Paul and Jennifer listed their downtown Toronto condo two weeks ago. Then Jen’s mom sent her a copy of the Post Magazine article on the future of real estate prices – the one I shared with you a few days ago, in which all the experts (but not me) predicted an eruption.
Jen, 28, a hospital worker, sent me this note last night: “Dear Garth (can I call you that??) – We put our perfect two-bdrm condo on MLS last week and then stood back and waited for the offers. Fourteen couples came through. Cool. Then nothing. We priced it $15K less than the same unit upstairs (which has been for sale, we now learn, for four months). So we dropped the price again by $7K five days ago. More nothing. Meantime four more units came up for sale in this building alone. We are dying here. What should we do? We already bought a house in Scarborough. Desperate Jenny in CityPlace.”
Meanwhile in today’s Wall Street Journal a story on Canadian real estate, “Housing Booms North of the Border” rightly points out Canadians are more indebted than Americans, housing has doubled in price in a decade, and people here are buying with picayune down payments. But it also trots out the usual cadre of bank economists, mortgage primers and house pumpers to tell us there’s no bubble, it’s different here and a US-style meltdown won’t happen.
I juxtapose these two items for a reason. It goes to a debate that’s rocked this testosterone-drenched blog now for months. Are we in the middle of an inflationary romp, fueled by cheap money and a recovering economy, that’ll goose houses and stocks higher? Or are we deluding ourselves, since it’s only excessive debt and government spending that are temporarily propping up prices?
It’s the only question that matters. After all, if inflation wins, higher wages and economic output will keep real estate values and stock markets swelling. If deflation wins, homeowners will lose vast sums of equity and people who loaded up on bonds will look like geniuses. For anyone who has the bulk of their net worth in a house (or equity mutual funds); for young couples with fat mortgages and no equity; anyone who traded up within the past three years; or people facing retirement who think their home is their financial saviour, deflation’s a game-changer. It brings disaster.
So how real is this threat?
Ironically, the more real estate values rise, the closer it gets. The reason is families suck up more and more debt in order to buy houses, decreasing their cash flow, making them susceptible to rate hikes and stifling their consumer spending. All of that is bad economics.
The more indebted governments become, the closer it gets. Vast amounts of tax revenues must be flushed away in interest payments, often to foreign bondholders. Governments have less to spend on domestic programs, especially the kind of billions in stimulus we’ve been showered with (Canada’s ‘economic action plan’). The next step is austerity budgets, and deflation creeps nearer.
The further the US housing market falls, the closer it gets. This week came news that 13% of all homes in that country are vacant – a shocking number. Two million more foreclosed properties are about to come on the market. This is robbing the American middle class of its accumulated wealth, as prices continue to plunge. If you think Canada can avoid deflation if it erupts in a consumer spending-starved USA, you’re nuts.
The more external shocks, the closer it gets. Looks like Japan has a full-fledged nuclear meltdown on its hands now, while radioactive water is destroying the countryside. The Arab world is in flames with war or unrest in Libya, Bahrain, Yemen, Syria and even Saudi Arabia. Oil at $100 is already enough to slow global growth and hasten a retrenchment. Crude at $150 precipitated the 2008 financial crisis. What happens if it hits $200 while nuclear energy is blackballed and planetary energy costs spiral?
There are more threats, of course. Greece and Portugal seem ready to cave. Britain’s in a total funk. The US is now fighting three wars it can’t afford. Everybody you know is in debt, and your 25-year-old children are afraid to leave home. And things are supposed to be normal again?
Oh yeah, and while planeloads of Chinese are supposedly hoovering southern BC, Jenny can’t sell her below-market condo in the heart of Canada’s biggest city. Go figure.
A couple of weeks ago I boldly said (how else would I say anything?) that the real estate correction had arrived. Its presence would be evident, I added, when it was too late to respond. There’s no doubt in my mind the best months of this post-crisis recovery are already in the rearview mirror.
So don’t bother posting comments about multiple offers on the house down the street or the alarming appearance of lawn Asians in your hood. There will be greater fools throwing their money around, jacking prices on dwindling sales, until the end.
Just hope you find one.
Garth radio interview here.
227 comments ↓
First! Mwaahahahahahaha
First!!!!
Awesome article, as always. This is the year of pain, and a lot of people are oblivious to what’s coming. They are more concerned with Jersey Shore or Lady Gaga. Sheeple.
ha ha ha !
‘nuf said.
Garth, clearly you haven’t been to skatch lately, or listened to our news. Sunshine and lollipops and we are different. Clearly our strong domestic economy here in skatch will keep our wealth driving for years, we don’t need the U.S……oh wait……we exported $15.2 billion to them in 2010…….ehmmmmm………ehmmmmmm……wait, one sec, just saw the news, back to sunshine and lollipops and the just confirmed we are different. Phew, that was a close one!
Firm sales in Regina down 38% YOY. Median price up 2.6%. Active listings down 5.3%.
Strike?
http://www.reginarealtors.com/images/trendline/weekly_activity_reports/regina_wmar_2011_03_28.pdf
Garth your the man, in time you will get your 15min of fame, as for me your are my hero.
Garth for prime minister
Went for a walk in my modest neighbourhood of soon to be underwaterpeg tonight, saw exactly one for sale sign when until recently there would have been dozens. People have been paying upwards of $260 a sq ft in the area. I inherited, so the house was free, and I can’t find an apartment for what it costs me to live here. Not sure what kind of neighbours I’ll eventually have, but the crash is already here. Someone paid $230,000 for the 900 sq ft shack next door, and it is in need of major repairs, but it has some nicely upgraded moldings . . . long live the house horny!
Forgot to mention – those numbers are for the week ending March 19th. Ouch!
It’s not so simple as a) INflation or b) DEflation.
We’ll likely see rising prices in the things that count and falling prices (“values”) in stuff requiring debt. Housing is the big one. That’s what has been happening in all developed economies, at varying speeds and in varying places, and Australia & Canada are up next.
It’s not just hoarding and commodity speculators (as the hoi polloi like to imagine): it’s MONEY-PRINTING.
So be patient; buy some gold, keep some cash, stay invested in non-consumer stocks, pay down debt and hedge for price inflation…
Garth for Prime Minister
“I juxtapose these two items for a reason. It goes to a debate that’s rocked this testosterone-drenched blog now for months. Are we in the middle of an inflationary romp, fueled by cheap money and a recovering economy, that’ll goose houses and stocks higher? Or are we deluding ourselves, since it’s only excessive debt and government spending that are temporarily propping up prices?” – by GT.
Definitely deluding ourselves!! So many of my co-workers can’t seem to see past the Global News!!
I think it is a combination of nearly all the things mentioned. Definitely cheap money, definitely Gov’t spending, definitely excessive debt. Recovering economy – not so much!!
“What happens if it hits $200 while nuclear energy is blackballed and planetary energy costs spiral?”
If that happens Alberta rents will go through the roof as we will be seen as the safe haven in the world. This will bring investors into the market and will support housing prices. Prices probably won’t shoot up because they are already high, but the “melt” Garth describes simply won’t happen here, not with huge migration as people come here for the jobs.
Yeah, all those teachers, firemen and Best Buy clerks paying $5 for a litre of gas will be spending up a storm and making Calgary a paradise. Good luck with that. — Garth
I admit, that picture was too cute not to share. I’ve stolen it and blasted my FB people with it.
Maybe the old lady can show this blog to her ‘adult’ nephew after all….
I’m all for the pics, they bring a sense of reality to the situation, in a twisted kinda way…
Anyways, keep doin what yer doin…
Also, if you make a run for PM (yaya doubtfull) you got my vote too. Keep in mind I don’t vote basically because theres never been a single candidate that justifies my filling out that stupid form.
This country needs a realist. GT for PM!!
It was only a matter of time, and that day has arrived. As one investor said long time ago, ” At first, I was loosing money slowly, as time went on it picked up speed”.
As always, we will pay dearly for our sins.
I like your commentary today.
Short real economy, long paper economy.
Great article Garth, its the same here as many of the links I have posted point out. Stock on market is rising quickly the greater fools are still out there but their numbers are falling. I would not be surprised by this time next year it becomes clear even to the delusional that prices have peaked and melt is upon us. Of course the RE industry will call the bottom on prices every month claiming now is the time to buy, interesting times ahead for both our countries.
Aussie Update
Biggest myth in RE (prices only ever rise) now under pressure.
http://www.couriermail.com.au/property/values-dip-as-first-home-buyers-lost/story-e6frequ6-1226029377101
Steve Keen also supports the removal of negative gearing for infestors (hic) on established properties.
http://www.debtdeflation.com/blogs/2011/03/29/getup-proposed-campaign-against-negative-gearing/
Cant tell what a bubble is, this might help.
http://aussiehouseprices.blogspot.com/2011/03/definition-of-bubble-part-1.html
Garth,
you’re forgetting Natural Gas…We have enough of that to keep us from developing more nuclear energy. You’re also forgetting to mention that many who own their condo or home will do everything to hang on to it. If the market falls, most will try to ride it out. As long as they keep their jobs, they’ll keep making payments. Rates won’t rise dramatically, as the US is in such bad shape that they have to keep rates low, even though they are trending up. The unemployment situation in Canada is not too bad, especially, given that the US is slowly starting to turn around. In Vancouver, even if unemployment rises, many people have so much money that the employment rate is not an issue. Many Asians have paid cash for their houses.
By the way, thanks to Stephen Harper for transferring all the liability to the taxpayers via CMHC. Our undemocratic, arrongant, power hungry PM who’s party has been found in contempt of Parliament. A man who has no respect for our democratic institutions. Let’s hope the simpletons don’t vote him in again
That really is a great post.
For my money deflation for all things unneeded is here already. The race for the bottom has begun.
Not the case for things you HAVE to buy though.
Garth: Did Jenny tell you what her condo was listing for? If she took 22k off a 800k or 900k listing it would be pocket change and not worth mentioning. Heck, my neighbours house came down 15% (60k on a 400k property) before he got any bites last fall, in Calgary.
It will probably be later in the summer before we start to see any desperation on the part of sellers. They tend to be a kinda hopeful and patient bunch (to some degree) unless something really scary comes along and spooks them – cue Mark Carney after the election…
Two-bedroom condos in that area sell for 400-600K. — Garth
Garth with the election upcoming will you please provide your insights as the big day approaches. I know it is not a theme on your blog, but I find your posts about politics and your experiences in politics very enlighting. Thanks.
Can I take a few dozen Tums first? — Garth
Carney is all talk…telling the world interest rates should rise. He and his neo con masters have ruined Canada with their low interest rate policies. Very soon indebted Canadians who have gourged on low rates to fund their instant gratification of big house fancy cars and show off lifestyles, will wish they never voted Harper into power. The great Canadian depression will squash these greater fools.
Some news on housing prices and immigration;
Marriages with a foreigner will soon require to be of a minimum duration of 2 years before the spouse (and eventually parents, grandparents, siblings, etc) will get to stay in Canada permanently.
Presently it is 1 day. My guess is spouses paying big money to get to Canada by way of marriage…divorce 1 day later…and then bring the rest of the family. Then the money follows and they bid up housing prices… essentially what is happening right now…especially with temporary workers/students!!!
Forgot the link,
http://www.winnipegfreepress.com/canada/breakingnews/new-rules-of-engagement-proposed-for-marriages-involving-immigrants-118807564.html
Yup people in Ontario are in for a rude awakening. This so reminds me of the late 80’s but worse. We did not have 35 and 40 year amortizations and low interest rates back then so we just invited more people to the party. Happy days are behind the real estate splurge. Have been for six months really. We get the Provincial budget tomorrow and I am sure Duncan will hide things and sugar coat it. Not sure winning the provincial election in the fall by whomever (probably PC’s) will be a good feeling.
History appears to be repeating itself.
I’m having trouble posting!
I’ll try later.
Here’s a story about the CREA cartel and it’s challenges:
http://www.torontolife.com/daily/informer/from-print-edition-informer/2011/03/09/for-sale-by-owner-realtors-are-still-trying-to-keep-the-public%e2%80%99s-hands-off-mls-but-you-can%e2%80%99t-hoard-information-in-the-information/
It’s stranglehold in the marketplace is waning.
Not sure where deflation is going to come from.
$200 groceries easily fit in 4 small bags.
Do not confuse price inflation with asset deflation. They will come together. — Garth
From Jenny in Cityplace, eh?
We know Cityplace Toronto as the next ‘ghetto’, ground zero. Stick a fork in it!!!
Look at the pics of this sprawl. Scroll down for the wide angle shots:
http://tinyurl.com/66w8fk5
Read the horror stories:
http://cityplace-ghetto.com/
http://torontorealtyblog.com/2011/02/25/the-friday-rant-cityplace-as-a-ghetto/
Greetings: I would like to share a story with the bloggers of an indication I believe shows how desperate retailers are getting:
Couple of weeks ago, I was in a local building suppy place to pick up some OSB shelving material. While there I went and looked at a piece of knock-down furniture I was interested in purchasing for a upcoming wedding gift. This furniture was attractive, because I had already built one for ourselves and was impressed with the quality of manufacturing. Made in USA, Oregon I think. Anyhow, the regular price of 239$ was reduced to 201$ Decided to buy one unit. As the clerk was helping me load onto a cart, I was telling him how the quality impressed me. He asked if I was willing to buy all the remaining stock. We went back to the shelf area and there were three more boxed units, plus a display model. I said” how much?” response was he would go and crunch some numbers. Shortly came back with a floor supervisor, told me if I took all, they would be 175$ each and no charge for the floor model. Done deal!! I went to move the truck around to the loading area and the yard fellow bought the display unit from me for 60$, I helped him load it onto his pick-up. Without a doubt, money is tight here in “different” Alberta.
I was watching HGTV, two different shows, two different countries and worlds apart. The one couple from the US were buying a house, the price of the house was around 280K, they offered around 265K and than haggled with the seller. They were very reluctant to budge on a 3,000 dollar difference. I have seen this over and over again, US couples that will not even go 10K over their budget or at least are very reluctant.
Than there was the Canadian couple, they got into a bidding war and went way over their budget which was already recklessly high at between 400-500k. They paid 571K for…….here it comes…….a one bedroom, no typo mistake, A ONE BEDROOM tiny house in what looked like Toronto. What’s 70K extra right? Especially for a spacious….errr…cozy….errrr….ok, puny one bedroom house (can you call a one bedroom house a house?). So anyways, they paid this much and now realize they need to rent their even tinier basement out to try to manage their grossly overpriced mortgage. I didn’t watch the rest but the cost to suite their basement which was an empty undeveloped shell was going to run around 40K. They wanted to rent it out for 900 dollars if possible. Do the math, by the time they get renters, pay the capital gains taxes and extra utility costs, it would take 5 or 6 years just to cover the cost of the renovation costs. I swear people today have no plan and never sit down and crunch numbers when they jump head first into buying their first place.
We have all said it before, we are in for a world of hurt when interest rates move up even a fraction. The stupidity of this generation defies explanation, who can explain what is going through their fiscally retarded minds.
#15 mel
I think the response was about bankruptcy. How’d you go bankrupt? Well, slowly at first, then all at once.
According to income statistics released by Canada Revenue Agency (this past February) 75% of tax-filing Canadians earn less than $50,000 per year. This is contrasted with what average house prices have done in the last decade.
http://fullcomment.nationalpost.com/2011/03/28/canadas-housing-price-mystery/
you get my write-in vote!
Garth > Iggy
U** > UCC
(in my riding of Trinity-Spadina, only the socialists and communists have a chance anyways)
@Thetruth
I don’t think that is an adequate fix for the immigration dilemma. Simply put this will far disadvantage those that are coming to the country to contribute to the tax base and marry Canadians. The Rich will still be able to buy their way in, plant their spouses and extended family, and go pay their taxes elsewhere whilst they bleed Canada dry of Real Estate, health care, school systems etc etc.
“#13 WesternCanadian on 03.28.11 at 10:23 pm
“What happens if it hits $200 while nuclear energy is blackballed and planetary energy costs spiral?”
If that happens Alberta rents will go through the roof as we will be seen as the safe haven in the world. This will bring investors into the market and will support housing prices. Prices probably won’t shoot up because they are already high, but the “melt” Garth describes simply won’t happen here, not with huge migration as people come here for the jobs.”
====================================
I always get a chuckle when I hear Albertan’s believing that high Oil prices will drive another housing boom. Housing in Alberta peaked and started falling fast at the point when Alberta’s economy was the hottest. I mean it was blistering hot yet house prices started to cave and cave fast. I have lived here my whole life and understand that only a small percentage of this province works in the energy field.
During the last Alberta boom, my costs skyrocketed yet my wages did not budge. I am a well paid professional yet like many Albertans, it became almost unmanageable to live in this province. Keep in mind that house prices doubled and that created the wealth effect which cushioned the blow of skyrocketing costs for many. Next oil boom there will be no doubling of house prices so the boom will feel more like a slight pop as the wealth effect will no longer be the real driving force in the economy as it was during the last boom.
okay are you blocking html codes now?
Have no idea what you are talking about. — Garth
http://calgaryrealestatereview.com/2011/03/28/calgary-peak-buyers-todays-sellers/
picayune: of little value
http://en.wikipedia.org/wiki/Picayune
If you think Canada can avoid deflation if it erupts in a consumer spending-starved USA, you’re nuts.
despite the concerted efforts of the wealthiest, most powerful country on earth, it has erupted
the games continue
http://www.theredpin.com/blog/canada/canada-mortgages/are-you-ready-to-purchase
When I viewed her credit, the beacon score was lower than 680, so I knew she would not qualify for a Free Down Payment Program, or 5% cash back plan. She needed $22,500 for the 5% down payment, and $6750 for the closing costs. With her $15,000 in personal savings, she needed an additional, $14,250. Out of luck? Stuck renting for another year or two until she saved that amount? Not so….. the client, without realizing it, had a few more resources to consider. With a personal line of credit with a limit of $20,000 and zero balance, the client was able to ‘borrow’ the down payment from her line of credit. This type of down payment is acceptable with many lenders, as long as the income can support the payment for the new balance on the account.
I don’t know how representative the NXT condo project in Toronto is (by the lake in Etobicoke for local readers), but I saw a Craigslist post for one person saying he has 17 condo units for rent. I’m not sure if the one guy owns all 17 or if he’s posting for a bunch of owners, but that’s trouble!!!
Correct me if I am wrong, and I know you will, but a deflationary environment would be bad for bank prefs? I realize there will be increased demand but will that offset the mortgage defaults their balance sheets will suffer? Would emerging market bonds or oil producing companies with decent dividends be a better choice. I realize a balanced portfolio is best, but it seems wiser to limit exposure to our banks? Thanks for all you do. B.
Oh, CityPlace. There will be lots of sob stories like this one in the near future. How do you sell a condo there, when there’s dozens of nearly identical units within 5 minutes?
And the longer you sit on in, the more worthless it becomes. In just a handful of years, these units, and more importantly the buildings, will be old and busted. With so much ownership by “investors”, and such high rental rates, there will be little to no incentive to spend money to maintain these towers. These are condos, not apartment buildings. Management will be powerless.
Hundreds of the young and horny have been suckered into buying at CityPlace, without proper due diligence to know what they are really buying.
Real estate busts happen from the outside in. From the outlying areas, the ex-urbs, to the suburbs, and into the core. In the core, and everywhere, the lower end falls first. That’s CityPlace.
I called the meltdown thing the day the reactor buildings started blowing up. If they were generating that much heat (to generate the hydrogen that caused the explosions), there was no way they were going to stop at least a partial meltdown without pumps.
I think the situation inside the containments is far worse than they are letting on.
Break out the bell bottoms – were going back to 70s stagflation baby. I can’t say I remember much of it being a toddler but if its anything like that groovy 70s Show it couldn’t have been that bad.
Stagflation is the bad inflation – thats where you get the double digit cost of living increase along with high unemployment grinding down the middle class. No help for houses, even if prices don’t crash holding onto a dead asset for a few decades isn’t exactly #Winning. Big government = big deficits , everybody cries.
As much as I salivate at the thought of a deflationary spiral its not in the cards. Its one of the few things I agree with Bernanke about – in a deflationary event the central banks can always drop money out of helicopters to the masses on the streets. Theres a reason he’s called helicopter Ben.
Central bankers won’t admit it but there is direct correlation between QE and commodities inflation, politicians are now starting to sweat. The chaos in the middle east isn’t huddled masses yearning to breathe free, its unrest because the lower classes can’t afford to eat. Funny thing how people tend to riot when hungry. You can bet China is watching this all unfold nervously, and you can bet they are already making plans to tighten monetary policy and turn off the taps.
High fives to everyone who rode the reflation wave over last few years – the ride isn’t over yet but I suspect we are in for a pause. The banks know the guillotine is being greased so they’ll be making noise to scare money out of markets & commodities back into bonds. I’m back in cash for the most part because of this, liquidity is king. Of course this pause is just a head fake, no-one actually wants to live under austerity so it won’t be long until they restart the printing press and it starts all over again.
This is how it started back in 08.
Slow spread of listings, and its all about localized dynamics.
Condos in toronto are not a good mix, to many of them around, too much choice.
To much future demand forward.
What Jenny and all other folks listing their house should ask themselves is this:
could i afford my home at the listing price? My guess is that for many, the answer is either no, they can;t afford it or, they would never spend that much to live in it.
Thats the whole fallacy of the RE dream, everyone always thinks that some greater fool, rich china man, Iran oil sheik, Russian with rubles falling out of his pocket etc.. is going to buy it.
Deflation won’t happen because the US Fed and other central bankers won’t let it. QE to infinity.
HGTV-lovers beware…once a bubble gets too big, any number of seemingly innocuous events can pop it.
It starts with silence, then confusion, then anger, then tears. All you have to do is tune into the experience of your American friends.
Here are the 8 steps to a Canadian housing crash:
http://www.planbeconomics.com/2011/03/28/8-steps-to-a-canadian-housing-crash/
Safer nuclear reactor technology, check it out.
http://en.wikipedia.org/wiki/Pebble_bed_reactor
http://article.nuclear.or.kr/jknsfile/v39/JK0390103.pdf
Sorry to say it but Vancouver is different. I’ve been a bear here for a long time but prices just keep going up. Maybe I’ll have to hook up with BPOE. Hah! not in this lifetime.
Wil Wertheim, a realtor in Van and it seems an all round nice guy, publishes weekly stats on the greater Van RE sales and these first few months of ’11 they just keep going up. Look at the chart of weekly sales—it’s damn near vertical.
And therein lies the rub.
As Garth said:
“There will be greater fools throwing their money around, jacking prices on dwindling sales, until the end.”
And that’s where we’re different. Against all logic and reason Vaners will buy into the coming storm, whistling a happy tune. Until it crashes—hard and it will be hard. Look at that pretty green line on the sales chart and picture it coming down just as far and fast.
http://agentwill.com/weekly-stats/
What you didn’t mention from the Wall St Journal article:
To be sure, most economists here say Canada isn’t facing an American-style housing bubble, and they cite a host of reasons such as tighter lending, a buoyant economy and a robust labor market. Gross domestic product grew at a surprisingly strong 3.3% annual pace in the fourth quarter. Canada also has gained back all of the jobs it lost during the recession.
and:
One of the things buoying Canada’s market is a global trend that has seen Asian—particularly Chinese–buyers snap up homes in places from Europe to Australia and to Canada, particularly on the West Coast. Chinese buyers have stampeded in to Vancouver and to Toronto, two of Canada’s hottest markets.
Cam Good, a real-estate marketer in Vancouver, said he has sold 700 homes in the Vancouver area so far this year, 60% of them to Chinese immigrants. “That’s probably consistent for the whole market,” he said. “They’re the biggest group for everybody.”
I linked to the article. I think most of us can read. The WSJ just proved it, too, can be scammed by a pumper. — Garth
Hi Garth.
I agree with pretty much everything you say when it comes to housing. I try to tell my house-horny young friends to not buy right now. its not a good time. no one listens.
i dont agree with the way you fear-monger with regards to the world news. please chill-out on that.
keep up the good work.
Is it just because of the Spring or are there a lot more properties for sale in Toronto and surrounding area right now?
Does anyone know what the debt of Americans was before they sank? I think we are at $1.40 or something per dollar in Canada right now.
Plan on real estate continuing it’s upper trajectory in highy desirable hoods until the chinese say they’ve had enough. Interest rates are on hold for the foreseeable future and a raccoon and cat fight is worse than a cat and dog fight.
Phew. Got all subjects removed on the sale of our place today. Now booking vacation in Hawaii to celebrate. Here’s to liquidity!
Toronto’s condo market is a time bomb that is starting to explode. Thousands of empty units for sales and thousands and thousands of condo units’ for rent and tens of thousands of condo units to hit the market which will speed up the current housing crash in Toronto. Sellers are starting to poo poo their pants as they can not sell and many seller bought another home. Can you spell BANKRUPT? double mortage. Many people can not afford one mortgage. Toronto condo’s are built cheap and many who bought are those who put nothing down and thus the quality of people living in these condo’s is showing around the city.
http://torontorealtyblog.com/2011/02/25/the-friday-rant-cityplace-as-a-ghetto/
Not sure where deflation is going to come from.
$200 groceries easily fit in 4 small bags.
Do not confuse price inflation with asset deflation. They will come together. — Garth
Garth is spot on as usual. It’s only inflation if the increase in your wage packet matches the increase in your grocery bill. Did your wage packet shrink or stay the same while food prices were rising? That’s deflation in action. Did you lose your job? That’s deflation in action.
And the really scary thing is that deflation has hardly even got started in Canada yet. Wait nine months…
#18 Tim
“Many Asians have paid cash for their houses.”
Why does this keep coming up? Who knows for sure where “their” money comes from? This is just more baseless HAM gossip. Please stop.
You know they are down playing the situation. Radiation is raining down on Vancouver. Spin that one realwhores.
Radiation detected in B.C. seaweed and rainwater not dangerous: researchers
Read more: http://www.vancouversun.com/news/Radiation+detected+seaweed+rainwater+dangerous+Researchers/4517000/story.html#ixzz1HxVT2kgi
http://www.vancouversun.com/news/Radiation+detected+seaweed+rainwater+dangerous+Researchers/4517000/story.html
hmmmmm ANOTHER reason why Mr Harper wants the election before Summer?
Whether he gets his majority OR the Liberals get their coalition govt. He wins!
Majority means he can do what ever he wants while Rome(or in this case Canada) burns. OR
The Liberals get to deal with a multi year fiscal meltdown in a Coalition of the Bickering.
impressive……
Oh ya remember the air is safe to breath after 9’11. They wouldn’t lie about RADIATION?
http://www.vancouversun.com/news/Radiation+detected+seaweed+rainwater+dangerous+Researchers/4517000/story.html
–
The pic is nice. No, normal flew the coop and is gone now. Normal service will be resumed in a decade or two.
“. . . the usual cadre of bank economists, mortgage primers and house pumpers to tell us there’s no bubble, it’s different here and a US-style meltdown won’t happen.”
These same eccspurtz said to buy Bre-X and Nortel at the top. How did that work out? I see those ‘experts’ in money laundering still have jobs with no credibility.
“So how real is this threat? It brings disaster.” — Well said!
*
#37 45north — Referring to this? — Shutdown.
*
BoE wants further QE’s — 3, 4, 5 etc. Damn the torpedoes and run the presses flat out! Portugal and Ireland.
Hypocrites Whether dubya or Obama, they have achieved ‘regime change’ by clearly interfering in those countries. What goes around . . .
Something, whether gold or credit cards, will eventually replace the US$. Could be a combination of the Rouble – Yuan.
Harper Majority? Another POV. I sincerely trust he will lose 30 or more seats.
Snopes Exposed Guess who funds Snopes?
GE “General Electric may be the company with the closest ties to the Obama administration (if not, GE is second only to Goldman Sachs), and here we see the company benefiting from an abrupt foreign policy change made by President Obama…” GE built the reactors at Fukushima.
Fukushima At 1:45 in the 7:02 video, the newscaster states that a crane collapsed onto the fuel rods.
3:41 clip Protests in LA.
Euro Failure Portugal latest stop, Greece about to default but Iceland are the big winners, as they told crooked banxters to shove it where the sun don’t shine.
One Hour clip Maybe something in this, maybe not. Japan is in such a shambles now, this may all be for naught, plus 5:46 clip Could be this is why HAARP was used to knock off the reactors.
Geothermal Power Japan is not (apparently) going to use the power, which would replace nuke power for a decade. Link in.
Mish Q&A re: the trail of the holy investing grail.
Link in. Saturn is acting up, having a hissyfit. Is Niribu hiding somewhere?
Forget lawn Asians. This just proves anyone can be hired.
http://edition.cnn.com/2010/BUSINESS/06/29/china.rent.white.peopa
@ the truth: I actually have had friends who’ve married foreign nationals, and have experienced the process of bringing their spouses to Canada. The process takes much longer than a day – in some cases more than 24 months, as documentation, proof of education and skills, affidavits and attestations are copied and delivered, and in some cases, due to Canadian bureacratic incompetence, and bungling by the staffs of Canadian MPs, several steps in the process had to be repeated.
In a couple of cases, the process seemed so convoluted, that it might have made more sense for these spouses to immigrate to Canada as single professionals and then gotten married, instead of trying to enter Canada as the spouse of a Canadian.
I don’t know how much clearer “C” can be. He doesn’t want to be typhoid Mary after all.
http://www.cbc.ca/news/business/story/2011/03/28/dollar-rises-carney-comments.html
Also, does the income splitting promise not sound a little slapped-together/last minute? Why wasn’t it in the budget? Have the Conservative campaign poohbahs seen some scary numbers that we’re not privy to?
HGTV’s new show “till debt do us part-homeowners edition” starts in early April. The network wouldn’t have a show on unless there was a strong market for it. It will be interesting how they present this one . . .
Looks like Paul and Jen may be about to find out what the word “illiquidity” means.
The very fact that four new listings have already appeared in her building implies that there are now increasingly more sellers than buyers and when this happens the getting out becomes much more difficult.
The next word that may start to come to mind ought to be “confidence” and when that becomes negatively commonplace, then the next word should be “Fear”.
A traditionally horribly illiquid asset like real estate can implode in price in a very short time and perhaps that time is close to now.
Ever seen a few hundred greased pigs in the slaughterhouse pen heading for a hole in the fence at the same time?
We might soon get a chance to see that one wrt to the bloated real estate market in Canada.
Good luck Paul and Jen …. Sincerely, and i hope you are able to get out before the boom is lowered, if it is at all.
I watch the Ontario based renovation shows like ” Real Renos” with Jim Caruk. Not sure if the prices they quote on the show is correct on what people spend on renoing a house. These people are well over half a million dollars where in the hell does the money come from ?
I also watch the Sarah Richardson’s designer show again where in the hell does the money come from. To redecorate a house she is spending tens of thousands of dollars. The series Sarah’s house she spent hundreds of thousands of dollars.
I also watched the full series of ” Bryans House ” again based in Ontario it seems to be money is no issue.
People in Ontario spend that much money ?
When some of these people have a crap in the morning does part of their brain with the common sense go down the toilet.
When things start to fall sure glad I don’t have the DEBT ball and chain around my leg.
Japan has me more than a little scared. The latest dispersion map for Caesium 137 has the stuff airborne over Ontario. And what happens to the financial markets if Tokyo becomes a ghost town? Hell, what happens to the markets if the entire island of Honshu … God, I don’t even want to type it.
It’d be less scary if it looked like the Japanese had some sort of plan in place to get the reactors buried, but they seem to be wandering around aimlessly. For how much longer will radiation pour into the atmosphere and the Pacific?
Then there are two aircraft carriers sitting in the Straits of Hormuz and there is so much strife going on in the surrounding countries I cannot figure out for what precise conflict the carriers are there for.
We’ve suddenly decided to back Al Queda rebels in Libya.
Europe looks more and more like it will default on its debts and the European Union may fall.
And idiots in Parliment – I blame all of the frakkers for this – have decided with all of this crap going on world wide, now is the time to have an election?
In the meanwhile I am trying to source iodine and geiger counters.
If you decide to not post this frightened little missive, Garth, I entirely understand. How the hell does one plan for one’s financial future in such times?
Sounds like lotus land is ready for disaster, but I am willing to bet the NYSE melts down first. WAY overvalued and bubbly.
I agree. This is the year it will happen. In the Okanagan area of BC (a short plane ride away from Vancouver, though the Rich Chinese apparently can’t find it), there are deals to be had. I know at least 10 people who are in trouble over real estate. Too much real estate debt! It will not end well, but end it will.
Anecdotal evidence on downtown Vancouver condos.
Had a friend stay in a good hotel in downtown Vancouver for a few days last week.
The hotel was surrounded by lots of condos and her report was that as soon as it got dark out she noticed a whole bunch of the condos never had lights on. Said it was real eery.
Maybe everyone was out partying celebrating their gains or perhaps there are a bunch of empties out there that haven’t been talked about much in the scheme of things.
Time will tell…
I have got to admit that I have been pretty surprised by the extent of the bad news coming out of the US on it’s housing market.
I known better though. The “reversion to the mean” rule tells us that the correction is not over by a long shot and yet I am often hopeful enough to allow myself to be deluded despite all the bad news.
So the US is still in a deflationary spiral. They continue to set records for bad news down there that even exceed the negative statistics from the Great Depression itself!! How can that be happening without anyone actually declaring housing a national emergency.
One thing we do know is that during the Depression buying power was actually increasing for most people. Fewer dollars could buy more in 1939 than they could in 1929 for example.
This is obviously not the case this time around as housing values are falling simultaneous with purchasing power. So Americans (and we Canadians too eventually) are taking a double hit in the loss of wealth in core assets and again in the loss of wealth of their currency (buying power).
That in essence describes why the prices paid for consumption goods is increasing at a time when home prices are falling. This is a function of a falling currency in an economy beset by deflationary headwinds and it is worth noting that the Canadian dollar has really not increased so significantly. We are really only seeing our currency appear to appreciate because the Greenback is in decline against it.
That was a great post today by the way Garth. I think you have drawn people to make the correct conclusions about where we are heading without having to say it in small words or crayons.
The conclusion as always tells us that debt is our biggest enemy right now and income will be our best friend as the days roll past. Bring on the Dividends friends. We will need them. We will want those returns to be inflation adjusted though.
Here is a nifty calculator by the way for comparing the purchasing power of the US Dollar between any two years since 1774. You can draw your own conclusions about what kind of world we are really living in after toying with it awhile. It is fascinating stuff really.
http://www.measuringworth.com/ppowerus/
http://www.measuringworth.com/uscompare/
There are a dozen other great calculators there too.
TheTruth @24:
I agree with the news in the Winnipeg Freepress.
It is about time we got tough law against marriage fraud and immigration fraud.
God knows how much crap got into Canada through these loopholes. Stop it now.
I wish someone would explain the Asian phenom with RE. The place we’re renting sold for 1.9 mil. The rent is $3600. The owner (overseas Asian with kid in school here) can’t be making money and he owns several similar properties in Vancouver. Why do they buy if there are better investments out there?
Garth:
Great post – thank you.
Some food for thought:
Canadian national debt is ~560 billion according to Canada’s national debt clock. (It is 1/2 of ~$1trillion in mortgages we owe!)
Assume 10 million Canadians drawing $1,000/mo in CPP+OAS+GIS = $10 billion/month. CPP can be drawn before age 65, at a lower monthly payment. Include EI etc. if you wish.
56 months of paying these guaranteed Gov’t retirement benefits will double the national debt in roughly 5 years. This may not necessarily happen tomorrow, but if it happens…
AgAu
#13 Western Canadian
I think you may live in a box, ain’t no Calgarians spending shit. Teachers are getting laid off from the CBE, Shaw just laid off more than 100 people, it goes on and on. The “boom” was not from oil or natural gas, it was from cheap credit. Retards who should of never been allowed to buy a home were allowed to thanks to the government and the banks. I think Calgary will have the biggest fall of all, especially since people can throw their keys in an envelope and walk away in this province AND most of these new owners will go back to their families in other parts of Canada. Alberta is going to be a bloodbath.
Europe is screwed
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/bernanke/Euro%20stress%20test.gif
Thanks Garth, I got a really good laugh from that nice Pic today, I needed one.
I’m get a bit stress thinking about stand up in public and asking some seriously question of the party candidates in the public debates!
I’ll be write them down for myself so I’ll have a better change of getting it just worded right, short and concise for when I get up to the microphone.
And I’ll be ready if they insist when you arrive at the debates that the question are written out, for one person to read aloud.
I’ll already have it typed up to make it easier to read and then more likely to be read in the first place. When they pull out the questions from the box for the candidates to answer.
“Our lives begin to end the day we become silent about the things that matter.”
Martin Luther King Jr.
“First they ignore you. Then they laugh at you. Then they fight you. Then you win.” – Mahatma Gandhi
RE: #13 WesternCanadian Where are you in Alberta? Everybody HAS to drive everywhere! We have a glut of condos and houses sitting empty all over the city! I would not be suprised if by the end of the year we have a 10% empty household/condo ratio like the USA.
I live in Edmonton-Have all my life. In my late 40s now. Massive expansion of Brown Vinyl sided cookie cutter houses throughout the outskirts of the city, bilions of dollars of real estate built up. Most of the folks that live there drive up to an hour to work each day. I have a few friends who wanted to buy “out there” because they had to have something big and new.
Now my friends that live out there are making over $100,000 a year for the household, but with car expenses & rising gas they are really feeling the crunch. Groceries up over 5% in two months, gas 20%. Our “service fee” or “Deliver charge” as they call it in alberta for electricity is the same as the actual usage in many households as well since deregualtion of the electricty under the Conservative government. Swelling electrical bills to the most expensive Per KWH in north america.
So how will prices surge? Sales surge? No more 40 year Subprime like in 2007…overbuilding still continues…
And dude don’t you remember 2007? It was a speculative bubble! Homelessness soared. I saw the standard of living collapase around me as the MSM kept repeating over & over how much rent was going up in so many buildings (they never mentioned the rent was going up so much to get people out to flip the buildings into condos for specs to buy). THIS caused a huge surge in rising rent prices and a low vacancy rate due to the older rental building being emptied Four years later many of these building have dozen of advertisments daily in The local Journal, Craigslist & Kujiji still trying to find suckers to rent in the speculative condo flips. Luckily reality is starting to set in and rent is usually 30-40% cheaper than it was 4 yrs ago.
20+ foreclosures A DAY in ALberta, 25 Bankruptcies A DAY in ALberta, and we are at historical lows for interest rates. $150 a barrel will send everything rising-including interest rates, and then we could be another Phionex another Vegas down another 25-40%!
why would inflation propel real estate higher? We all saw that the U.S real estate market went bust while stocks, oil etc were sky high.
These recessions are starting with the culprit ….real estate and the ridiculous valuations of home prices. I’m sorry, but I’m a home owner and have a fixed salary but costs of energy, food etc are going up, it’s going to hurt me financially. I won’t be looking to upgrade my home.
As far as the nuclear debate goes, China and India are still going full steam ahead with nuclear. People seem to debate “nuclear or not?”, rather than “nuclear or what?”
Sorry, but I don’t want to live with having to keep the power off for 3 or 4 hours a day just because the Japanese built reactors on top of one of the world’s largest fault lines. I also don’t anticipate earthquakes of that magnitude to rock us very often. Wasn’t that one of the largest in the last 100 years?
I’ll take my chances. I want a running refrigerator, television, computer, heat, lights etc. No black outs needed.
Hi S.B., Since you ask about and said you have seen my letter to the editor in the Scientific American magazine April 2011
Do you think it might get more than just a few good people to look into this important human health issue for there families well being and in enough time for many of them to start stand up at public election debates and meeting demand to know which Party will pledge and put in writing that they will stop water fluoridation in Canada, immediately after being elected. Do you think many people will start asking question in time, so we all will know before we get to vote at the poles? I hope so.
Important Question will need to start being ask fairly soon then, and by more than just one person in one place in Canada.
This continued practice is just wrong on so many levels!
But I guess you’d need to look at the available science information to come to that conclusion,
as I have.
I don’t believe the editors of Scientific American would have place my letter into there publication unless they were also convinced of the scientific evidence that is now clearly pointing to the fact that some very serious attention should now be brought to bear to protect peoples health, and stop it.
All the science I’ve seen is clearly telling me it must end now in Canada, I’m convinced it is causing harm to some people. The organizations that still keep promoting it, they have lost all credibility with me, and are teetering on the verge of grossly negligent as far as I am concerned. Can’t they read the science? Are they incapable in acting in the public best interests now?
It seems not since they have not, not yet anyway.
All Good men and women must speak up to have this stopped now! This election is the time to get it on there radar by asking them tough and pointed question in public to get it on the record. And more that just once and more than just one place.
I’ll be asking!!! How about you?
This issue reminds me of the second hand smoking issue. Even as the science was pilling high that it was causing harm to some people, the companies did all they could to down play the danger from there product that they had be selling for year as being safe to use, even good for you.(NOT)
In Ontario the ‘Safe Drinking Water Act’. The law about this! Which was written after the Walkerton water tragedy. Clearly spells out it must stop! Why it is still continuing is truly unbelievable and unimaginably to me. (If asked can give specifics.)
Lets hope at least one of the Federal Parties have some good and wise people that with actually look at the science and think for themselves. And then quickly take the needed action to stop this immediately after they are elected. In order to actually protect people and there families from further harm from this toxic stuff.
When the Parties puts it into writing, and their Leader states they will put a stop to it, they will have my vote this time! Except never H because,
I have emailed my MP a couple times over the years asking if she can help stop this addition of industrial toxic waste into the public water supply. I suppled the FAN link for a start. Nothing has happened, not a word except they got my email. Maybe this serious health issue isn’t ‘sexy’ enough for Harper to bother about?
I have lost all faith that the ‘Harper government’ could ever be capable or trusted to actually stop it.
Sure Harper can try and clam it’s not his problem, If not the PM then whom? It is a human health problem requiring action to fix now. If your not prepared to take action in the best interest of your fellow human beings health and welfare, in light of the mounting evidence, what is the world coming to anyway?
Since H has gone back on his word a few times and even his own election law. For me too think he’s actually capable of do anything to stop this, even if he put it into writing would now be a big stretch for me to ever fully believe.
If you need to again review my letter as seen in Scientific American magazine and the documents it mentions, the FAN site has posted it, along with lots more good science based information about the issue.
http://www2.fluoridealert.org/Alert/United-States/National/Letter-in-Scientific-American-Skeptical-About-Fluoride
“Our lives begin to end the day we become silent about the things that matter.”
Martin Luther King Jr.
“First they ignore you. Then they laugh at you. Then they fight you. Then you win.” – Mahatma Gandhi
Did you also read on the CRA web site: 8 million Canadians do not pay tax? did you also read 188,000 Canadians pay 21% of the federal taxes. go figure. Land of steal from the rich and give to the poor, gotta love Canada, imagine if those 8 million people got CMHC mortgages.
We are not at the top yet if I compare to Australia.
Well like I said a few months ago Spring will be the deciding factor for this top, but with an election coming. and low interest rates and the economy moving along and over 3,000 winners at my Timmies shop who would bet against R/E? I bet next spring.
Garth Man, can we bring the Rhino party back? Is it hard to before May 2?
5:30 am and already 40 posts does no one sleep?
I find it very amusing that many here think a house price correction can only come with some external shock. They seem to dismiss the notion that prices (being too high) could cause a correction. So I hope to point out by using recent history of the US experience just how wrong this way of thinking really is.
What do you know someone has done the timeline for me.
Full article here. http://www.moneymorning.com.au/20110325/why-australia-is-set-to-follow-us-path-of-house-price-doom.html
To quote the important stuff, here is the time line behind the US housing melt down.
“In a nutshell, this timeline (graph in article) disproves one of the key arguments made by spruikers – an idea we’ve never believed anyway – that Australian (Canadian ?) house prices can only fall if there’s a major shock to the economy.
The chart above proves that isn’t the case.
The S&P/Case-Shiller index revealed house price growth was in a steep decline from early 2006… and went negative in the first quarter of 2007.
During that period, what was the US unemployment rate? That’s right, it was around 4.5%. That’s lower than the current Australian unemployment rate.
At that time there was no major shock to the economy. In fact, the first of the big financial firms to collapse – Bear Stearns – didn’t collapse until March 2008. A full year after house prices had started to fall.
And even if you take the first signs of trouble at Bear Stearns – the USD$3.2 billion “self” bailout of two of its hedge funds – that was only in June 2007… months after house prices started to sink. And still long before the market received a genuine shock to the system”.
Aussie Update
http://www.theage.com.au/business/seeds-of-next-banking-crisis-now-being-sown-20110329-1cdyl.html
http://www.moneymorning.com.au/20110329/real-estate-industry-forecasts-major-price-falls.html
Hello Garth.
Real Estate buyers/owners and Bond investors are suffering from continuity bias. They think past performance and promises are indicative of future performance. All glory is fleeting people and some times an illusion.
Relative to the global currency supply or even the global economy as expressed in unbacked fiat currencies gold and silver are extremely under priced even at current so called market prices.
Come to think about it many silver and gold advisors
suffer from continuity bias as well largely due to their limited sub par view of the potential price rise.
It seems like they work with the bears to limit price expectations to something that still constitutes a deep discount price and hence a dishonest price.
Buy low and sell high applies to more than paper assets and real estate. Just remember when buying metal don’t buy paper or expose your metal to being lent or stolen.
Steven
Do not confuse price inflation with asset deflation. They will come together. — Garth
__________________________________________
so, what assets have been deflating in canada? certainly not house prices. so, what else? can’t name anything else?.. which means, up until now, we have price inflation AND asset inflation. and don’t say it’s coming. that’s irrelevant. we’re talking the here an now. which has been endless inflation.
tmg on 03.29.11 at 1:45 am
I wish someone would explain the Asian phenom with RE. The place we’re renting sold for 1.9 mil. The rent is $3600. The owner (overseas Asian with kid in school here) can’t be making money and he owns several similar properties in Vancouver. Why do they buy if there are better investments out there?
Hi TMG..
Not just Asians but why would anyone. IMHO its the delusion, the faith that RE is some kind of magic asset.
Notice how people in this group (BPOE etc) never have much more to say than “an almost religious rant”, nothing more than what they want to believe. When you question these types with any kind of logic or math they quickly recite the well worn lines of the spruikers, much of this being complete rubbish.
Challenge them with the facts about rental yields or income to price ratios and they are speechless, or respond, “that doesnt matter”. These are the fools in our midst, the brainwashed those not capable of their own logical thought. Much to this old fellas disbelief it seems very wide spread in the community.
How long before both our countries housing markets tank only depends on how many greater fools there are left.
“Bubbles only burst when the pool of greater fools runs out and not before”.
I say tell the whole story as it really is.
Even in a crash, homes still sell but of course in less quantity.
In this declining market a seller must adapt and use a strategy that works. Marketing is key.
There are so many unrealistic, idiotic, clueless owners that live like pigs in dirty homes with bright red painted walls, etc. Those homes won’t even sell in a surging market.
Garth stop scaring the impressionable folks out there.
If you think China is going to save Canada, think again:
http://www.sbs.com.au/dateline/story/watch/id/601007/n/China-s-Ghost-Cities
Another WSJ piece on the Canadian Market, with some nice graphs showing the trend of house prices vs. debt vs. mortgage deliquencies (hint – they all go up together):
http://online.wsj.com/article/SB10001424052748703784004576220994025363866.html
The problem with people’s otpimism regarding inflation is that many have trouble understanding its evolution.
If inflation hits, profit margins will contract first before business plans are adjusted to reflect the new reality.
As margins contract, workers will get laid off and many won’t be able to keep on paying their mortgage. Thus housing will tank in the initial stages of inflation.
WSJ reports: “Cam Good, a real-estate marketer in Vancouver, said he has sold 700 homes in the Vancouver area so far this year”.
Impressive, that’s 8 a day, or one every hour (if he works 8 hours a day, including weekends).
Not only are the Chinese buyers snapping up every property in site, they are turning our real estate agents in to indefatigable superhumans.
Or else WSJ has given up on the more tedious parts of journalism, like fact checking.
You’re also forgetting to mention that many who own their condo or home will do everything to hang on to it. If the market falls, most will try to ride it out. As long as they keep their jobs, they’ll keep making payments.
——
That means banker will keep on getting their money and consumer spending will just dry up. Not a good scenario for many small Canadian businesses.
But then again, when I attended a Goldman Sachs financial conference circa 2003, every single bank CEO repeated the same mantra, that US homeowners would do whatever it took to make those mortgage payments.
We know how devoted US homeowners have been. LOL!
Did you also read on the CRA web site: 8 million Canadians do not pay tax? did you also read 188,000 Canadians pay 21% of the federal taxes. go figure. Land of steal from the rich and give to the poor, gotta love Canada, imagine if those 8 million people got CMHC mortgages.
————-
Why do so many people think that high earners are worthy of their loot?
Many higher earners don’t necessarily make more money because they are so much better and harder working than everyone else but simply because the sector they work in benefits from government largesse such as those working in the FIRE economy for example.
If you look at it that way, it suddenly makes makes sense that they should pay a larger share of Canada’s taxes. This is their way of thanking society for its generosity.
…After all, if inflation wins…If deflation wins…
Last I checked it was happening at the same time. Always does.
…Crude at $150 precipitated the 2008 financial crisis. What happens if it hits $200 while nuclear energy is blackballed and planetary energy costs spiral…
Get real. Nuclear energy WILL NOT be blackballed. There is no option. Period.
#86 -Steven Rowlandson.
Steven, you trying to tell us that if silver doubles from here, SLW( Silver Wheaton) doesn’t at least triple??
#13 WesternCanadian
….If that happens Alberta rents will go through the roof….
Hey … it natural gas that really drives the province. Makes up 65% of the Alberta budget. Do a little light reading next time.
Attempt to influence voters……>>>>>>>
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Here is the Cityplace Toronto MLS area, just look at all the units offered within this small area
http://tinyurl.com/4u96dux
Scroll to the left on this MLS map and you move towards the equally saturated King West condo strip.
Another localized ground zero, X-condos with 30-40 units on offer, always, for the past two months:
http://tinyurl.com/6hm2y3l
A write up about these X condos:
http://torontorealtyblog.com/2011/03/16/x-condos-before-after/#more-3441
#83 GregW, Oakville on 03.29.11 at 3:39 am
Unfortunatley I think the deadly Flouride (and Chlorine) poisons are some of the smaller worries these days. My hope is, like cockroaches, we slowly develop immunity to the posions sprayed on us.
How about the deadly chemicals contained in shampoos, creams, deoderants, and cosmetics that men and women slather upon themselves, daily?
How’s that war on breast cancer coming along? I thought so.
The genetic-altering chemicals in plastics and plastic bottles? Recently exposed in the media, but now out of sight. I can’t help but remember that eugenics and genetics and chemical warfare was a huge part of the 3rd Reich’s research again certain parts of the population. AIDS anyone?
And the mind control ADD drugs, and vaccines, given to kids as young as four now. I know a young (26) former teacher, who said almost 1/2 the kids in his class were labelled with some sort of disorder now, it’s on their school records.
I can’t help but remember that mind control and drug experiments were a huge part of the 3rd Reich and Russian gulag experiements. Get ’em while their are young.
But maybe I’ve said too much. We won the war right, all the baddies no longer exist we live in some king of fantasy utopia/heaven?? Do you Monsanto much?
The obesity and diabetes epidemic? I understand that the man-made sweeteners and chemicals (Sucrose/Glucose/Hydrogentated Corn Syrup etc.) do not signal to our stomach when it is full, unlike with natural foods. Diabetics use Glucose to manage their disease?!
Sucrose/glucose is in EVERY processed food now, even in the so-called healty ones:
– Granola/health bars, all fruit juices, all baked goods, processed cheese slices, cereals, crackers, the list goes on.
Another great cartoon from Bruce MacKinnon.
http://thechronicleherald.ca/brucemackinnon/mackinnon-cartoon-2011-03-29
If only raccoons were so cute and kind to cats.
The picture is a photoshop job.
Here’s the original raccoon being a sneaky raskel, sans imposed feline friend.
http://catssneeze.blogspot.com/2008/05/todays-raccoon-pic.html
How dare they Photoshop the kitty out of the pic? — Garth
After getting back from flying Air Canada business class ($10k round trip) from Vancouver to London UK I have to say I was not impressed by Vancouver nor it’s 1st Class airport facilities; there were no rich Asians in the 1st class lounge nor did I see any rich asians flying around in helicopters while flying into Vancouver on a semi-private jet.
Other than the mountains surrounding Vancouver; the small city looks no different than any other US city.
Canada is a beautiful country, but why Vancouver is “sought after” I cannot understand nor would invest there.
#65 tunano
This is the link:
http://edition.cnn.com/2010/BUSINESS/06/29/china.rent.white.people
This sentence, located in its final paragraph, best describes a city on Canada’s west coast:
“There is quite an elaborate fantasy world going on here where if everyone buys into it, it does not matter if it is the truth.
Food for thought:
1. In the JAPANESE housing bubble in the 80’s, criminal syndicates were very active speculators; when the bubble crashed, they threatened the banks to be let off the hook and they were.
2. Could it be that big speculators are shorting our mortgage market right now?
GUYS, READ THROUGH THE LINES (of the newspaper..)
My hubbie and I sold our air space (condo) in Vancouver for over 1/2 a million and bought a whole house with property in the Maritimes for less than the down payment on the condo. Feeling pretty smug being mortgage free and having cash in the bank, but can’t help being concerned about having half our networth tied up in real estate…hopefully the job holds out until I can build up more cash resources.
Thanks for the guidance Garth, it was nice to have someone saying what we were thinking.
Herb: talking about Ottawa: Besides, why are we preparing to spend $2.5 B on Light Rail Transit if there is no problem commuting
to increase the capacity of public transit through the downtown core. Currently Albert and Slater are at capacity
http://www.ottawalightrail.ca/en/
Herb: talking about Ottawa: Besides, why are we preparing to spend $2.5 B on Light Rail Transit if there is no problem commuting?
to increase the capacity of public transit through the downtown core. Currently Albert and Slater are at capacity
http://www.ottawalightrail.ca/
I was going to comment about CityPlace but it looks like #29 S.B. on 03.28.11 at 10:48 pm and maybe a few others beat me to it.
By most accounts, CityPlace is like a university residence complex for the mid-late 20s crowd, but with fewer rules. Pot smokers in the hallways, vomit in the elevators, cabs lined up outside on Friday nights waiting to take mini-skirted residents to the club district. Not the kind of environment that promotes high resale values.
S.B. on 03.29.11 at 9:23 am
#83 GregW, Oakville on 03.29.11 at 3:39 am
———-
The better we are at controlling everything bad, deadly, evil, the larger our population gets.
The larger our population gets, the more we destroy the environment.
Catch 22.
the problem is the link:
http://www.ottawalightrail.ca/
if I add the suffix “en/” the post is just dropped, don’t know why, it’s a perfectly valid url
SOME CONTEXT PLEASE
13% vacant house rate in the U.S. sounds scary, until, that is, you put it in context…
Every vacation house and every second house is counted as vacant even when it is not for sale.
The vacancy rate in 2007 was 11%… So it is today only 2% higher.
You cant’t buy low if you are forever afraid to buy low.
It always looks darkest before the dawn…
There are always reasons for fear.
To the bold (but not the reckless) will go the spoils.
peter on 03.28.11 at 10:37 pmGarth with the election upcoming will you please provide your insights as the big day approaches. I know it is not a theme on your blog, but I find your posts about politics and your experiences in politics very enlighting. Thanks.
—————–
I second this emotion! I’m dyin’ to hear your sage insights on the upcoming election, please! :o)
Hi #84 Income tax, re: sleep.
Some seem to have much on there minds. This quot seems to cover many things I’ve found.
“Belief in myth avoids the discomfort of thought”
by a person with the initials A.L. in BC Canada as far as I know?
IMO Harper reminds me of the fabled emperor with no clothes.
I hope the people can figure that out in time and vote! Is the media prepared to help spread the word? If we are not vigilant you many find your family waking up in a place you really didn’t ever want to be in!
Luckily it’s different here eh? (tongue-in-cheek)
Down south RE prices just keep falling…
http://news.yahoo.com/s/ap/20110329/ap_on_bi_ge/us_home_prices
Factor in our superior weather and our oh so fiscally responsible citizens and it becomes so obvious why us high and might cannot fall.
Maybe we need a little more radiation fallout to stimulate the brains. I think Canada is long overdue for a wake up call of some sort…that includes the morons on the hill.
Does anyone know why inflation is running at 2.2% in the USA while inflation is running at 13% in China? Shouldn’t the USA consumer be paying higher for consumer goods as the prices of oil, copper, et are rising so fast this year? I can see why the Canadian consumer has been shield due to the appreciation of the Loonie but not clear why the USA consumer seems coated in Teflon yet the USA dollar falls like lead.
Hi #102 S.B., re: AIDS anyone?
Have you seen the movie/video “In Lies We Trust”
There is an admission to the cause of AIDS!! By the guy that did it!!!
and other very dark deeds of man.
Caution, cover the kids ears when you watch it.
And then there are the plans of Codex,
“Codex Alimentarius”.
We are all so screwed!
“Our lives begin to end the day we become silent about the things that matter.”
Martin Luther King Jr.
“First they ignore you. Then they laugh at you. Then they fight you. Then you win.” – Mahatma Gandhi
At #52: Ohhhh, little Timmy, how short-sighted you are. The Chinese are facing an economic and real estate collapse of their own. No more Chinese buyers in Canada once this happens – guaranteed. Also, MOST economists now believe Canada is facing a U.S.-style downturn in its economy and real estate values. Some even stating it will be worse in Canada than the U.S. That would only make sense.
…”The next step is austerity budgets, and deflation creeps nearer.” – Hon. GT
Correct. Better known as the Paradox of Thrift. Witness Blighty.
TMG/ Aussie Roy
Asian real estate investing is about inter-generational wealth. Over time, most paper investments get challenged, wiped out. The ground under one’s feet will be here for hundreds of thousands of years. And the powers that be can’t take that away from you. It’s a hard asset mentality not simple accounting that takes precedence in the buying process.
Greetings: As we head into the election, todays’ post by Kunstler is relevant. Part way through he talks about lack of leadership.
http://kunstler.com/blog/2011/03/make-no-mistake.html#more
Inflation? Deflation? Heads you lose, tails you lose. The deteriorating economic crisis will not be solved until the debt is purged from the system, either through default or hyperinflation. People have to be living in a dream world to think that the current economic policy of borrow and print is a cure for the ailing economy, since it is what created the crisis in the first place. We are rearranging the deck chairs on the Titanic and there is no exit strategy.
G-Man, reading your post today – a very humbling experience – in my neck of the woods, on a quiet court which I haven’t seen any action with real estate for the past 7-8 years…all of a sudden 3 homes have come on the market in the past 2 weeks – we have talked at length and I have thought of selling back in 2005, but we have our roots planted here – our home, is shelter and we bought way before the magical ride of double digit increases… I just wonder if the market totally craps out – will I see prices back to the averages in 2000 – that will surely stab the economy in the heart.
I just find it incredible, in the late 80’s the cause of the condo crash in Toronto was pointed towards that investors made up 40% of the condo market – and in true form, when things started to show some cracks, the roof caved in … and today – it’s the same story but no financial paper/magazine seems to even make the comparisons – I guess the advertising dollar from this segment is their lifeline and why cut off your own head –
A final note – funny how bad news is all around us – but most take no notice – but if your neighbour seems to have hit a brick wall (financially speaking) – panic seems to set in real fast –
Bubble in Vancouver?? You ain’t seen nothing yet. Why isn’t all that HAM buying up in their own country?
China Ghost Cities
http://www.businessinsider.com/china-ghost-city-documentary-2011-3
#53 aaron
I agree, Garth’s comments on world news can be pretty bleak.
Maybe this will help:
In Tokyo you can expect a high of 16 °C for Wednesday with clear skies, and a N wind at 11 km/h. Humidity at 47%. Overall, a pretty nice day! Now over to Libya; Canadian lead NATO forces are being heralded as liberators, and local merchants are reporting an increase in zippo and Canadian flag sales… I say CANADA you say LIBERATE…
Over to the UK. Millions of British are welcoming new austerity measures, with many more wondering; should traffic lights only flash amber during quiet times? And in EU. Portugal, Italy, Greece, and Spain (PIGS) are set to release a Mediterranean cook book, centered around pork dishes, to help offset some of their current debt obligations.
Have a great day everyone!
Does anyone know why inflation is running at 2.2% in the USA while inflation is running at 13% in China?
———
Basket of goods.
In China, food = 50% of basket.
In US, food = 5% of basket.
Necessities are going up, discretionary falt or down. A lot more discretionary in US than in China.
Do I live in a parallel world? I have not see a decrease in house prices in GTA. I am telling you. In the last year houses have increase dramatically, if you sale @ price reduced (-10%) who cares, you are pocketing at least 30% in gain. Now, this is just an example because I have not seen any drop in price specially in OVERPRICED WOODBRIDGE, ON.
Do I live in a parallel world? I have not seen a decrease in house prices in GTA. I am telling you. In the last year houses have increase dramatically, if you sale @ price reduced (-10%) who cares, you are pocketing at least 30% in gain. Now, this is just an example because I have not seen any drop in price specially in OVERPRICED WOODBRIDGE, ON.
The ground under one’s feet will be here for hundreds of thousands of years.
———-
On the 89th floor?
I was driving around the amazing, phenomenal Richmond yesterday. The perimeter of the town is nicer than ever -a seawalk/riverwalk that surrounds 3/4 of the city and is being upgraded all the time. The retail/business core is 100% different than it was even ten years ago.
However, the rest of the place is the same dump it’s always been. There are a ton of shoddy neighbourhoods in Richmond that the odd monster house certainly can’t save. Except for a few select areas on the outer edges near the water, Richmond is as flat and damn-near ugly as ever. Oh yeah, and it’s built on silt. In the event of an earthquake, say all the newspapers in the past couple weeks, any bridge that even touches down in Richmond is unsafe. A million-plus for a piece of sh*t teardown in THIS place? Pulease!!
Last week, I drove through the south Okanagan, from Peachland through to Osoyoos. Still as beautiful as ever – orchards ready to blossom, vineyards on the hillsides, lakes everywhere. Yet the For Sale signs are epidemic, as are the price reductions. We looked at a dozen houses while we were there – all priced less than $500,000 and each with lovely lake views.
And very, very few are being sold. Realtors tell me straight-up that they’re 20 – 25% off their highs of two years ago, and falling. “Bring us any offer” is the phrase of the day in the beautiful Okanagan.
Three weeks ago, I took a spin throught the Fraser Valley, and I can say with all certainty that Chilliwack, for one, is a dead zone. There, you can buy a NEW house, on the hill with a view in a nice neighbourhood, for much less than $400,000.
In Abbotsford – the east portion of Abbotsford, up on the hill and with commanding views of the farmland and Mt Baker in the distance – prices for a good home in a great enighbourhood start at less than $400,000. Huge price reductions are commonplace. And still so few people are buying.
The moral? Like I’ve been saying for quite some time, the correction is already here in so many areas. When will it hit places like Richmond, where all the realtors and the mainstream media point to as evidence that real estate is super extra stupendous HOT? Who knows. Yet apart from a scant few spots, Richmond, for me, is a hole. That it literally *will* be a hole in the event of a serious earthquake only seals the deal.
Do I live in a parallel world? I have not seen a decrease in house prices in GTA. I am telling you. In the last year houses have increase dramatically, if you sale @ price reduced (-10%) who cares, you are pocketing at least 30% in gain. Now, this is just an example because I have not seen any drop in price specially in OVERPRICED WOODBRIDGE, ON……!!!
Hi 114 Lisa, This site has election and government stuff, I believe 24/7.
Caution, corporate mass media filters ofter off.
http://www.cpac.ca
Garth I just saw the roundtable article in the Richmond Hill Post, pictures and all.
You should not have let Barry Cohen bend you over like that.
I’m surprised you let him get away as easy as you did.
Boy, I can’t stand that guy or the bald headed tree on the left side either. Pumper extraodinaires !
Vancouver: Best Place on Earth? HA! Hell, it doesn’t even make the top ten in THIS country. Why? Real estate prices, cost of living, and (as if you didn’t know) the unrelenting rain. Read more:
http://www.news1130.com/news/local/article/204523–vancouver-is-not-best-place-to-live
Vancouver: World’s Third Most Expensive Place to Live. Read more:
http://www.news1130.com/news/local/article/204523–vancouver-is-not-best-place-to-live
#100 john m on 03.29.11 at 8:48 am
Attempt to influence voters……>>>>>>>
Writers Needed To Post Right-Wing Comments (Vancouver, Calgary, Toronto, Halifax)
Date: 2011-03-28, 3:18PM MDT
Reply to: [email protected] [Errors when replying to ads?]
………………………..
I just read the ad this am. I know there are lots of con posters who comment on articles in the Chronicle Herald and also post the same garbage on many other msm sites across the country. Seem to recall the PCO awhile back hired some pro cons to monitor and refute any articles that didn’t support the con talking points.
At the supermarket yesterday I spotted a poster stuck on the noticeboard – “How to buy a lovely home in Trenton with zero downpayment” http://www.trentonzerodown.com/.
Reading the blurb, this realtor insists that as well as trawling through the different kinds of home loan programmes on our behalf, his Home Finder Team will provide us with up to the minute information on new listings “even before many other real estate agents have seen it!” – which will be news to them, I am sure.
There was a strip of phone numbers attached and including the one I took, only two had been removed. Maybe they are not so dumb around here.
Some photos of Detroit -http://www.dailymail.co.uk/news/article-1370199/Detroit-Haunting-photos-crumbling-remains-highlight-decline-Motor-City.html
US home prices off to dismal start in 2011 according to Case-Shiller index data released for Jan. 2011. US real estate is firmly in double-dip territory and several US markets back at 2000 levels:
http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff–p-us—-
http://www.marketwatch.com/story/home-prices-fall-for-sixth-straight-month-2011-03-29
According to Robert Shiller “there’s a substantial risk of home prices falling another 15%, 20% or 25%” (in the US).
When headlines become this dismal it is usually the signal that the bottom has been reached or is very near?
http://finance.fortune.cnn.com/2011/03/29/why-house-prices-will-keep-falling/
The American. Love your posts. You give to them straight.
Right on re Tim #52. He usually sounds like he’s trying
to pump RE.
Concerning Alberta, here are a few sources for you to peruse:
http://www.cba.ca/contents/files/statistics/stat_mortgage_db050_en.pdf
Figures from the Canadian Bankers Association show mortgages in arrears (delinquent for 90+ days) for January 2011 in Canada stand at 0.45%
The figure for Alberta is 0.84%. The previous record (Feb, 1997) is 0.69%.
In June of 2007, mortgage arrears in Alberta (same source) stood at 0.14%.
The increase to January 2011 is 600%. Six-fold increase in less than 4 years.
Immigration statistics from the ministry of Finance and Enterprise:
# March 24, 2011 – Quarterly Alberta Population Report – 4th Quarter of 2010
http://www.finance.alberta.ca/aboutalberta/population_reports/2010-4thquarter.pdf
# March 11, 2011 – Demographic Spotlight: Recent Migration Trends in Census Divisions: Fort McMurray, Calgary and Edmonton
http://www.finance.alberta.ca/aboutalberta/demographic_spotlights/2011-0311-migration-trends-fort-mcmurray-calgary-edmonton.pdf
Select quotes from the report:
– the 2010 population increase was the lowest since 1996 (1.39%)
– Alberta’s population growth rate in 2010 was the lowest in 15 years
– In 2010, the province received a net inflow of 24,177 international migrants, a record high level in Alberta.
Summary Statistics for 2010
Population (Jan 1, 2010): 3,690,250
Births (Jan – Dec): 53,046
Deaths (Jan – Dec): 22,349
Net Interprovincial Migration (Jan – Dec): 6,797
Net International Migration (Jan – Dec): 24,177
Net Non-Permanent Residents (Jan – Dec): -9,168
Growth (Jan – Dec): 52,503
Population (Jan. 1, 2011): 3,742,753
Note that growth in 2010 can be attributed fully to births.
Reviewing Table 5 is essential to understand migration trends since 2006.
– Interprovincial migration: 2006 =46.2K; 2010= 6.8K
– International migration: 2006 = 16.6K; 2010= 24.2K
– Non-permanent residents: 2006=7.8K; 2010=-9.2K
Normal?
Not sure if someone posted this already…
http://www.bobtruman.com/blogs/bob_truman/archive/2011/03/29/what-happened-to-the-shadow-inventory.aspx
Comments?
Alan on 03.29.11 at 11:02 amTMG/ Aussie Roy
Asian real estate investing is about inter-generational wealth. Over time, most paper investments get challenged, wiped out. The ground under one’s feet will be here for hundreds of thousands of years. And the powers that be can’t take that away from you. It’s a hard asset mentality not simple accounting that takes precedence in the buying process.
LOL, what a total load of skippy sh*&. Its hard to know where to start. Its no different for an Asian a Canadian an Amercian or an Aussie. Its just speculation, just like your statement they (including you?) ALL presume house prices can only ever rise. Do they?.
Intergenerational wealth, would pressume that land values only ever go up. Lets take a look at a real life example of Asian intergenerational wealth, lets see how its worked out for those rather wealthy Japanese in the 80s, you know the great Japanese land shortage, prices can only ever go up, price to income ratios dont matter, rental yields dont matter, nothing matters coz houses can only ever go up because they aint making any more land, right. Its a HARD asset..
Surely even if you pay a little too much for land 20, 30 at very least 40 years later you will be richer, right?. MMM trouble is it didnt turn out that way property prices in Japan when adjusted for inflation they are 40% below their peak of the late 80s early 90s.
So again without this delusional rubbish that house prices can and will only ever rise no matter what their price is currently, is a delusional fantasy.
Most wealthy families I know here (Asian, Afican, European etc) didnt get that way from having a few houses, most have productive income producing assets, you know they are producers, investors, capitalists not just delusional house price speculators. You know these are clever people able to think for themselves as we say here, they can tell the shi& from the clay.
Again its the inability to even consider that any RE investment could go badly for years and actually cost you your wealth that is the most telling.
Too much RE Kool aide I fear and not enough free thinking while looking at actual examples of the REAL world.
Sorry your statement is rubbish, but hey dont believe me ask the Japanese how their RE portfolios have contributed to their wealth over the past 30 or so years.
Yeah but cant happen here (wherever here is), right?…
Cautionary Afterthought RE: …
“If deflation wins, homeowners will lose vast sums of equity and people who loaded up on bonds will look like geniuses.”… Hon. GT
[FT] – US muni bond demand slips into big freeze
“…the US municipal bond market, blighted by concern that struggling states and cities could default on their obligations, has gone into a deep freeze. Sales of new bonds have plunged as retail investors, traditionally the biggest buyers of municipal debt, have fled. The first quarter of the year will record the lowest amount of quarterly new issuance in more than a decade. At $44bn, the amount raised will be less than half the new bonds sold by this time last year.”
http://tinyurl.com/6c3bsq6
Psst to GT – ‘Just sayin’, so to speak…
#23 The Truth, you wrote:
” Some news on housing prices and immigration;
Marriages with a foreigner will soon require to be of a minimum duration of 2 years before the spouse (and eventually parents, grandparents, siblings, etc) will get to stay in Canada permanently.
Presently it is 1 day. My guess is spouses paying big money to get to Canada by way of marriage…divorce 1 day later…and then bring the rest of the family. Then the money follows and they bid up housing prices… essentially what is happening right now…especially with temporary workers/students!!!”
#76 Jas, you wrote in response:
“It is about time we got tough law against marriage fraud and immigration fraud.
God knows how much crap got into Canada through these loopholes. Stop it now.””
*************************************
I wonder, do either of you have any direct recent experience with immigration to Canada, spousal sponsorship, etc?
I’m guessing not.
If you did, you would know that Canada actually (surprisingly) has one of the toughest immigration systems in the world.
For example, Canada is one of the only countries in the world with no fiance’ visa. A couple must get married outside Canada, and then submit an application for a spousal visa. The visa typically takes 6 months or longer to process and review, and there is a pretty stringent set of supporting information on the relationship.
Similarly, even to get a tourist visa to visit Canada is very very difficult for someone unless they are citizens of a small list of visa exempt countries.
Frankly, your posts have a strong subtext of xenophobic “blame the foreigners for all our troubles” and I find your comments distasteful.
Real estate fluffers can’t maintain it. Home prices are falling towards normalized levels in the US.
http://www.ritholtz.com/blog/2011/03/case-shiller-dismal-start-to-home-prices/
The primary reason for ultra low rates is that our own government(s) are ‘selling’ bonds and ‘buying’ them back in the same transaction. Foriegn buyers are not part of the equation……the suckers are the citizens who watch in numb silence as their national debt levels soar.
Having just spent several weeks in China I can reaffirm that the main reason a billion Chinese nationals want to get the hell out of China is that their own country is a complete shithole. If you lived there you would be as desperate as they are to get out. If you can somehow get past the public relations propaganda of the ‘progress’ being made and the tourist opportunities available within the limitations of your strictly limited visa you might notice that China is what Europe would look like if the Nazi’s had won the second world war. China is corrupt on every level….it is a frightening place for citizens who live in constant fear of the state police apparatus…..business ditto. Get in……get out is the rationale. It’s worth every penny in bribes and thievery to get the hell out…..you’d do the same.
Housing is a G8 mugs game….being manipulated by the Keynsian clowns who created the mess we’re all in today over the western economies. In Britian, where the government has jacked up house prices to goose property tax revenues as they have here, a new scheme ( for Britian) has been hatched……the 30 year intrest only loan to first time buyers…..5% down…of course. It’s criminal…..but the government needs to keep the tax revenue flowing from the juiced up market in order to keep the entiltlements to the civil service unions in the black. The country is bankrupt…..but no one wants the ‘good old days’ to end….they will…..in a big writhing heap.
When China turns the corner, don’t expect the transition to be without massive bloodshed. If you think Gaddafi is nutz…..have a look at the track record of the Communist Party of China……wouldn’t you hedge your bets? BTW the biggest recipient of Chinese ‘wealth’ is Switzerlands banks. Canadians shouldn’t flatter themselves thinking that ‘everybody’ is desperate to come here. Canada is a refugee camp, lifestyle is far better in Europe for the well heeled.
It’s official!
Even Rosy thinks we’re okay!
http://www.theglobeandmail.com/globe-investor/markets/markets-blog/rosenberg-canadian-housing-is-okay/article1961301/
That’s it! I’m selling tomorrow.
>#55 City Slicker on 03.29.11 at 12:10 am
>Does anyone know what the debt of Americans was before they sank? I think we are at $1.40 or something per dollar in Canada right now.
I believe it was 1.48 in the U.S. and Canada has passed 1.50.
#13 WesternCanadian
….If that happens Alberta rents will go through the roof….
Hey … it natural gas that really drives the province. Makes up 65% of the Alberta budget. Do a little light reading next time.
dd
Natural gas made around 40% of AB revenue from 2004-07. Now less than 7%, actually lesser than revenue from lottery. NG does not drive the province anymore it is the Crude.
Next time do some light reading.
Great article Garth. I was out walking near Lakeshore drive in Penticton, and on condo building had three units for sale. This building looks like it was built in the late 70’s\early 80s. One unit was slashed from $275K to around $195.(this unit was on sale for over a year) A one bedroom was priced at $160K, and another was for sale by owner. Lots of for sale signs popping up like mushrooms, but not many sold signs, though the ones I saw that were had a “new price” sign, before they were sold. Also lots of for rent signs, but not lower prices. Wasn’t the HST suppose to create jobs and make items cheaper. I didn’t believe that for a second.
“The more external shocks, the closer it gets. Looks like Japan has a full-fledged nuclear meltdown on its hands now, while radioactive water is destroying the countryside.”
If any one of the 6 reactor vessels is cracked then the only solution is entombment. It appears that TEPCO understands this and is waiting to see exactly how many will need to be buried. In the interim radioactive particles (Plutonium 239, Iodine 131, Cesium 137, and Xenon 133) continue to enter the sea and airborne particles are making their way around the world especially North America. This is truly a disaster that has only just begun. The disasters (both human-derived and natural) keep on coming and what happens in 3 or 4 weeks when the next big event strikes and the one after that etc?
#51 Patz–Wil Wertheim, a realtor in Van, and it seems an all round nice guy, publishes weekly stats on the greater Van RE sales–etc etc etc
ya right –when they start breaking up the stats into each municipality, like they once did, you ‘ll get a true picture of where this market is headed–and when certain areas started heading down—don’t be fooled by the “all around nice guy”
if they weren’t afraid don’t you think we’ld get the stats for each municipality–hell’ they break up different parts of Van proper and give you stats as long as they’re going up—but you don’t easily find stats on all areas cause they’re going down down down–watch this
http://www.youtube.com/watch?v=q3qK1AI5bmo
Garth, great post as always but the last couple of blog posts don’t mention a thing about property virgins deep throating debt, nothing about house horny, not a word about old weazers, stuffed baby boomers and so on. The spice seems to be missing from your blogs. I miss the spice. Would you please sprinkle some on for me? Thanks.
#88 Aussie Roy on 03.29.11 at 7:31 am
Alot of the Asian’s send their kids to school here. Because they can’t make the grades in their own country.
So they buy a unit for them to live in during the duration of their school years. Once they graduate they
will go to where the jobs are.
Note: not all of them are completely paid for. The numbers game can be deceiving, there could be mortgages held off shore.
#131 Alex – my buddy rent in the okanagan
At a reduced rental rate because the owners are desperate to get anything.
She says its been like this for about a year. And none of the houses are moving.
this area is toast, anyone who has bought there should expect to loose big time.
Too Bad so Sad.
Garth,
Just another example of how prudent Canadian banks are different from theirs counterparties south the border:
On Tuesday March 29, 2011, 11:17 am EDT
By Dave Clarke
WASHINGTON (Reuters) – U.S. lenders would have to offer mortgages with at least a 20 percent down payment if they want to repackage the loan to sell to other investors without keeping some of the risk on their books, according to a proposal U.S. bank regulators endorsed on Tuesday.
http://finance.yahoo.com/news/Regulators-define-safe-home-rb-2470686586.html?x=0&sec=topStories&pos=main&asset=&ccode=
52 Tim–don’t believe everything you read—it might make you a bit delusional about the real state of the job market in Canada –replacing a real job with 3 part time jobs that are only temporary is not getting back to where we were before the downturn
Cam good works for Key Marketing Inc.–big on new highrise pre-sales–(700 units sold- probably true)–
they are the realtors for Pt. Coquitlams first highrise (the shaughnessy)as i’ve posted before they have already dropped their price on lower end units by 25k–
it won’t be finshed for a couple of years
if the condo market here keeps tanking, i wonder how many of these pre-sales will actually close or will the buyers walk away and then be taken to court by the developer
#150 John
Might have something to do with the fact you can’t GIVE NG away these days.
On the HAM anecdotes (Aussie Roy / new_era / etc.)… don’t forget about the Chinese banks and other businesses that are essentially government-backed and regularly get bailed out — that is the source of many of the millionaires trying to get their money out of China.
Here’s an anecdote:
Bank A and Contruction Company B are told by the Chinese Government to hit a certain GDP goal.
Bank A lends $1B to Company B, which a few key bankers and consturction owners get a cut of (and they are millionaires because of it).
Now – the construction project makes no money, and the loan is never repaid. Company B goes bankrupt, and Bank A is stuck with a bad loan. The Chinese government is forced to clean up the mess (or else they’d have to close the bank).
So – if you had made millions on these phony GDP make-work projects, wouldn’t you want to get some money out too?
If you think I’m making this up, just look at the history behind the 1990’s asian financial crisis in Thailand, Malaysia, Indonesia, Singapore, Hong Kong, and The Philippines… just google “bob hasan” – one of the kingpins from Indonesia – and you’ll get a feel for it.
Lots of government-backed monopolies and pegged-currencies (just like China) and shady business deals where huge bank loans were made with no intent of repaying them.
I went to fill up and what did I see? $1.39 for premium. Ouch.
Bye bye housing.
Veron housing looking like okanagan
http://www.thesunonline.ca/News/Story.aspx?ID=1376644
Nonplused
Excellent article today from Global Research.ca on the disaster in Japan. Interesting to note that the US’s EPA’s radiation monitoring sites have stopped giving data online. For you or your kids, there are natural remedies for radiation concerns that may be of interest, ie spirulina. Not fear mongering, just economical, common sense steps one could take. Also I’m stocking up on Japanese seaweed, something we eat, as it may be compromised for the next few thousand years…
Oakville Greg
I’m staying temporarily in the Waterloo Region, where they are stopping the f in the H2O. As SB mentioned, there is a battle against your health now and it’s on so many fronts but stress will perhaps do your heart in the fastest…
Dear Bloggers,
Almost every recently listed house in Vancouver Westside has a sold sign on it. When I checked the listings for $750,000 to $1,500,000 with three bedrooms, I get a mere 67 listings. Some of these listings are way over the top, even for Vancouver Westside, so obviously they will be sitting there for a good long while. I thought that the Spring market would result in more listings, but I see less. What gives? Is there a seller strike? I can’t imagine there would be given that even borderline crap seems to sell in this hood. Any thoughts?
50 Mean Gene
I read this regarding pebble reactors ..
The demise of the pebble bed modular reactor
By Steve Thomas | 22 June 2009
■After years of investment, South Africa has abandoned its plan to develop a fleet of electricity-generating pebble bed modular reactors (PBMR), once hyped as the future of nuclear power.
■Problems with the PBMR aren’t new; a 2008 German report chronicles Germany’s own problems developing the reactor since 1967.
■China, still developing PBMR-based power reactor designs, has taken a slow approach and it is unclear if they have run into problems as well.
=============================
Title: A safety re-evaluation of the AVR pebble bed reactor operation and its consequences for future HTR concepts
http://www.thebulletin.org/web-edition/features/the-demise-of-the-pebble-bed-modular-reactor
http://juwel.fz-juelich.de:8080/dspace/handle/2128/3136
RE: #154 Coin
You just don’t get it do you? Or, are you in denial?
Seeing that ALberta 90 day arrears in mortgages (foreclosures or short sells) is up 600% since 2007 when people were paying 7% rates, not historical lows like now, is a sure sign of things to come. We are a lot like the US here in ALberta. Calgary was voted the most US-like city in Canada with it’s private health clinics and schools etc..
Thanks to Garth and Nostradamus Le Mad Vlad for keeping me coming back and keeping it interesting.
Bubble boy ..imagine you lived in papa new guinea
http://www.rdtunapng.com/
The World Bank, through its subsidiary the International Finance Corporation, is developing legislation to create Special Economic Zones(SEZ) in Papua New Guinea.
SEZs are fenced tax-free zones where foreign companies will be encouraged to set up sweat-shop type factories exempt from the usual laws of PNG.(Papua New Guinea)
SEZs involve taking land from local people who rely on it for their subsistence lifestyles, importing labor for low-paid jobs, pollution and environmental damage – but they deliver very few benefits.
The result of this secrecy is that IFIs (international finance banks )deny communities their right to timely information and, by doing so, prevent meaningful participation in the design and implementation of projects and policies.
===========================
28 March 2011
Five country delegation of civil society organizations are at the IDB Annual Meeting of Governors in Calgary, Canada to monitor implementation of reforms that were agreed a year ago in exchange for a $70 Billion capital increase. Reform areas of critical focus include social and environmental safeguards, climate strategy, and results management.
To: #132 t.o.living. on 03.29.11 at 11:41 am
Since you posted this three times I believe you should buy three properties. Realtors love to talk. Show us and get out there and keep the market going.
Frabjous day!
We just found ourselves a lawn Asian, and now we have a sales contract on our suburban home outside of Vancouver, with the funds transferring at the end of April. Paid $250 K for the house in ’99, put some dough into upgrades and a rental suite, and now we have a closed deal for $681 K. Something interesting about this transaction: it closed in the second week of March, and the buyer amortised over 35 years.
Whew! Close call.
Something else of interest: we leveraged that house to buy (and occasionally sell) some other properties in the South Okanagan during the bubble years, one of which we still own; the home of our dreams is a fabulous lake view property that we rent out in summers to tourists. For five years now this place has given us positive cash flow, and (when it isn’t rented) I can’t even imagine a more splendid place to be. Now, post sale, we own it outright, and we also have a nice, six figure cash balance in the bank. We have rented condo in Vancouver as a place to stay when we are working. Maybe we’ll buy one post the correction.
Sweet!
And how, you may ask, were things for us in early March of 2011? Well — terrifying. We were spending twice our income (two kids in Uni.) and treating the house as an ATM. In my wife’s head it was also ‘our retirement’ I am the family treasurer, and I could only see a something dreadful coming at us like a freight train…
‘Calloo callay he chortled in his joy’.
Final point: I have known of this blog for a number of years, but I never had the courage to open it until we closed this sale. Great analysis, Garth, and beautifully written to boot. I read it daily. Keep up the good work!
#47 Kitchener
“What Jenny and all other folks listing their house should ask themselves is this: could i afford my home at the listing price? My guess is that for many, the answer is either no, they can;t afford it or, they would never spend that much to live in it.”
This to me is SUCH a key point. That’s why I ultimately sold my house on the west side of Vancouver. I thought I paid a lot for it in 2002, (It was approaching $500k.) When 8 years later, it had increased in value by 2.6 times, I knew I would be hard pressed, as a well paid professional with lots of saving, to afford it. Or rather, I would NOT be able to afford it and a comfortable retirement. To me it was a clear indication to sell.
On the same vein, someone else commented a month or so back, that when someone says now or you will be priced out of the market, that’s not possible when you ARE the market.
I do credit this blog for helping reinforce that what I was feeling/thinking made sense!
Oh and I also agree, no external shock needed to have the bubble pop. Look at the US and Japan, despite record low rates and their markets imploded.
To:#154 Coin on 03.29.11 at 1:14 pm
They are saying that individuals calling for a real estate downturn have been wrong for almost two decades.
Two decades? We were deep in the downturn back than.
Try two years. Just figure we are two years deeper into a correction the other way. How is that?
Any thoughts on bond ETFs or U.S. real estate ETFs?
Canadian housing market is a classic story of a frog sitting in a pot of water slowly boiling to death. And we are almost at the boiling point and steam oozing out, but more naive frogs jumping in to join the party. By the way, I boughta one bedroom condo at Place 8 years ago for $164K including parking. And I sold it for $349K two years ago because the view of the Lake I saw when I first moved in is blocked by another condo. Soon Front and Spadina will become the most densely populated area in North America. Glad I moved out of that place…
Possibly Vancouver has the highest gasoline prices of any suburban sprawl city anywhere ($5.23 US/gal).
“From dream home to nightmare debt”:
http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/from-dream-home-to-nightmare-debt/article1960943/
#166 bridgepigeon – just checked the EPA Radnet site, and could download the data with no problems. I think that’s old information.
#18 Tim on 03.28.11 at 10:31 pm
Congratulations!!!! I see that you are heavily leveraged on Van RE market. By your wording I can say that you are desperate. RIP.
The market can stay irrational longer than you can stay solvent.
John Maynard Keynes, (attributed)
English economist (1883 – 1946)
Where could I get one of these lawn Asians? They would look great; like a middle ground between my gnomes and my cigar Indian.
#61, Re: radiation- yikes! Wonder how soon it will be before radiation-linked symptoms and cancers start cropping up like mushrooms. What a mess. Wouldn’t touch B.C. real estate with a barge pole…..don’t relish the idea of being slow-cooked. Inhaling handfuls of iodine pills won’t do the trick either.
@#66-smartalox: Sorry but I have to disagree with you. I am currently living with a “married” couple who are going through the process a faking it to the government in the hopes that the foreign national, currently out of status for several years (!) will benefit from medical treatment and Canadian social programs. The entire thing is a fake. And it is working marvellously. CIC even made a house call which was a joke. It is extremely easy to fool Citizenship and Immigratrion Canada. Extremely easy. Why do you think our country is the way it is now.
Imagine, if you have a nice fat bank account and you want to “buy in” what you can accomplish.
Add the ernomous drug production economy which goes on year after year without any trouble at all and it is really difficult to say what is what anymore, including in real estate. The “underground” economy in Canada is huge.
Aussie Roy,
That was quite the rant.
I don’t drink the koolaid unless it’s vintage red wine.
I suspect you been spending far too much time on this blog and convinced yourself that real estate is the plutonium on Japans soil.
In order to understand Japan you need to see that it is not a country that welcomes new immigrants. So this would tell you something of the issue that breed the decline you speak of. Secondly, the Japanese have an older population declining population. This is the cause of their deflationary and problematic economic situation. So please edumicate yourself.
Lastly, you need to take a step back and look at real estate over the last few hundred years, not a quick glance over the last 25 years and you will understand where my thesis comes from. Stock markets and those companies that occupy them come and go. One day your own the largest telecom company ten years later its worthless. (Nortel) Today you own RIM and 10 years from now it will be worthless or have been taken over by another. A plague, fire, tsunami, earthquake or nuclear disaster will affect all economies. What’s alway held it’s value over the milennia is real estate and hard assets. The KEY to truly understanding this is to not believe real estate will make your rich. It is a store of value. It will be worth something -always. It may be worth less 10 years from now because of economic turmoil but it will be worth something. You can’t say that for a piece of paper.
Finally if you want to throw history at me, show me a graph of the value of real estate over the last 300 years and show me any 10 year block of time where the value of real estate was lower than the previous 12 years.
“Yeah, all those teachers, firemen and Best Buy clerks paying $5 for a litre of gas will be spending up a storm and making Calgary a paradise. Good luck with that. — Garth”
I never said that consumer spending would increase, so maybe you need to real more carefully. I said migration would pick up because the jobs in Ontario would disapear under the scenario you described. This would drive rents higher which will support housing prices.
I don’t even see how that would be a contentious debate. Jobs in Alberta = Migration – Demand for housing = Higher rents… Where is the flaw in that logic?
Also, what’s with your math? You said $200 oil in the post… You think $200/barrel oil translates to $5/litre gas? Have you even bothering doing the correlations?
Why would we move to Alberta? — Garth
“I always get a chuckle when I hear Albertan’s believing that high Oil prices will drive another housing boom”
Did I once say in my post that housing would boom???
Garth where do you get these readers from, their reading comprehension is probably a grade 6 level?
I argued that rents will increase which will provide support for housing prices. “SUPPORT” housing prices.
How the heck did you get, “boom” from that post?
David Rosenberg says the Canadian housing market is o.k. and there is no over supply.
I am now convinced that there will not be a serious correction in housing prices and that is a good thing for Canada’s economy.
Sorry Mr. Turner but the jig is up, although you are a pretty good Financial Adviser.
The music has not even started. — Garth
tkid
“How the hell does one plan for one’s financial future in such times?”
Short the markets through inverse ETF’s. When the markets tank you make money.
Mr. R.
#186 Alan:
“show me a graph of the value of real estate over the last 300 years and show me any 10 year block of time where the value of real estate was lower than the previous 12 years”
http://financialinsights.wordpress.com/2011/03/28/house-prices-examining-inflation-and-the-supplydemand-factors/
From zerohedge.com
US stories:
1 in 3 defaulters in homes have not made a payment in 2 years or more. 1 in 2 have not made a payment in 18 months or more! Talk about stimulus. Ponzi baby.
http://www.fundmymutualfund.com/2011/03/nearly-13rd-of-home-owners-in-us…
#186 Alan, you wrote:
“Finally if you want to throw history at me, show me a graph of the value of real estate over the last 300 years and show me any 10 year block of time where the value of real estate was lower than the previous 12 years.”
*********************************************
As requested:
http://static2.businessinsider.com/image/4bfff45c7f8b9ac749710200/chart-of-the-day-long-term-real-house-price-indices-1880-2010.gif
http://www.debtdeflation.com/blogs/wp-content/uploads/2009/04/IMG0027_46434765.PNG
http://troyounce.blogspot.com/2010/02/house-prices-heerengracht-amsterdam.html
#121 Alan
How’s that inter-generational wealth generator working for those Tokyo urbanites who bought in ’89 with 100 yr “inter-generational mortgages”?
LOL.
#146 dave99
You must be an immigration lawyer or consultant.
The truth is the truth. Telling it like it is. And I’m not Caucasian, so playing the racist card can rest…it’s so overplayed!
To another poster, the one day meant time after landing on Canadian soil.
Rosenberg: Canadian housing is okay : http://www.theglobeandmail.com/globe-investor/markets/markets-blog/rosenberg-canadian-housing-is-okay/article1961301/
Is Rosenberg biased too Garth? Or just wrong?
Who cares? He’s been both in the past, and sometimes prescient. — Garth
WesternCanadian…
I know what you are saying about jobs and migration to Alberta.
Since everyone likes anecdotal evidence, here is some:
– My brother is an electrician, he is a single guy with no kids so he doesn’t mind spending two weeks stints working in Fort Mac for the higher wages. He says they are short workers NOW, not when oil reaches $200 a barrel but now.
-Also heard all of the office space in Calgary is being bought up again as the major oil companies have their head offices there.
Take it for what it is worth.
Garth, ya awsome! Wanta run in for MP or MLA in Vancouver? I will vote for ya.
Nightmare for residents trapped in Spanish ghost townsHalf-finished developments languishing amid dust and weeds reveal the scale of a burst property bubble Spain will take years to recover from
Aditya Chakrabortty guardian.co.uk, Monday 28 March 2011
“Having just spent several weeks in China I can reaffirm that the main reason a billion Chinese nationals want to get the hell out of China is that their own country is a complete shithole. If you lived there you would be as desperate as they are to get out. If you can somehow get past the public relations propaganda of the ‘progress’ being made and the tourist opportunities available within the limitations of your strictly limited visa you might notice that China is what Europe would look like if the Nazi’s had won the second world war. ”
Your argument belongs in 1990 when urban planning was a disaster in China, but the situation has improved incredibly over the last ten years. Tens of millions of people have moved into well planned and quiet suburban communities, within reasonable highway commutes to any of dozens of economic zones around China’s major cities. These new population areas are NOT shitholes, and although more densely populated, they would not look out of place in any major suburban area in Canada.
A 30 year old professional family in China can well expect to live in a 1500 to 2000 square foot flat, with underground parking and a semi-private elevator. The company I work for owns a several units in a TINY gated community of about 5,000 people, surrounded by beautiful parkland and modern amenities. Hundreds of similar communities dot the area around what is really a mid tier economic city.
disclaimer: I am no apologist for the country. It has a plethora problems, but the improving living conditon of the middle class is not one of them.
Canadians would be STUNNED to find out how well some average people live in China. People are not desparate to get out of the country, and many of the upwardly mobile are staying and taking advantage of greater opportunities than they have in the west.
Ontario just announced that they are appointing Don Drummond to head up a fact finding committee to investigate privatization of public works. Apparently even the ‘Liberal Nirvana’ has come to grips with what has been officially recognized as a 250 BILLION DOLLAR public debt !!!! If they admit to this paltry sum you know its gotta be double that…at least !!
This has nothing to do with Canadian federal debt or deficits ( now soaring past the trillion mark). Flaherty says they’ll ‘balance the books’ by 2013….Bwahahahahahahahahahahaaaaaa !!!!…in your dreams Jimmy Boy…in your dreams.
Don’t forget how the Liberal Party ‘balanced the books’ by off loading all Federal spending onto the taxpayers and doubling personal income taxes while allowing massive increases in local taxes. There has never been any national debt this high under any ratio…even the war spending didn’t come close to this. Remember the government had ‘ room to tax’ under the TRUEDOUGH Liberal rabble when debt/income ratio’s were below twenty percent ( late 80’s) as were personal tax rates. That ratio is way past 160 and income taxes are above 80 percent when the indirect local consumption and service taxes are calculated into the direct taxation schemes. No room to raise taxes anymore douchebags……one too many times too the well…..the taxpayers tapped out. Now that the Fed is promising spending..where is the money going to come from.
Technically the opposition was right to challenge the credibility of the Cons budget numbers and fold up the tent with a contempt play for an election ( it was low hanging fruit. But who remembers a Liberal budget forecast that was even close to the reported projections?
So, we payy 400 to 500 million +++++ for a useless election because of the power mad aspirations of the effete Liberals…to do what for the citizen?????????
BTW the ‘Pesky Mosquito’ is back and running for the Libs in Richmond….what gall the man has after being bounced for ethical skullduggery the last time around….only a lawyer could have so little moral fibre.
Oh Canada…..the Bolivia of the north.
Dave,
Your chart proves my point perfectly. -Thank-you.
Interesting article:
http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/from-dream-home-to-nightmare-debt/article1960943/
This pathetic, moribund blog was mentioned in Globe and Mail today:
http://tinyurl.com/6x3lfzt
“Concern about a housing bubble in Australia has risen to the point where first-time buyers are urged by a group called Prosper Australia to stay out of the housing market. Read all about it on Canada’s own Greater Fool blog, or check out the Prosper Australia website. ”
Prepare for more blog comments! I wonder how Garth finds the time…maybe Bandit approves posts on the side, or maybe it’s time – in true reckless RE fashion -to “Robo-approve” the comments! ;)
Then we’d be up to our thongs in house pumpers! — Garth
Back to politics for a sec., when any party rolls out the “Helping Working Families” schtick, turn the other way.
What families?? Majority of the population is empty nest wrinkly boomers, and a good number of the remaining are either divorced, childless couples (including same-sex), or common law at best. And people tend to have 1.5 kids, max.
The politicians are harkening back to a time which no longer exists – Mom, apple pie, and baseball. White picket fences.
Fact is, we can guarantee that in 2-5 years’ time EVERY cost of living input will be higher. Bank on it.
#200 Xindai Shan
“Tens of millions of people have moved into well planned and quiet suburban communities”
What percentage of the entire population would that be?
–
#171 Stevermt — Anytime!
#178 Sunshine Blower — “. . . of a frog sitting in a pot of water slowly boiling to death.” — Like this? 3:55 clip. Monty Python.
#189 Frank — “The music has not even started. — Garth”
Hmm. One would have to agree as the next round of defaults / foreclosures has either started now, or will start in the near future. Toss in the nuke meltdown as an aside. What is happening now is just the preamble. 2014 is a year to avoid completely.
*
EPA + m$m Fooling sheeple here about the radiation levels from Fukushima, plus Iceland and: “No, Portugal announced they detected fallout yesterday.” wrh.com. All the bailed-out countries.
4:30 clip Earth is leaking free energy from hydrothermal vents. More than enough energy than nuke plants can provide. “We could have this clean energy source running now had we not spent that $14 trillion on keeping the Wall Street bankers out of prison for the mortgage-backed security fraud.” wrh.com. Thorium Further evidence.
Fukushima is not the only thing melting down.
Economy Individual investors beating the big boys at their own game. There are trillions of $ sitting on the sidelines, some coming in and taking profits, then going, and Fudging Numbers The US Fed. What did you expect?
Notice “. . . there will always be billions of dollars available for the US Military to police the planet, from Libya to Afghanistan — but not for you or your health, welfare or education. We can’t afford you.”
Jesse Ventura Obviously he has something on the feds., otherwise they wouldn’t have pulled this stunt.
GE Along with building the Fukushima reactors, they (along with Soros) also own Obama.
10:23 clip “This is very powerful stuff…and I’m a 2-decade atheist.” Not necessary to watch the whole thing, but he calls it right on corruption, etc. North Americans are lazy sheeples, with their wool pulled over their eyes.
Your Papers Please History rhymes and repeats. WW2 all over again.
Go Far East, as that is where all the new jobs will be soon.
Rebellion “Massive tax increases passed on poor and elderly. Taxes on rich and corporations cut by almost 2 billion. Elections to be suspended, officials summarily dismissed by corporate overseers.” Martial law in Michigan?
Monsanto Lest we forget . . . Big pharma and oil, too.
Libya + Fukushima “It just occurred to me that we are seeing Obama’;s Katrina! A natural disaster threatens the United States, and Bush, totally focused on his holy crusade against the Muslims, abandons the people of New Orleans to the ravages of the flooding. Nuclear melt-downs threaten the United States and Obama, totally focused on his holy crusade against the Muslims, abandons the people of the United States to the ravages of fallout.” wrh.com. So this is The Fourth Crusades, as part of everything else. Tokyo.
My observations in central Toronto over the last 3 weeks have been: fewer listings & price listing lower than in the past 2 years. Is this a trend starting?
Here is an artcle that explains why today’s inflation feels more than the reported 2%. The author claims, it’s because of how the US and Canadian governments collect and report the data.
http://www.theglobeandmail.com/globe-investor/investment-ideas/experts-podium/bond-investors-should-beware-the-inflation-mirage/article1962140/
In an amazing development in Libya, the Opposition National Council has created a central bank which it has named the “Central Bank of Benghazi”.
This is to ensure that the countries banking which was previously under the strict control of Mr. Gadaffi is now held in the hands of the Transitional Government and that they will play the leading role in allowing policy to be set beyond the reach of Tripoli.
Many people will be surprised by this development as it has preceded the formation of an elected Government however I think it tells us that some significant moves are afoot to permanently isolate Gadaffi and his family while shifting financial resources into the hands of the Transitional Government.
Plus, they can now begin the process of creating their own currency! This in itself is fascinating. Furthermore, the rebel government has formed an oil company that is gaining recognition in the West as the only authorized and legitimate broker of oil products out of that country.
Again, My Gadaffi, his family and cohorts are being frozen out of the action and one more critical step has been taken to deny him access to funding he will need to carry on a war within his own country and against his own people.
The old expression “the pen is mightier than the sword” was never more true than it is today and we are now seeing how swiftly the reins of influence and power have shifted from the West to the East with little more than the stroke of a pen and a well attended press conference.
And here is why they need a new central bank…..
http://en.wikipedia.org/wiki/File:Libyan_Dinar_50_Dinars_Note.JPG
(Hint: So they can remove the dictators picture from the notes)
doctore on 03.29.11 at 7:19 pm
———-
My favorite line in the G&M article is:
“Gail, if I put this $45,000 kitchen into my house, that’s an investment.” I say, “Okay, when are you planning to sell the house? Fifteen years, maybe?” Well, then it’s not an investment, it’s a consumer item because 15 years from now that brand new kitchen is going to be an old kitchen. Nobody’s going to want it. Everything has a lifespan.”
I makes me think of friends of ours whose house is now over 400K but needs a new kitchen and bathroom. The problem is that it’s a 1960s model which keeps on eating up their remodel budget The latest being foundation and beam work…
They were just commenting how they would not be able to afford the house if they were buying now. She could not help but wonder how young couples were able to afford the houses in their neighborhood at these prices, especially considering all the work they will be needing in the near future.
181 EB
Yes, info from last week, I see it’s running.
Interesting site…
The establishment of a Central Bank in Benghazi is so absolutely brilliant as an act of war that most will find it baffling at first.
The primary purposes of a Central bank of course are to issue currency, to set interest rate policy, to oversee the commercial banking sector and to set monetary policy for a country.
In this case the new central bank may also act as a clearing center for financial transactions between Libya (East) and the countries and business it trades with and become the point of contact with the Bank of International Settlements (BIS).
Furthermore, if accepted by the international banking community they will be able to begin accessing and tapping into the vast reserves of capital and other foreign investments previously held by the Gadaffi regime and that are currently frozen in Europe and the US. This amounts to many tens of billions of dollars.
It should now be obvious to all where this will lead.
First, a new currency can now be introduced if required and this is not as exceptional as it sounds at first. Even the American revolutionaries printed up their own scrip. They had no choice if soldiers were to be paid. We can be quite sure meanwhile that the current Gadaffi regime is not stocking banks and ATM’s with freshly printed bills as is normal daily practice.
In a time of war the government holding such powers would withhold financial resources in order to strangle off the rebellion. With this act though, the Benghazi rebels might actually turn the tables and revoke the countries old currency thereby forcing loyalists to reconsider sides.
Impossible you say? Think about it for just one minute.
Please consider than an acceptance of the new Central Bank of Benghazzi by the BIS and international banking community is tantamount to a refusal of the continued recognition of the existing Libyan currency and banking apparatus that stands behind it and will only trade and do business with the new bank.
The new Central Bank of Benghazzi will therefore be on the hook to compensate through the issuance of a newly established currency and frozen funds would offset any theoretical losses foreign banks might suffer. This is no small measure. If the banking community accepts the new central bank then Gadaffi is finished. Game over. His stash of Libyan paper is worthless overnight and the old regime will be crushed by paper, not bombs.
Second, with resources shifting into the hands of the rebellion the new government would be in a position to authorize payments to the allied forces now supporting the rebellion (if required) and to buy its own arms without the need for financial support from the West.
Last, this act will enable the Government-in-waiting via management and control over its financial resources to establish rule over the exisiting banking sector and thereby ensure the free flow and regular trade of goods and services into the country while it simultaneously gains the financial tools necessary to establish it’s own bureaucracy, to issue pensions and to finance all the normal apparatus of government including a military.
The rebellion in short will not wither for lack of funds while it battles Gadaffi forces on the ground and so this really is one of the most amazing developments of the battle so far.
It is the event that will turn the tide once and for all.
In #204 S.B. on 03.29.11 at 7:43 pm wrote:
Prepare for more blog comments! I wonder how Garth finds the time…maybe Bandit approves posts on the side, or maybe it’s time – in true reckless RE fashion -to “Robo-approve” the comments!
Then we’d be up to our thongs in house pumpers! — Garth
Strine thongs? Or [shudder] Canuck thongs? I guess the latter!
I want to add one final comment on Libya (with apologies to those who hate the topic and would prefer a discussion of politics over war!….then I will relent and go back to discussing houses).
Is it not obvious to everyone that the financial leverage over the conflict in Libya now in fact rests in the hands of the West and that significant pressures can be applied over the development of the democratic process that is underway?
This conflict will be ended in short order and with little risk to the Western forces allied against the current regime if the focus is placed on the flow of capital and the establishment of new lines of communication regarding trade relationships. Obviously we are seeking new partners to bargain with and Mr Gadaffi will not be at that table anymore.
A war won on paper and contracts is always preferred to one that relies on guns and bombs. My preference is that the developing transitional government be enabled to acquire its own needs by utilizing the existing resources of that country and that it be asked in exchange to guarantee, to compensate, to insure and to indemnify the West and its interests for the support it now requires.
This is not cynical but only acknowledges that the country of Libya and its people do have the resources to deploy in order to win their own freedom.
But who will be the point of contact to make those commitments on behalf of the people of Libya during a conflict? That is the body we should be dealing with if it is one who’s word can be counted upon.
#197
Hahaha! I’ll believe it when I see them filled! There are so many people in the oil industry who are still out of work!
Jen your hospital work is full of shit. She only wrote to you to use you as a marketing tool to try to get out of her overprice pos apartment in the downtown core of toronto. I’m sure she got in at $300k and how wants $500k for her worthless concrete shoebox for boohoohoo $478k oh the horror! She can’t buy that house in scarlem anymore for a straight up 1:1 switch. Pathetic. The day people stop thinking that their home is an investment and a place you reside in for shelter and the day Mark Carney stop fucking around with interests and we institute REAL honest monetary system is when this housing nightmare and insanity will end
I don’t smoke pot but this Government sacrificed one of our citizens for the phony US “Drug War”. Our good Government decided to Extradite Mark Emery for selling Marijuana seeds to the USA. Something that is not a crime here. Our sovereignty has been violated like a teenage girl on a basement couch.
That along with the billion wasted on the pretentious show for the G20 in Toronto.
And lastly the sacrifice of the future of hundreds of thousands of sucked in home buyers all for the sake of getting elected by pumping up the housing bubble.
They lost my lifelong vote. I am abstaining from voting this election.
[…] to the club district. Not the kind of environment that promotes high resale values.” – Joe Q. This entry was posted in Uncategorized. Bookmark the permalink. ← A different kind of […]
#196 The Truth, you wrote
“You must be an immigration lawyer or consultant.
The truth is the truth. Telling it like it is. And I’m not Caucasian, so playing the racist card can rest…it’s so overplayed!”
***
Uh, no, actually.
And yes, “the truth is the truth”. But your comments were entirely uninformed and inaccurate.
And as far as the “racist” card. I suggested xenophobia, which is a fear and/or resentment of foreigners (ie.non-canadians). It has nothing to do with race or racism.
#203, Alan, you wrote:
“Your chart proves my point perfectly. -Thank-you.”
In response to the links I posted at #194, in response to your request at #186 where you:
“Finally if you want to throw history at me, show me a graph of the value of real estate over the last 300 years and show me any 10 year block of time where the value of real estate was lower than the previous 12 years.”
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Your statement that these graphs prove your point is as absurd as saying 1+1=3.
There are numerous decades where real estate prices are lower than the prior decade.
These graphs prove the exact opposite of your point.
@ #147 dave 99:
It is easy, legal, and efficient for a foreigner to come here and “visit”, subsequently marrying and applying for residency via the marriage. No marriage outside of the country is necessary. Sure, the pending immigrant can’t leave Canada again until the residency is processed, but other than that little consideration it’s easy peasy.
My husband has been here for just under 2 years now, we have been married for 20 months of that, and he should be getting his residency in a few more months. It was complicated and slowed by a few moves we did (Van to Cal, Cal to Tor) otherwise he’d have had his residency by now. So it’s very, very easy at this point.
As far as housing…
We rent. We like looking at condos, and we notice how no matter WHAT building we look at, what suite we want, what view, something we would buy (if we were stupid) is available. We are looking at 2+ den, highest floors, best views, usually corner units.
The ONLY reason there are units like this available in developments that have been pre-selling for years is because people aren’t buying! Unless of course people are only buying the small crappy units with ugly views. Yeah, I can see why they lined up for those. :-)
@ #147 dave 99:
Courtesy of my husband, Canada recognizes “dual intent” (unlike the U.S.) so you can actually come here for the purpose of marrying someone if you can demonstrate legitimacy and funds to support your time during the immigration process. This is done through an interview at port of entry, where you would be issued a visitor record instead of a stamp in your passport. If you marry while in Canada without declaring your intent, they still honour the marriage and eligibility for residency. <– we have firsthand knowledge of this, as this was our case.
In other words, Canada doesn't have a fiancee visa NOT because it's harder to get in, but rather because it is LESS stringent than the U.S. :-)
(They are, however, pretty in-depth if they don't feel a case is legit)
#222 Jayar, you wrote:
“It is easy, legal, and efficient for a foreigner to come here and “visit”, subsequently marrying and applying for residency via the marriage. No marriage outside of the country is necessary. ”
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That is 100% untrue.
Allow me to repeat. 100% untrue.
Allow me to repeat. 100% untrue.
First, as I wrote in my original post “…to get a tourist visa to visit Canada is very very difficult for someone unless they are citizens of a small list of visa exempt countries”. (ie. the european union countries, the US, japan, etc). For all other countries, getting a tourist visa to Canada is VERY difficult. I presume that your husband has citizenship in one of the Visa exempt countries.
Second, using a tourist visa to bypass the spousal visa program is ENTIRELY illegal and constitutes immigration fraud. I am quite certain that when your husband came to Canada, he did not tell the customs and immigration officer that the purpose of his visit was to “marry his Canadian fiance and establish permanent residence”. Had he done so, he would have been denied entrance.
For those who want to learn more about the reality of tourist (aka visitor) visas to Canada, and about the spousal visa process, I direct you to the below discussion board.
http://www.canadavisa.com/canada-immigration-discussion-board/index.php
Full disclosure, I have no professional involvement nor vested interest in the immigration business or immigration policy.
Garth, Love the blog. I thought I was crazy all these years. Sheeple telling me “You’re throwing your money away, you have to buy” and I never felt good about it. Toronto prices are non-sensical. Now I know I’m right. It feels good. Thank you.
PS I just bought Money Road and I can’t put it down.
Dave99:
You can believe what you like. :-)
You are correct that he is an EU citizen, and that he didn’t declare that he was coming to marry his fiancee – this is how we even found out about this little loophole. You can take my experience as you wish, but here is what happened:
He crosses in via plane (YVR). He didn’t declare intent. A month or so later, we ACCIDENTALLY crossed the border in northern BC – yes, it is possible. If you have never been there to see the border crossing, it is a little shack that you aren’t even sure anyone is in, and the US border is a couple miles beyond the Canadian crossing. Anyway, long story short we are stopped coming back into Canada.
Border agent asks: for what purpose is he here.
Hubby: I told them I came to marry my fiancee
Border agent: WRONG, try again… If you had, you would be in the system with that in your visitor documentation.
Hubby: okay… I told them I was coming to see my girlfriend. (sheepishly, but true)
A couple hours, a vehicle search, and lengthy interviews later…
Border agent: you should have told them the truth when you came in in the first place. This would have gone a lot easier if you had.
100% true story. Take it for what it’s worth – either there exists a loophole, or we are just so lucky that fortune shines down on us. Either is fine by me. :-)
FWIW, as of Feb 18 2005 legal immigration status is NO LONGER A REQUIREMENT for spouses/common law partners of Canadian citizens/residents who want to apply for residency. Even out of status visitors can apply from within Canada.
That is all there in black and white. I am sure you are well able to find all that information. I just wanted to share my story. Maybe it will encourage you to do more digging and it will help you (or someone else) one day.
(I wish I could edit my post… Oh well)
I wanted to add that we crossed back in through Northern BC without ANY documentation (we weren’t planning on accidentally crossing any borders that day) and as you know I am sure, his status didn’t even make him eligible for re-entry. Heck, he didn’t even have his passport!
Yet not only did they let him back in, they noted in his file that he had undergone an interview process, and it hurried his application.
I do want to caveat that this is the only immigration process I have seen firsthand, and I am mo expert. Is it possible the border agents saw a nice couple “stuck” outside Canada and didn’t want to throw the book at us? Is it possible their actions were affected by the fact that if they deported my husband I would have been completely alone to somehow get back to Van with our vehicle? Sure. It is also possible that the border crossing was small enough they took the time to work with us, rather than throwing him out of the country and moving on. Or, you know, denying him entry and leaving him stuck on the side of a mountain…
#226/227,
Jayar, the immigration officer in BC did you a favour. Your husband’s answer revealed immigration fraud, and the officer directed your husband towards the correct answer.
This sentence you quoted is irrelevant. “….legal immigration status is NO LONGER A REQUIREMENT for spouses/common law partners of Canadian citizens/residents who want to apply for residency. Even out of status visitors can apply from within Canada.”
I never claimed differently. Yes, if someone is ALREADY in the Canada for a legitimate purpose, then they can file for an in-country spousal visa. But that was not the topic at hand. The topic was people from outside the country gaining entrance and citizenship through marriage.
The fact that your husband knowingly withheld the purpose for his original entry into Canada is not a loophole. It is immigration fraud.
I completely understand why he did it, and I completely understand why you view it a misdemeanor victimless crime. But I hope you understand that this was only possible because he was an EU citizen. For 85% of the world’s population, they can not use this “loophole”. Read the forum I had posted to learn more about the difficulties most couples and families face.
Well folks. Welcome to the beginning stages of a DEPRESSION. It has already started in the US and with 73% of our exports heading South, we are next. They stop consuming and we get pounded. Done deal.
We do not have the infrastructure in place to service our Asian customers for energy so what else is there? Lumber? That industry does not know what is coming once Russia signs on to the WTO in September. Export tariffs drop significantly and Russian lumber out competes north american producers in the Asian market with one stroke of the pen.
I love being 30 and not owning a home. The most important asset you will have in the coming years will be your ability to pack up and move. Not get stuck in a home you are paying more than what it is worth and cannot relocate. Hide the decline.
Mr. R.