when one is buckled up and markets have cratered (such as Oct. ’87), because they will bounce back.
Those who have a small amount of common sense (follow this blog and posters’ comments) are already buckled and prepared for crash landing (unless we’re going down head first); the juvenile delinquents are the unbuckled ones, and they will be the hardest hit.
“. . . this miserable outcast, oversexed blog . . .” — Hey, if it’s okay to trash this blog, you must be doing something right! Getting under F’s skin? Driving H into a kamikaze election which could lead to heart failure?
“It’s one hell of a lot closer than 99% of the population imagines. Poor suckers. . . . the last two years not saving, building up liquid assets, paying down debt or preparing in case things hit the fan again.” — That time is right now; the crescendo is here, yodeling all around us.
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#14 Defrauded2 — “. . . listing in the spring . . .” — How convenient for all concerned that when sheeple decide to list, the world breaks out into song. Realistically, this means there will be a flood of listings, little or no buyers, mtgs. which cannot be paid and debts which cannot be serviced at all, due to the contraction of money.
So I guess TSHTF big time just about now, Harper will call a snap election, 95% won’t bother to show up and vote so the CPC gets a majority with the 5% that do vote. We get what we didn’t vote for and meanwhile, the cycles continue to change.
#22 Elmer — Agreed. Our last four cars (when I used to be able to drive) were all second-hand and a few years old. Traded three in and one fell apart. The better half is driving a second-hand-, one owner Mazda Tribute which is very reliable.
#26 McSteve — “It may be time to put this blog out of its misery. — Garth”
Not if enuff ov us blawg dawgs hijack this site and turn it into a pawno view!
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Gold-pegged Yuan / Peso-pegged Dollar What a thoroughly absurd world we inhabit.
Mikey the Realtor — here’s one for you.
Japan Credit Rating is zero, zip, nada.
Public – Private Cameron has set the ball rolling iin the UK.
Depopulation with Monsanto A marriage made in (fill in the blank). Plus Monsanto — A Liability.
There is extra-terrestrial life and the after-life. Personally, I prefer the latter.
Debt If, as some say, there isn’t any need to pay back debt, why the hell are sheeples getting their knickers in a knot? Spend like the US Fed and BoC! Repayments be damned!
People want jobs, not debts. There are not many good-paying jobs left, but mountains of debt — WHICH DOESN’T NEED TO BE REPAID!
If the US Fed doesn’t have to repay their debts, why should we? Ask C-H-F; they have spent us into oblivion.
Here we go again! We are all talking the next high of the price of oil. Do you really think that the world economy would survive for long if we would to have $200/barrell? Not for long, I know that for sure!
The fact that oil is going up faster than the economy tells me that it is peaking in price, and so does the economy.
Oil has only 1-2 years left in it’s cycle. After that, it will go back under $ 40/barrell. And that includes all agriculture commodities, copper…..
Besides many reasons to support prices in all commodities which at the moment is easy money, bad weather, falling oil rich countries will eventually come to end. When that day comes, starting by end of this year, we are going to be left with the same old problems. Large debts, lack of savings, aging population, and another bout of deflation.
What happens if and when China runs out of customers much like Canada and other exporters did during the 1930’s? During the depression, life was much harder in Canada than the USA and the hard times lasted much longer. During the 1930’s the US did better because they still had a domestic market for their own goods partially by applying tariffs to imported goods which hurt exporters such as Canada. Our economy is much the same as it was back then, an exporter of raw materials, with a limited base of manufacturing. Also a very limited internal market for our own products. China could face the same fate as Canada did in the 1930’s. Europe, North America etc… may not be able buy their goods no matter how cheap they are. The so called good times in China could tank. Add to the previous issue high food prices and fuel costs do not bode well. The average Chinese Citizen is being squeezed to the breaking point.
Most Mainland Chinese are extremely poor. In this blog the talk is about all the wealth. Only a few well connected elite are wealthy. Chinas future could very well be bleak.
True anecdotes from the, “I see debt people” files:
An electrician buddy of mine gets a service call to investigate a “meter running too fast” in a ritzy part of Victoria. He arrives at a 4000 square foot house, complete with a Hummer and a Beemer in the drive. The place is stone cold; ‘woman in a coat and scarf answers the door.
Turns out she and her husband have had the heat off for the last 4 months; apparently been cutting out silly little frivolities like life-nourishing warmth to save a few bucks (hopefully make those car lease payments). She’s quite distressed that such measures haven’t made much of a dent in the ol’ hydro bill. Perhaps she wasn’t aware that 4000 square feet of lights and monster (stainless steel!) twin fridges and ovens will eat up quite a few watts.
Anyway, just to appease this sad soul, my buddy agrees to leave a secondary meter on the main line for a couple of weeks, come back later and check the main meter’s accuracy (noting that, in his experience, if anything, it’s likely running a touch slow).
All is not exactly as it seems …
hey garth don’t forget about Granny Smith Apples
– After the earthquake today, expect a rise in lamb chops and granny smith apples.
As we head into 2012 , except incidents to increase if you believe in the Ching Calendar
Sustainability will be the new mantra in the coming years. How do we get more from less. Less energy, less money, less resources, less greed. More living.
Start a garden in your front yard and grow food.
Buy a bike and ride to work.
Complain less, act more.
Your portfolio may shrink but maybe your wasteline will shrink too.
Just goes to show my prediction of uranium THEE place to be in 2011 was bang on. Feel sorry for the Canadians who will be saddled with higher gas prices. For Vancouverites this has zero effect. Lots in Dunbar have now skyrocketed as high as 2 million dollars. Bought with cash of course. So the Bentley cost $100 to fill last year and this year $150. No big deal. Pity the poor souls South in rain barrel Seattle stuck on I-5 burning fuel with their housing sinking like a stone. Last I heard a Kurt Cobain memorial bench is being put in place for Seattlites to contemplate their culture. But I digress, the Middle East crisis bodes well for Vancouver. Billions will flow out of the Middle East into Safe Have Vancouver. When uncertainty blankets the world a beacon of light shines through these dark times. That light is Vancouver, THE HARBOUR, the world seeks safe harbour. Come to Vancouver you are safe now.
The old adage says, “You can lead a horse to water but you can’t make him drink.” I’m doing as you’ve said and am conveying your projections to my immediate masses. My children can see the wisdom in your words because I can be persuasive with them but I have lost one of the flock. My neighbours son just asked his girlfriend to marry him and she said yes. Problem is now she wants a house and his parents are encouraging him to get one. They have read the blog but they can’t see the forest for the trees. The son is in the construction industry and can’t see the coming wave. I hate to push the issue but they are not “book smart” people who can evaluate both sides of the coin. They only do what their parents did before them. I’m hoping that the banks will do their job and refuse them the financing as they live paycheque to paycheque now. I don’t want to be sitting back smiling smugly as they lose there shirts but I will if I have to.
Gee, I’m almost wishing I wasn’t harbouring a couple mid-80’s Suburbans & a few 70’s musclecars after reading this…oh well…
After the second oil “crisis” in 79-80, George Goodman said the civilized world wouldn’t weather a THIRD oil crisis…he (& probably a lot of others) realized that the volume of money is sometimes secondary to it’s velocity. All this excess cash has to go somewhere, & assett bubbles of whatever kind are the logical results. (This is one of the few columns I’ve seen recently to mention this)
After re-reading that, I realize it’s kind of a broad stroke; guess I should stay on real estate topic here…that’s where most of the people I know are gonna get hurt. Funny thing is, this has been a frequent topic over coffee the last 5-6 years, & the people I know who are most exposed don’t want to discuss it in any detail once they see their own potential exposure. Human nature in full flight…
(strangely, all these peeps lived the 70’s & 80’s; guess they forgot!)
Wouldn’t be so bad if the excess cash had been put to practical use; infrastructure investment, building stuff, manufacturing things, etc. Instead, the more money created means even more money can be borrowed etc, etc, etc…a never ending cycle. The only thing generated seems to be a lot of paper & very large numbers on someone’s computer.
Cripes, it’s like everyone turned into a mini-Campeau-or-Reichmann-wannabe; but I doubt the middle class will be treated as gently by the banks as those two were!
I’m thinking this whole debacle is just the mother of all ponzi schemes…housing is probably the proverbial tip of the iceberg.
Joe Sixpack, here’s what we did:
1) CC got dumped years ago: bills get paid in cash or by MO. (I learned my lesson in the 80’s…your bank is NOT your buddy!) The GF & I actually SAVE UP for big-ticket items!
2) Not too much money in the bank, usually; it gets put into “semi liquid investments” that can be sold quickly (or not) for cash, or traded. We rely on our experience & our abilities, that’s what we know & can control…
3) thanx mainly to my GF, we could last a couple months (maybe 3) on what’s in the cupboards/fridges/freezers at any given moment.
4) Might be a bit lacking here, unless precious metal could mean a loaded 1970 Buick GS with a Stage 1 455 engine option! Hey, does “no paper” mean I gotta get rid of all my vintage hockey cards?
5) I’m gonna kinda wimp out here; I’m just making monthly payments that aren’t much. (self employed)
Btw, I have owned a couple of houses in my lifetime (& was fortunate enough to make a few bucks on both) but always found the upkeep a bother. Until recently, I simply traveled too much to make ownership a reasonable proposition.
Looks like I’ll be waitin’ a while now!
It is all getting really surreal-here is an older woman, a breast cancer survivor, who has been elected to the Alaska state legislature-obviously she is a risk to the safety of all commercial air travellers (or so the spin to the sheep goes) http://www.seattlepi.com/national/1110ap_us_lawmaker_airport_search.html
http://images.thetruthaboutcars.com/2011/02/russianbride.jpg
Hi Garth,
Don’t you dare put your most excellent blog to bed until you use this image from TTAC (The truth about cars)
Kind regards,
Brian Wallace. [email protected]
I’d like to hear you comment on Canadian commodities.
Rising gas prices will deflate tourism= decreased investment.
Hi Garth,
I purchased lots of gold and silver in 2006, best investment I ever made and far better returns than anything you have ever suggested. All types of investments should always be given serious consideration. Obviously Canadian real estate should now be off limits to any investor that can fog a mirror but don’t write off precious metals, history laughs at those who do. I find most of your writings excellent but you seem to have developed a problematic internal grievance toward precious metals, interesting since you seem a smidge above the average IQ;-)
Real Estate only goes up in Canada, specialy in cities like Toronto and Vancuver because people have a lot of money. This is all non sense. thanks
I read Jeff Rubin’s book. Basically, all the cheap oil has been found, only the hard to get stuff is left (that includes Ft McMurray oil sands). High priced oil is a double edged sword. Our affluent society is only affluent because of cheap oil. Everything is going to get expensive, for everybody, which means:
1 – disaster for countries like China and Japan and Korea and any other mass producing, energy dependant purveyor of oil based merchandise that has to use high priced oil to manufacture and ship their stuff.
2 – a boon for local based economies (good news folks, local work will come back) where shipping and manufacturing isn’t impacted by distance and expensive oil to move it.
The party is over. We’ve used up the cheap gift of oil in the ground. You’re going to have to give back all those toys (including your stupid McMansion or condo in the sky) for real things like food, heating, clothing. But be prepared to pay alot for them, because the only reason they have been cheap for so long is because of cheap oil.
Don’t believe me? You’re living in a house, heated or cooled by gas or oil, made out of plastic siding, paint, laminate, carpets made from oil or gas (petro chemicals). You’re driving a car made out of metals which needed oil to manufacture and plastic seats, dash, tires etc (all petro chemicals again), and you’re probably wearing polyester or nylon (now that cotton has doubled in price this year) made from guess what? And alot of it was shipped from China in big boats fueled by diesel fuel oil.
We’re screwed.
Garth,
I was saddened to hear of David Ingrams passing as of late. I read and listened to his outstanding tax tips and advice for a few years now and was very impressed by his character and knowledge. I am sure he had offered some insights to you and other readers here as well over complex taxation issues that he eloquently simplified in his easy manner.
For those of you who have not familiarized yourselves with Mr Ingram I highly recommend you read and listen to his posted articles at http://www.centa.com
My respects to the Ingram family and friends, such as yourself, of David Ingram.
jjpetes
Relax everyone,
If Oil goes to $150 and causes a double-dip recession, the price of oil will then fall back below $70, central banks will print even more money and we’ll be back on the stagflation road.
But it won’t be the end of the world.
Ah, you complainers in Canada. What are you paying for gas.. $1.30/l now? Damn, that’s cheap, I’ll take 100,000 litres at that cost!
In the UK I’m paying $2.30/l and to fill my 55l Audi gas tank it’s $125.
But Garth is right, high gas prices will stall any consumer spending. Even here in the UK very few SUV’s, pickups or even anything over 2.0 litre engine. Most common engine sizes are 1.2 and 1.4l.
Thus $2.30/ltr gas won’t kill Canada’s economy, it will just force you to downsize life. (that includes homes too)
Jeff Rubin spoke at York U in the spring. Fascinating talk. He said, “Cheap oil allowed the best farmland in Ontario and throughout North America to be paved over for suburb as it was cheaper to import food from across the globe than to grow it at home. At $200/barrel oil, those same market forces will plow the suburbs back into farmland. At $200/barrel, we simply cannot import strawberries from Chile or California, it is no longer financially viable to send raw lumber from Canada to China to be made into furniture and then shipped back for sale in Canada.
He was promoting his book: “Why Your World is About to Get a Whole Lot Smaller”
http://www.randomhouse.ca/catalog/display.pperl?isbn=9780307357519&view=print
Enough with Jeff Rubin! He’s an economist so what does he know?
I think that Nicole Fosse has it right. As in 2008-9 she says if prices going too high people will cut back on usage any way they can including giving back their SUV’s. It may take 6 months for the system to right itself, but it will happen. This is what is going on at present. As the price goes up people are cutting back slowly. Other wise the present price would be even higher.
What do you thing people are going to do in 2015 when it is projected that daily supply will be 70 Million barrels and demand still 90 Million. Only a short time ago economists were predicting that demand in 2035 would be 135 Million barrels per day. No trouble to predict when you you don’t have to explain where it is going to come from.
Garth,
I hope people have listened to your message about being diversified. Living in Toronto my wife and I are not quite at your recommended weighting (30% Real Estate), but we are about 60% equity/bonds and 40% Real Estate with no mortgage or other debt. I forgot to pay the credit card bill two months ago and got hit with $16 in interest charges. Paid that off quickly!
Not sure what the future will bring. I certainly wouldn’t have predicted the unrest we are seeing in the Middle East (at least this quickly). Just goes to show you that no one has the crystal ball. Placing all your eggs in one basket is certainly very risky.
Hey Garth, it is just not the Middle East and heaven knows that is really bad news. The US of A spent billions and continue to pour money into the region to guarantee the cheep flow of oil to the homeland. Soon it control could be gonzo along with their king pins who thought they were safe …. Well Hello? and is Isreal … “Worried or What” ?
Meanwhile back home on the ranch …. The Tea Party is about to drive the country into a dark hole with over aggressive budget demands and worst they have no understanding of the consequences of not allowing their National Dept to rise!
Does the Tea Party sound something like “REFORM” hello? Lets look at our great savings record over past few years.
Let THE FACTS SPEAK for themselves
(we started with over $14 Billion in the bank)
Over the past decade it had slowly declined to $458-billion in 2008. Now this has all changed. Our federal debt grew by $5.8-billion in 2008-09, by $55.4-billion in 2009-10 and is expected to grow by $45.4-billion in 2010-11. Further, it’s expected to grow through at least 2014-15. In just three years all the debt repayment of the past eight years will be wiped out.
Canada’s debt re-passed the $500-billion mark at 4:55:46 AM on December 2, 2009.
http://www.debtclock.ca/index.php?option=com_wrapper&view=wrapper&Itemid=1
So just where is Mr H & Co going to get the money to pay for the while runaway banyan they have been on for the last five years?
If you said “Taxpayers” and “Homeowners” go to the front of the class
#30 _ DA You really are a piece of work (I’ll use the word ‘work’ because the word I want to use wouldn’t make it through.)
Are you so pathetically insecure in yourself, so completely devoid of any sense of dignity, lacking even one shred of basic grown-up accountability, that you have to keep typing mindless, uninteresting and idiotic quips on an anonymous message board to keep yourself entertained?
Of course you don’t….your a real-TOR, and a fine representative of an industry full of professional liars and corrupt sacks of dung !
Go to your room, and Get Bent.
Time to buy some oil stocks.
I’m happy to be renting one of those new box condos in the sky. Because it’s in the city, I walk everywhere I need to go / worse case take the metro. And we only pay $40 a month for electricity / heating all year-round for a 1,000 sq. foot condo. We have only had to turn the heat on once this winter (and we only did it to test it to make sure it works).
#56 Jon B on 02.22.11 at 1:27 am
89 Octane sells in the lower mainland for $1.24/L today. Oil is trading at about $94 a barrel. I seem to recall the all time high price at the pump occured around the time we had $146 oil prices. At that time it was about $1.25/L. Talk about corruption………….<<<<<<<< How true! The oil companies have taken a God given product and exploited it making increasingly huge profits while our political leaders turn a blind eye.This can not be allowed to continue.
#62 Sea …. “I see debt people”
That is simply excellent.
#41 Wilma,
You said, “it has all been planned out by the USA for all the Arab countries to go into turmoil and the dictators to be overthrown.”
You are kidding right? You think they are that smart? Do you also think Facebook was developed by the CIA as a secret weapon. Please.
Just Thank God that Dick Cheney wasn’t still running the place or the US would have invaded Egypt and Tunisia by now in order to re-install his golfing buddies. With the Haliburton and Black Water teams there as well (of course).
#1 and #3 LH
So let me make sure we all understand you correctly. Assuming your figures are correct, you would be happy to collect a 6% yield on your RE rentals knowing how vulnerable they may be to capital losses going forward from here( Ya I know what you said, central areas of Toronto are safe..it’s different there) rather than collect same in liquid, dividend paying preferred’s.
The real estate religious mantra continues.
#74 Axe head and #78 Jack,
I think Rubin is pretty spot on with his assessment. I read the book as well and found it pretty persuasive. Clearly we are at or have passed peak oil and all we have left to find is the expensive and dirty variety. I also agree with Rubin that no matter what it costs we are going to find, extract and burn it down to the last barrel.
Maybe a good thing. After all, if the world have 3 or 4 times the supply of oil it does we would burn through that quickly and probably destroy our civilization through global warming. We are going to come close enough already.
Time for alternatives.
Garth ,your comments on Gold and silver being in a bubble would be vehomously challenged by many very smart, shrewd successful investors. Eric Sprott, John Embry and Schiller just to name a few.
I did not refer to a bubble. I advised people with capital gains to take them and to keep a PM weighting under 10%. Sound advice. — Garth
How could the Burnaby condos sell out so fast over the weekend? I thought all those people in line were just hired stooges, paid to be there by the developer?
Who bought the condos?
With everyone calling for heads to roll at Global for daring to portray the lineup of buyers as *gasp* actual buyers, where’s the mea culpa now that it’s clear the people were actually living, breathing, red-blooded greater fools?
Jeff Rubin’s book is a great read. It’s not pessemistic, it looks squarely at reality, explores the possibilities of what will likely happen, and finds the opportunities in it.
And as Garth always points out, there are always opportunities.
Rubin’s main point is that our entire world economy is based on oil, and we’ve passed peak oil. A flicker or shudder in the price of oil causes big economic reactions, but the steady rise of oil prices as it heads toward $400/barrel will force everything to change.
Find this book and read it.
I bought a copy for everyone in my family last year.
#73 Martin,
You must be new here. People don’t have a lot of money. People have a lot of debt. That is what has pushed Real Estate prices up.
Stick around. You may learn something.
I find it interesting that renters feel the need to mention their income a la “I’m a renter even though I make $xxx a year!” I guess they need to make themselves feel better about renting because it’s obvious that mentioning your salary has no context in there whatsoever.
The sad thing is that the $xxx mentioned isn’t even that much money which probably explains why they’re renting in the first place!
Today’s blog post is pretty much the same thing that has been mentioned ad infinitum over the last few years; neglecting to mention that Canadians are actually sitting on over $1 trillion in cash.
http://www.financialpost.com/Canadians+sitting+trillion+cash+mountain/2044036/story.html
Considering that mortgage debt is likely the largest debt on the Canadian household balance sheet, the fact that Canadians hold $1 trillion in cash makes the mortgage debt quite irrelevant.
In addition, Canada’s GDP continues to ratchet higher, surprising economists by increasing higher than expected when last reported in November 2010. All this despite rising oil prices, and a stronger CAD. In fact, Q4 is shaping up to be much stronger than expected!
http://www.bloomberg.com/news/2011-02-22/carney-says-canada-fourth-quarter-growth-may-be-stronger-after-export-data.html
So obviously the real estate bears now have nothing to talk about so they’re going to focus on real estate sales volumes which is again irrelevant (surprise surprise). My family has held Berkshire Hathaway stock for almost 2 decades and if I had a share for every time somebody mentioned that “Berkshire Hathaway trading volumes are down yoy which indicates a price drop to come!” I would be a rich man!
Seriously. Anybody who believes that quarter over quarter or even year over year sales volumes have any correlation to value is obviously quite new at investing; that, or they’re a swing/day trader.
Now the bears are pointing to higher long bond yields as a result of the stronger Canadian GDP to signal higher fixed mortgage rates and problems for those who have leveraged too heavily on mortgage debt (gotta give credit to bears for tunnel visioning any and all data to support their POV). The obvious flaw in this argument is that nobody gets fixed rate mortgages! Virtually everybody and their brother in the last few years is on an ARM product.
And of course Carney, Flarhety, and the BoC will raise short rates. No. Sorry. They won’t. And if they do, it will be by an amount as inconsequential as the arguments by the bears.
The fact remains: Canada is an awesome place to be. It really is. I can’t think of any place better!
Can you?
#7 Just a Tech on 02.21.11 at 11:06 pm
I think we’ll hit demand destruction as we did in 2008. Although I don’t truly believe that oil is abiotic and came from dinosaurs, we haven’t seen evidence of the contrary yet.
++++++++++++++++++++++++++++++++++
Wrong on both counts. Stable isotope analysis established long ago that oil sourced from living creatures. Anything to the contrary rates right up there with the moon shot being faked and WWE being real. As to dinosaurs, no… technically oil came from simple forms of marine life such as algae. Sorry guys, the dino myth is busted.
Having said all that, Saudi is undoubtedly faking their reserve #’s. But oil is funny stuff, it’s actually everywhere, but it depends on how much you want to spend. The way to think of it is like this:
You want $10 barrel oil? Sorry, we’re all out.
$20? Maybe a bit left.
$40? Quite a bit of that around.
$100? We got lots of it at that price.
Saudi is running out of the cheap easy to find stuff. But when they get to drilling with the kind of intensity that we do in Western Canada, I’m sure that they will find a lot more… it’ll be expensive, but there’ll be a lot more.
Heloguy: I’m hoping that the banks will do their job
Heloguy the banks are the banks.
You have to do something.
Hi! Devil’s Advocate, your trusted realtor here! I think you should offer $15,000 over asking…you know, just to make sure you get it. Oh, for sure this house is worth every penny…you’ll be $80,000 ahead by closing day. Just sign here….and here….and here.
Congratulations! You got the house! Now, get out of my sight, and make sure that my commission cheque is certified.
Really? You lost your job, and a bun in the oven? Well, if you’d like to get rid of , I know people looking in your area and I’d be willing to reduce my fee to get you out of this. But it looks like the price you should list at is maybe about $50,000 less…hey, the market changed, who could see that coming?! It was that Egypt thingy….
Yes, that’s right…a certified cheque please.
Very cool Rent vs Buy map for the US. Green = more affordable to buy. Red = better to rent.
http://www.ritholtz.com/blog/2011/02/rent-vs-buy/
No need to calculate one for Canada – it would always be green I imagine.
#193 TheBigLebowski on 02.21.11 at 5:20 pm
162 Oasis- you are correct, except its not really the new reality , its the same old reality that has been hidden to most people but is finally coming into view , even to the most dedicated 6pm news watchers and CNBCer’s
_____________________________________
Even Garth will figure it out one day. His problem, and many like him, is that he’s lived in a world where America was dominant in every respect of the word… Militarily, economically, and even innovatively etc. etc.
He now can not imagine a world where America is simply BANKRUPT.
Look at all this turmoil. Tunisia, Egypt, Lybia. What’s happened to the dollar? Why isn’t it going up? Where’s the safe haven play? nobody wants that toilet paper any more. What people want is gold. Silver. oil. food.. but certainly NOT US dollars.
America is bankrupt. end of story. They are impotent. Can’t do a darn thing about the middle east. can’t do a damn thing about thier own economy.
I don’t get the obsession about gas mileage in vehicles. Seriously….
The fuel cost of a vehicle is really a small part of the overall cost of owning a vehicle. Depreciation, insurance maintenance are the main killers. You could double the cost of gas and the overall cost of vehicle ownership might only rise 10%.
Personally, I love cars, but I hate new vehicles. I’ve only ever bought two, for cash, both of which were after I made a good hit in the market. I despise depreciation but, well… more money than brains on a couple of occasions.
Now, if you take Garth’s Jeep (lets say its a Grand Cherokee that’s paid for. Should he dump it and buy a Smart Car?
Let’s say he drives 15,000 miles/yr (market average) at 20 mpg (apologies to the metric crowd). That is 750 gallons of fuel per year. At $5.00 gallon that’s $3750 year.
Now, suppose he decides to dump the Jeep and buy a Prius? Prius costs $45K. Might get $15K for the Jeep. Assume Prius car gets double the mileage (unlikely, probably gets less than that). To make up the $30K difference in cost will take about 16 years. Good investment?
Yeah, not so much…..
How about an armoured camo Hummer with roof-mounted RPG launcher? — Garth
The interesting thing here is trying to figure out what the herd will do when the panic sets in, especially with a food/oil shock.
Come to think of it, there’s not much they can do because they are screwed. Heree comes the pressure for the nanny state to save everyone.
#9 Zero, that was deep man, I like your style. :)
Am I the only one that is noticing that the posts here are getting a little more silly and off topic all the time? I like to think that JF and MC secretly read this every day. When it turns into a survivalist site talking about hoarding food and people hoping for disasters it will lose any credibility with mainstream or new participants. I have referred a lot of people to this site telling them to take what they need from it but to ignore the crazy stuff and I know a lot look at it but don’t contribute. This is an important place to help keep the balance with all the CREA/Global hype. I hope it can stay factual, intelligient and interesting. Thanks for creating it Garth. I know when I look every morning I hope to see what is going on in Calgary, Toronto, Vancouver and Victoria.
The curse of negative home equity
” Wesley Ulloa bought her first condo for $230,000 in 2007, and watched helplessly as it lost two-thirds of its value during South Florida’s historic housing market tailspin.
The 24-year-old real estate agent has been selling units in her Coconut Grove building for $80,000, a figure that makes her shudder each month as she makes her mortgage payment. ”
http://www.miamiherald.com/2011/02/19/2076031/the-curse-of-negative-home-equity.html
Intelligent……oops.
@Zenith:
“The obvious flaw in this argument is that nobody gets fixed rate mortgages!”
Um… what?
Who in their right mind would sign up for a variable-rate mortgage today, with rates guaranteed to go nowhere but up for the next several years?
Oasis: Who will fill the vacuum when America falls?
Junius: I think Wilma is on the right track, though not for the same reasons.
Everybody: Just because it is claimed that the Vancouver condos were sold out does not necessarily mean that they were really sold out. All those ads in Craiglist smells like some kind of collaboration.
Mr. Plow: My apology last week was released at the same time as your silly statement.
Canada is an awesome place to be. REALLY? Not for the last five years buddy.
This ain’t Canada anymore
A police oversight body is probing the comments of a police officer who was caught on YouTube telling a man who refused to be searched during the G20 summit, “This ain’t Canada right now.”
http://www.cbc.ca/canada/story/2011/01/21/g20-police-officer-youtube.html
“I was actually responding to him, saying, ‘OK, well, I’m not going to open my backpack so I’m going to leave and that’s actually when he assaulted me and said you don’t get a choice.”
Those Who Sacrifice Liberty For Security Deserve Neither.
~ Benjamin Franklin
The expiration of the five-metre rule that had Toronto residents fearing arrest if they strayed too close to the G20 security perimeter came with a startling revelation Tuesday — it never existed.
http://ca.news.yahoo.com/s/capress/100629/national/g20_secret_law
.
.
@9: Zero, WTF?
@41, Wilma, that’s an interesting theory. :-) Can I ask where you got your information or how you came up with that? Just curious…
@65, BPOE, it seems you have a read hard on for Seattle. Are you jealous of them? Get over it already. Seattle’s a better city than Vancouver in almost every way and most people know it. Turtle vs. the Hare. Turtle wins every time. Vancouver is tired and done. Apart from its setting Vancouver is one fugly city. Those billions you’re talking about are going directly in the $US – not $CAD. You do realize nobody has agreed with you thus far, right? (crickets chirping… I guess this is where we get a flood of posts from people that now agree with BPOE as he rallies his friends)
@94: Zenith, you are full of it. I can think of at least ten other places I’d rather be than here. Your figures are off anyway. And if we’re all sitting on $1Trillion in cash, that is roughly $27,000/Canadian. That isn’t very much at all, especially where this is heading. That won’t even start to pay off our debts.
@98: Anotherlowlyrenter, we couldn’t get a map like that for Canada for a number of reasons. To start, we do not have the transparency the U.S. has with real estate. The CREA has bought the media.
If Saudi Arabia erupts, forcing oil spigots to close, then $200/bbl is a very real possibility. I don’t care what “experts” say, $200 /bbl will cause far more economic pain than any benefit, even here in Canada.
The only assets that would avoid a heavy loss in such a scenario would be precious metals, treasuries/bonds (short-term flight to safety) and the US$.
Hunker down, buckle up, have a sno-scone and enjoy the show.
Ahhh, Better then Reality (fake) TV.
————————————————————
#82 David
Davie…R U new here? Chill bro…Don’t waste your text.
‘It’ ain’t worth it.
#91 Kevin:
“With everyone calling for heads to roll at Global for daring to portray the lineup of buyers as *gasp* actual buyers, where’s the mea culpa now that it’s clear the people were actually living, breathing, red-blooded greater fools?”
Kevin, my personal argument with Global BC (and the reason I’ve filed my complaint with both the station, the CRTC, and now the Canadian Broasdcast Standards Council) is that its news department, in effect, pumps real estate and has a big hand in pushing pricing higher. Why does it do this? Because, IMO, one of its most consistent, biggest dollar advertisers is the local real estate mob. And creating news stories to benefit your advertiser, when you’re purportedly in a position of trust, presenting “balanced” news, is both immoral and illegal. Joe Q Public watches the newscasts, figures real estate is a magical thing, and gives more thought to buying even though prices are admittedly crazy. And that drives the market even further into the stratosphere. And sooner or later, people are crushed.
How many stories has it broadcasted in the past few days alone that further the realtor mantra of “Buy now or be priced out forever” and “It’s different here”? I can count three and I don’t even watch it every night.
Now, I wonder how many major two- and three-minute segments it’s featured that looked at the massive slump in Chilliwack? Kelowna and the south Okangan? Vancouver Island? Squamish & Whistler? Seattle? Much of Canada? How often has it recently aired a piece that says, “Yeah, there is a mania in certain neighbourhoods of the greater Vancovuer area, but there’s also a hugely growing inventory here and across the entire province that’ll likely grow even more after March 18”? Global is, after all, supposedly a province-wide station that presents a balanced perspective. It says you can “trust” its newscasts. I call bullsh*t.
Also ask yourself this: How many times has it aired a piece that says, “If you’re thinking of buying in this overheated market, remember, you not only pay a tremendous cost for the home itself, but for all that (escalating) interest over the term of your mortgage, all those (escalating) property taxes over the years, condo maintenance fees if applicable, rainscreening if applicable, realtor fees when you buy and sell, lawyer fees when you buy and sell, repairs, city utility bills, and any renovations you want to do? How often does it warn prospective buyers that the cost of living is rapidly increasing, so on top of all of the above, you’re also paying more at the pump (I saw $1.26/liter yesterday), more at the grocery store checkout counter, more at Home Depot, etc, etc, etc. And how often does it lay out the exact monthly figures of a buyer who puts 5% down for a typical $800,000 piece of sh*t on the lowly east side, and then ask the biggest question of all, “What happens if the real estate correction we’re already seeing across the majority of the province spreads to Vancouver and knocks, say, 20% off the value of a home you can barely afford in the first place? What if you’re ready to retire and you need to cash out, but can’t?”
Now, you may say it’s not Global’s job to warn off prospective buyers. But dammit, thery’re certainly ready and willing at every chance to turn real estate NON-news (a helicopter ride, a trumped-up condo lineup) into news, complete with over-excited news anchors, if it benefits its advertiser.
It’s sickening, dude. Global’s slanted “coverage” not only furthers but in many ways creates mania, and mania is one of the driving forces at the top of any bubble.
BTW, Global STILL hasn’t replied to any of my complaints at this point, but it’s probably too busy arranging for Ozzie Jurock’s next noon news hour pumpfest.
I think you have drawn the right conclusions here today Garth. When we look at the impending collision of rising interest rates, rising energy costs, food inflation gone mad and an inevitable fall in asset prices (at least in our country) we can see that growth will be negatively impacted globally and that the commodities boom might well ultimately be self extinguishing. I agree with your comments of a few days back as well that stock markets have gotten too far ahead of themselves. For that matter, so have prices in the much speculated upon commodity sector.
#91 (Kevin)
“How could the Burnaby condos sell out so fast over the weekend? I thought all those people in line were just hired stooges, paid to be there by the developer?”
Simple really. All of the sales were to speculators trying to profit in the condo futures market. A very few of them may actually do so if they sell their paper soon. Think Nortel.
This blog is becoming as depressing as it was a few years ago. Some people just live for misery and carnage.
It is so depressing watching people throw their lives away so they can own a home that will eventually own them.
@106 Kevin,
Lot’s of people because they see the difference between fixed rate and variable rate and the bankers tell them that they save money by going variable and that they can always “lock it later”.
I never understood why anybody would want a VRM or a 5 (or even 10) year term on a huge amount of debt. I would want predictability, not the best deal out there.
But then I am apparently weird with that thinking.
Comments wrt Real Estate in these cities anyone?
World’s Most Liveable Cities: 2011 Economist Intelligence
http://www.huffingtonpost.com/2011/02/21/worlds-most-liveable-cities_n_825964.html#s243568&title=10__Auckland
In uncertain times like this, energy and precious metals help to protect portfolios. Kudos to those who had the foresight to buy these types of equities.
=======================
CANADA STOCKS-TSX decline cushioned by soaring energy
* TSX dips 7.28 points to 14,115.83
Energy sector is lone riser, up 2.3 pct
By Ka Yan Ng
TORONTO, Feb 22 (Reuters) -Toronto’s main stock index was little changed on Tuesday morning as energy shares surged on a big jump in oil prices, limiting heavy declines across most of the rest of the market.
Fears that intensifying political tension in Libya, the third largest oil producer in Africa, could disrupt global economic growth boosted oil prices more than 5 percent, lighting a fire under the index’s oil and gas shares, which rose 2 3 percent.
Both Brent LCOc1 and U.S. crude oil CLc2 rallied to 2-1/2 year highs on concerns the revolt in Libya could spread to other major oil producers, while gold prices steadied above $1,400 an ounce.
“There’s some reaction to the idea that these high oil prices could choke off the recovery to some extent,” said Michael Sprung, president at Sprung & Co Investment Counsel.
“The only sector that’s positive in Canada is energy, although gold is doing fairly well.”
Top blue-chip gainers were almost universally from the energy group. Safe-haven gold issues were also strong gainers, helping to cushion the slide in the index’s materials group, which fell 0.4 percent.
Suncor Energy (SU.TO) rose 2.8 percent to C$45.53, while fellow oil producer Canadian Natural Resources (CNQ.TO) gained 3.3 percent to C$48.82. Imperial Oil (IMO.TO) advanced 3.6 percent to C$49.87. Barrick Gold (ABX.TO) added 1.4 percent to C$51.54, while Goldcorp (G.TO) was up nearly 1 percent at C$44.90.
At 10:40 a.m. (1540 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 7.28 points at 14,115.83. Nine of the 10 index sectors fell.
The slim decline in Toronto contrasted with steeper drops across world stock markets, which fell as Libyan leader Muammar Gaddafi signaled defiance of a revolt against his 41-year rule. He appeared on state television and denied he had fled the country. The uncertainty fueled a flight from risky assets.
http://www.reuters.com/article/2011/02/22/markets-canada-stocks-idUSN2228376420110222?feedType=RSS&feedName=marketsNews&rpc=43
#98 Anotherlowlyrenter
Thanks for the link. I especial enjoyed the guidelines for the comment section! For those of you who missed it;
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
Perhaps Garth could use it as a template to update his helpful reminders.
>#94 Zenith on 02.22.11 at 10:10 am
>Today’s blog post is pretty much the same thing that has been mentioned ad infinitum over the last few years; neglecting to mention that Canadians are actually sitting on over $1 trillion in cash.
How is that wealth distributed, exactly?
this is how it is distributed in the u.s.
Here’s the latest I can find for canada. Table one of this survey Also in chart form.
You’d be surprised how little that pile of wealth owned by a minority helps the average homeowner buy stuff or pay the mortgage. There are only so many tim hortons and dry cleaning runs the very wealthy can buy in a year to keep a service economy humming.
@91 Kevin.
Those condos in Burnaby did not sell out in a day. I work with developers in Vancouver, and I know no one can sell 200 units in a day, even in good times. Most assignments are arranged well before the sales centre opens, after months of marketing work. They may have marketed in Asia, they may have signed blocks of assignments to real estate agents, but they certainly have been working for months. The opening is just for hype. Hence the ad seeking folks to line up.
Check this clip with the beautiful Wendy Mesley talking to an ex condo marketer on how its done;
http://www.youtube.com/watch?v=SNyltNIHhgs
After a year of coming to this blog nothing has changed.
Garth’s posts change with the times (change in mortgage rules, Egypt, Sales dropping etc…) but the comments after his posts are always the same.
You have a handful of really intelligent posters who have something to offer, but the section is diluted with;
– Crazies
– Crash cheerleaders
– Realtor haters
– People obsessed with DA etc…
At least the gold bugs are gone, but I agree with Garth and DA, this blog is starting to run its course. Either that or get rid of the comments section, it is becoming useless.
As Garth has said it is a free site, its just too bad so much time has to be wasted sifting through the crappy comments to get to the good ones.
But I guess its all relative, what I find annoying, others might lap up. Maybe I’m the outlier, not the other way around.
You are welcome to make a constructive, intelligent and insightful comment. — Garth
#112 Alex
I have friends who work in the media, not TV but print media.
Have you considered, that maybe they do story’s that you consider “real estate pumping” because that is what viewers want to see? Do you think people want to tune into the news or open a news paper to see that their house is worth FA?
I can only speak to Alberta, during crappier times (2008) they didn’t hesitate to discuss the dropping Real Estate market because it was news worthy.
I’m guessing they don’t report it now because it is simply not news worthy.
Until you know how the media works, and what goes into selecting what stories are run, your wasting your time writing all of those letters. Your time would be better served calling the Assignment Editor at Global to ask him or her some of these questions, rather than jumping to conclusions every time you see a story “pumping real estate”.
#117 Michael
My 5 year variable is coming up this October I think I maxed out at 5% for a few months, but have been paying about 1.8-2.2% for the majority of the term.
You tell me if that was a bad decision?
If you follow the rates, and see where they are going going on a variable can be quite beneficial.
#91 Kevin
Well put! I was thinking the same thing.
I am going to have to follow your posts. Too bad this isn’t like twitter so you can just follow the good ones.
AxeHead # 74 and others.
You seem to forget natural gas in all its forms.
There is liquid natural gas, compressed natural gas
and others.
There’s enough NG in the world, particularly in Canada and the US to last hundreds of years. It is also available near the consuming markets.
NG can easily replace oil in transportation, heating and other energy uses.
Here is a festering problem that has not gone away. Although you think it might have based on world stock market performance over the last several months.
Economists Warn Greece May Have to Quit Euro
http://www.spiegel.de/international/europe/0,1518,746957,00.html
“Never underestimate the ability of governments to totally screw things up.”
(c) unknown
Moving beyond RE for a minute and into oil..
We moved out to Calgary in September and drove through the northern US. After a long days drive we decided to stop for the night in Belfield, North Dakota on I 94. I noticed 75+ tanker trucks everywhere in this little hamlet. When I went into the hotel to get a room I was told there was nothing there and I wouldn’t find anything for 100 miles. Why I asked? The front desk clerk looked at me as if I was from another planet. Why the oil boom of course. The Bakken. Its being going on here for a year and a half. Tanker trucks full of oil coming 24 hrs a day. A gentleman in the back says thats nothing, the Freeport, which resides below the Bakken is even bigger. It has enought oil to support the US for some 290 years!
After doing some due diligence I find these same numbers showing up in some numbers put out by Stansberry research and interestingly in an interview put out by Stanberry with Steve Forbes he says America has 290 years of supply.
I was also told that the oil was light sweet and required little in the way of refining.
I understand there is even more oil in the Rocky Mountains that is even greater than this find. Is this America’s new source of cheap oil? Why is it being kept so hush hush? If it costs $16 to produce like the article attached infers what impact will that have on the tar sands?
My point is money and agendas move markets up and down and are supported by the media. It happens in RE, oil, gold you name it. The pendelum just swings from side to side supported by the corrupt media IMO.
Here’s a link to what I am talking about. Comments either way would be welcome.
http://www.hotstockmarket.com/forum/thread/64349/the-bakken-is-the-largest-domestic-oil-discovery-since-alaska-s-prudhoe-bay-and
It’s 1.04 in Calgary. Not sure why the big difference in BC. I guess Esso is less corrupt in Alberta. Or maybe it’s politicians using green shifts as a pretext to raise taxes on people.
While the cost of retiring is going up up and up
you can now get spain real estate for 50% off.
can even drop 70-90% the ways things are going
http://www.dailymail.co.uk/news/article-1359029/Spains-villa-values-HALVED-UK-immigrants-afford-come-home.html
#44 (low density) Sam
The AMEX goes up all the other markets go down.
Commodity-fueled markets higher, consumer-sensitive ones lower. Where are the crayons? — Garth
Crayons are needed for this site. Please don’t forget, investors come to this site for knowledge with varying degrees of knowledge. They are doing the right thing by coming here, and sharing in your insights.
Fair enough. Higher commodity prices support a resource-heavy exchange like the TSX. They torpedo markets which trade heavily in companies which depend on consumer spending, such as the NYSE. We saw that this morning as the Dow sank and the TSX 60 gained. — Garth
#45
His name was Mohammed Bouazizi.He made $10 a day
selling fruit from a cart in a country most of us could not
find on a map.The government took his cart.He could no
longer support his family.He set himself on fire,a few days later he died.So began a revolution,metastizing
daily,and their world,and ours,will never be the same.
===========================
Mabuz – Mabus
think about it
#97 David on 02.22.11 at 10:36 am
Well done, but have you noticed that Sybil is laying low now that real estate is the main topic on this blog? He’s lying in the fetal position and trying to figure out what to do next. As long as Garth keeps showing examples of the unethical nature of the real estate industry, he’s silent.
Perhaps I’m wrong though, maybe this is just one of his seasons of “quitting this blog.” He goes through massive mood swings and goes from worshipping this blog to despising it.
One moment he’s the originator of all things ethical and good, standing up for what is right, the next he’s espousing “sympathy for the devil” and lauding the fact that he’s a real pain in the butt to others on this blog.
But of course, like a good junkie, he reads every word of this blog. So, if he doesn’t respond, don’t worry, he’s read your piece.
@125 Mr Plow
In your case that worked, but to take a five year sliver to show me that a 5 year mortgage with VRM is a good investment over the lifetime of the debt is a bit dishonest, don’t you think?
Certainly, but my approach to large amounts of debt is a bit different than most peoples:
1. Can I afford the ENTIRE debt at the current rate?
2. If yes, then I take on the debt, if not then I do not.
The problem with VRMs is that most people do not actively manage their debt nor do they necessarily understand what it all means.
For me the logic is rather simple: Debt needs to be paid off, if I make a long term commitment (because who really is going to pay off their house in five years?) then you should have predictability in that regard.
Rates in the past have shot up higher. Let’s presume for a moment it’ll been 1986 instead of 2006, would you have thought you made a smart choice as well?
If people want to go VRM, go, don’t let me stop you, but at least budget based on a Worst Case Scenario, not on a best case one.
BTW, even if I could be convinced to go with VRM and five years, my budgeting would be based around the median for interest rates, which lies around 8%. What got us into the bubble is that people do not think of the debt as “long term” or that something like increasing rates could happen, this is what will cream a lot of people in the end.
News Flash: Mr Plow is threatening to quit! I just hope that he has more chutzpah and backbone than DA< who just keeps making false promises that don't last as long as it takes for them to get posted.
There is enough uncertainty present in the global economic/social/political scene to warrant a healthy (10%) dose of gold “immunization.”
http://www.kitco.com/ind/nadler/feb222011.html
====
As Garth has stated, 5% precious metals allocation to be defensive, and up to 15% for those who are aggressive. For many, 10% allocation might be a logical compromise in their portfolios.
Public Service Anouncement for the benefit of Mr. Plow, DA, any others nneding guidance:
If you don’t think the comments section lives up to your own high expectations, there is a more direct and controllable way for you to get what you want, rather than hoping this blog ends. Here it comes….are you ready? I’ll only type this once, but I’ll do it slowly for you…..
Stop reading them.
Here’s something else to consider as oil goes to the moon. Natural Gas is plentiful and cheap. Wouldn’t you consider switching over your fleet to run on it from Diesel. This is long overdue IMO. The technologies there and so are the savings at these prices. By the way I have no interest nor do I care if you purchase Westport.
http://www.westport.com/
A recent post also pointed out that food prices were up despite record crops of wheat and corn. My argument is that money moves commodities up and down and they use the media to support their actions. Once they have made their profit they pull out and the retail trade is left holding the bag. Look at uranium. They purchased shares cheap, plastered the media everywhere that it was going to $100 a pound, ran the stocks up and now they are selling off.
As an aside the US government is the major buyer of stocks as insiders, retail investors and mutual fund managers sell. This is a manufactured market and will only go on as long as the US government is able to push it. Given the economy, why would anyone risk capital here given the downside danger? The few that are are ready to run for the exits at the first sign of trouble.
By the way, in the last downturn PM and PM stocks fell first and were followed by the general market. PM stocks will get caught up in a general downturn but IMO will lose the least. Physical holdings will be the best bet but I still expect a correction there too. Don’t let emotions dictate when and what you decide to buy.
Lastly although I believe if the free market prevailed PM would rise to new all time highs.
Re: Vancouver.
Given that politicians are generally less-than-efficient (I’m being generous) in providing basic services, being prepared for eventualities, and protecting the public in general….and given that B.C. politics is even immensely more incompetent, more entertaining, and completely corrupt as compared with anywhere else in Canada, where do Van. residents get the supreme confidence to live on a major fault line, and pay a huge premium to do so? Do you think that seismic activity cures cancer or something?
I second the need for crayon-lessons. Maybe include one crayon-lesson a day? If you ever start to Twitter, the Twits could be the crayon-lessons.
I learn as much from the simplified explanations inside your responses to comments as I do the blog posts.
So I’m not the only one here who reads Jeff Rubin’s blog or has read his book. If he is right, and he puts forth some convincing arguments, then when the economy gets whacked with the next recession it will be a good time to load up on energy stocks while they’re cheap.
Derek Kravitz, AP Real Estate Writer, On Tuesday February 22, 2011, 11:37 am EST
WASHINGTON (AP) — Home prices in a majority of major U.S. cities tracked by a private trade group have fallen to their lowest levels since the housing bubble burst, and analysts expect further declines this year.
The Standard & Poor’s/Case-Shiller 20-city home price index fell 1 percent in December from November. Prices fell in all but one of the metropolitan markets tracked.
The only city to see a gain was Washington, where hiring by the federal government has helped boost the region’s job market.
Eleven of the markets hit their lowest point since the housing bust, in 2006 and 2007: Atlanta, Charlotte, N.C., Chicago, Detroit, Las Vegas, Miami, New York, Phoenix, Portland, Ore., Seattle and Tampa, Fla.
The housing sector is struggling even while the rest of the economy is showing signs of a slow but steady recovery. The latest evidence of this divide came Tuesday when the Conference Board said its Consumer Confidence Index rose in February to its highest point in three years. The index surveys how people feel about hiring and income, and how they see that changing over the next six months.
By contrast, the outlook for housing in 2011 is not promising. Construction of new homes has fallen to a rate of about 600,000 homes built per year. In a healthy economy, builders expect to construct about 1 million homes each year. Homeowner vacancy rates are near record highs and the creation of new households in the United States is at its lowest point in four decades.
“Despite improvements in the overall economy, housing continues to drift lower and weaker,” said David M. Blitzer, chairman of the index committee at Standard & Poor’s.
The damage from the real estate bubble has spread well beyond the Sun Belt, where new homes cropped up at a frantic pace during the mid-2000s. In many places, prices are expected to keep falling for at least the next six months and several analysts said they expect prices to fall at least another 5 percent.
Some of the worst declines are in cities hit hardest by foreclosures and high unemployment, including Detroit, Phoenix and Tampa. A home that sold for $250,000 in the Motor City in 2000 now sells for roughly $163,150, according to the housing report. Homes in Las Vegas and Cleveland now sell, on average, for less than they of what they did a decade ago. Many people are holding off buying or selling homes because they fear the market hasn’t hit bottom yet.
A large number of homes that aren’t selling are contributing to a second wave of price declines since the boom years. Many of them have been vacant for months.
In December, prices fell for the sixth straight month and for the eighth time in the past 11 months. Foreclosures are also expected to increase as the year goes forward.
“There’s just way too many homes out there relative to demand and we’re not going to see that change anytime soon,” said Joshua Shapiro, chief U.S. economist for MFR Inc.
The housing recovery is uneven across the United States. Coastal cities in California and the Northeast are faring much better than the Midwest and Southeast. That’s mainly because they benefit from expensive and somewhat recession-proof housing markets buoyed by low unemployment and limited new construction.
The Case-Shiller report measures home price increases and decreases relative to prices in January 2000 and gives an updated three-month average for the metropolitan areas it looks at.
I am troubled when I see very obviously bright people spelling Libya wrong. It’s Libya, not Lybia. Come on people. Also, the doom-and-gloom can be contagious. I, for one, don’t believe in a RE crash here in Canada, just bought a new home in Milton (but sold my current place immediately, just to be safe :)
#127 eaglebay
NG is the fuel of the future.i
I recall a news blurb many many years ago concerning a ceramic engine powered by natural gas. [mazda or toyota , cant remember which]
no oil was used by the engine for lubrication
I expect this has evolved since then.
we have so much it is burnt off….
well not for long.
you have to wonder why it is not THE fuel in this day and age.
Mr plow-123
Funny thing, I read here by choice. You?
Question. On Jan 26 we reserved a flight online to Europe and paid with TD Visa. As of Feb 17 had not rec’d a paper bill so paid it paid it online. Cost was almost $2,250. so did not want to get hit with interest charges. As of today no paper visa bill. Rarely use visa but usually by the time we receive the bill, we have about 5 days to pay it due to inconsistent postal delivery & shorter time visa now allows between charge and payment due date. Re postal del. time, a sis posted 2 B’day cards same time. One arrived 1 day later, the other 5 days later. Friend recently mailed a card to Ontario and it took 10 days. Rarely use visa for purchases, but always pay total off a day before due date.
So, my question is, if I had not rec’d the paper bill before it’s due payment date, and after checking it’s postage date, would a bank (TD in this case) credit me for the interest or could I go after Canada Post (I know, good luck with that!!)?
Only one way out of this. I am waiting for squirrel pelts to appear on a commodity exchange. I am going to make a killing … er, have made killings … of many squirrels I mean. You guys know what I am getting at – a funny!
Garth,
When the gold mining stocks begin diverging from the spot price( and they have been!) it’s a sign that people are putting their money into the raw stuff rather into the market.
Seems gold investors are having less and less faith in the markets and more into hard assets.
I can’t say I blame them, can you?
We’re talking 10-20% in precious metals not bullion bunnies.
$$$
Case Shiller SFH price change
#130 CalgaryRocks on 02.22.11 at 1:42 pm
#85 john m on 02.22.11 at 9:46 am
#56 Jon B on 02.22.11 at 1:27 am
89 Octane sells in the lower mainland for $1.24/L today. Oil is trading at about $94 a barrel. I seem to recall the all time high price at the pump occured around the time we had $146 oil prices. At that time it was about $1.25/L. Talk about corruption………….<<<<<<<< How true! The oil companies have taken a God given product and exploited it making increasingly huge profits while our political leaders turn a blind eye.This can not be allowed to continue.
It’s 1.04 in Calgary. Not sure why the big difference in BC. I guess Esso is less corrupt in Alberta. Or maybe it’s politicians using green shifts as a pretext to raise taxes on people.
.
We have 10 cent per/l transit tax in Metro Vancouver and a planet saving carbon tax that is 8 cents per/l I believe.
#91 Kevin: “I thought all those people in line were just hired stooges”
Really, that’s what you thought? That *everyone* in line was paid? Big of you to admit your limitations like that. I’d be embarrased.
Here’s how it works: the paid people start the line, then bandwagon speculators hear about it and jump in line and buy a bunch of condos. That’s why the developers pay people to start lineups. Because naive people want to buy what other people are buying. That’s why they have paid audiences on info-mercials. Get it? It’s not so hard.
PS to my previous post. We use Primus (previously Wintel) for long distance for years – 25 cents a call in Canada & US – no time limit (24/7) and great rates for overseas calls. Finally switched to online billing as their bills came from BC and had only a few days most of the time to pay the bill due to their billing/mailing dates and Canada Post. At least if you’re away, can check on bills.
Greetings: # 27 [Eaglebay] “NG can easily replace oil in transportation…..”.
Nonsense: Look out the window when a jetliner flys overhead, watch the cement trucks hauling to a condo project, the 18 wheelers bringing food into Canada, truckloads of lumber moving to construction site, locomotives pulling through the Rockies, hauling massive numbers of railcars, monster farm equipment tilling and harvesting, big rigs moving supplies into Canadas’ hinterlands, container and bulk cargo ships carring every imagineable product a person can imagine. Your statement is pure fantasy, there is no other product that can do what oil does, it keeps the global economy running.
One thing you should find interesting is the in ALBERTA our export of oil our main GDP Peaked in the summer of 2006. Production of oil went down in 2007, and plunged in 2008. Yet the prices soared in 2008 as actual demand tanked why? It was speculators. Just like all the housing specualtors of today. The housing market peaked now it will correct and it will slowly take a nose dive never to return to the highs we’ve seen for another decade or so…
Back to 2008, people i know in different job calsses (office & drillers etc.) had very little or no work to do in 2008. The gas & oil patch was deader than many had since since the early 90’s. It was the media that made it seem like we were in the final stages of the end of oil for god’s sake!
Now this time there really is a huge demand from china for oil, but in 2009 we used the least amount of energy in north america than the last 41 years… Hard to say for sure how much oil will go up this time..another 20%?
ANd the housing market down another 20-30%? or more? I think so…
Mr Plow: This blog has, at least six exciting months ahead. Perhaps it will one day become boring as the Housing Crash.com site has become. BTW, don’t let the door hit you on the way out.
Ever heard of on line banking? Or telephone banking for that matter. The balance should be displayed on your online banking account and you can pay it anytime. Don’t need to wait for the paper bill.
#134 Michael…
Yes I see your point. You are talking more about budgeting, I was talking about the benefits of a VRM vs a locked rate. I agree with you, people who budget on a VRM like it is going to stay that way forever, likely shouldn’t be on a VRM.
Everyone has different appetites for risk, for me a VRM has always worked great and I would argue that it has allowed me to pay my debts off quicker.
Don’t you think there’s an evolving nature to this blog? As veterans fully understand what Garth says, the discussion will evolve, but will still always need to answer the same questions over and over for the benefit of new arrivals. And there’s always going to be radicals who show up and ask silly questions and, for the most part, they will remain unchanged from this blog. Then there’s the new arrivals who possess little understanding, which is why they have come here. Belittling anyone’s limited knowledge is self defeating, when I believe the original purpose of this site was to make knowledge readily available. In other words, doesn’t this site exist primarily to draw new people who don’t understand how the investment, economy, financial works? Once you lose sight of that, yeah, the blog loses a reason to continue its upkeep, which is probably quite substantial.
Then you have to ask the question: Where do we go from here?
As more and more people start to see what’s really happening out there, they are going to search for answers online. So the blog should evolve, not shut down.
My first car ever was bought second hand from Gaz Metropolitain in the 80s. It was dual fuel, regular or NG. Any car can be converted for less than 1k. You do lose your trunk space though as that is where the NG tank goes.
#74Axe-Re all the Jeff Rubin comments, shipping goods from China to Canada is so cheap you wouldn’t believe it-do your own research. If oil ever gets so expensive you can’t ship goods cheaply from China on a big boat going 15 mph, you had better live near the harbour, because there isn’t going to be any goods trucked 200 miles inland. Somehow Jeff ignores this simple fact.
David…
Nowhere did I threaten to quit, do you know why? Because its pathetic to threaten to quit, because it would assume someone would care if I left.
In fact even referencing quitting sounds pathetic because it assumes that I am compelled to be here. I contribute when I have time, and when the topic is worth contributing to, like most people.
You know what else is pathetic? Online pissing contests. Sorry your feelings got hurt.
Vancouver Anecdote:
‘Feeding Frenzy’ in Richmond –
“45yr old house; 60×120 lot; Willing to Accept $950K 3mths Ago; Sold For $1.4M; Buyer 21yr old Kid In Car, On Phone To Parents In China”
http://wp.me/pcq1o-1T5
Commodities and equities are taking a steep dive today with the turmoil in Libya. – Commodity Bloodbath
#143 Markusinthe’Saug
I, for one, don’t believe in a RE crash here in Canada, just bought a new home in Milton (but sold my current place immediately, just to be safe
———————–
Carlyle of Milton here (soon to be Carlyle of Toronto)
Milton is way overpriced in my humble opinion. Real Estate in starter town homes that were 270k 3 months ago are now over 300k and detatched homes are going for over 400k.
It’s like the entire town thinks it’s Oakville or Mississagua … but it’s not. Yet I always here my fellow Miltonians saying why it’s different in Milton
“Close to THREE major highways”
“Great schools”
“Good churches”
“We’re not Brampton”
“Families with high incomes overall”
“Big growth area”
“etc etc etc”
I think most people are kidding themselves if they think anyone moves to Milton for any other reason than the fact that it has historically provided a big bang for the buck in terms of real estate. I suppose there are those few that moved to Milton for other reasons, but for the majority — it’s always been cheap real estate.
But the price advantage is almost gone now compared to nearby Mississauga, Burlington and Oakville. So you tell me, what’s going to keep driving demand in Milton? Why go to Milton when you could be in Burlington, Oakville or Mississauga for a tiny bit more? What’s going to happen to demand for Milton RE when gas goes up past 1.20 a litre? 1.30 a litre? 1.50 a litre?
These were all questions I pondered just before deciding to get out of Milton Real Estate while I could still come out a winner $$ wise.
I suppose my only caveat is that if you work in Milton or nearby Mississauga then maybe it’s worth it. Commuting though to Toronto or anywhere east of Mississauga will drain all joy out of your life. Trust me I know.
I listed early february. 16 showings, no offers. I guess I should be happy that I am still getting showings. Two twonhome units have listed since I listed. I scrutinized their property with a fine tooth comb and adjust my price accordingly. I’m going to be the first unit to sell.
#153 Dodged-A-Bullit-in Alberta
Not only is not as easy to substitute NG as some are led to believe, but the supplies are not as plentiful as claimed. Sure, the stuff will last 50 years, at current rate of consumption, and much much less if there is a significant shift into it (which will also shoot up the price).
Everything sells, it’s just a matter of coming to terms with the price at which the floodgates of demand will open releasing that relentless torrent of sequestered buyers… There is always a demand. What most of you preach as a failed market fail to understand is that prices had merely pushed beyond the willingness of buyers to buy. There is a distinction between that and a failed market. Clearly our markets have not “failed”.
Now that the lofty expectation of greedy sellers, who’s knuckles have been whacked by the harsh ruler of supply and demand, have come to terms with the realities of that market, things are getting back to normal and indeed picking up once again. Not to mention that the market has had some time to catch up to those lofty price expectations somewhat mitigating the need for prices to capitulate to the demand, or lack there-of, in order to entice it back from retreat.
Ask Rob… he knows…
http://www.cbc.ca/news/canada/british-columbia/story/2011/02/22/bc-olympic-village-sales.html
#118David-another B/S list. There isn’t one city on that list “liveable” for the average worker (maybe Calgary?)-if you live in Vancouver, and you don’t have at least three million or a very high income, life will be a constant uphill struggle (just ask your wife how things are going). I am not postive on Phoenix, but it is a lot more “liveable” than Vancouver at this point (just don’t get sick).
#161 By all means, keep pissing Plowboy.
#134 Michael and Mr Plow
It all depends on timing and goals. I got a nice 5 year VRM (P -.75) 3 years ago…
…I recently paid a small penalty and locked in at 3.39% for 5 years just before Christmas. Rolled in some HLOC (4%) debt. We have no other debt. Now the mortgage will be almost done in 5 years. The new mortgage has very generous pay back features.
Our ‘bunker’ is ready-locked-loaded. There is turmoil brewing. It will be longer and harder than most think (IMO). It’s all about timing, as I think interest rates will go higher ; quicker than most think.
So, was I crazy to give up 2 more years of Prime -.75 and take the 3.39% for 5 years? See ya in 5 years and we will see.
There are no hard and fast rules. There was a reason I took the five.
BTW, I used a most excellent mortgage broker (referred to us by a very trusted friend)
I find Mr Turner’s advice to be quite balanced. Whether we speak of precious metals or housing, Garth is not contrarian. I find him balanced and objective. Do not put all of the eggs in one basket.
there are nuclear ships
http://gcaptain.com/the-worlds-first-nuclear-merchant-ship-ns-savannah?565
====
…”By not disclosing short positions, swaps and fixed income securities, outsiders will not be able to fully ascertain the extent to which a hedge fund is, well, hedged. Further, the 13F does not disclose positions in commodities, currencies, futures or other markets. ”
.
On Friday, the Securities and Exchange Commission charged Goldman Sachs (GS, Fortune 500) with fraud for failing to disclose conflicts in a 2007 sale of a so-called collateralized debt obligation (CDO) that was made up of assets backed by mortgages.
The SEC alleged that Goldman allowed Paulson to help select securities in the CDO, known as Abacus 2007-AC1, without telling investors that Paulson was shorting some assets in the CDO, or betting its value would fall.
http://money.cnn.com/2010/04/21/news/economy/John_Paulson/index.htm
“There is an entire generation of young Spaniards with a millstone round their necks that will have to work their whole life to pay for houses now worth half what they bought them for,” said Enrique Quemada, head of One to One Capital Partners.
I guess not everybody can run fast as they think
Hope and change all right-Americans can’t afford to drive to the Walmart, so they walk to the Dollar store http://finance.yahoo.com/news/WalMart-says-needs-more-time-rb-1909513686.html?x=0
#160 BrianT,
You said, “shipping goods from China to Canada is so cheap you wouldn’t believe it.”
Please enlighten us with your expertise. Or is this just flying out of your ass as usual?
Rubin outlines all of this in his book. In particular, food that is refrigerated is expensive to ship overseas.
His main point on this matter is undeniable. As energy costs rise the price of producing certain goods at home becomes increasingly more competitive. Food is top of the list. It is insane that we import fruit and vegetables from China.
Dodged-A-Bullit-in Alberta #153
You forgot to mention spaceships.
NG can be used as fuel for all transportation needs.
Open you mind a bit. Don’t forget that Alberta’s production is at least 70% NG, not oil.
Ever heard of Google?
Diesel engines can be converted to NG. The technology exist and it has been done before.
#153 Dodged-A-Bullit-in Alberta on 02.22.11 at 3:43 pm
Greetings: # 27 [Eaglebay] “NG can easily replace oil in transportation…..”.
Nonsense: Look out the window when a jetliner flys overhead, watch the cement trucks hauling to a condo project, the 18 wheelers bringing food into Canada, truckloads of lumber moving to construction site, locomotives pulling through the Rockies, hauling massive numbers of railcars, monster farm equipment tilling and harvesting, big rigs moving supplies into Canadas’ hinterlands, container and bulk cargo ships carring every imagineable product a person can imagine. Your statement is pure fantasy, there is no other product that can do what oil does, it keeps the global economy running.
+++++++++++++++++++++++++++++++
Right on. The entire energy issue can be summed up in two words: Energy Density. Energy density is how much energy you can pack into a given volume. Oil has a lot which makes it a very versatile fuel. NG has less, and the issue of compressing it and storing it is much tougher than oil. Nuclear has massive, unbelievable energy density, but converting the energy to a useable form is very difficult.
Batteries, solar, wind, hydrogen, etc. have extremely small energy densities. That’s why they suck.
#44 (low density) Sam on 02.22.11 at 12:53 am
#17 Spazmogen on 02.21.11 at 11:27 pm
When oil jumps, what happens to the equities market?
Will it also rise or fall?
Both. — Garth
_______
or either or neither – (Garth squared)
Commodity-fueled markets higher, consumer-sensitive ones lower. Where are the crayons? — Garth
__________________
I was thinking more on an individual stock basis,
stuff like commodity companies whose price structure is fuel heavy and whose ores bodies are marginal, or who can’t pass along increased prices will have lower earnings and lower stock prices, that kind of thing
#156 CalgaryRocks on 02.22.11 at 4:02 pm
So, my question is, if I had not rec’d the paper bill before it’s due payment date, and after checking it’s postage date, would a bank (TD in this case) credit me for the interest or could I go after Canada Post (I know, good luck with that!!)?
Ever heard of on line banking? Or telephone banking for that matter. The balance should be displayed on your online banking account and you can pay it anytime. Don’t need to wait for the paper bill.
…………
Guess you didn’t read my post.
> Commuting though to Toronto or anywhere east
> of Mississauga will drain all joy out of your life.
I think this is in Daniel Gilbert’s book “Stumbling on Happiness”
This is one of the enduring myths of real estate – people think the feeling they have of the view or the big garden will last forever, and they’ll get used to the commute. Completely the opposite is the case.
The research Gilbert talks about shows people get used to the view within a month. Used to the big back yard within a month. But the irritation of the commute never goes away.
People do the exact opposite of what will really make them happy long term.
Well, looky here…Hmmmm?…How can this be? ‘Snicker, snicker’…
http://tinyurl.com/4kjagt2
@ #166 Timing is Everything
You may purchase the report for US$500
http://www.eiu.com/public/topical_report.aspx?campaignid=Liveability2011
#30 Devil’s Advocate on 02.22.11 at 12:20 am
It may be time to put this blog out of its misery. — Garth
YUP
================
So DA
What’s your recipe for realtor (human?)sacrifices to appease the CMHC gods?
This announcement by International Energy Agency claiming Peak Oil has already passed since 2006 had never made it into MSM.
http://www.fastcompany.com/1702570/international-energy-agency-peak-oil-has-already-passed
When the largest oil producing country is investing in solar in a huge way for preservation reasons, that kinda sums it up.
http://www.fastcompany.com/1728619/saudi-arabia-looks-to-alternative-energy-as-peak-oil-looms-heavily
Cheap oil is getting harder and harder to find while demand is growing.
That will mean greater oil prices, greater food prices, famine, wars, etc.
These middle east events are just an convenient excuse that will be used for what is to come.
#158 Canayjun,
You asked, “Then you have to ask the question: Where do we go from here?”
Obviously this is all up to our benefactor Mr. Turner. However I can throw in my 2 cents.
I hope that we will not stare around for 5 years watching the aftermath of the train wreck like most of the US sites. Meanwhile those who remain in denial will pop on and cry “bottom” every once in a while to prove they are still sitting in the dark.
My hope is that we will focus on 2 things:
1) Focusing on the real reasons we had a housing bubble and taking steps to ensure that one cannot come again in the future (or our future).
2) Focusing on constructive ways to rebuild the economy and our society.
I am looking forward to (2).
Inflation? Why should I be worried about inflation, I’ve got silver bars.
Hope you enjoy the taste. — Garth
Garth perhaps you should sprinkle some salt on that fiat canadian cash and wolf it down..Why don’t you learn something about SILVER before you post that childish remark that the 10 yr. olds post daily since it was $4.50!!! Silver is an industrial metal that is used for that computer your reading right now..More OIL then SILVER on this earth..
the crevice
March/April 2011 Issue
How Rich Are the Superrich?A huge share of the nation’s economic growth over the past 30 years has gone to the top one-hundredth of one percent, who now make an average of $27 million per household. The average income for the bottom 90 percent of us? $31,244
http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph
#182 thecomingdepression More OIL then SILVER on this earth..
——————–
The World runs on oil not silver.
Jess at 187 says:
The average income for the bottom 90 percent of us? $31,244
Jess, surely the people on this blog spending time talking about investments are mostly in the top 10% of earners or maybe top 5%.
Surely you not suggesting that this blog is all about people making $31k or less giving investment advice to each other???
Then again, your premise could explain a lot about the opinions on this blog.
#175Einstein: There is a wonderful new technology available to you-it is called GOOGLE. Do your research on the fuel efficiency of freighters versus trucking and present us with the results. One piece of advice: try not to swallow every piece of nonsense the MSM feeds you.
#185 Junius…
I am guessing the site will turn less to real estate and more to investing and creating wealth after the “bottom” whenever/whatever that is.
I don’t know that there will be that much social commentary, but who knows?
#74 AxeHead
But …..but….you never said if my buy meal # 4 and get 2 free egg rolls will increase in price.
#122 South Sea Company
Good points…(BTW excellent video…saw it a while back)
Its like an auction….
Create a mirage of demand that acts as a black hole to suck in the remaining suckers.
Unlike a SFH. ( ie built in say 6 months) multi – family units have a longer time line from conception to birth. The sales methodology has evolved to pre-sale versus kick the tires.
In the Burnaby example….it seems likely that a high percentage of the units were flogged elsewhere, the leftovers given to locals.
Caveat Emptor ad infinitum…
#161 Mr. Plow: “You know what else is pathetic? Online pissing contests. Sorry your feelings got hurt.”
You know what’s far more pathetic? Someone who complains about online pissing contests, then immediately continues to engage in one. Wow.
Peak Oil:
– has the potential to affect every asset class in one form or another over the next two decades (and not in a good way!)
– inflation* will be largely driven by rapidly increasing energy costs that no gov’t or central bank will have any meaningful control over
– the drawing down of easy oil in the coming “Age of Scarcity” will be an unprecedented event in human history. It will have profound affects on our economy and lifestyle – overpriced real estate will be the least of your worries!
I have always believed that energy inflation will damage our economy and real estate prices far more than any central banks interest rate hike. Household incomes have been in decline for decades measured against “real” inflation not the inflation-lite stats based on Greenspan’s distorted methodology.
In fact, increasing energy costs may suppress real estate prices indefinitely in North America! Sure in the hell wouldn’t want to be heating and air conditioning one of those 5000-7000 sq ft monsters in the coming decades.
Which countries are prepared or taking action? France, Germany and China. Who is least prepared? US and Canada (the Energy PIGS!)
Who has high-speed railÉ
-Japan, Germany, France, Spain, and China* Brazil by 2014.
-United States – money has been set-aside but budgetary constraints (and the airline lobby) may derail any meaningful progress.
-Canada – high speed rail is not even on the radar in a country largely built on iron rails!
*Actually energy is already driving inflation which is likely double or even triple what the US/CAD gov’t statistics show because they conveniently exclude petrol and food prices ! LOL Of course most of you already know this when you leave the service station or the grocery store.
**China will have more miles of high speed rail than any other country 68,000 miles by 2012 – well before I can ever hope to take a GO train from Newmarket to the Big Smoke on the weekend!
Garth – once your blog’s assertions have been validated in terms of an Canadian RE melt you can simply transition to Financial Planning in the “Age of Scarcity” – there will be millions desperate for advice.
Start caching dried squirrel meat!
–
Alice (sorry, Herbert), when I arose at the crack of supper today, I had this uncontrollable urge to sing. But I decided against it, and so spared y’all from the horrible screeching of two Burmese Siamese puddytats.
*
#128 Genghis — If Greece reverts to the Drachma and Germany the Deutschmark, the UK already has the pound then the Eurozone can call it quits. It wasn’t any use anyway.
#129 bystander — “Never underestimate the ability of governments to totally screw things up.”
Wasn’t that the reason govts. were invented for? They’re not much use in any other form!
#184 [email protected] — “These middle east events are just an convenient excuse that will be used for what is to come.”
Good point. We ain’t seen nuthin’ yet, but when all things happen at roughly the same time, we will know better. See the following clip for further details — Order out of chaos, but chaos must be artificially created and implemented first. 2:36 clip The Middle East and the Bilderberg Group. Y’all know the rest.
Two Weeks US Govt. shutdown. A reason for all these uprisings in the ME, to shift sheeple’s attention away from their own problems. Rome is burning and Nero playing with fiddlesticks.
In keeping with the above, Germany has a super-volcano which is rumbling. Ahhh, ‘Twas the best of times, ’twas the worst to times.
#26 McSteve on 02.22.11 at 12:02 am
I’ve owned a few Jeeps. None have cost $40 to fill, even at $0.75 per litre. I’m betting your closer to $100.
It may be time to put this blog out of its misery. — Garth
.
****************
Keep ‘er going Garth!!! You should have lots to blog about in the next while! Bless the Greater Fools out there, for they do not know what they have reaped!
We are too humble!!! The rest of us need your sage thoughts!
Oh, okay. If you insist. — Garth
The party is over. We’ve used up the cheap gift of oil in the ground. You’re going to have to give back all those toys (including your stupid McMansion or condo in the sky) for real things like food, heating, clothing. But be prepared to pay alot for them, because the only reason they have been cheap for so long is because of cheap oil.
Don’t believe me? You’re living in a house, heated or cooled by gas or oil, made out of plastic siding, paint, laminate, carpets made from oil or gas (petro chemicals). You’re driving a car made out of metals which needed oil to manufacture and plastic seats, dash, tires etc (all petro chemicals again), and you’re probably wearing polyester or nylon (now that cotton has doubled in price this year) made from guess what? And alot of it was shipped from China in big boats fueled by diesel fuel oil.
We’re screwed.
———————————————————-
Just a thought >>> At the turn of the century the idea of removing oil from the ground WAS a DIFFICULT TASK given the technology available at the time. Today that same oil we call “easy oil” Why? Because technology has made previously DIFFICULT TO EXTRACT oil ….easy!
In the 1960’s when some of the first oil was being extracted from sand in the Ft McMurray area it was a DIFFICULT TASK ….Today it is a much easier and cost efficient task that is becoming easier and more cost competative all the time.
Extracting oil from the middle east and shipping it to different parts of the world is still cheaper than extracting oil from sand ….. The main reason for this is the Saudis and Iranian’s have old equipment, cheap labour and dictatorships.
However, very soon those dictatorships will be gone and that once cheap oil is going to become much more expensive. The new “cost” is not because of extraction methods but because of the “NEW” cost of doing business. Everything from the cost of labour to investments in new equipment and much higher royalties will change the price of oil. The new governments in the middle east are going to need a ton of money to restructure there countries in a way that starts to benefit the people of those countries. Post revolutions are always about change and money, lots of money …. and for the countries of the middle east that means changing the price of there most valuable asset.
Oil Sands has been working hard to me more efficient and cost effective and very soon it is going to be the new “easy oil” !!
Oh and don’t buy a house right now you will get your perverbial throat cut …..not to mention you’ll end up bankrupt and worse yet Garth will tell you “I told you so”
simkev03 …out!
#168 BrianT on 02.22.11 at 4:36 pm
Do not shoot the postman …. I would not want to live in any of those cities. Big rich city people kinda believe they know everything, me I am just an old country boy as my wife has reminded many times over the past 43 plus years.
Anyone who wants to learn more about how expensive energy helped trigger the 2008 collapse, and how it will trigger future collapse…
http://www.planbeconomics.com/2011/01/31/peak-oil-and-the-new-boom-bust-cycle/
A Question?…….has anyone in their lifetime seen such a dramatic rise in the cost of living as we have in the last 2 years?…..the wonderful “HST”..here in Ontario Mcguinty took the heat for it as did Campbell in BC but from what i have read it originated in Ottawa (mr.”h”) and also where do the proceeds go?…Ottawa from what i have read..and then mr.”h” and company dole it back out to the provinces (correct me if i am wrong?)..every household here in Ontario got at the very least a 25% increase in the cost of living (unheard of in my lifetime).Pretty insulting when we see for example…our federal government approving a potential 200 million for temporary “state of the art”digs while renovations are done in parliament?Now the oil,companies are trying to rape us with huge increase in fuel costs……..we can not handle it,people are already struggling. Hmmmmm i wonder if people march on Ottawa to overthrow mr “h’s” government…will he use rubber bullets :-)
nope no problem here, no mainland chinese buying going on in these parts!
http://www.bclocalnews.com/richmond_southdelta/richmondreview/community/116513228.html
The force-placed insurance scandal
Nov 9, 2010 17:31 EST
housing
American Banker’s Jeff Horwitz has a spectacular piece of reporting today about goings on in an obscure corner of the mortgage-servicing world known as force-placed insurance. Essentially, if a homeowner fails to keep up their insurance premiums, then their loan servicer will step in and buy an insurance policy on their behalf, to ensure the home remains insured. It’s all perfectly sensible in theory. But in practice, it’s ripe for abuse, especially when the servicer owns the insurer
http://blogs.reuters.com/felix-salmon/2010/11/09/the-force-placed-insurance-scandal/
———————–
Rogers, who was increasingly unhappy over his inability to get satisfaction from Wells Fargo over fees related to his mortgage, and initiated foreclosure proceedings as a way to get their attention.
Now how exactly could he do that? And is his action a possible template for other frustrated homeowners?
Rogers had a legitimate beef. The California bank had doubled his insurance costs, putting him in a policy that had him carrying $1 million of insurance on a property he bought for $180,000 in 2002. Note that this looks an awful lot like a forced place insurance scam; servicers find creative ways to overcharge for insurance and then get kickbacks.
When the bank refused to answer questions about the charges, including ones sent in writing, Rogers looked into ways to force the bank to respond. As the Consumerist explains:
Wells Fargo Meeting Today With Philly Homeowner Who “Foreclosed” On Them (Here’s How He Did It)
By Ben Popken on February 18, 2011 10:00 AM
http://consumerist.com/2011/02/how-this-philly-homeowner-foreclosed-on-wells-fargo.html
#179 Live Within Your Means on 02.22.11 at 5:41 pm
#156 CalgaryRocks on 02.22.11 at 4:02 pm
So, my question is, if I had not rec’d the paper bill before it’s due payment date, and after checking it’s postage date, would a bank (TD in this case) credit me for the interest or could I go after Canada Post (I know, good luck with that!!)?
Ever heard of on line banking? Or telephone banking for that matter. The balance should be displayed on your online banking account and you can pay it anytime. Don’t need to wait for the paper bill.
…………
Guess you didn’t read my post.
Oh you’re right. I just gave you a way to make sure that you are not late on your CC payment. I am SOOOOO sorry! You like things complicated.
So, here’s the answer to your question. Canada Post is responsible for you not paying your CC on time because “you haven’t received the bill”.
Firstly, no doubt, this is the first time TD Bank has ever heard THIS excuse, so no worries they will be most understanding.
Secondly since you didn’t receive your uninsured, .50$ letter on time, you just go ahead and ask your postman for the interest that the bank charges and he will just pay you cash next time he comes by. On top of that, he will give you a unicorn and some magical beans.
Good luck!
TEACHERS AND ILLITERACY, OF ALL KINDS: SUCH A PAIR!
Bill Bonner, through his “Daily Reckoning” blog, has written a lot about the history of various Western civilizations; they generally progress, in various stages, from agrarian to industrial (ergo industrious) to entitlement (oblivion).
Later some other loosely organized human enterprise comes along, rinses and repeats.
TODAY’S ENTITLEMENT BUNNIES…TOMORROW’S NOBODIES
So the public sector in Wisconsin and other Midwest states are up in arms. Why? Because their “hard won rights” will be taken away by nasty right-wing (Republican Party) governors and governments.
The protestors demand consultations and negotiations.
But the governor of Wisconsin, who was elected on a promise to cut deep, to reduce a $3-billion state deficit,
says “no” to talks.
Why? Because he knows that all such “consultations” are just union delaying tactics leading to a furtherance of the status quo: inertia of the highest order.
Teachers are amongst the key whiners. So read the following from Wisconsin this date:
(CNSNews.com) – Two-thirds of the eighth graders in Wisconsin public schools cannot read proficiently according to the U.S. Department of Education, despite the fact that Wisconsin spends more per pupil in its public schools than any other state in the Midwest…only 32 percent of Wisconsin public-school eighth graders earned a “proficient” rating while another 2 percent earned an “advanced” rating. The other 66 percent…earned ratings below “proficient,” including 44 percent who earned a rating of “basic”…The $10,791 that Wisconsin spent per pupil in its public elementary and secondary schools in fiscal year 2008 was more than any other state in the Midwest…
This means that the zombies have taken over taxpayer-funded institutions and public policy initiatives, in the last several years, not only in Wisconsin but even in a school district, and city works yard near you!
Teachers, especially, should know better. But they’re as ignorant as the mushy-brained little zombies they’re training up for the next round of picket line duty! Bad futrue Karma!
Even the vaunted Nobel prize winning economist, Paul Krugman, is whining on the side of the public sector.
His argument is that if the “system” can bail out the bankers, they can protect the last bastion of middle-class-dom from the ravages of that self-same system.
He forgets who’s paying both bills: the taxpayers! But he probably thinks it’s the “government” which has the money, something that the heads of teachers’ unions everywhere firmly believe. Such a disconnect! So…
CALLING ALL ZOMBIES! NOW READ THIS:
From today’s issue of Time online. The author is my favourite former CIA spook Robert Baer in a “viewpoint” article about Libya:
“…a source close to the Gaddafi regime I did manage to get hold of told me the already terrible situation in Libya will get much worse.
Among other things, Gaddafi has ordered security services to start sabotaging oil facilities. They will start by blowing up several oil pipelines, cutting off flow to Mediterranean ports…to serve as a message to Libya’s rebellious tribes: It’s either me or chaos…
The source went on and told me that Gaddafi’s desperation has a lot to with the fact that he now can only count on the loyalty of his tribe, the Qadhadhfa. And…he only has the loyalty of approximately 5,000 troops…his elite forces, the officers all handpicked…
My Libyan source said that Gaddafi has told people around him that he knows he cannot retake Libya…But what he can do is make the rebellious tribes and army officers regret their disloyalty, turning Libya into another Somalia.
“I have the money and arms to fight for a long time,” Gaddafi reportedly said…As part of the same plan to turn the tables, Gaddafi ordered the release from prison of the country’s Islamic militant prisoners, hoping they will act on their own to sow chaos across Libya.
WHEAT AND CHAFF
History has its own unique and cruel ways of sorting the wheat (the reality) from the chaff (the zombies’ fantasies).
The cruel truth is that oil is heading for two C-notes a barrel! And the governor of Wisconsin is thinking out loud about canning the zombies.
In other words, back to the basics of survival in a country deep, deep in all kinds of glue. Lessons here for all of the rest of us.
How about a nice night school course in survival outdoor cooking? But no teachers please! Picket signs don’t burn very long, or hot enough to cook this squirrel I just finished “euthanizing” with environmentally-friendly cotton gloves!
#190 BrianT on 02.22.11 at 6:45 pm
#175Einstein: There is a wonderful new technology
>available to you-it is called GOOGLE. Do your research on
>the fuel efficiency of freighters versus trucking and
>present us with the results.
I’ll save the trouble. It’s roughly 1/10. Which means a freighter going 1000 miles transferring to a truck which drives inland 100 miles is the same as a freighter going 2000 miles.
YMMV. [heh]
#198 simkev on 02.22.11 at 7:27 pm………….<<<< hmmm so you think the "saudi's" have old equipment and cheap everything eh? Well i find that very hard to believe since they are and have been the largest supplier on our planet! In fact they are Ontario's largest supplier and our fuel after being brought here thousands of miles on tankers is still cheaper than western Canada (that i find hilarious :-) ).In fact as far as the TAR SANDS go (the name of them before they changed that environmental catastrophe to the "oil sands" ) are merely "IMO" nothing but a good excuse to drive the price of crude up and reap enormous profits on conventional oil which i have read costs $6 a barrel to bring up out of the ground. But! irregardless no private enterprise should be permitted to reap the enormous profits they do at their whim from God given resources that belong to us all.
#198 simkev on 02.22.11 at 7:27 pm…….P.S.–your not from Alberta are you? :-)
#189 The InvestorsFriend
Sources
Income distribution: Emmanuel Saez (PDF)
Net worth: Edward Wolff (PDF)
Household income/income share: Congressional Budget Office
Real vs. desired distribution of wealth: Michael I. Norton and Dan Ariely (PDF)
Net worth of Americans vs. Congress: Federal Reserve (average); Center for Responsive Politics (Congress)
Your chances of being a millionaire: Calculation based on data from Wolff (PDF); US Census (household and population data)
Member of Congress’ chances: Center for Responsive Politics
Wealthiest members of Congress: Center for Responsive Politics
Tax cut votes: New York Times (Senate; House)
Wall street profits, 2007-2009: New York State Comptroller (PDF)
Unemployment rate, 2007-2009: Bureau of Labor Statistics
Home equity, 2007-2009: Federal Reserve, Flow of Funds data, 1995-2004 and 2005-2009 (PDFs)
CEO vs. worker pay: Economic Policy Institute
Historic tax rates: Calculations based on data from The Tax Foundation
Federal tax revenue: Joint Committee on Taxation (PDF)
Read also: Kevin Drum on the decline of Big Labor, the rise of Big Business, and why the Obama era fizzled so soon.
#194 betamax…
Yeah one reply certainly defines being engaged in one.
By me replying to you does that mean I am now engaged in one with you?
#189 The InvestorsFriend…
HA! Love it!
–
Totalitarian Democracy under the NWO. Or not.
Big Pharma covered from lawsuits now, just as Monsanto has shifted all the liability insurance on to farmers (last night’s link).
Walking Away from a home in the US — pros and cons.
8:14 clip No more silver! Gold bars are full of tungsten!
Libya – Egypt Note the term ‘foreign mercenaries’ — who are the foreigners (terrorists), and who placed them there?
CIA Drumming up new biz. in Pakistan with their operative, Davis.
1:22 clip No sound, but Iran has two ships heading through the Suez Canal.
Af’stan Kannaduh is no different to the US with war crimes, esp. under Harper.
Update Businesses refuse to serve TSA staff. Internal revolution with others to follow? Divide and conquer.
Is he ever right on the money! More changes than expected.
NAU – SPP “This North American Union is being openly set up. This is simply another move towards a world government.” Don’t forget the election. Vote the CPC into hell.
Lawyer accuses Nevada Supreme Court of pre-determining 4closures.
Libya declares Force Majeure on oil exports. Italy depends on Libya’s oil.
Big Pharma The mind is an adequate to good servant, no more than that. We all have our own box of toys to play around with.
The Security Budget “Obama and the Democrats have proposed widespread cuts to critical programs from a 50% cut in low-income heating assistance to nearly a 30% cut to the clean drinking water fund.” Obama’s a war-monger and always will be — worse than dubya.
Obama can go to hell “So when gas hits $25 a gallon, you get down on your knees and thank you lucky stars you have a President who places the wishes of Israel so much higher than what is best for the American people!” wrh.com. He is also worth US$10.5 mln.; link — http://www.interestingstuffs.com/barack-obamas-estimated-net-worth-2011/
3:17 clip Man takes on bank and wins!
Economy In The Grave “Relax; you can always join the army! We have a LOT of work coming up!” — Official White Horse Souse” wrh.com.
This ME mess will eventually sort itself out, the only good news from it is the markets are now coming back to earth and we should get some good buying opportunities in certain areas…..at some point.
Nope I just can’t do it… I cannot resist.
Chris… if you possessed even a smidgen of grey matter with which to have such an open mind as to watch that short video http://www.youtube.com/watch?v=H9Vl8ygka98&feature=related objectively you might come to the stark realization what message the Rolling Stones were trying to convey within the lyrics of the song. That so many of the blog dogs find my presentation of it so irritating is what most amuses me.
You just don’t get it do you?
Yesterday you said this blog should cease. Today you post. Tonight you’re gone. — Garth
Oil and Gold….Gold and Oil…my my…it’s that 70’s show all over again. This time it only took 18 months to spill over whereas in the 70’s the top was years in the making. This Black Swan event is a godsend to oily goldy investors who stand to benefit enormously from the current ‘crack pot meltdown’ in the Middle East. Buy oil stocks instead of real estate and you just might survive the coming price shock. It has long been said that you don’t buy gold to invest..rather you buy gold for insurance…well here it is folks….that policy finally pays out.
DELETED.
An interesting topic that often surfaces on some Peak Oil sites relates to determining where you would want to live in a world without oil?
Determining how far backwards you think our world* is headed without oil is difficult but it would shed some light on where would be the best place to live considering many factors such as availability of food, arable land, clean water, employment etc…. Some find this topic pre-mature and others completely absurd. However I am persuaded, as are many others much smarter than I, that if Peak Oil is not already here it is just around the corner.
If we go back to a time before oil was heavily exploited we would definitely be considering small and medium sized towns in the NE portion of North America that were built between the 1800’s – 1930’s
Many of these cities and towns flourished long before the automobile and they offer up a relatively dense living conditions in comparison to our vast soul-less suburbs. These cities are almost always located on a waterway or a rail line. Prior posts by Garth and others have indicated that smaller bungalows will be demanded by down-sizing boomers, these homes are more affordable and energy efficient. Over the next several years the energy consumption of a dwelling will begin to have a greater and greater impact on it’s value. The demographic shift in boomer real estate preferences will likely make way for a Peak Oil panic as folks try to determine were they need to be in a radically different world.
Of course it goes without saying, the family farm will be a valuable commodity. Arable land will be coveted by all. Our subsidy reliant farmers will make way for affluent land-owners employing farm labourers, who will grow the food that will keep us all alive.
All those textile and manufacturing jobs will be returning almost as quickly as they left in the 80’s and 90’s. When the cost-benefit of transporting goods across vast ocean’s evaporates. Once again, as we have for thousands of years, we will be born, live, raise families, consume, and then die – locally!
I certainly believe that I (and most definitely my children) are going to live through part of this transition unless fusion reactors become a reality!**
*some depressing scenarios have us headed back to pre-industrial age, the Dark Ages and some back the Stone Ages!
**I was mentioning Peak Oil to a colleague and he calmly told me there was nothing to worry about as the US gov’t already had a plan to provide us with an energy alternative to oil but “they weren’t telling us about at this time!” LOL LOL I wondered if he was talking about the same US government that can’t even fund Social Security!
@ BestPlaceonErf or BPOE(whatever)
Just curious.
Now that the $600 million dollar roof “Upgrade” at the BC Place Football Stadium ( non Canadians take note: canadian football attracts perhaps 12,000 people on a very good day) in vancouver is almost halfway finished.
Will you be willing to have your taxes climb?
You see the ONLY hospital left in the down town core (St. Pauls)is 100 years old, an earthquake disaster waiting to happen, power outages in the hospital are an annoying occurance and estimates of $1 Billion dollars are being tossed around for a new hospital.
BUT there isnt any money in the city or provinces’ budget.
Nice. they will spend billions on sports arenas and sports “shows” but when it comes to pay for a desparately needed hospital…..
sorry , no cash available
#175 Junius
“It is insane that we import fruit and vegetables from China”.
——————————————————-
Yes it is. There is some precedent for it though and we have been importing fruit from Asia since as long as I can recall.
When I was a kid we would all look forward to the much anticipated Mandarin Oranges from Japan each Christmas. Of course, we don’t grow oranges in Canada and so it was not really so crazy to import them mid-winter as a special treat.
Now these imports are just taken for granted. I was amazed to discover that a package of snow peas in my fridge had come all the way from China. They were a good price too.
Snow Peas for crying out loud. Who would have thought.
http://www.businessinsider.com/this-is-what-a-recession-looks-like-2011-2
Home prices fall to lowest level since housing bust in most major US cities
February 22, 2011, 6:38 pm EST
WASHINGTON – Home prices are hitting new depths in most major U.S. cities and are expected to fall further over the next six months.
In a majority of metro areas tracked by Standard & Poor’s/Case-Shiller, prices have fallen to their lowest points since the housing bubble burst.
High unemployment, stricter lending rules and fears that prices will continue to fall are among the reasons why few people are buying homes. A rising number of foreclosures are also weighing down prices. And as more people get stuck in depreciating homes, housing could slow the economy.
http://ca.finance.yahoo.com/news/Home-prices-fall-lowest-level-capress-3953286724.html?x=0
http://www.businessinsider.com/case-shiller-new-lows-2011-2
Are we not forgetting one important fact about rising oil prices (today as well as back in 2008)?
Specifically much of the rapid inflation in oil, food prices and commodities are not real wealth creation. Rather these rising prices are bubbles in and of themselves. The rapid price increases are being driven by too much free money in the financial sector which is making money betting on rising prices. We know how that bet worked out with housing in the US, Europe, Japan and soon Canada, Australia and China.
If China ever slows down…
#216 Ding Dong, the witch is dead! Which old witch? The wicked witch!
$1.17/L gas and counting
more radio ads about condos
2008 all over again
I smell panic around the corner
oh how vulnerable
Shillings expects another 20-25% drop in US housing.
There is absolutely no way on earth that we are not going to go down big time very soon. Actually, I no longer think that we are on the precipice. I think we are in free fall.
#195 BrianT,
First of all, that was about the 10th time recently you have made a bold statement with no facts to supprt and then told everyone else to go do the research. Why would I bother to do your research? Are you always this lazy.
Secondly, of course boats use less fuel than trucks on a per lb basis. However have you considered that a product from China is probably moved by truck to a port then loaded then shipped then unloaded and moved again by train or truck?
There is no way you are going to convince me that shipping a product from China uses less fuel than something made here does.
You don’t back your comments up because you can’t. Again.
I won’t have to skip so many posts now that DA is gone.
#185 Junius
Yeah, I’m looking forward to 2) also.
I think that new arrivals at this website is a really good indication that people are starting to open their eyes. When new arrivals (with what appear to be silly questions) increase, then the website is fulfilling what I thought it was meant to accomplish. When the blog is the same people, already fully learned about what Garth has to say, discussing the same subjects over and over, then the blog is kind of repetitive. And if the blog is hijacked/attacked by people who think they must strongly disagree with Garth, as if that is somehow going to change things “out there,” it’s just pointless.
New arrivals keep the blog interesting, as you can/may get to witness them coming to more realistic viewpoints. Also, economic reality is unfolding, and opinions can change as it unfolds. That’s why I think the blog would evolve over time, rather than become obsolete.
Ex-cowtown/Another Albertan
“Right on. The entire energy issue can be summed up in two words: Energy Density. Energy density is how much energy you can pack into a given volume. Oil has a lot which makes it a very versatile fuel. NG has less, and the issue of compressing it and storing it is much tougher than oil. Nuclear has massive, unbelievable energy density, but converting the energy to a useable form is very difficult.
Batteries, solar, wind, hydrogen, etc. have extremely small energy densities. That’s why they suck.”
Exactly…like I tell some young farmers who believe they can continue make/do things they have become accustomed to in our oil dependent situation once we’re forced into relying on less dense energy sources “How big of a sail would you have to attach to a sixty foot set of drills to catch enough wind to drag it over the earth at six miles per hour?” A fairly large one I would imagine.
#32 Tim wrote…
“Furthermore, most of the protests have been driven, not by raving Muslims, but by young Arabs who want a better deal, so though they’re in for a rocky time…”
——————————————————–
Or maybe it is “..young Arabs who want a fair Sheik..”
#10 Soylent Green
How does your post relate to Real estate or the Economy?
#50 Hoof-Hearted to #13 chanman
Surrey is a shitehole and will take years to up its image.
———————————————————
Actually I still remember Surrey fondly. We had friends there who had a 10 acre farm, early 70’s. You would probably call them hippies. Anyway, they had picked up the place for peanuts really. The area was just not in such big demand in those days.
Many people then thought of Surrey as farm country. We used to go out weekends and take care of the place. You know, milk the cows, feed the geese and chickens and make sure the goats were not wrecking the joint….and to pick berries.
Those were the good old days.
#235 Utopia
Maybe then,…… but not now…
#237 Hoof Hearted to #235 Utopia
Maybe then,…… but not now…
———————————————————-
I could kick myself for having not bought that Surrey farm when our friends suddenly “broke up” and just wanted to dump it as fast as possible. They asked us too. We said no,….too many rednecks were moving in right about that time.
Course, we did not notice all the developers. No faith.
Hmm.
Don’t blame the US housing crisis, the scummy loans, the greedy bankers, the credit-suckers or the price of oil, Garth.
Jimmy Carter got it right back in ’79. From Wikipedia:
——————————————————–
In 2008, a U.S. News and World Report piece stated:
We would also do well to remember the sort of complexity and humility that Carter tried to inject into political rhetoric… Carter was unwilling to pander to the people… What Carter really did in the speech was profound. He warned Americans that the 1979 energy crisis — both a shortage of gas and higher prices — stemmed from the country’s way of life. “Too many of us now tend to worship self-indulgence and consumption. Human identity is no longer defined by what one does but by what one owns”, the president said. Consumerism provided people with false happiness, he suggested, but it also prevented Americans from re-examining their lives in order to confront the profound challenge the energy crisis elicited. Despite [some failures] Carter left behind a way of talking about the country’s promise and its need to confront what is undoubtedly one of its biggest challenges — to solve the energy crisis in a way that takes seriously both our limits and our greatness
—————————————————–
Too bad nobody listened back then. Maybe some will listen this time around… but the pessimist in me is doubtful.
There’s never an good time to have a negative take on real estate….there’s too many people in the same corner, the corner that makes them their living, to get that view aired.
Developers, realTORs, appraisers, lawyers, bankers, mortgage brokers, home furnishing store owners, renovators, insurers, etc. etc. etc. all on the same side, and the lonely consumer on the other.
And that’s when things are NORMAL, bouncing around, and there could at least an honest difference of opinion on where things are heading in the future.
But you get all these people backed into a corner like this…the market on fumes, the needle on E for the past several kilometres…..and the high-test vitriole starts to spew. Garth is going to become a bigger target than Harper could ever dream, but at least for a better reason.
So stay tuned to Global BC…the best shows are just starting.
#210 John M
Good thoughts there John …. actually Saudi equipment, Iranian equipment …as was Iraqi equipment is older technology. Why you ask? Like many badly managed companies and in this case countries …the profits are not turned back into the companies / countries they are used by a few people to buy Gold plated plasma TV’s, nice resort hotels, very very expensive “ladies / men of the night” and Airbuses enmasse!
As for the oilsands and what it costs to produce a barrel of oil it could be $6 or$16 bucks or more ….. but did you know that it costs about $5 to make a pair of jeans …ship them to N America and sell them for $150 !!! Figure out that profit margin and puke. And that little train wreck causes alot more pollution than the oil sands …. not to mention the low low low wages paid to make those jeans.
Yep from Alberta (Ft Mac) but I don’t work for one of the Oil companies …and let me guess you are from Toronto or Van or something like that. (Where the sun always shines and there is no pollution) go figure!
kev …out!