Different

Let’s end the week by murdering a myth. Tomorrow I will show you how to earn three times the rate of a GIC with little risk while paying 80% less tax. But right now it’s time to gut a sacred cow and hoist the entrails aloft. If that doesn’t turn you on, there’s always hockey.

When important people like MSM reporters, Global TV anchorettes, bank economists and F tell you it’s different here (than in the US) because ‘we don’t have subprime mortgages’ they should be corrected. Of course we do. In spades. And they risk bringing us a similar result to that which leveled the American middle class.

We have liar loans (no income verification). We give people without any money fat mortgages (houses are now an entitlement). We have teaser interest rates (encourage people to borrow knowing full well loan costs will jump later). We securitize mortgages (hello, CHMC). We have minimal (5%) downpayments and we let people borrow those.

And like the Yanks in the heady days of 2005 before their bubble burst, we actively encourage people who have no savings, virtually no income and no assets – who actually require social assistance to find shelter –  to jump into massive debt and buy a piece of real estate at its most inflated price. If this sounds unCanadian and wildly irresponsible, it probably is. And it’s 100% certifiably sub-prime.

Recently I told you of government-funded programs in places like Skatch and Cowtown to help poor people buy houses they can’t afford. Dangerous as they are, they cannot hold a candle to the latest house horny scheme from one of the country’s largest credit unions and real estate pumpers, VanCity.

It’s called the ‘Springboard Homeownership Program’. If this is you, the bank beckons: “You currently live in non-profit housing and are on a low income with no savings. You are ready to make the commitment to own a home, but need a structured plan to help.” You will notice that to buy a home in Vancouver, one of the most unaffordable cities on the planet, you no longer need “money” or “savings.” You just require a plan.

Oh, and no downpayment. None.

Instead VanCity will lend these struggling folks an interest-free loan over 10 years big enough to equal 20% of the purchase price on the house they obviously can’t afford. On a $300,000 hovel, that would be a $60,000 borrowing costing $500 a month for the next decade. But that’s just the start. In addition, this vampire credit union will loan the other 80% in the form of a mortgage amortized over 25 years, with interest-only payments.

The loan is closed for 10 years, and the rate is 6.15%. Monthly payments would be about $1,100 (interest only), so combined with the downpayment loan, the total burden would be $1,600 – plus the usual costs of real estate ownership, including property tax, insurance, condo fees and maintenance.

So in 10 years, where are the victims who had low income, no savings, no credit rating and received a break by being in public housing before being enticed into this real estate deal? They’ve paid $20,000 in loan payments and $130,000 in mortgage interest, as well as closing costs – for an expenditure of  $156,000 (plus occupancy costs). And they still owe $240,000.

Does this sound like a way to give a hand-up to the less fortunate among us? What happens if interest rates in a decade have doubled? Or the value of the real estate declined? In fact, the hapless ‘owners’ can’t even sell their home before the decade is up in the event of job loss or sickness, without additional financial penalties.

People with no money, marginal employment, no creditworthiness, no savings and unable to afford market rents being offered $300,000 to buy a home they cannot afford. How is this different from welfare Oakies or Wal-Mart clerk boys in Orlando being handed sub-prime mortgages they’d never repay?

Oh, there is one reason it’s different here.

Our bankers saw the US collapse. We know better. We just don’t care.

220 comments ↓

#1 Jeremy on 03.17.11 at 9:52 pm

QFT

#2 zing on 03.17.11 at 9:55 pm

1st

#3 zing on 03.17.11 at 9:55 pm

2nd

#4 zing on 03.17.11 at 9:56 pm

3rd ha!

Grow up. — Garth

#5 CoB on 03.17.11 at 9:56 pm

Holy sh*t. This makes me want to move out of the LML.

#6 xyz on 03.17.11 at 9:59 pm

Wow! Is that sh*t for real?

I swear if I had any money I would close all my bank accounts and stuff it in my mattress.

#7 i.am.first on 03.17.11 at 10:00 pm

…again!

#8 Min in Mission on 03.17.11 at 10:05 pm

That is unbelievable. Luring someone into a “deal” like that is unconscionable!! The term “vampire” doesn’t even come close to be an accurate description!!

I cannot imagine how a person would feel when they finally “came to” and realized how deep the water was.

#9 Sid on 03.17.11 at 10:05 pm

if vancity is giving up the down payment, then I imagine cmhc is not involved in this. Seems like an awful lot of risk for a bank to be taking.

#10 Peter Pan on 03.17.11 at 10:06 pm

I guess Vancity will end owning much crappy real estate in the East End once the bubble blows up… wonder how the members are going to feel about that.

How can the management of any financial institution think it’s a good idea to lend money to someone who has no skin in the game? It’s like the executive suites of these institutions have been taken over by zombies.

#11 Boombust on 03.17.11 at 10:08 pm

Garth,

One question. Has Global TV Vancouver been breathless with excitment over this Van City proposal?

#12 mid-Ontario on 03.17.11 at 10:09 pm

“They’ve paid $20,000 in loan payments and $130,000 in mortgage interest, as well as closing costs – for an expenditure of $156,000 (plus occupancy costs). And they still owe $240,000.” Garth
—————————————————–
Seems fair to most in Ontario because we have learned essentially from this blog that there is a never ending stream of Asian buyers on the West Coast always ready to pick up $300k+ teardowns and build Mcmansions seeming unaware of a opportunities in the USA of 1/4 the price and a touch drier than 9 months of rain that Vancouver and area offers. Also, they are unaware of Garth’s theory that it is not different in Canada and real estate will go down.

Anyway, tonight the armies are plotting to step on a rascal in Libya (good luck sorting this mess out afterwards).

This plus the full impact of the meltdown in Japan will soon be understood by the market.

The above will expedite QE3 to save us all for another few months.

I look forward to your blog tomorrow BUT I must admit that the PM’s offer volatility unlike anything I have ever experienced in other sectors in the market. In some way, the volatility is addictive. I get bored easily.

#13 Dodged-A-Bullit-in Alberta on 03.17.11 at 10:10 pm

Greetings: Here is text of E mail I sent to Van City:

Subject: Springboard Homeownership Program

“Greetings: This E mail is to let you know that I feel Van City should be ashamed of attempting to sucker in new home buyers with this package. If a person has no savings, downpayment, low income why are you affering them this crap? For shame, for shame.”

Perhaps other bloggers could do the same!!!

#14 Drew on 03.17.11 at 10:13 pm

Damn genius.

#15 Best place on meth on 03.17.11 at 10:16 pm

This is why the CMHC needs to be wound down and private insurers take over.

The banks would stop this kind of crap immediately if we taxpayers stopped insuring their potential losses.

#16 Makes Cents on 03.17.11 at 10:17 pm

I would LOVE to see the “Home Readiness” financial literacy course they make you take! Who could fall for this??

#17 Anotherlowlyrenter on 03.17.11 at 10:18 pm

Wow is all I can say – powerful stuff – this is the kind of post that makes me wish you were in the ‘conventional’ media, Garth. This post needs to be picked up globally. Or you need to write it as an op-ed in the NYT or WSJ or even the SCMP (Hong Kong’s newspaper). The Chinese may be coming (right now) but they’re not stupid. They know how to ride a trend – they ride it good and they ride it long time – but they also know how to ride it down.

The newspaper clipping below is from 1996 – Hong Kong property prices ultimately fell 65% from that peak level.

http://www.thestandard.com.hk/news_detail.asp?pp_cat=&art_id=34439&sid=&con_type=1&d_str=19961113&sear_year=1996

#18 RE CRASH on 03.17.11 at 10:24 pm

A co-worker said Canada was different then the US since the US gave people 35 year mortgages with zero down and we don’t do that here. I kid you not. The House bubble in Canada is WORSE then the US. Canada is one of the biggest housing ponzi in the world. Look out below cause the crash is only going to get worse from here. Sorry realtors time for a new job……realtors are pooping their pants.

#19 bsallergy on 03.17.11 at 10:24 pm

SPLAT! Crap that’s my asshole going through my brain. Thought there were no windshields in Canada. Damn.

#20 Roial1 on 03.17.11 at 10:24 pm

Garth, Garth, Garth, You do not see how this realy works. It is just how it looks. THERE ARE NO $300,000 homes in Snafuver. It is just an advertising hook for the gullable. The qualifications can not be met by ANYONE. These people do not exist.
It is an April fools juke gone bad early.
Just Laugh out loud and forget it.

#21 Victoria on 03.17.11 at 10:25 pm

I remember in the late 80s people living in council houses (low rentals) in the UK were encouraged to buy their homes through a government programme. I know Thatcher was in power then. Interest rates went up and it was just a disaster. So many people lost their homes.

I was in my very early 20s living in Europe and thinking my this is really sad why would they ever do that in the first place.

#22 Alex on 03.17.11 at 10:26 pm

Dodged a Bullit in Alberta: Already done. And yes, I completely agree. I hope many of the people concerned enough to religiously patronize this filthy, hedonistic, perverse, oft-ridiculed yet somehow righteous blog also pick up their virtual pen and announce their thoughts to the outside world.

I so rarely get a response to my continuing barrage of emails (only when I file a formal complaint, it seems), but somwhere in the back of my noggin I know someone reads my stuff and maybe – maybe – at least thinks about it.

Gotta do what you can. Gotta fight the power.

What was that proverb about the mighty oak tree?

#23 Chiquita Banana on 03.17.11 at 10:31 pm

The good news is that you can’t buy much with $300K in Vancouver.

VanCity is usually the best of the bunch. I wonder what happened?

#24 Jon B on 03.17.11 at 10:34 pm

Wow, pretty incredible. I think it’s been voiced on this pathetic blog a few times in the past that greed has no bounds among the Banksters. We live in a world where the stupid and ignorant are prey. Banksters are predators. Watch out.

#25 JO on 03.17.11 at 10:39 pm

I work in the CU industry and have for 10 yrs. This program sounds absolulely pathetic and in complete violation of credit union principles…That this would even be allowed is shocking. But it is not surprising, Most of the senior management at large CUs are former bank execs and what do they care.

Such is the state of the housing Ponzi scheme that all tactics are used to try to keep the mountain of debt growing a rapid clip..after all, mortgages are over time paid down…new fools must be brought in to take on new debt and keep up the illusion of high home prices..a complete government and bank/financial industry fraud on the so called middle class. After all, since when is lower home prices a bad thing for most of us regular people ?

In Japan,the despots launched multi generational mortgages where young innocent kids are now liable for inflated mtgs taken out by mom/dad in the late 80’s/early 90’s. In Europe, some countries saw banks issue extended amortizations of 50 years..and other products including interest only mortgages..of course it failed. This massive credit inflation and now QE policies aimed at maintaining inflated asset prices is a fraud on a scale of 1000 times larger than Madoff. Those prudent enough to save and stay out of debt are watching their life savings effectively taxed away..or are forced to speculate to make enough to cover the tax known as inflation.

Fuck the establishment…down with bond prices…the faster it happens the sooner this bullshit ends.
JO

#26 HouseBuster on 03.17.11 at 10:40 pm

Unbelievable.

#27 Kevin on 03.17.11 at 10:45 pm

On my blog I have commentary on the Saskatoon situation in regards to “helping” people get into home ownership.

“The City of Saskatoon, Canada Mortgage and Housing Corporation (CMHC) and the Saskatchewan Housing Corporation have created the Mortgage Flexibilities Support Program to increase affordable homeownership opportunities in Saskatoon.

With a 5% down payment grant from the City of Saskatoon and mortgage loan insurance from CMHC or Genworth Financial, qualified homebuyers will have the means to finance the purchase of a new home.”

http://saskatoonhousingbubble.blogspot.com/2011/01/subprime-is-alive-and-well-in-saskatoon.html

#28 Mr. Lee on 03.17.11 at 10:46 pm

And the beat goes on Mr. Turner.

The moment that slick marketing convinced the masses that a home was an investment much like a mutual or an equity rather than a dwelling, homes will now be subject to the same physical realities as investments.

In you latest book, Money Road, you bring up Bob Farrel’s 10 rules of investing. I bet all of house crazed maniacs dollars to diamonds that housing will abide by these rules. But then again you have been mentioning this for some time now.

By the way Ms. Lee and I are putting up the house in cow town, sell and rent while the going is still good.

#29 squidly77 on 03.17.11 at 10:49 pm

Predatory lending at its finest, what a pathetic industry and shameful industry.

#30 firsttimerinwaiting on 03.17.11 at 10:49 pm

Unbelievable that our Federal or Provincial Governments would ever let something like this happen. I wonder if The Honourable James M. Flaherty even knows about this? Setting up people for failure…disgraceful

#31 Timing is Everything on 03.17.11 at 10:50 pm

Yup, Cowtown IS different er, special…

““I’m not convinced that new mortgage rules have been that significant in impacting our market,” said the president of the Calgary Real Estate Board.

Although this may be the case for the national market, Stante said it doesn’t have to be the case in Calgary, where the economy has been relatively strong.”

http://www.calgarysun.com/money/2011/03/16/17633771.html

#32 wetcoaster on 03.17.11 at 10:58 pm

I can’t believe I just read that. So who is going to be left to live in the ghetto ?

Maybe VanCity should make a commercial like the ReMax guy :
“Hey homie, me and the posse goin down to VanCity man, we’s movin uptown mofo ! “

#33 TaxHaven on 03.17.11 at 11:00 pm

Interest rates may well double, but that can’t happen in isolation.

We’ll likely have years of soaring prices for food and fuel, medical care and education. Plus higher taxes.

Basics: interest rates rise when someone, somewhere, needs money, real money, real capital ~ instead of this counterfeit monopoly bank-created credit with which we are afflicted today. And we carry that in our wallets too, in paper form.

With debt levels – personal and government – so high vis-a-vis incomes, how can a debt-driven Canadian economy continue creating jobs? We’re certain to suffer AT LEAST long-term high levels of structural unemployment, plus probably a surge in bankruptcies and cuts in disposable incomes.

No one should fool themselves: debt levels and money-printing – NOT scarcity, uncertainty or greedy profiteering – are driving REAL asset (commodity!) prices higher.

House prices, inflated as they are, can only collapse…

#34 WesternCanadian on 03.17.11 at 11:02 pm

“How is this different from welfare Oakies or Wal-Mart clerk boys in Orlando being handed sub-prime mortgages they’d never repay?”

Its not different. NO ONE said it was different. This is a new policy that is being introduced NOW.

You cannot use a policy introduced now as a counter argument to past debates you have had with people who have been arguing that policies in Canada are different.

#35 T.O. Bubble Boy on 03.17.11 at 11:05 pm

That Vancity scam is so sketchy, I thought it was a joke.

My new perspective on Vancouver is this: it is very quickly transitioning into its very own 3rd world country.

The income inequality has reached 3rd world levels (only Chinese millionaires trying to get some cash out of the mainland can afford houses, while many locals suffer in low-paying service jobs). And, the government has no interest in correcting the problem (since their revenues are driven by property taxes, they would prefer sky-high home values).

The question is: will China have a financial crisis like what happened to Thailand/Malaysia/Hong Kong/Singapore/Indonesia/Philippines in the 1990’s? (or, more specifically, will the peg to the USD finally get dropped?) Real Estate holdings of the elite fell significantly back then, and Vancouver will be one of the places to watch if the same type of crisis happens again.

What does this mean for 2011? I think that the “average” price will actually stay at a high level in Vancouver — not because prices are actually rising across the city, but because there will continue to be fewer sales, and the multi-million-dollar properties being bought with offshore cash will continue to skew the average.

#36 Industrial Guy on 03.17.11 at 11:06 pm

It’s different here alright. We’re about to experience all the same economic turmoil that gripped the US. Lost billions in Real Estate value. Retirement nest eggs shattered.
The difference is .. our version will be compressed into under 24 months. We’re just late to this party thanks to almost free money from the Bank of Canada.

Don’t believe anything your Government tells you. Either it’s a lie or they really don’t have a clue about the nightmare that’s about to engulf our economy.. The “recovery” is about to fall flat like a souffle once all the “infrastructure cash” is gone. This rush to the polls stinks of the last Federal vanity election. Get the voting done before the real bad news gets out.

Growth in GDP based on $100.00 a barrel oil exports and bankers trading cash back and forth is not real growth. It’s a fantasy. This kind of GDP growth will not pay your mortgage and send your kids to college. It also generates very low tax revenues which explains why this “robust recovery” is still running deficits.

Mountains of debt have floated this ‘recover”. If we all focused on reducing our personal debt to 2005 levels. We would create a made in Canada depression.

Don’t look to the auto industry to be the engine of economic growth in Southern Ontario. Ford, GM and Honda sales were off by double digits In February. Even the mighty Toyota was off by 24%.

In Ontario, we’re told that electricity prices are rising because of increased costs. Bull****! The province is awash in surplus capacity. We have 36,000 Mega Watts in built assets and on any given day we hardly use 19,000 Mega Watts. Paying 70 cents a kilowatt for 12 cents per kilowatt “Green” power wasn’t too brilliant either. Ontario Power Generation is so strapped for cash that it can’t afford to hook up all these “FIT” and “MicroFIT” projects.

The real reason power is going up? The suppliers have learned to “game” the system. WARNING: You may require an airsick bag after reading this one:
http://www.thestar.com/business/article/956001–power-companies-short-circuit-market

#37 wb on 03.17.11 at 11:09 pm

Hey Garth, is there any way to ban from the site the less intelligent among us who waste our time by posting “first”?

#38 wetcoaster on 03.17.11 at 11:17 pm

I was thinking, why would they go after such high risk clients other than the gouge interest rate ? Now I see why in the qualifying, you cannot screw up on even one single payment or they begin foreclosure :

“What if I’m late with my loan and/or mortgage payment?

This is the first time any financial institution in Canada has offered such a mortgage so we’re assuming a lot of risk. Therefore, you are NOT allowed to miss, postpone or make a late payment. If you do, we’ll start the foreclosure process as quickly as possible, which means you could lose your home. “

#39 new_era on 03.17.11 at 11:23 pm

On the flip side garth

– The bankers and the rich DUCKS only got richer in the US

While the poor got left in the cold and ended up forking more money to the rich

A sweet Transfer of wealth from the middle class and poor directly to the RICH

#40 Adam in Montreal on 03.17.11 at 11:24 pm

What the feds should do is legally forbid CMHC form guaranteeing any mortgage that does not meet specific conditions, especially mortgages like this one. As far as I’m concerned, the banks can come up with whatever schemes their little hearts desire, but if they don’t meet those minimal conditions, they are solely responsible for guaranteeing the mortgage and if it fails, they have to deal with it.

The best part of this is that VanCity tries to pass itself off as some kind of fraternal, community-minded organization out to assist the disadvantaged. In reality they are pretty much in a no-lose situation because the buyer will pay the CMHC premiums, and the taxpayers will pick up the pieces later. Disgusting.

#41 Raven on 03.17.11 at 11:26 pm

I just lost a lot of respect for VanCity. I was thinking of moving my accounts there because I thought a credit union might at least possess some semblance of ethical backbone. But now I see it doesn’t either.

With all that is going on in the world (outlined daily on this blog), I am thinking I will never buy a place, but rather rent forever, try to invest my money prudently in other forms, and keep it light enough to travel come what may.

Look forward to learning more tomorrow, Garth. Thanks.

Til then, keeping the good people of Japan, and of Benghazi, in my thoughts. They have more dire things to contend with than I have ever had to bear.

#42 Devore on 03.17.11 at 11:27 pm

Ooff, I like VanCity’s “self employed” mortgages:

You’re self-employed or on commissioned sales, and have been in business for at least two years. Vancity understands that earning your living has added expenses. We approve your mortgage based on your strong personal credit history and your stated income, not just what’s reported on your Canada Revenue Agency Notice of Assessment.

Say what?! Yeah, we don’t care what you tell the CRA, just fill in this box with a number, wink wink.

https://www.vancity.com/MortgagesRenos/CustomFit/SelfEmployed/

#43 S.B. on 03.17.11 at 11:28 pm

Got oil? Do I hear 1.50/litre soon? Thanks to the oil-war cartel?

Just remember, there isn’t one dictator in power who is not supported and nurtured by the West, due to their strategic importance.

Go to google image search page and try these searches:

Gaddafi + bush
Gaddafi + obama
Gaddafi + sarkozy
And so on.
See how he is warmly greeted and welcomed by our leaders.

They have ensured that, for 40 years, he suffered not even so much as a ‘slip and fall’ accident (wink wink).
Just like when Bush Sr left Saddam in power after the 1991 invasion. It’s just common sense.
Turn off your tee-vee and THINK,
:(

#44 Otto Doppelganger on 03.17.11 at 11:30 pm

Vancity had a similar product a few years ago where you shared a mortgage with 3-4 of your closest friends…just googled it, called the “Mixer Mortgage” – yeah, the legal snafus between friends and family wouldn’t be difficult to untangle…not at all.

History will show that products like these that extended the bubble will have proven fatal to some folks’ finances.

Not one to typically engage in schadenfreude, I think I want the Vancouver market to implode now more than ever.

#45 Whistle punk on 03.17.11 at 11:40 pm

Where I live the credit union runs you through the third degree before they even think of loaning you any money. I have been told I don’t make enough annual income so go away, 40 grand isn’t enough for them.

Oh ya I live in B.C. and no where near Vancouver.

#46 45north on 03.17.11 at 11:42 pm

Peter Pan: I guess Vancity will end owning much crappy real estate in the East End

we need a list of the Vancouver municipal councillors who support this

#47 April on 03.17.11 at 11:48 pm

Garth, although the Canadian housing correction has begun are these schemes [VanCity] going to slow it down?

#48 dc on 03.17.11 at 11:49 pm

Garth, do you have the ability to delete comments? If so can you delete all of the ‘1st’ ridiculousness. Thanks.

#49 Devore on 03.17.11 at 11:49 pm

#23 Chiquita Banana

The good news is that you can’t buy much with $300K in Vancouver.

$300k will buy a 1 bedroom condo pretty much anywhere outside the “prime” Vancouver areas (downtown and near core). It’s not gonna be sexy, but when someone’s shoving free money in your hand, there’ll be people considering this.

#50 McSteve on 03.17.11 at 11:50 pm

This is completely insane. How’s it even legal?

Oh – and remind me: do you get a prize for being first or are some of the posters simply stunned.

#51 Big Al (New) on 03.18.11 at 12:07 am

Hey WB, how in the hell do you know what level of intelligence someone has based on one word. Relax dude it’s all good while we wait for the collapse.
Know god almighty what a selection of ass hats we have for a selection should a Feral election be forced. We got MI there wanting to build a stadium in every town, just in case the NFL shows up wanting to play hockey in QC. SnH who’s committed to fighter jets at no fixed price, and good ole Jumping Jack Flash in the pan the King maker in his own mind. Should be interesting to see if any of the opposition has the testicular fortitude to actually pull the trigger. The leader who does and puts a stop to those annoying putting Canada to work conservative ads has my vote.

#52 pigeon patties on 03.18.11 at 12:13 am

THIS IS THE BEST deal I have seen yet. If I could be convinced to move back to Vanjing, I would take it in a heartbeat.

They provide 20% down interest free so I don’t need to pay CMHC for insurance, saving about 7%. No insurance means Vancity is on the hook alone. No taxpayers. Interest only on the balance locked for 10 years makes my payment completely stable. All for the price of rent. The only downside is if you think housing prices will be lower in 10 years.

In the meantime, I put my previous house money into 7% dividend stocks paying monthly and take some chances.

Opportunities come along all the time and my cash would be available.

I LOVE IT!

But I could never be convinced to live in Vantown again. ugh!

#53 Utopia on 03.18.11 at 12:14 am

Is Vancity going the way of the Dodo. I think so.

Unfortunately there will be more than a few failures amongst Credit Unions across this country on the tail of a major housing correction. They are just not capitalized well enough for the most part to withstand a serious shock to their balance sheets.

What this means to credit consumers and savers is that in the future we will have fewer options when it comes to banking if this country does in fact experience a correction that resembles what happened in the United States.

The semi-casual stress tests on our own banking sector came back with flying colors we presume, (relative to other countries anyway) but that is not necessarily a recommendation for the smaller institutions.

This article today demonstrates how these credit granting bodies are putting themselves and their enterprises at serious risk that might evolve from an interest rate shock or economic downturn in the future. Consumer failures can indeed result in the failure of lenders. Look at what has happened South of us.

Actually, on the point of stress tests for Canadian Banks, The Office of the Superintendant of Financial Institutions (OSFI) has been far less than transparent in divulging its results. In other words, they are not really releasing much of the details of their work or the conclusions they have come too.

Not publicly anyway.

There is a major story here that has really not been touched in this country in any great detail. I see significant risks evolving for our financial sector though and very little demand or appetite amongst the public for a serious public and transparent review.

We need disclosure and we need it now as the real estate market is clearly rolling over to the downside and heading for a sustained US style correction.

That should give all us Canadians a big boost of confidence. Right? We feel good about our Banks and Credit Unions……don’t we???

Anyway, we can just assume that they (the Credit Unions) know what they are doing and that they understand the risks being undertaken. My own reviews of three regional Credit Unions has already told me though that they are amongst the most vulnerable of this countries financial institutions.

They took a hell of a beating from the credit crisis incidentally despite the fact this country as a whole skated over the worst effects of the recent recession.

How might they fare under a more direct threat and one that takes place in the absence of continued Federal supports for the financial sector such as what took place following the credit crisis? Is this country in a good position to absorb some REAL bank and Financial sector losses should they should occur?

Many of these smaller organizations do not have the deep pockets to withstand a genuine crisis in other words (my opinion) and may well face insolvency and closure in the event of a housing price collapse.

That means in brief that there will likely be a further consolidation amongst the financial services and banking outlets in this country as a result of the fallout from a housing bust. A bust that I see as a high probability. Fewer choices, more centralized decision making and an end to some of the regional players altogether is an expected outcome.

Hope you all feel safer now.

For a list of all the Financial Institutions that OSFI regulates you can go to the following site. Surf it for fun. There is enough material there to warp any good sober mind. Only an accountant could really love it though.

http://www.osfi-bsif.gc.ca/osfi/index_e.aspx?DetailID=568

#54 Pd on 03.18.11 at 12:14 am

I have read this blog for over a year. This is my first post. The trend of readers racing to post a comment about being “first” needs to stop. It is childish, no longer funny and a waste of everyone’s time. Garth, please stop publishing such posts and spare us.

#55 WesternGrit on 03.18.11 at 12:22 am

There ARE homes in Greater Vancouver that are less than, or around the 300K mark. They’re not SFHs, for sure, but townhomes, condos, and the like. Skip out to Chilliwack, or to anywhere in the rest of BC, and you can find homes for less than 300K – and VanCity does offer morts outside of Van “City”…

This won’t end well…

#56 ExExpat on 03.18.11 at 12:32 am

This is just about how I remember things in the States in 2005/2006, sales were slowing down, prices were stagnating, and really stupid financing was going mainstream. Probably had to, everyone one credit worthy who wanted a house had already bought. The crash that got the headlines in Canada, fall 2008, was another 2 years into the housing decline.

It seems in Canada we have managed to socialize stupid financing ideas instead of leaving it in the hands of Homestake Mortgage and the like. Nice, taxpayers can lose the money up front instead of bailing out banks later. Using the same timeline, the Canadian subprimes could keep the bubble sort of inflated but likely not growing for another couple of years. Or not.

#57 Drew on 03.18.11 at 12:36 am

Yes, this stuff even goes on in the ‘peg. You don’t need any money to buy a home here.

Homebuyer Down Payment Assistance Program (HDPA)

Eligibility Criteria
• Must be a first time homebuyer • Must be purchasing a property in Winnipeg from the eligible inventory • Gross household income not exceeding $54,016 • have a mortgage pre-qualification certificate from a financial institution (for at least
$90,000) • Be willing to reside in the property for a minimum of 10 years
Loan Features
• Available for 5% of the purchase price + $1,500 for closing costs (up to a maximum of $9,000)
• The assistance is provided in the form of a forgivable loan, subject to the applicant remaining the homeowner/occupant for 10 years
• Should the owner sell or rent the property prior to the 10 year term expiring, the un- forgiven portion must be paid back to MANITOBA HOUSING.

http://www.hopwinnipeg.com/index.htm

#58 B on 03.18.11 at 12:40 am

I was born and raised in Skatch, I’m not a farmboy so please do not have any toothless misconceptions. I hate it here, always have, nor do I understand why anyone would want to live here.

In 2007 I knew what a non-socialist government would bring us to where we are now. I seen the rise of commodity prices and knew where our housing would be today. I was young at the time, wanted to buy a house knowing where pricing was heading faster than drill rigs could punch holes in the Bakken. When housing prices here rose 100% in such a short span, it drove me nuts. Even as a young man before I had any real financial sense I KNEW there were no true fundamentals supporting the sudden price gains. Ultimately it is what brought me to this fine blog in the first place.

I always pitch the case for Skatch, as long as commodities are driving the world, we’ll continue to grow. I’ve always said housing will likely not see the same percentage drops that the other bubblicious places will due to jobs here.

Today I was thinking about the jobs tied to housing here in Sask account for a huge amount of our workforce. Everything from the RE agents who are multiplying like rabbits to the 20 something Duramax driving, bobcat pulling, basement digging chumps and they are by the 1000’s here in Sask. We won’t look so hot when a large portion of all those tied to the Sask housing boom are steamrolled by the price drops. I can’t count on how many young guys I know of who make a living off housing that just made the 5/35 plunge themselves. It may get ugly here after all.

#59 BAD on 03.18.11 at 12:41 am

Seems it’s time to pull up stakes and move south.

#60 B on 03.18.11 at 12:41 am

P.s. Thanks for my new background image Garth! Haha the best picture yet!

#61 Otto Doppelganger on 03.18.11 at 12:42 am

Here we go:
http://www.cbc.ca/news/canada/british-columbia/story/2011/03/16/bc-olympic-village-lawsuit.html

Best Place on Earth.

#62 Nostradamus Le Mad Vlad on 03.18.11 at 12:45 am

Thank gawd I’m neither last, first or anywhere in between so technically, I don’t even exist!

#19 bsallergy — Interesting look from a front row seat!

#39 new_era — “A sweet Transfer of wealth from the middle class and poor directly to the RICH”

Synchronized with higher oil / food / hydro, costs of rebuilding after ‘quakes plus anything else, along with depopulation.
*
RE + debt — yadda yadda yadda etc.

“When important people like MSM reporters, Global TV anchorettes, bank economists and F . . .”

These individuals are truly legends in their own, tiny little antiquated minds, and if nothing exists between their two external antennae (ears), they have nothing to evolve from being worthless pieces of harebrained trash into m$m junkies. That’s all they will achieve.

Oh for the good old days of Carl Bernstein, Bob Woodward and Walter Kronkite.

“We just don’t care.” — That’s putting it mildly. Banxters + sheeple took us down this path, the former reaping profits and the latter to be hit with tons of shit.

No doubt C-H-F will be handing out fresh supplies of toilet paper so they can clean themselves up.
*
#25 JO — “Fuck the establishment…down with bond prices…the faster it happens the sooner this bullshit ends.”

You may find this link from Leap 2020 interesting — Global systemic meltdown.
*
Japan — meltdown underway.

Yen vs. US$ today, and US food highs and New Madrid Fault Something to sleep on tonight.

Radiation The effects on anyone.

NWO UN impose no fly zone and take Gadaafi on. What makes this interesting is that Israel has hired plenty of South African mercenaries to keep him in power. This may well develop into something a lot bigger, so Gold Buy and hold.

Georgia Recall when Georgia tried to beat Russia at war, and Putin / Medvedev routed them in two weeks or less? Now a revolution there.

From Mish Good take on why less employment means less home sales, either new or used.

6:12 clip It’s here. Unofficially, of course as the m$m in their right minds would never put this to the public.

Libya The IMF + UN + WHO = NWO. Just as the Polish govt. was conveniently wiped out in a plane crash for dumping the IMF, so they are trying to pull the same stunt on Libya.

Soylent Green Is People — You may find this amusing.

7:27 clip Pink Anderson and Floyd Council — Pink Floyd — DSOTM. Been on the charts for a total of nearly 16 years now, the first 14 of which were in a row. Syd Barrett founded the group, later replaced by David Gilmour. The Dark Side of the Supermoon is tomorrow.

#63 pablo on 03.18.11 at 12:58 am

I just wanted to be the first one here today……………. to predict that R/E in skankcouver will very likely glow in the dark very soon, much the same for the troglodytes that live there given the made in Japan nuclear fallout coming to our pacific coast courtesy of the jet stream. Also if they’re not successful in containing the meltdown occurring there will be very significant radiation levels wafting to b.c.’s shores. But on the bright side; what will radiation do to the t.h.c content in the bud crop next year?

#64 BPOE on 03.18.11 at 1:00 am

Great forced savings plan. Mortgage rates will still be at all time lows 10 years from now. Pride of ownership over renters remorse. Mae you, your family and friends proud. Be an owner. Be a somebody! Remember when you were young what you were taught and thought about renters. Yup, still the same people, criminals and lazy. Move up and be PROUD you own a piece of Canada.

#65 Lily Spring on 03.18.11 at 1:00 am

That type of lending is called “loansharking”.

#66 Seeker on 03.18.11 at 1:03 am

Here it is in Calgary! One of those programs that they tried to lure my friend into a small box with no parking for more than $250,000 total and a 35 year mortgage with 0 down. Couldn’t believe this was still happening.

http://www.inhousesociety.org/

#67 nonplused on 03.18.11 at 1:04 am

Why are we even talking about this when Japan is maybe 48 hours from a nuclear event bigger than Chernobyl and the UN just authorized the escalation of WWIII in the Middle East?

Oh ya, it’s a housing blog. Well, if you have a house, stock up on duct tape and poly.

The British and French already have planes on route to Libya. But that crazy Kaddafi has Russian built anti-aircraft missiles and he’s going to shoot them down if he can. He might even be crazy enough to try a “defensive first strike” on an aircraft carrier or torch his oil fields.

In Japan, if they don’t get water in those reactors and especially the containment ponds stat they are going to have a Chernobyl style exclusion zone on their hands in just a few weeks. Unfortunately the Japanese cannot force people into the area and to their certain death to sandbag the plant like the Russians did so the plant will probably remain open to the air in pretty much its current configuration. And, also unfortunately, in Japan the exclusion zone will involve an area that was economically important to the world, unlike Chernobyl.

God help us if another tsunami hits and washes all that now exposed crap out to sea any time in the next 30 years. I guess it would mostly sink and finally be water cooled, but 3 eyed fish might be the norm in the area.

What I am no really worried about, longer term, is how these nuclear reactors can be kept cool as we power down during an emergency or even as oil becomes very expensive. It’s clear that the cooling pumps have to be running and the plant staffed for years and years after they shut it down. Can we honour this commitment? Clearly the backup plan is diesel generators to run the equipment, but what if you can’t get any diesel?

The real reason the US and the Soviet Union went to civilian nuclear power was not because it was economic (it’s not), but because they needed plutonium to fuel the “Mutual Assured Destruction” program (MAD). Plutonium is not found in large quantities in nature so it had to be manufactured. Nuclear electricity is just how they sold and financed the production of it in the quantities envisioned.

Oh sure, France has a lot of nuclear plants too, but they also maintain one of the larger nuclear bomb fleets in the world too. Other than Japan, almost no nation that has nuke plants doesn’t have nuke bombs or at least the capacity to make them. Even Canada could make one if it wanted to.

I am also curious as to how close exactly we were in North America to a loss of a plant in North America during the big blackout a few years back. From what I now know about how these things work, most of the reactors in North America would have been in emergency shutdown mode and running on diesel backup until the power grid was back up. Think about that for a moment. How long could they have stayed on diesel if the power grid hadn’t come back?

I have learned way more in the last week about nuclear power plants than I probably wanted to know. But the critical design flaw in most of them seems to be the need for a substantial cooling effort and readily available water to provide that cooling whether the plant is operating or not, for years after shut down, and the critical fact that as the water runs low the zirconium tubing that holds the fuel rapidly deteriorates and produces huge amounts of hydrogen (in reaction with the steam, the zirconium steals the oxygen from the water vapour at high temperatures leaving liberated hydrogen (water is H2O)), which is very explosive and can destroy the plant, and has destroyed the outer structure in at least 4 plants in Japan.

Housing prices in Canada, while interesting to Canadians, is now officially the last of our worries. The plant units in Japan are melting down, at least 3 of them, and 2 containment ponds might also be doing the same with no containment. And WWIII is up a notch. Housing doesn’t matter. Nobody will be paying anything for a house in about 1 year. Food will be the order of the day.

#68 Burnt Norton on 03.18.11 at 1:12 am

Garth, do you have any thoughts on leasehold property? If it can be purchased at a 50% discount vs freehold and if the lease is pre-paid until say 2050 (past my expiry date) and when no capital gains can be expected, doesn’t it offer more or less the equivalent of renting without the risk of being tossed out of a rental house by a landlord who wants to sell?

#69 SafetyBear on 03.18.11 at 1:15 am

And from a place that really ought to know better. You’ll love this Garth

http://www.thisismoney.co.uk/mortgages-and-homes/article.html?in_article_id=525769&in_page_id=8

#70 gotta do it! on 03.18.11 at 1:32 am

First!!?

#71 dd on 03.18.11 at 1:38 am

” You will notice … you no longer need “money” or “savings.” You just require a plan.”

Sounds like almost every govenment in the world.

#72 dd on 03.18.11 at 1:42 am

…Instead VanCity will lend these struggling folks an interest-free loan over 10 years…

Wow. I guess the banks are running out of prime and subprime suckers. This is no prime.

#73 Bailing in BC on 03.18.11 at 1:44 am

Zing, you are my hero!

#74 warptweet on 03.18.11 at 1:45 am

The Wackos at Vancity tried a thing called “BIKESHARE”
in 2007. Free bikes left to “SHARE” around the city. I never ever saw one of these bikes after a few weeks into the program. They of course were all stolen, repainted. or sold for scrap metal.
Sometimes I wish I could be irresponsible and squander other peoples money, just like the executives at Vancity.

#75 KingBubbles on 03.18.11 at 1:47 am

Still horny in Winterpeg! Check out these stats:

Date Address Area List Sale
—————————————————–
3/15/2011 293 Yale Ave 1810ft2 399.0K 431.5K
3/15/2011 207 Waterloo St 1918ft2 399.9K 427.5K
3/14/2011 779 Laxdal Ave 1908ft2 329.9K 365.0K
3/9/2011 10 Hedgewood 1800ft2 479.9K 545.8K
3/8/2011 118 Brock St 2104ft2 399.9K 411.0K
3/8/2011 772 Oak St 3258ft2 487.5K 565.0K
2/28/2011 74 Niagara St 2285ft2 338.9K 385.1K

I hope the Ramen Noodles will taste good for the next 20 years.

#76 Tim on 03.18.11 at 2:02 am

Re #37
Hey Garth, is there any way to ban from the site the less intelligent among us who waste our time by posting “first”?

—-
or dips like you who have nothing to contribute?…

Stick with blue chip, dividend paying stocks. Given the tax advantage, a 3.5% dividend is somewhere near the equivalent of 5% interest on a GIC, due to the different tax rates. Stay clear of bonds, if you must own bonds, then buy an index fund and stay short.

#77 SuddenValley on 03.18.11 at 2:14 am

Dear Van City,

Your marketing team has it all wrong. It should be called the “Van City Pop Champagne T-Pain homeowership Program”.

It’s guaranteed to attract the right audience.

#78 Smug-R-Us on 03.18.11 at 2:18 am

#40 Adam in Montreal

I do not believe CMHC would be involved in mortgages of this sort. CMHC comes into play only for mortgages with less than 20% down payment. The Vancity deal, while it may be subject to criticism for other reasons, does not appear to raise CMHC or the taxpayers being on the hook.

I bet Vancity makes a killing off this.

#79 Thetruth on 03.18.11 at 2:20 am

What is and what should happen in Canada are two different things!

Should:

— Income verification via Canada Revenue Agency for mortgage qualification for both self-employed and employed people… no liar loans

— eliminate mortgage amortizations lengths that go beyond age 65! and have a maximum 30 years.

— double or triple property taxes on non-resident or non-citizen homeowners…this would also encourage immigrants to become citizens asap.

Is:

Corruption…Canada is being sold out!

#80 Bailing in BC on 03.18.11 at 2:22 am

Inspired by #37 wb

Hey Garth, is there any way to ban from the site the less intelligent among us who waste our time by posting “Hey Garth, is there any way to ban from the site the less intelligent among us who waste our time by posting “first”?

#20 Roial1 Snafuver! Brilliant ROTFLMFAO!

#81 Gord In Vancouver on 03.18.11 at 2:29 am

Great post, Garth.

It’s called the ‘Springboard Homeownership Program’. If this is you, the bank beckons: “You currently live in non-profit housing and are on a low income with no savings. You are ready to make the commitment to own a home, but need a structured plan to help.”
______________________________________

Pathetic.

Vancity wouldn’t have introduced this gimmick if a market for it didn’t exist. This (and many other factors) confirms Vancouver’s real estate bubble.

#82 Thetruth on 03.18.11 at 2:30 am

Furthermore…

On the second page of the T1 General Tax return, there is a question that asks a person of their RE holdings outside Canada and if they are greater than $100,000.

Many lie on this and nothing is done! Seniors , especially immigrants (because they came from somewhere else so they own RE somewhere else), say no. they don’t declare their income (keep it low) and thus collect tens of thousands in OAS/GIS benefits they are not entitled to.

Where do you think these people go to 5 months during winter if they don’t own RE outside Canada??

Scam/Blind eye by governemnt that costs my Canada Billions in unpaid taxes and paid out benefits!

If this gets posted great. If not, at least Garth has read it!

#83 Bilbo Bloggins on 03.18.11 at 2:34 am

Sounds like an exploitation of the financially uneducated.
Slavery is back! Bow and bend over for your credit union

#84 Cato on 03.18.11 at 2:40 am

Why would the banks & mortgage industry behave any other way? Moral hazard at its finest – losses aren’t going to be the banks problem its going to be the taxpayers problem.

Do you think banks would approve liar loans electronically within seconds with no formal due diligence if they were actually exposed to risk of a loss? They behave this way because they know they have nothing to fear. The specuvestors who gambled big and won over last several years will walk away with their gains. You can thank our easily obfuscated bankruptcy laws for that – majority who didn’t party their winnings away will can hide their gains and walk away from mess they created. But the loss just doesn’t disappear into thin air, its passed from the debtor to society at large. Its society who ends up formally absorbing any widespread loss thanks to a system backed by the taxpayer. At the end of the day who is the real greater fool – the speculator, the bank or is it the rest of us?

What is happening in housing is just a symptom of a much larger keynesian experiment that was doomed to fail but whose failure could always be kicked down the road until now. Most politicians never let a good crisis go to waste so don’t expect big brother to do the right thing. Anyone not drowning in debt should be following the smart money and profit where they can while they can because the mess coming down the pipe will probably shatter alot preconceived notions about what society actually owes any of us.

#85 Steven Rowlandson on 03.18.11 at 2:45 am

The sick puppies that want to keep the real estate market inflated and red hot need to be put out of business Garth. In the name of fiscal sanity if for no other reason .

Steven

#86 early mid life crisis on 03.18.11 at 3:14 am

I remember seeing a global news story on that when it first came out. But Garth- you make it seem so dirty lol

#87 realpaul on 03.18.11 at 3:29 am

‘VanShitty Savings’ has obviously chanelled the spirit of PT Barnum and are now adapting the dead carney’s schtick, ‘theres’ a sucker born every minute’ and the lesser known quote ” it’s immoral to let an honest man keep his money’. Ten years of financial slavery for zero return….nice going VanShitheads…….it really is differant here…….legalized usury ……WOW !!!!!!

The catstrophe in Japan is history ….as far as the markets are concerned. Retail investors are fickle…..and short sighted. The reverse reality of the disaster is that it has been…like the aftermath of world war…a great time to buy. Institutionals got the drift after a couple of days hiding under the desk and are driving up the commodity and infrastructure issues….note the action in the TSX yesterday. Retail investors did the opposite and puked up cheap shares at a loss….ho hum.

#88 Ben on 03.18.11 at 3:31 am

Gangbanksters baby !!

#89 Jeremy on 03.18.11 at 5:03 am

http://calgaryrealestatereview.com/2010/11/24/calgary-house-price-index-september-2010/

#90 March of the Pigs on 03.18.11 at 6:05 am

#10 Peter Pan on 03.17.11 at 10:06 pm

These are the same people who were at the trough begging for money and then a year later walk around as if we’re the dummies… Sometimes a piece of paper from Harvard can actually make you think you are better than everyone else…

#91 Tony on 03.18.11 at 6:06 am

High ratio mortgage plus falling housing prices means instant bankruptcy if they’re smart enough to declare personal bankruptcy. Anyone with money would either pay cash or take out a variable rate mortgage or a loan at prime or prime plus one.

#92 March of the Pigs on 03.18.11 at 6:12 am

too bad they didn’t study physics, for every action there is an equal and opposite reaction.

#93 Ndg on 03.18.11 at 6:38 am

Here in Montreal we this…
They will lend you 10% all you need is $1,000
http://www.shdm.qc.ca/acces_condos/en/programme.php
Oh, and that…
5.5% cash back from National Bank
http://www.promonbc.ca/mortgage/?utm_source=Reseau%2BOlives&utm_medium=cpc&utm_content=Big%2BBox&utm_campaign=RON
Happy Friday!

#94 AxeHead on 03.18.11 at 6:59 am

#15 ‘Best Place on Meth’ – awesome handle dude.

#95 Mortgage girl on 03.18.11 at 7:17 am

I agree with post 20. Noone will qualify. It’s a marketing stunt.

#96 Values on 03.18.11 at 7:30 am

Unbelievably irresponsible lending from a bank.

I guess CHMC will be backing this too for the good of the taxpayers?

#97 greyhairedoldgoat on 03.18.11 at 7:35 am

So….If you can’t pay the mortage during the 10 years, for whatever reason..What are they going to do to you? Take your house? Ruin your credit rating? Sue you? You had nothing to begin with and still don’t.. Just stupid.

#98 dd on 03.18.11 at 7:43 am

Oh look,

Bank of China is lifting reserve requirements for a fifth time this year. Will commodities, gold, silver even notice this time? No. The main driver, the good ol US dolllar is going south.

What was that about in times of trouble people flock to the US safe haven? Could this time be different?

#99 Macrath on 03.18.11 at 7:47 am

Banking vultures feeding on the unemployed carcase of the citizenry. The icing on the cake !

G7 gang up to burn the shorts so forget about hedging your portfolio, they just want to make sure we are totally vulnerable when they harvest the remains of our savings. That sucker bullion is looking shinier buy the day. The problem is you can`t bury it in the basement of a rental.

#100 Jas Girn on 03.18.11 at 8:06 am

Garth, do not delete the people who post “first.” They entertain me and they are just excited to be first. That means they are eager to read your blog. You should be flattered. Lol.

Btw, when a society becomes too smart, they think that whatever they do is right. This housing scheme will not turn out good. Canadians have become so short-sighted that they will not be ready when shtf. Folks, more inflation is coming. So learn sustainability and stock up on food and supplies. It’s better to be prepared than to be sorry.

#101 David B on 03.18.11 at 8:16 am

I would mow appear money is nothing! Yes homes in Canada will continue to rise …. so will the stock market … why because the fall in Japan was stopped by the G-7 going to printing presses and giving them cash …. as they not what they did for Wall Street and the big auto makers? So the beat goes on. Print money let the little fish fry and the fat cats get fatter …. Sadly, very sadly the futures market see’s growth in the Japan disaster … not to mention political hay for buying more super aircraft to enforce fly zones .. even aircraft that could not even fly there due to small fuel tanks and only one unproven engine! ….. oh what a sad world we now live in eh.

#102 shanks on 03.18.11 at 8:21 am

sounds like short term gain for long term pain… I think i heard somewhere that this is going to end badly.

#103 Moneta on 03.18.11 at 8:25 am

Best place on meth on 03.17.11 at 10:16 pm
This is why the CMHC needs to be wound down and private insurers take over
———
Actually, CMHC took these risks because it was forced into competing and acting like a private firm.

Not sure this type of insurance would do too well without government intervention. It’s like the airline and telecom industries. The smaller firms are parasites living off the host. Could the smaller carriers survive if Air Canada was not forced to offer many low traffic routes or BCE was not responsible for supporting the infrastructure?

#104 Moneta on 03.18.11 at 8:36 am

Why are we even talking about this when Japan is maybe 48 hours from a nuclear event bigger than Chernobyl and the UN just authorized the escalation of WWIII in the Middle East?
———-
Well the market went up yesterday and the news is getting old. It’s already getting harder to follow the situation in Japan.

In the meantime, I hope I don’t hit a pothole because I might not be able to drive my car for a few years if they run out of parts within the next couple of months.

You’ve got to love our just-in-time production concentrated in Asia. Maybe they should grow our food too, and manage our army so we can just relax in Florida, sipping Margaritas collecting dividends on our Emerging market shares. LOL!

#105 Oasis on 03.18.11 at 8:40 am

#62 dd on 03.18.11 at 7:43 am

dd, what’s amazing is that anyone looking at a chart of the USDX, can honestly say they are a bull on the dollar. they are either liars or clueless. (http://charts.insidestocks.com/chart.asp?sym=DXM1&data=A&jav=adv&vol=Y&divd=Y&evnt=adv&grid=Y&code=BSTK&org=stk&fix=)

the dollar is now on a path to accelerated losses. the USDX will see new lows BELOW 70 on the index this year. and eventually, below 60.

print print print. can anyone else hear the presses??

look at the explosion in monetary base (http://www.investmenttools.com/thefed/federal_reserve_monetary_base.htm) and M1 (http://www.investmenttools.com/thefed/us_m1.htm)

producer price skyrocketing again (http://www.investmenttools.com/thestate/ppi__pruducer_price_index.htm)

consumer prices now HIGHER THAN 2008 (http://www.investmenttools.com/thestate/cpi__consumer_price_index.htm)

#106 theletterM on 03.18.11 at 8:51 am

(Desperation + Emotions + Ignorance) x Greed = FAIL³

#107 Moneta on 03.18.11 at 8:58 am

What is happening in housing is just a symptom of a much larger keynesian experiment that was doomed to fail but whose failure could always be kicked down the road until now
———–
The credit crisis started a long time ago when we were still in caves. It’s the natural evolution of man.

Let’s go back to the Thatcher era where she privatized national assets. Canada, being stuck between a rock and a hard place in the early 90s, was also forced down this path.

Canadians want to be rich like the top 10% of Americans but also want to hold onto their social net. All they see is the US perpetually cutting taxes and want the same in Canada. This forces our government to sell us the idea of running departments as economic entities. The problem is that many departments will never be profit centers but are being forced to operate as such.

CMHC is one of those. It has been forced to think in terms of growth and protect its market share when growth should have never been part of the equation.

And the more Canadians stay attached to their social net plus want tax cuts, the worse it will become. These contradictions force our governments to lie to us.

#108 realpaul on 03.18.11 at 9:23 am

Olympoo Village (M)owners sue ‘because they were lied to’ Bwahahahahahahahahahaha. Reports were coming out during the construction phase was the norm. Water was everywhere…parking flooded…walls ripped open……windows wouldn’t seal……..But I like this…in the Million Dollar units ‘the master bedrooms are so small that the door hits the bed when opened’ Bwahahahahahahahahahaha….. this one is your fault homoaner. Paying 1.3 million for that piece of crap was a decision based on greed and stupid greed…mixed with dim sum ga ga and just plain being stupid.

See……I’ve said it before…people who don’t earn their own money are exceptionally stupid ‘investors’. If you had to fight for every dime you wouldn’t have made such a stupid decision in the first place. Bwahahahahahahahahahahahahaha !!!!!!!

A million bucks and no insuite laundry….or dishwasher……..nice pick ….. bonehead. bwahahahahahahahahahaha …how stupid can you get????????

#109 Finanzkrise on 03.18.11 at 9:24 am

Vancity also ranks among the 10 largest banks by assets in Canada (I think it was around 8th or 9th), yet deposits are not CDIC insured. Rather, the province of BC is offering ‘unlimited’ deposit insurance. So where are the reserves for that one? Surely coverage of potential losses from one of the most exposed financial institutions in one of the world’s frothiest real estate bubble markets is not something the province has the resources for? And why would the feds bail out a regional credit union beyond the CMHC insured portion of that risky debt? What about the rest of the (non CMHC covered) residential as well as the commercial real estate which will need to be marked down? Yes the big 5 banks have exposure here too though they are more diversified and in very pessimistic scenarios the feds would put significant resources forward to prevent a failure in that group.

#110 WINNIPEGER on 03.18.11 at 9:28 am

KINGBUBBLES- where did you get the stats? Can you provide a link…thx

#111 allister on 03.18.11 at 9:32 am

Two things

1. get your savings out of that place if you have a deposit there.

2. Did Washington Mutual exectutives relocate to VanCity?

#112 Another Albertan on 03.18.11 at 9:44 am

#67/nonplused:

It doesn’t work exactly like that. In the event of a cascaded series of events on the transmission grid, the tributary feeders that service lower voltage substations and customers are part of a remedial action scheme. The breakers are armed to trip those customers offline.

Substations have battery banks to operate SCADA and breakers while the high-side service is gone. While it make take a while for individual events to ring out (weather, etc), station service is the first thing to be restored. That is power to plants and substations. Customers may be wholly offline, but producers and infrastructure will be off their backup systems in short order, probably a couple of hours at worst.

Blackouts are really customer events from this perspective. Customers are kept offline until such a time that the infrastructure is stabilized and can ramp up on generation.

I’d also suggest that the backup diesel units would have well over 24 hours of fuel on site. Preferential supply contracts would likely trigger and tankers would start rolling shortly afterward. Yes, that privilege is baked into the operational costs.

If you google around, you can find the blackstart schemes for Alberta using Bighorn and Brazeau hydro facilities as well as the 500kV 1201L line to BC. The documents will explain the order of operations and which facilities get brought up in which order.

Distributed generation still requires transmission lines in order to create reinforcement and to bolster overall system stability. Stable systems require both.

Everyone else’s mileage may vary.

#113 The American on 03.18.11 at 9:45 am

At #10: Peter Pan, this is how it will end… I worked for WaMu, the world’s largest thrift based in Seattle, at the time it imploded. I even approached executive management and explained to them what they were doing made no sense whatsoever. I even said it felt like a “ponzi” scheme on some levels. I was told to “keep [my] head down and just do [my] job.” I know without question that THEY know what they were doing is absolutely deplorable behavior and illegal. I lost nearly $800,000 in granted company stock due to this Thrift’s collapse. So, apart from my portfolio and 401K and hard-assets and savings, I now get to start all over again at the ripe age of 35 (well, almost).

Well, today there is justice for those sons of bitches, including Kerry Killinger, Steve Rotella, and Dave Schneider (he’s a real prick with the personality of a deflating douche bag), and I want my money back.

http://www.nytimes.com/2011/03/18/business/18bank.html

This is tremendous news, and FINALLY someone may have to suffer some embarrassment and pay up.

The similarities between Canada and the U.S. are almost downright creepy. Because I’ve been inside banking within Global Treasury divisions for over 15 years (yes, I worked at one while putting myself through college), I can honestly attest that the banks are BY FAR more responsible for this mess than any real estate “professional” – the RE folk would be rendered powerless in their propaganda without cheap money provided to the masses, and lenders know this. The more creative the banks/credit unions become with lending programs, the nearer the real estate collapse is at hand.

So, with that all said, can someone PLEASE EXPLAIN to me why Canada has followed the U.S.’s footsteps VERBATIM, 5 years after witnessing a U.S. housing collapse and the damage it brings to one’s economy? Also, can someone explain to me WHY many would feel it is honestly different there? No, seriously, WHY?

#114 Willa on 03.18.11 at 9:48 am

Why do we even have the CMHC? Where did the idea come from that the government and people should be on the hook for loans made by banks? I know this is /was supposed to protect banks from failure. But if they’re just deferring the costs of failure to the government, people and home buyers, and if they’re not taking the responsibility to be prudent and risk-averse, then what’s the point? That’s not stability.

#115 TS on 03.18.11 at 10:10 am

I guess when homeownership is now around 72% that programs like this were bound to spring up.
The ‘Springboard Homeownership Program’ has no ownership by the purchaser in it. More like a rent to own program.Another way to move vacant inventory. I said to myself someone of influence on the Board must be personally involved in the real estate development game. They seem to be a well meaning socially responsible bunch on the Board.
So my guess is that Bob Williams and Van City has an affiliation to a project or two that are going south.
https://www.vancity.com/AboutUs/OurBusiness/Governance/BoardofDirectors/CurrentBoard/BobWilliams/

#116 realpaul on 03.18.11 at 10:11 am

Even more reckless stupidity is Canadas adding billion more in debt onto the backs f taxpayers by shorting the $C to buy YEN at a loss. This interventionist strategy HAS NEVER WORKED……..EVER.

http://www.financialpost.com/news/Canada+joins+drive/4463369/story.html

A freaking disaster for CDN taxpayers.

#117 The American on 03.18.11 at 10:16 am

AT #47: April, you stated, “Garth, although the Canadian housing correction has begun are these schemes [VanCity] going to slow it down?”

April, I sincerely doubt it will slow anything down (much like trying to redirect the Titanic). Oh, they’ll capture a few more fools, but it won’t be enough to stop any correction.

I find the time/space continuum to be somewhat different between Canadians and Americans. The “correction” that took place in Canada in 2008 was no kind of a correction at all, and it lasted a whopping 45 days. WHEW! STOP THE CAR! LOL The correction lasted until the Bank of Canada announced “emergency rates,” which only screwed Canadians even more, its just that people really don’t understand that part… yet! No, we are talking about a very real, very serious correction. These do NOT happen overnight or in as little as a handful of months. The end results are horrific, and EVERYONE, rich and poor, will be adversely affected. Habits change immensely and a lot of reality checks come into fruition, creating pain and strain on families and singles alike.

What we’re talking about here is a REAL correction that will last seemingly for forever – as in YEARS, much like it has been in the U.S. This will not happen and be over in a couple of years. Noticeable evidence (not some statistical report, but truly noticeable) of the correction will begin between late July to early October this year, depending on your market. Vancouver will be in the latter. This is when the realturds come out in full-force with Polly Anna, cherry-picked data to support a “rebound” as ridiculous as it may seem. They’ll capture a few more idiot buyers, but it won’t be enough to stop the melt, though.

Watching the commentary, particularly from realturds in Vancouver, is like watching a movie all over again from what I witnessed here in Seattle only three years ago. Seattle began its correction at that time. When you’ve seen a movie before, its very easy to call out the next scene.

Today, the realturds in Canada are coming out more often to ease public awareness of a forthcoming collapse. This mens four to six months from now you will be able to witness with your own two eyes the TRUTH of the matter instead of listening to some b.s. report your local realturd hands you.

#118 TS on 03.18.11 at 10:16 am

To #84 Cato on 03.18.11 at 2:40 am
Funny you should mention this.
You can thank our easily obfuscated bankruptcy laws for that – majority who didn’t party their winnings away will can hide their gains and walk away from mess they created.
The Office of the Superintendent of Bankruptcy Canada statistics are in for December.
I note one interesting comment from the report below.
The proportion of proposals in consumer insolvencies increased to 31.3 percent during the 12-month period ending December 31, 2010, up from 21.6 percent during the 12-month period ending September 30, 2009. This increase may be an indication that consumers are taking advantage of changes to the Bankruptcy and Insolvency Act. The changes, implemented on September 18, 2009, allow consumers more flexibility in filing proposals.
http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br02560.html

#119 smw on 03.18.11 at 10:25 am

#33 TaxHaven on 03.17.11 at 11:00 pm

http://www.theglobeandmail.com/report-on-business/top-business-stories/canadian-food-prices-to-rise-by-up-to-8-td-warns/article1947020/

BINGO!

#120 canali on 03.18.11 at 10:26 am

i sent this site/critique to vancity’s feedback link
attention to a VP of product development/mortgages (etc) as below….will be interesting to see if they come on here and reply.
Mail: Vancity
PO Box 2120
Station Terminal
Vancouver, BC V6B 5R8
Phone: 604-877-7000 or 1-888-Vancity (826-2489)
Fax: 604-871-5406
E-mail: [email protected]
Online comment card: http://www.vancity.com/feedback

#121 Jas Girn on 03.18.11 at 10:32 am

Nostradamus Le Mad Vlad and Soylent Green is People, I apologize to you guys for writing that you should be banned. A lot of the stuff you write are very good. Just make it short and sweet though. Thanks.

#122 canali on 03.18.11 at 10:32 am

Problem, IMO, Garth, why a correction is taking longer here, is when you get recent ratings (economist?) but of course quality of living doesn’t obviously take into account being able to AFFORD a place…but regardless this sort of ‘award’ just keeps on driving up this area’s prices…or at least sustains the madness…or at least slows down the ‘sinking’

http://en.wikipedia.org/wiki/World's_most_livable_cities

#123 ash on 03.18.11 at 10:42 am

#13 Dodged-A-Bullit-in Alberta
Perhaps other bloggers could do the same!!!
*****************************************
I agree, I also sent them an e-mail to tell them they should be ashamed of themselves.

#43 S.B. Turn off your tee-vee and THINK
**************************************
I agree 100%!!

It’s going to be interesting what will happen with the world in the next bit, the lid is being blown off the pot….
It needs to happen though, we are way to destructive to this earth, ourselves, our fellow humans. Sadly the pattern for humans seems to be ignore things until it gets so bad that were forced to open our eyes, and by that time its usually too late. I think things need to happen though as we are destroying this earth so that we can have materialistic things, we are killing ecosystems, animals, ourselves, tribes, communities etc. So sad….

#124 ash on 03.18.11 at 10:45 am

#100 Jas Girn
So learn sustainability and stock up on food and supplies. It’s better to be prepared than to be sorry.
*******************************************

Wise words! :)

#125 Adventures in Sea-Tac with Moneta on 03.18.11 at 10:51 am

42 Devore – you’re not self-employed are you? I always had a hassle with the bank and my income. They even admitted it was a hassle, as they knew the game the
accountants play to minimize taxable income. Now I dont
care, the bank comes to me.

#126 Atb on 03.18.11 at 10:56 am

I would venture to guess that CHMC is probably insuring these loans. I would find it difficult to believe that any institution or individual would willingly act in such an irresponsible manner, unless they’ve figured out a way to dump the risk onto someone else’s balance sheet. In the US the banksters thought that the securitzation market was the way to dump the garbage they’d originate to dumb/greedy investors, in Canada the answer is called CHMC. In my purview Canada makes the US look like a beacon of high ethical standards, at least there the risk was being recycled within the private sector, in Canada you don’t even pretend to do that, you just dump it onto the taxpayer from day 1! No offense, but your country and institutional system is a complete joke. Were it not for the vast mineral resources that the country has, you would hardly be noticed in the world map.

#127 reality guy on 03.18.11 at 11:09 am

I like what Vancity is doing.

Getting into the game and making money

“NO RISK TO THEM”

Get rid of CMHC and you get rid of these silly loans.

Look the US is going to get rid of Fanny and Freddy. Because it dumb

#128 David on 03.18.11 at 11:18 am

#13- Dodged…..I don’t agree with the crux of the message of your e-mail. IMO, it should go:

VanCity: Good luck with your new mortgage program. But when the SHTF, don’t dare look for a bailout or sympathy from taxpayers…..just take your lumps and march into the garbage pile of failed banks (please say hi to the Anglo Irish folks).

In in the meantime, keep paying those bonuses to your senior “executives”…..it’s always the best part of the story to see those guys’ houses, sports cars and Caymen properties on the evening newscasts afterwards.

#129 Donn on 03.18.11 at 11:19 am

Garth, thanks for your blog. Looking forward to your teased post on GIC beating low-risk investment. This Vancity program is the crowning achievement in stupidity, the CMHC should not be involved in this or any similar programs. Anybody thinks it can’t happen here, I would be happy to take 20% less for our house in Windsor then its 2006 value……

#130 reality guy on 03.18.11 at 11:20 am

Ahh another nice Stock Rally, time to make some quick profits to take a more defensive position and wait for the next spike.

Too Bad the people in with huge mortgages are paying their money to their “MASTERS” (the banks) for the rest of their 3 or four lifetimes. Can’t make real money. Especially when the Expert are all saying real estate will go sideways with a good chance of a correction in the nearby future.

The difference between rentings and paying a mortages is you can boss the land lord, but you can’t boss the banks (they will kick the crap out of you).

#131 45north on 03.18.11 at 11:23 am

Utopia: Unfortunately there will be more than a few failures amongst Credit Unions across this country on the tail of a major housing correction.

so I looked up Alterna bank:
http://mcaf.ee/128e3
which is not much information

Utopia what do you think about the Alterna Bank?

Nonplused: The real reason the US and the Soviet Union went to civilian nuclear power was not because it was economic

yeah I think that’s a big part of it. So I have been reading about Liquid Floride Thorium Reactors (no really I have). Seems like a better solution.

Cato: What is happening in housing is just a symptom of a much larger keynesian experiment that was doomed to fail but whose failure could always be kicked down the road until now.

you’re describing most of the Federal Civil Service

GreyHairedOldGoat: .If you can’t pay the mortgage what are they going to do to you? Take your house? Ruin your credit rating?

all of the above plus, on a random basis they will let you stay in the house without making mortgage payments. The Government will promise to help but not.

my plan is to pay everyone who is foreclosed $1000/month provided that the bank forecloses. Oh and also CMHC pays the bank for its loses provided the bank forecloses.

#132 Alex on 03.18.11 at 11:31 am

#133 The American: Greed. Short-term greed. Never underestimate its power.

#133 Macrath on 03.18.11 at 11:33 am

E-mail: [email protected]

Dear VanCity:
Would you lend me 300k to buy a 40k power of sale in Windsor Ontario. I need the extra cash for granite and stainless.

Sincerely,
selfunemployed

#134 Diffrent on 03.18.11 at 11:34 am

All right. All together again folks, this time with feeling:

“This will not end well!”

Now that that’s out of the way, let’s ask the heretical question: WHEN will it end? This is where things get misty…

Unlike the States, Canada doesn’t have a bunch of mortgages designed to reset at stupid rates after five years. Rates here are tied to the overnight lending rate, which doesn’t seem set to go anywhere fast, so don’t look for the trigger there.

So what else? Buyer fatigue? Changing sentiment? Hasn’t happened yet. Believe me, I want the madness to end as much as anyone but this bubble is looking more like the Stay-puft Marshmallow Man than the Hindenburg. So where are the Ghostbusters? Nowhere in sight…

Alas, this temple of Contrarian thought is looking rather shabby. Where hopeful ones once came to find solace and share reason, vandals now squat and write “first” with the shit from their brains, while ancient devotees and neophytes console themselves with moralizing rather than arguments.

Garth, I have no doubt you will be proven right one day, and I do appreciate you keeping the flame alive; I just hope we all live to see the day of fiscal reckoning.

#135 Smug-R-Us on 03.18.11 at 12:06 pm

I am still confused as to why some of you folks think CMHC is involved with these loans? This is all on Vancity’s dime – their profit if it turns out well, their loss if it turns out badly. None of you will have to budge from your basements to pony up any sort of relief here.

And the comments about a financial institution acting greedy? Last time I looked, financial institutions like banks and credit unions are not charitable institutions, nor are they your uncle Leo trying to give you a hand up. They are, and properly should be, oriented toward maximizing profits.

#136 panopticon singularity on 03.18.11 at 12:11 pm

“Hey Garth, is there any way to ban from the site the less intelligent among us who waste our time by posting “first”?”

Agreed, every time i come on here i think i accidentally am on a gaming forum for kids with all the “WoOT! FiRsT PoSt” comments.

#137 Kitchener1 on 03.18.11 at 12:25 pm

#82 the truth

You have to realize that 100k CAN is a lot of money in terms of RE in many parts of the world. The average house in US is something like 150k CAN and thats the US.

I dont understand the ramifications, what if seniors own property elsewhere?? its a dumb move for them because it will probley cost them maintence/property tax etc.. for 12 months when they only live there for 5 months.

In my opinon, someone on pension or fixed income would be much better off renting anywhere if they only plan on living there for 5 months.

Seriously, im in my early 30’s and wouldnt buy a property if I only used it for 5-6 months a year– that would make no sense for me, how would it make sense for someone on fixed income???

Why would the govt care? Canadians are not taxes on forign income anyway if they live in that country full time, unlike the US were citizens are taxed on entire income regardless of were they live.

#138 bridgepigeon on 03.18.11 at 12:26 pm

Nonplused : correct
Nostradamus:
600 000 spent fuel rods in danger equals what?
Obviously downplaying this is essential for governments, but what do we do when it blows over here? Precautions?

#139 LML Boat Person on 03.18.11 at 12:29 pm

I used to think that this RE bubble would only burst when interest rates started to rise. I don’t think that anymore.

The RE pumpers and the CMHC have fished so far down the food chain that even eggs and minnows are now the catch-of-the-day. Nobody and nothing left.

The tulip bulb mania didn’t end because of an increase in interest rates. It ended because someone decided that the tulips weren’t worth it. And others followed that sentiment.

Out here on Van Isle large #’s of houses are starting to go up for sale. The ones that haven’t sold yet are covered with “Price Reduced” stickers. Interest rates haven’t jumped (yet) and the 5-35 is yet to expire.

Stick a fork in it. This this is done.

#140 CalgaryRocks on 03.18.11 at 12:42 pm

#114 Willa on 03.18.11 at 9:48 am
Why do we even have the CMHC? Where did the idea come from that the government and people should be on the hook for loans made by banks? I know this is /was supposed to protect banks from failure.

The CMHC has produced BILLIONS in profits for the government. Unfortunately, since everything that the government runs turns into a ponzi scheme sooner or later, these BILLIONS were sent into general revenues, never to be seen or heard of again.

So now, the CMHC doesn’t have this money to cover potential failures, therefore the tax payer is on the hook.

The same happened to EI premiums. Canadians over contributed 51 BILLION since the late 90s and now that this money is needed, it isn’t there. EI premiums are actually rising. Can you freaking believe these people.

Do I need to mention this all happened when the Liberals were in power?

#141 Jeannie on 03.18.11 at 12:50 pm

Garth has really stirred up a hornets nest with todays message. The anger, disgust, and frustration here is palpable.
#67.Nonplused, your usual voice of reason puts things into perspective, I was thinking along the same lines.

The stoicism of the Japanese people, the N.Z’s, the Aussies is admirable, and the courage of the Libyan ‘rebels’ is heroic.
And although this is ‘just’ a Real Estate blog, hopefully the knowledge offered, and shared, will help to effect intelligent decisions in our day to day lives.

Thanks to all of you for sharing your opinions….. except for the asinine blogger who wants to be first, grrrr.

#142 Devore on 03.18.11 at 12:53 pm

#125 Adventures in Sea-Tac with Moneta

It’s the complete lack of verification I was commenting on. This is carte blanche for money laundering through real estate.

#143 Devore on 03.18.11 at 12:54 pm

#125 Adventures in Sea-Tac with Moneta

Just because due diligence is a “hassle”, does not mean you dispense with it.

#144 Al on 03.18.11 at 12:58 pm

It’s different here as we have the Chinese buying as well as a commodity based economy.

#145 Daisy Mae on 03.18.11 at 1:09 pm

“Oh, there is one reason it’s different here.

Our bankers saw the US collapse. We know better. We just don’t care.”

Yes….it’s very sad, actually.

#146 BigAl (Original) on 03.18.11 at 1:11 pm

#10 Peter Pan on 03.17.11 at 10:06
“…How can the management of any financial institution think it’s a good idea to lend money to someone who has no skin in the game? It’s like the executive suites of these institutions have been taken over by zombies.”

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

Because this era is the end of criticism. We live in an era where only positivity is allowed.

I can guarantee how this went down in the boardrooms of VanCity. All talk of this was probably cloaked with todays office-speak of phony posititivity. The probably used phrases like
“we believe that all key stakeholders within this sector may significantly benefit from positive supports with the introduction of those previously marginalized by often-times overly arbitrary barriers to entry”. In such a meeting, if you’re the one who points out anything to the contrary, you’ll probably be labeled the “negative ninny” in the office, and most likely be pushed out.

This business culture is now the norm, not the exception. Young, high-risk, group-think race to the bottom.

#147 Patrick on 03.18.11 at 1:30 pm

Anyone else read the Economist’s special report on property the other week? Contained an interesting piece on the boom in “international buyers”. Funny — it covers other places in the world, but there’s no mention of Vancouver or condos in Toronto whatsoever. Seems like the things that we’re told make us “different” are happening elsewhere, too. Of course, the Canadian news media lost the will to dig deeper, long ago.

http://www.economist.com/node/18250421

#148 45north on 03.18.11 at 1:33 pm

Diffrent: Unlike the States, Canada doesn’t have a bunch of mortgages designed to reset at stupid rates after five years.

well Canada does have a bunch of mortgages that do reset after five years. that’s for sure

the rates at which they reset will be higher although that is not explicitly stated

#149 Mr.Plow on 03.18.11 at 1:47 pm

#108 realpaul

That was what I was thinking when I read the article.

The developer would not have had to do much to avert a lawsuit, but it reeks of buyers remorse. They were waiting for anything they could to sue over to get out of their awful decisions.

#150 Mr.Plow on 03.18.11 at 1:49 pm

Garth…

Don’t take this the wrong way, but do a lot of your posts center around Vancouver and TO because they are the ones in the deepest sh*t?

Meaning, writing about how deep they are in because the “correction” is going to be more focused in these areas than other parts of the country. Not to say other cities will be immune, just less exposed.

#151 Marc on 03.18.11 at 1:50 pm

I am not up to speed on non profit rent rates, but what can one find for $1500 p/m in non profit housing? What is considered to be low income? Surely if someone is paying $1500 p/m for their shelter, they must be making at least 18K per year and walking to work and eating out of dumpsters to have not missed or been late on a rental payment.

#152 Mr.Plow on 03.18.11 at 1:52 pm

#114 Willa

The point is to provide some control over the banks for high risk loans (high ratio, same dif). The bank needs it CMHC (or Genworth) approved before they can issue a mortgage to a person.

Meaning CMHC is supposed to keep them in check from poor lending.

If they aren’t doing that or are helping it along then it is all for nothing. I guess time will tell.

#153 Mr.Plow on 03.18.11 at 1:55 pm

#130 reality guy

How do you boss a landlord exactly?

Maybe a landlord who needs you, but any tenant of mine that tried to go outside of our agreement or act like an ass I would kick them out in a second.

I guess that’s why I have had tenants for the last 6 years, never paying a rent increase or decrease. An equal and fair relationship.

#154 Mister Obvious on 03.18.11 at 1:57 pm

#146 Big Al (original)

You response to #10 (Peter Pan) is absolutely dead-on correct. It’s exactly how I see today’s world and I couldn’t have said it better myself. Hat’s off to you, sir.

“The End of Criticism” I really like that… maybe there’s a book in there somewhere. (A few articles thusly named exist on the net).

Perhaps this blog is one of the last bastions of good old fashioned critique.

#155 martin on 03.18.11 at 2:07 pm

I dont know what you guys are talking about but my cousin just sold hic 600 ft condo in young and eglinton toronto for 365k which he bought in 2005 for 196k. real estate aint going down anytime soon. just facts speak louder then statistiks. martin

#156 VanCity Girl on 03.18.11 at 2:11 pm

Here’s an interesting piece of info… I was talking to a friend who has some local high up banker friends in Vancouver. They told him that the demand for credit has dried right up. All the money buying houses is coming from off shore funds. He said that even canadians are no longer seeking to purchase as prices are so out if whack.

These are cold hard facts coming from bankers who lend money. THERE IS NO DEMAND FOR CREDIT. Everyone is head over heels in debt. Wake up Vancouver. We’re gonna get f*#%ed. It’s going to get very ugly here.

#157 jess on 03.18.11 at 2:27 pm

36 Industrial Guy
…outrageous!
and who ends up paying for the fraud?
carbon carousel fraud

money-laundering following an investigation into a multimillion-pound scam involving carbon emissions permits.

Italian minister fears feed-in tariff fraud
February 4, 2011 | By sunfeed | In solar
A sudden rise in the number of solar power installations in Italy is being investigated by the government over fears of feed-in tariff (FiT) fraud, according to Industry Minister Paolo Romani.

http://www.guardian.co.uk/commentisfree/2010/mar/01/solar-panel-feed-in-tariff

Are we really going to let ourselves be duped into this solar …1 Mar 2010 … George Monbiot: Plans for the grid feed-in tariff suggest we live in … the perfect carousel fraud, bypassing their solar panels by …
http://www.guardian.co.uk/commentisfree/2010/…/solar-panel-feed-in-tariff – Cached

==========
Authorities in Spain have launched an investigation into solar energy installations that have been selling electricity apparently generated at night.

The Spanish government called on the National Energy Commission (CNE) to look into the matter after a newspaper investigation discovered irregularities in the times at which solar energy was being generated.

Spanish newspaper El Mundo found that between November and January, 4500 megawatt hours (MWh) of solar energy were sold to the electricity grid between midnight and seven in the morning.

It has been suggested that some plants in the regions of Castilla-La-Mancha, Canarias and Andalucía have been using diesel generators connected to their solar panel arrays to illegally benefit from government subsidies.

#158 betamax on 03.18.11 at 2:35 pm

#54 Pd: “The trend of readers racing to post a comment about being “first” needs to stop. It is childish, no longer funny and a waste of everyone’s time. Garth, please stop publishing such posts and spare us.”

Well said.

#159 Sam Tinbecker on 03.18.11 at 2:38 pm

Great article about return to 30 year mortgages and why our house prices are so high. Well ,exactly what Garth has been saying.

http://blog.canadian-dream-free-at-45.com/2011/01/19/30-year-mortgages-and-undoing-the-past/

#160 pbrasseur on 03.18.11 at 2:43 pm

These easy credit scams are pretty amazing. Also they are immoral and wrong.
But in fact there is one thing that is “different here”: Access to credit.
This is what collapsed in the US and then the real estate market followed.
In Canada we have a different situation because the CMHC, that is the federal government and its ability to print money, backs credit directly.
Now that does not mean the credit binge can go on forever, just that a US style financial crisis is unlikely because it is unlikely that credit will freeze suddenly. It also mean that credit could remain available still for a long time and therefore this bubble could go on yet for quite a while.
Garth is telling us this is it, the market has already shifted, I say not so fast, although I do agree this market is ultimately unsustainable, the market has not tanked yet and as long credit is available and as long people believe in real estate you could be surprised…
Either way the more this credit binge continues the worse the consequences will be for the Canadian economy as a whole.

#161 bigrider on 03.18.11 at 2:45 pm

Boy everybody needs to read today’s breakfast with David Rosenberg. Bottom of third page paraphrasing ‘ in my 30 years of forcasting I have never seen a more compelling case for investing in Canada… Cdn dollar to appreciate by 20% against U.S dollar..debt to GDP light years away from U.S ..unemployment two full percentage points lower..net exporter of precious oil U.S net importer”..he goes on and on.

He has definitely changed his tune from 6 months ago when he called the Canadian RE market 15 to 35% over valued.

He is not talking about real estate. You are mixing houses and equities. — Garth

#162 Dave in Victoria on 03.18.11 at 2:45 pm

#44 Otto Doppelganger on 03.17.11 at 11:30 pm
Vancity had a similar product a few years ago where you shared a mortgage with 3-4 of your closest friends…just googled it, called the “Mixer Mortgage” – yeah, the legal snafus between friends and family wouldn’t be difficult to untangle…not at all.

…………..

I actually think you’re off base with this one. The two products bear little to no resemblance to one another. I personally think that shared mortgages between family is a smart idea, given that you’re buying into a well priced market.

The concept of living with extended family or living in something other than 2000 square feet of wasted space is foreign to most fat North Americans, who are accustomed to excess and waste.

The list of benefits to having multiple generations living under one roof is long, and is rooted in the traditions of many more advanced and time-tested cultures. Spoiled fat North Americans have troubles understanding any concept that involves common or cooperative enterprise.

As for legal entanglements, well, that’s why you draw up some legal agreements, and sort things out as best you can before you go into it. Lawyers will gladly assist you with this, for a ‘small’ fee.

#163 BC Bring Cash on 03.18.11 at 2:48 pm

just when we all think the ponzi scheme is running out of recruits. Whats next? Maybe Vancity will let the scrap metal recyclers (dumpster divers) use their empties as payment that way they don’t have to haul them to recycle depot. Oh yeah they can claim a limitless income from their recycling business to qualify for a monster mortgage far greater than $300,000.

#164 jess on 03.18.11 at 2:55 pm

chinese reverse mergers?

http://sharesleuth.com/investigations/2011/01/you-wont-find-s-paul/#more

1 in 10 reverse mergers of Chinese firms on US stock exchanges “fraudulent”
From Offshore Alert:

March 17, 2011 – At least 10% of Chinese companies that have gone public on stock exchanges in the United States are engaged in fraud. The deals often involve establishing offshore holding companies in the British Virgin Islands, Cayman Islands, Samoa or another offshore jurisdiction in order to conceal illegal conduct. The startling claim, following extensive research, was made to OffshoreAlert by Sharesleuth.com, an investigative news web-site.

#165 Roial1 on 03.18.11 at 3:07 pm

#63 pablo on 03.18.11 at 12:58 am

But on the bright side; what will radiation do to the t.h.c content in the bud crop next year?

I don’t know about the THC but the radiation should mean that you just have to wave it in the air to light it up????

#166 Dodged-A-Bullit-in Alberta on 03.18.11 at 3:19 pm

Greetings: #128-[David]

Did you send that message to Van City?? Do it!!!! Link below:

[email protected]

#167 Roial1 on 03.18.11 at 3:23 pm

#80 Bailing in BC on 03.18.11 at 2:22 am

#20 Roial1 Snafuver! Brilliant ROTFLMFAO!

I’d love to take the credit for this name but in truth I can not.
The Vancouver Sun had a cartoonist w-a-y back in the 60’s who, as I recall, started to call the city that.

His name was Len Norris. I stopped buying the Sun when he retired. He was the best and NO topic of local interest was a “sacred cow”.

#168 Vancouver_Bear on 03.18.11 at 3:42 pm

I like this part…..it was never tried before…..and it’s not called subprime. Part about foreclosure is the sweetest. Bring it on! Let the sheeple to suffer, so I can pickup that house for 25% of the price they paid!

“This is the first time any financial institution in Canada has offered such a mortgage so we’re assuming a lot of risk. Therefore, you are NOT allowed to miss, postpone or make a late payment. If you do, we’ll start the foreclosure process as quickly as possible……..

#169 Nostradamus Le Mad Vlad on 03.18.11 at 3:46 pm

#138 bridgepigeon — “Obviously downplaying this is essential for governments, but what do we do when it blows over here? Precautions?”

Not much that anyone or any govts. can do. Precautions? Unfortunately, no one can prevent anything major from happening. If we were able to, most of us would live to be 150 or so, CC and nuke power would not be an issue, there would be few, if any wars and peace would reign supreme.

This planet was designed to be a violent, warring and changing world, and constant change (evolution) is one of the things we have to live with, whether we like it or not.

#157 jess — “and who ends up paying for the fraud?”

Taxpayers, that’s who via an unnecessary carbon tax, which is only going to make the wealthy wealthier.

#170 Roial1 on 03.18.11 at 3:47 pm

#113 The American on 03.18.11 at 9:45 am

So, with that all said, can someone PLEASE EXPLAIN to me why Canada has followed the U.S.’s footsteps VERBATIM, 5 years after witnessing a U.S. housing collapse and the damage it brings to one’s economy? Also, can someone explain to me WHY many would feel it is honestly different there? No, seriously, WHY?

Yes, I think I can.
Steve said that “You won’t recognize this country when I am done”

His supporters just did not realise That he ment to destroy it. (The country, the middle class and medicare) And he has accomplished his mission.

#171 Vancouver_Bear on 03.18.11 at 3:48 pm

#156 VanCity Girl on 03.18.11 at 2:11 pm

I can confrim that creadit is dead….from all my credit card companies, and including my bank where I have credit line I got letters with low interest offers ranging from 0-3% for 12-24 months….that is just hilarous. They want me to go into the debt trap at any price.

#172 Vancouver_Bear on 03.18.11 at 3:51 pm

#153 Mr.Plow on 03.18.11 at 1:55 pm

Are you even in Canada? Read the tenancy act….tenants have way more rights then slumlords…..Try to kick me out and you will end up paying huge penalties, giving me a free month of rent and pay my moving expenses…..Jst try.

#173 Prof ANON on 03.18.11 at 3:52 pm

To the folks saying that no one will qualify, the details of the program don’t seem to state “single detached home”. There certainly are a variety of coffin condos available in this price range.

#174 Mister Obvious on 03.18.11 at 4:00 pm

#158 (betamax)

Let’s say you’re walking through the park one day and you come across some dog crap. Do you:

(1) Step around it and get on with your day or…
(2) Step in it, then complain bitterly to city hall

It’s the internet my friend. There really are people so lame as to take joy in being the ‘first to post’. They are especially pleased when others are irked in some measurable way.

The only one who can stop them is Garth himself and I expect he will if he really wants to. Lighten up. You might live longer.

#175 TS on 03.18.11 at 4:04 pm

To: #155 martin on 03.18.11 at 2:07 pm

I dont know what you guys are talking about but my cousin just sold hic 600 ft condo in young and eglinton toronto for 365k which he bought in 2005 for 196k. real estate aint going down anytime soon. just facts speak louder then statistiks. martin

Just curious what did your cousin replace as his principal residence? Did he buy a bigger place? Might the purchaser been young and put say 5% down with a 35 year amortized mortgage? More details please…
No one said that sales are not happening.

#176 Junius on 03.18.11 at 4:17 pm

#117 The American,

You said, “So, with that all said, can someone PLEASE EXPLAIN to me why Canada has followed the U.S.’s footsteps VERBATIM, 5 years after witnessing a U.S. housing collapse and the damage it brings to one’s economy?”

As Garth said above, “Our bankers saw the US collapse. We know better. We just don’t care.”

This is the real crime of our time in Canada. It is impossible to believe that they are so stupid. There is only one answer – Greed. Greed and the understanding that no matter how bad it gets for people the banks will be bailed out. No morals. No moral hazard.

Meanwhile we have a Federal Government getting ready to go to the polls looking for a majority mandate on the basis that they have been marvellous stewards of our economy.

It all makes me ill.

#177 Bill Grable on 03.18.11 at 4:18 pm

Will you all please drop “me first”?

Jeez, I feel like Bev Oda has some relatives that post here.

Mr. Turner puts a lot of effort into trying to get us numbskulls to pay attention and we don’t need trifle screwing up the discourse.

Por Favor.

Over to you, Mr. Turner.

#178 tmg on 03.18.11 at 4:21 pm

How much money do I need to have it make sense to hire a someone like you, Garth?

Enough to own a Hummer. Email me if you wish, [email protected]. — Garth

#179 Alex on 03.18.11 at 4:24 pm

#150, Mr Plow: What I’m noticing is that the smaller centers are *already* mired in a correction. At least around here (BC). That’s the way housing bubbles usually seem to deflate, from the outside into the core. Look toward Vancouver’s eastern suburbs and you see very little buying and lots of new listings/price reductions. Go further into the Fraser Valley and the situation is only heightened. Chilliwack is a mess. By the time you get to the Okanagan and then further into BC’s north, prices are off their highs 15 – 25% or more, yet people still aren’t buying.

I think the blog and most people who post here focus on the big centers because 1) That’s were most of us live, and 2) Because once the cracks begin to appear in the major cities, it’s theoretically game over.

#180 VICTORIA TEA PARTY on 03.18.11 at 4:39 pm

MELTDOWNS: JAPAN — LIBYA

After days of lying through their teeth, the bucket carriers for Japan Inc., their backs to the wall and facing future legal actions due to their blithering incompetence, have admitted the Japanese nuclear problem is a world-class nightmare with no end in sight.

March 18, 2011. Times of London reported this:

“The boss of the company behind the devastated Japanese nuclear reactor today broke down in tears – as his country finally acknowledged the radiation spewing from the over-heating reactors and fuel rods was enough to kill some citizens.

Japan’s Nuclear and Industrial Safety Agency admitted that the disaster was a level 5, which is classified as a crisis causing ‘several radiation deaths’ by the UN International Atomic Energy.

Officials said the rating was raised after they realised the full extent of the radiation leaking from the plant. They also said that 3 per cent of the fuel in three of the reactors at the Fukushima plant had been severely damaged, suggesting those reactor cores have partially melted down.

After Tokyo Electric Power Company Managing Director Akio Komiri cried…, a senior Japanese minister also admitted that the country was overwhelmed by the scale of the tsunami and nuclear crisis.

He said officials should have admitted earlier how serious the radiation leaks were…Nuclear experts have been saying for days that Japan was underplaying the crisis’ severity…

It is now officially on a par with the Three Mile Island accident in Pennsylvania in 1979. Only the explosion at Chernobyl in 1986 has topped the scale…

Deputy director general of the NISA, Hideohiko Nishiyama, also admitted that they do not know if the reactors are coming under control.”

PRAYERS FOR THOSE LIVING DOWNWIND FROM FUKUSHIMA…(all of us…)

So. Truth from the mouths of bureaucrats backed up against the brick wall of reality. No wiggle room, no prevaricating, no back-filling, no clap-trap.

This Japanese power plant business is the real meal deal.

What’s next? And where and when will all of those airborne particles of radioactive this and that be heading? Downtown Tokyo is one bet. After that?

As for that 5 out of 7 nuclear disaster severity measurement, another reality check please. This should be an 8 out of 7 debacle.

This disaster is magnitudes worse that Three Mile Island in Pennsylvania in 1979. At that plant NO radioactive matter was released into the atmosphere. None. All that happened was that the Yanks went nuclear, in their own silly minds.

This Japan catastrophe will make Chernobyl look like a family popcorn event involving the kitchen microwave. There is no good spin. This is just an amazing story.

NEXT FALL-OUT: LIBYA vs UN GASBAGS AND RELUCTANT YANKS

Another amazing situation is when you combine “efforts” by an American president, who no longer wants to commit his troops to yet another cause in the Mid East, with the worse than useless United Nations, and its no-fly-zone resolution.

Mr. Obama pontificated this morning about the seriousness of Col. Ghadaffi’s bad behaviour in the Libyan desert, while French and British combat aircraft and ships, bolstered, by similar Yankee hardware prepared to start their newest adventure high above said desert.

Why hasn’t someone in the military HQs of America or Europe told the UN that a war can’t be won by bombing alone. History shows one must seize and control the territory of the “enemy” for success to follow.

Bagging a few camels and air bases won’t cut it. But it’ll look good at UN cock and tail parties in the embassies of the Elites.

Ghadaffi is winning this thing hands down. If bombed or if his aircraft are shot down, he’ll buy more equipment and hire mercenaries to fly them. He’s got the loot, and a “loyal” following driven by fear and greed.

He also knows that the West, without the US, will NEVER stage a D-Day style assault on the beaches of Tripoli and Benghazi. So he’ll just keep pounding on the so-called rebels until he’s won, or whatever.

WHAT ABOUT THOSE “REBELS” ANYWAY?

BTW just whom will these “good guys” be patrolling the Libyan skies for?

Are these rebels homegrown prospective game-changers acting alone and, therefore pure of heart? Or are they being sponsored by, say, Iran?

Iran is the main change agent in the Middle East right now, fomenting rebellion in Bahrain, neighbouring Saudi Arabia, Iraq and, probably, Yemen.

The ayatollahs must view this panoply of violence with a certain degree of satisfaction as it tries to wear down the Great Satan’s empirical resolve in the oil rich territories.

This could be one interesting weekend upcoming.

#181 Moneta on 03.18.11 at 4:52 pm

“I think the results are worse than the numbers are showing,” he said. “I think there are a lot of people who are insolvent and are going through a process to deal with their debts, but they aren’t necessarily at this time filing assignments in bankruptcy or proposals.”

http://www.theglobeandmail.com/report-on-business/economy/canadian-bankruptcy-filings-fall-as-economy-improves/article1947467/

“Mr. Zweig said he is still seeing a large number of seniors among those filing for bankruptcy, with many living on government pension allowances and using their credit cards for necessities like food and clothing.

A 2006 study funded by the Office of the Superintendent of Bankruptcy concluded seniors are the fastest growing category of personal bankruptcies in Canada, accounting for one in nine new filings. ”

If they are suffering now, imagine when house prices tank…

#182 Vancouver_Bear on 03.18.11 at 4:52 pm

#64 BPOE on 03.18.11 at 1:00 am

BPOE…..Best Pot on Earth? How can I get some of it?

BTW the Columbia Generating Station located in WA state has a similar type reactor produced by GE….slightly advanced but similar. In case of big one……survivors will be killed by this invisible enemy…..so much for BPOE.

#183 bigrider on 03.18.11 at 4:54 pm

Garth’s reply to bigrider in #161- “you are mixing houses with equities” in reference to David Rosenberg article.

Yes Garth I understand he is referring directly to equity investments but I think you can extrapolate from the bullishness he has for Canada and his lack of reference to his prior call on housing being 15-35% overvalued( by the way, he has really been burying that one under a carpet as no mention in over 6 months) that he is not exactly bearish on housing anymore.

I mean if Canada is such a great place to invest and Canadian dollar going to be so strong going forward, would he not conclude that housing going to be equally as strong?

#184 Another Albertan on 03.18.11 at 5:09 pm

#180/Victoria:

This isn’t meant to be pedantic, but the reality is that Chernobyl and Fukushima are point-in-time events that garnered INES numbers. Additionally, there is Kyshtym in the late 1950s that ranked as a 6 that no one talks about. On top of that, there is no discussion about aggregate contamination numbers (factoring in half-life decay) over much longer periods of time at other locations around the world that might equate to a 4 equivalence. I suspect there are spots in the South Pacific and in Russia (or former republics) that were reasonably (and regularly) hot about 50 to 60 years ago.

Everyone else’s mileage may vary.

#185 skyrider on 03.18.11 at 5:17 pm

Big Al, Mister Oblivious…watch this if you haven’t seen it,

http://www.youtube.com/watch?v=u5um8QWWRvo

Barbara Ehrenreich “Smile or Die”

about positivity climate today

#186 bystander on 03.18.11 at 5:22 pm

The Game Flaherty and Carney playing is called:
“One Big Giant Casino”. Look behind the curtains:
http://www.youtube.com/watch?v=LI2jDJ4foJ8

“Listen to me! You don’t fight the MARKET man. DON’t FIGHT THE MARKET”:
http://www.youtube.com/watch?v=Gvl0_wxhzuw

Is seems that Flaherty and Carney don’t listen. Its not going to end well

#187 Naive or Stupid on 03.18.11 at 5:39 pm

ALERT ALERT ALERT…
This just happened in Calgary. Source is my friend a Mortgage Broker.

A client didn’t have downpayment of 5% but wanted a 35 year mortgage for 400K. So they had to go private for 5% down. Against his recommendation they arranged private lending for 5% down for 18% interest rate and rest as mortgage for current variable rate. They closed yesterday.

Is this called sub-prime or predatory lending ?? I am not sure why the private lender would take such a risk with little or no guarantee… I have to ask him about the guarantees or lien

#188 Whistle punk on 03.18.11 at 5:44 pm

There is still sales in the popular rural areas but those sales are the boomers that sold their house in crapcouver and buying a retirement house out of the Lowermainland area. They have lots of HAM in the bank and are spending their time looking for what they exactly want.

Nobody is in a big hurry anymore they are actually taking their time to decide before the flop the money on the table. Some are buying a chunk of land and letting it sit till the cost of building a house comes down. The smart shoppers are out there they are the ones that are not walking around with a house horny stiffy.

The stupid baby boomers that bought a house without really thinking about it is over the dumb ones bought without thinking. Lots of them out there 3 years ago, they are the ones in trouble. Over paid for a place that is dropping in value.

The working man buying a house in todays market forget it is not happening in the rural areas. They can’t afford to buy and with the work dropping off it isn’t helping.

It will be very interesting to see what happens in the next year or two. Glad I never sunk myself in house debt, I have all the freedom in the world.

#189 AACI-Okanagan on 03.18.11 at 5:45 pm

135 Smug-R-Us on 03.18.11 at 12:06 pm

I am still confused as to why some of you folks think CMHC is involved with these loans? This is all on Vancity’s dime – their profit if it turns out well, their loss if it turns out badly. None of you will have to budge from your basements to pony up any sort of relief here.

And the comments about a financial institution acting greedy? Last time I looked, financial institutions like banks and credit unions are not charitable institutions, nor are they your uncle Leo trying to give you a hand up. They are, and properly should be, oriented toward maximizing profits.

Bingo.. fact is CMHC is becoming more prudent on what they will insure, more people are getting turned down and CMHC is requesting way more appraisals on property than they ever have something they rarely did.

#190 Devore on 03.18.11 at 5:55 pm

#183 bigrider

American markets have been doing marvelously, even while their housing fell off a cliff, and continues to slide. The markets only bear passing correlation to the real economy.

#191 Mr. Plow on 03.18.11 at 6:00 pm

#172 Vancouver_Bear

The guy I was commenting on was talking about bossing his landlord.

All I’m saying is if a landlord is desperate for a tenant, then yeah maybe the renter can dictate to him or her what you want and do what you want. If you are renting from someone who can be selective and doesn’t need a sorry ass who wants an unbalanced agreement then good luck bossing that landlord around.

Has nothing to do with the act.

#192 poco on 03.18.11 at 6:09 pm

#176 Alex–so true –condo market in tricities is dropping further–lots of sellers underwater
townhouses a little slower in price drops but some owners are seing the light and listing 15k to 20k below their neighbours—(just like 2008)
–SFH’s a bit slower off the mark to lower their price–many have been listed since last spring and are now dropping because of the number of new listings of SFH coming on;though many owners with new listings still think the markets booming –they’ll soon see as they sit through the spring and summer
what i have noticed is a big increase in higher priced homes (800k+) coming on the market and many of them haven’t been for sale for years–boomer effect???
i wouldn’t call this a balanced market,it’s extremely disjointed if you know what i mean?

#193 bystander on 03.18.11 at 6:10 pm

#117, The American, said:
“So, with that all said, can someone PLEASE EXPLAIN to me why Canada has followed the U.S.’s footsteps VERBATIM, 5 years after witnessing a U.S. housing collapse and the damage it brings to one’s economy?”

False sense of security of Canadian financial system that gives F and C reasons to think Canada is different.

1.
During recessions smart money, large and small investors, speculators, and hedge funds, run for safety to protect their capitals against inflation. They do that hiding in commodities, incl. gold.
Having said that, Canada is commodities based economy with half of the world resource based companies traded on Canadian stock exchanges. The capital from all over the world flee and hide from risks in Canada subsequently driving CAD to it’s current heights, driving prices of commodities through the roof. This provides a false sense security of the Canadian financial system.

2. CMHC insures mortgages in Canada, but, unlike mortgage insurers FannyMay and FreddyMac in United States, CMHC is not traded on the market, thus there is no way to short the Real Estate market in Canada. This makes Canadian government via CMHC to become the largest speculator in the Real Estate industry in the world today.

Watch for correction in commodities.
“We are different in Canada” until we are not.
You have been warned.

#194 ballingsford on 03.18.11 at 6:22 pm

Pd on 03.18.11 at 12:14 am
I have read this blog for over a year. This is my first post. The trend of readers racing to post a comment about being “first” needs to stop. It is childish, no longer funny and a waste of everyone’s time. Garth, please stop publishing such posts and spare us.
**************

Come on PD, how much time does it waste? It takes me less than 1 second to read it. Are you a slow reader?

Stop acting like a child.

First!!!

#195 Devore on 03.18.11 at 6:40 pm

#192 poco

That’s the problem when houses aren’t flying off the shelf. In more normal times, like we’re now seeing in the burbs, you can’t price your property in line with listings. Listings just show you what HASN’T sold. Who gives a crap. Your competition, and your comparables, are the recent sales. That’s what buyers look at when the MOI creeps over 4 and 5 months, and that’s what keeps driving prices down. No one HAS to buy. Buyers always have the upper hand.

#196 john m on 03.18.11 at 6:49 pm

CMHC was originally designed to make affordable housing for all Canadians not to be a political tool for votes…”H” changed that CMHC’S safety net with reasonable down payments and shorter term mortgages with proper screening for for eligibility for insurance has been eliminated by “H” and his cronies (no one else!). Corruption ,dishonesty,contempt for taxpayers,disregard for the laws of parliament,and self promotion for really doing nothing paid for by our tax dollars..lets not forget people there really was no stimulus plan until they were forced to act by the opposition (we were only in a technical recession)……..this can not be tolerated much longer …in fact perhaps it is already too late…personally i have sneaking suspicion CMHC is already in trouble (after all their source of income is pumping out mortgages) and they are pumping them out in billions “taking from peter to pay paul” CMHC used to have a ceiling of 150 billion…..where are we now–somewhere around 600 billion and rising thanks to “H” and his cronies—that i find SHOCKING! …in fact so shocking it is more than the federal debt since confederation……May we be blessed with a divine intervention or IMO we are f–ked.

#197 ballingsford on 03.18.11 at 6:50 pm

BTW, let’s all raise our glasses to toast that March 18th is finally here!

May you Garth and all you blog dogs, who aren’t real estate agent fraudulent porn stars, live long and prosper!

A tip of the hat to all of you!!!

Cheers!!!!!!!!!!!!!!!!!

#198 john m on 03.18.11 at 7:21 pm

189 AACI-Okanagan on 03.18.11 at 5:45 pm……dream on ! After 600 billion out the door guaranteed for a paltry 3% —“the cattle are already out its too damn late to close the gate” ! Since this is an investment blog and we are already on the hook for “H” and companies self promotion decisions…….would you gamble your life savings for 3% commission on a buyer with little or nothing down -to make his payments on a 35 year mortgage for an overpriced piece of real estate? ———– as “H” stated the other day in a photo opp “we are the envy of the world” ——now thats funny!!

#199 Hoof-Hearted on 03.18.11 at 7:42 pm

VanCity?

It is a left wing lending institution. Full of NDP whack jobs.

This is simply some stunt that will create more poor than alleviate house horniness.

One should follow the money and try to find out which cadillac socialists in BC manouevered this stunt.

https://www.vancity.com/MyCommunity/OurVision/GrowingTheSocialEconomy/

QUOTE:
Growing the social economy

Social enterprises, co-operatives and the not-for-profit sector are key drivers of the social economy. In general terms, the ‘social economy’ refers to a third sector of the economy that falls between the private sector (business) and the public sector (government).

The social economy includes organizations like co-operatives (like Vancity or housing co-ops), not for profit societies and charities (like the Phoenix Centre and United We Can).

As a financial co-operative, Vancity is an active member of the social economy sector. We invest in the social economy because we believe it contributes to a better quality of life for our members and their neighbours, and will lead to a more inclusive and sustainable community over the long term.

#200 Hoof-Hearted on 03.18.11 at 8:14 pm

#180 VICTORIA TEA PARTY

I coached a team several years ago.

One players parents was from Chernobyl.

They passed away a few years ago from cancer after beating it once, then succumbing.

This is typical BS from Gov’t (ie Japan), trying to prevent panic knowing full well delay may set up future victims.

#201 bridgepigeon on 03.18.11 at 8:23 pm

Please explain why Canada has followed in the US footsteps when we know what has happened…
All the responses are good; we do not learn.
Please explain why the US is printing money like the banana republics of yesterday when we know what has happened…

#202 Hoof-Hearted on 03.18.11 at 8:28 pm

A tale of TWO Cities…even if it’s the same City

COV’s Olympic Village ” such a deal”

http://www2.macleans.ca/2011/03/08/live-like-an-olympian%E2%80%94now-half-price/

VERSUS: OV Village lawsuits

http://www.youtube.com/watch?v…..r_embedded

#203 Nostradamus Le Mad Vlad on 03.18.11 at 8:42 pm


Censored News from Fukushima (only on the m$m, not the ‘net).

Confirmed The TSA has helped decrease airport traffic in the US. They are shooting themselves in the foot.

CC “The climate change fanatic has plenty of outside income. Did he obtain the proper waivers from NASA as he must according to the law?”

Buried? Japan may bury the reactors.

Investment Banxters salivating, so where does the term cocksuckers come from?

More spent fuel in US reactors, and the fallout has already been found in Berkeley, Calif.

The F-35 “In other words, we’re spending more on this plane than Australia’s entire GDP ($924 billion).”

Adios, unions Michigan passes financial martial law bill.

On the other hand, could it mean the US$ and loonie are tanking big time against the Yen?

‘Net cleanup That will cut back on unwanted spam.

Iraq “That is the really cool think about hunting for weapons of mass destruction that don’t really exist. You can spend the rest of your life living on taxpayer money looking for them.” wrh.com and 15:15 clip One million dead Iraqis, based on lies.

Leaving USA More people are quietly leaving the US for greener pastures.

North America not prepared for mega disaster. Guess the next few months will be interesting. First, Chile’s 8.8; next is NZ’s then Japan, all on the Ring of Fire.

LIBOR “Libor is rigged. Bankers busted again.”

#204 Dubble on 03.18.11 at 8:43 pm

Thanks for the link. Just emailed them now…

Hello,

I am writing today to offer my opinion on your new mortgage offering, designed for low income borrowers. It is irresponsible and foolish to design a program for borrowers who will likely be wiped out if interest rates normalize, or a small correction were to occur in Vancouver’s housing market. In my opinion, both of these things are due. A mortgage product like this proves that a bubble exists.

Did we not learn anything watching the experiences of our southern neighbors? Are you ex Wa-Mu employees? If it didn’t work for them, how will it work for you now?

If I were a depositor with your institution I would be removing my funds on principle alone. Thankfully, I’m not.

#205 Aquarian on 03.18.11 at 8:44 pm

While I agree this scheme is spectacularly ludicrous, you won’t see enough volumes in BC to trigger a US style crisis. They wrote millions of loans over 3-4 years according to Michael Lewis. It is still insanely greedy.

#206 The American on 03.18.11 at 8:53 pm

At #147: Patrick, your point is well put. I’ve been saying this same thing for over two years.

At #176: Junius, thank you. That is very sad to me they would take such grave advantage of the public’s trust.

At #193: Bystander, that was a VERY good response. Thank you.

#207 dd on 03.18.11 at 8:56 pm

Gold is up over $24 bucks in two days. No mention of it in the post. Only mention the down days. Figures.

#208 Sue on 03.18.11 at 8:58 pm

I’m hoping that most spring/summer buyers have been pre-approved bc my bf STILL hasn’t gotten around to listing yet. grrr He wants to finish the f*&^ing landscaping first. I have to purposely not talk about it to avoid putting his head through a wall. (and I’m a really nice girl).

#209 VICTORIA TEA PARTY on 03.18.11 at 9:03 pm

#200 Hoof-Hearted

Thank you for you comment. What a heart-breaking experinece that must have been.

I just watched a American scientist, on CNN, who criticised the Japanese government saying they are “living in a parallel universe.”

He said the four reactors should be covered with sand, concrete, boron and whatever else it will take to stop the monster.

Those items were also poured on top of Chernobyl’s reactor, he said.

#210 Dan in Victoria on 03.18.11 at 9:15 pm

More than 125 elderly patients were abandoned by medical staff six miles from Fukushima reactors…..

http://www.msnbc.msn.com/id/42150705/ns/world_news-asiapacific/

#211 Jimmy Jones on 03.18.11 at 9:26 pm

I read somewhere that governments love to get people into debt, as they are more obedient citizens after that.

#212 Foster Dulles' paunch on 03.18.11 at 9:41 pm

There’s still plenty stupidity south of the border. I know of americans who insist the U.S. middle class HAS NOT been decimated by the RE burst.

#213 Timing is Everything on 03.18.11 at 9:43 pm

#42 Devore

Come on..You wern’t born yesterday.
Also, If it is not illegal, why not. What’s the name of the game….

http://www.news1130.com/news/local/article/194386–vancity-posts-record-results

#214 Kits on 03.18.11 at 9:47 pm

Garth,

Didn’t the lending practices in the US deteriorate just before the collapse? I vaguely recall that competition for the few remaining greater fools led to outrageous 115% MV loans, among other things. I think the VanCity package it further evidence of the RE top in Canada.

#215 Moneta on 03.18.11 at 10:04 pm

One players parents was from Chernobyl.
———-
One of my colleagues at work was in Romania and pregnant when the Chernobyl disaster occured. 500K away?

The last time I saw her, she was getting her teenage daughter followed for thyroid problems.

#216 AACI-Okanagan on 03.18.11 at 10:32 pm

@ #198 john m on 03.18.11 at 7:21 pm

Dream on? 3% on 600 billion is?? do you actually believe that everybody will default on their CMHC insured mortgage? This is not the first market crash that CMHC has been through.

#217 Kits on 03.18.11 at 10:55 pm

113 The American – great post

#218 Toon Town Boomer on 03.18.11 at 11:22 pm

# 185 skyrider
Your smile or die video posted speaks volumes about the way we are condition to think. Excellent post. Hope everyone checks it out.

#219 betamax on 03.18.11 at 11:34 pm

#174 Mister Obvious: “Lighten up. You might live longer.”

Right. Only positivity is allowed here.

#220 KingBubbles on 03.19.11 at 8:54 am

KINGBUBBLES- where did you get the stats? Can you provide a link…thx

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These stats come from
http://keystonematrix.ca/matrix/login.aspx