Four years old, two storey, three bedroom, two bath, 2,400 square feet – all for $64,000. Nice. “We recently purchased a home in Phoenix Arizona,” Crystal writes me, “and wanted to open a business and relocate there from Canada,” she says, “but it did not turn out this way.” And the real estate wasn’t so hot, either – despite scooping a property for a fraction of its former worth. Now it’s worth $61,000, and falling. Crystal just learned about deflation.

“It costs us about $5,000 a year just to maintain,” she says, “so what should we do? Keep the house, try to find renters and sell later? Or sell immediately, preferably to another Canadian, like baby boomer retirees? How soon do you think the Phoenix real estate market will pick back up?”

Of course, the house costs them more than five grand. There’s also the $64,000 cash they put down (plus closing costs), which could be earning five thousand – which means Phoenix is eating close to $1,000 a month, factoring in a trip a year to check on things. Trouble is, there are lots of perfectly fine houses for rent in that city for less than a grand a month, and good tenants are tough to find. Renting will also mean having to file an annual US tax return, and being nailed for any cash flow surplus. Bummer.

And it all seemed like a no-brainer. Just buy a cheap house online.

As I’ve said before, as a long-term strategy, sell Canada-buy America works. We’re inflated, They’re deflated. Both markets have only one direction in which to go. In Canada we fork over about 40% of our earnings to feed houses (it’s70% in Vancouver). In the US now, that number has withered to 13.1% of median family income. We have 70% home ownership, and rising. They are at 66% and falling. We think it’s different here. And so did they.

I said yesterday the US housing market is one of the external factors you need to pay attention to. Its continuing crisis is a potential trigger for continent-wide deflation. Cascading real estate values not only rob American consumers of their wealth, and diminish that country’s appetite for our goods, but also provide us with an example of what can happen when you put your faith in a house.

As I also said, if we do stagger through a deflationary episode the losers will include people with big mortgages and little equity, and those with stock-laden investment portfolios. The winners will be folks who loaded up on bonds and, of course, renters. Liquidity will be worshiped. Debt will kill ya.

Yes, exactly. This is the nightmare scenario for the Canadian middle class – those folks who have drunk the Royal Re/Max Kool-Aid, pigged out on 3% mortgages and turned their RRSPs into granite countertops. We now have more household debt than the hedonist Yanks. The average downpayment is a weensy little 7%. Most new mortgages taken out (at least until two weeks ago) were for 35-years – which means homeowners rent money instead of build equity. We spend what we earn (at least). We pay more taxes than the Americans. Our houses cost twice as much. Guess who’s in the deflationary crosshairs?

I know, I know. Everyone says a ‘US-style’ housing dump won’t happen here. And that’s probably correct. I seriously doubt there will be neighbourhoods anywhere in which houses lose 80% of their value, as they’ve done in some Phoenix hoods. And it’s unlikely we’ll hear realtors in Calgary or Kelowna or Toronto say something like this (uttered this week by an insider in Fort Lauderdale): “If there weren’t vultures out there, you’d have a city of dead carcasses. It’s like the circle of life.”

But that’s not the point. A mild 15% correction in Canadian house values, and a protracted recovery, would finish off more of your friends and relatives than bubonic plague. They’ve borrowed to the max, saved diddly, have no cash reserves and can only afford their homes because of mortgage rates which are the lowest in recorded history. In short, the Canadian middle class has taken one mama of a gamble that from here to eternity it’ll be wall-to-wall inflation. For this strategy to work, houses must increase every year. Yet for that to happen, so do incomes. And have you scored a raise lately?

Exactly. This is what worries me. Should worry you, too. Especially if you’re a hormonal virgin or a crusty Boomer with a two-acre family room.

Now, how about Crystal? Is poor Phoenix ready for a fabled rebirth out of its own ashes? Or, just nicely cooked?

Well, this week’s news is that house prices in 18 or 20 major US cities have plopped again, led by a 9.1% collapse in – you guessed it – Phoenix. The betting is now that housing will soon be in a double-dip recession, with values hitting new lows. Foreclosures are expected to rise 20% in 2011. All gains in real estate values since 2001 (ten years ago) have now been erased. New homes are selling at 2003 prices. Resales, at an average of $156,100, are at 2002 levels. Construction is at a 50-year low.

So, Crystal, your strategy’s obvious. If you can’t wait five years, snare a Canadian. I hear they’re horny.


#1 S.B. on 03.29.11 at 10:17 pm

I can see the future:

“Mommy, why are we living at Grandma’s place?”

“Because your father and I bought a $500,000 1-bedroom condo 5% down, a few years ago, and upon renewal at 5% rates with $1200/mo combined hydro/condofees/taxes we were forced into selling it for $380,000 – the going rate”.

“Mommy, Grandma smells like old people”.

(To be continued ;) )


#2 bsallergy on 03.29.11 at 10:24 pm

Nice to see such optimism Garth. Housing won’t crash here? Really? Not like in the states? You mean it’s different here? Wow! They will slowly deflate, it took us longer to get there, we’ve stayed there longer, so it will likely take us longer to revert to the mean. I hope it is so.

Where did I say that? — Garth

#3 SF on 03.29.11 at 10:25 pm

Hi Garth,

You have mentioned that if we go through a deflationary period then equities will tank. If I have a 20 year time horizon why not ride out oil and other blue chip stocks?
It is pretty difficult to time a market.

Simple: just balance equity with fixed income. — Garth

#4 Kitchener1 on 03.29.11 at 10:27 pm

Buying US is a suckers game for most people. There are great deals south of the border, and buying does make sense but not for the average person.

US will recover but its all about location.

#5 tonguestump on 03.29.11 at 10:28 pm

SB, what a dumb comment

#6 Bobby on 03.29.11 at 10:32 pm

This whole idea of looking solely at prices is certainly misleading a number of people. It reminds me of sports equipment sales at a major retailer here in Canada who ironically found themselves in court for misleading sales practices.
They would mark a ski jacket down from $499 to $159 making buyers believe they were getting a screaming deal. The reality was that most other retailers were selling the same jacket at a regular cost of $199.
So that home in Phoenix that seemed like a screaming deal at $64 k, doesn’t really compare if it really was only worth $125 k in the beginning.
Yes, it is going to getvreally ugly out there!

#7 GregW, Oakville on 03.29.11 at 10:42 pm

Garth, This is very promosing. Both got back to me with info that both the Liberal and NDP. Seems they have people looking at the science calling for the end of water fluoridation. It’s toxic.

So the Greens will soon may no langer be my only possible choice for my vote. The Greens are the only party calling for the ending of water fluoridation and will stop it if elected, up to this point. It sound like we will here news from the other two party’s soon!!! I wonder which will do it first?

This site had good science that is saying wise men will stop water fluoridation if they care about the health of people and there own families they stop it to if elected.

But to know that I guess you’d need to read the science yourself.

I guess I won’t start celabrating until I see it in print.
Until then I’ll need to be satified with my letter to editor in this April Scientific American Magazine on page 8

#8 Drew on 03.29.11 at 10:44 pm

you hit the nail on the head with “For this strategy to work, houses must increase every year. Yet for that to happen, so do incomes. And have you scored a raise lately?”

We have seen some inflation, but sustained inflation can only happen when incomes (or credit) increases. Right now we are witnessing a temporary rise in the costs of goods, but in the long term, we can’t afford it and just like housing, it is sure to be corrected. That is the market. Deflation will come.

#9 Dave on 03.29.11 at 10:47 pm

Garth – good talk on the American situation, but what about the elephant in the room: the U.S. vs. Canadian Dollar. If you bought last year, your house in PHX lost it’s x% in value + about 2.5-10 cents (depending on when you purchased) on the dollar since you’re holding a U.S. denominated asset. Vacation rentals via have never looked better.

#10 Sargon on 03.29.11 at 10:48 pm

Few people have the grapes or the patience to go long in RE and wait out the price ‘appreciation’.

Canadians act like house flipping is enshrined in the Charter of Rights and Freedoms.

#11 Hoof - Hearted on 03.29.11 at 10:52 pm

I think we should tax anyone that gets to be #1 on Garth’s blog


H,F and C

#12 Ralph Cramdown on 03.29.11 at 10:58 pm

What I don’t understand is our trade deficit. We’re running one. Here we are, “hewers of wood and drawers of water” and commodities are at a record high (except uranium). Shouldn’t we be running a trade surplus?

#13 Victor on 03.29.11 at 11:01 pm

Hi Garth, given the outlook for potential deflation on the horizon would you be more apt to recommend regular bonds or real return bonds for the fixed income portion of someone’s account at present. Any insight appreciated. Thank you.

#14 SquareNinja on 03.29.11 at 11:08 pm

I laugh whenever people put the cart before the horse. Nice going, Crystal et al.; buying a house first is always a good idea when you plan to relocate, but aren’t 100% sure. Why don’t I just sell my pocket watch to buy my wife a comb, whilst she sells her hair to buy me a chain for my pocket watch.

Hmmm… maybe I should buy a dozen houses in Detroit for that $64,000… Chrysler has been having some snazzy commercials lately: Imported from Detroit.

#15 BPOE on 03.29.11 at 11:10 pm

Richmond BC currently is like buying Apple stock 5 years ago while Phoenix is like buying Nortel all the way down. Point is Richmond is a winner going higher and higher. Some posters state prices are being lowered. They just don’t get it. This is how it works. In Richmond you put a lower price than your neighbours selling. This causes a market frenzy with multiple bids. Works everytime. Folks these stories of Canadians having debt is a bunch of bull when it comes to Richmond. Please come visit. Multiple offers, tear downs of entire neighbourhoods. It’s all good folks and it’s all here in BPOE. Did I mention Richmond houses up 22% in the last 12 months. Did your stocks perform this well? That’s what I thoug. Renting is a disgrace to your heritage. I can ensure you when you were born your parents didn’t say”Gee I hope one day little Billy or Sally will get a good job so they can rent”

#16 Jon B on 03.29.11 at 11:22 pm

BPOE = Richmond BC Realtor

#17 Crazy on 03.29.11 at 11:24 pm

Renting is a disgrace to your heritage. I can ensure you when you were born your parents didn’t say”Gee I hope one day little Billy or Sally will get a good job so they can rent”


Could not have said it better myself!

#18 CKAYE on 03.29.11 at 11:28 pm

Bobby: I agree $125k is the right price, and I also agree the 64k is still half price! Serioulsy watching and wanting…

#19 45north on 03.29.11 at 11:30 pm

Mark Hanson provides in-depth information and analysis of the US mortgage market. Here’s his latest piece.

Here’s a point-by-point comparison with Canada. Hanson’s comments are in italics and my comments are in regular font.

a wide scale principal balance mod program for distressed borrower’s will never happen. The $20 billion monetary fine is just not big enough to help.

No fine in Canada would be bigger. Canadian banks have not even been accused of anything! Second, Canadian banks have had a lot of time to prepare themselves. I think that they (the Canadians banks) are being especially scrupulous and have hired teams of lawyers to review practices and to head off any broad-based challenges such as the robo-signing of mortgages in the US.

In Canada there will be no principal reduction.

Loan mods, restructureings, workouts and payment plans are simply new-vintage, higher leverage, worse-than-Subprime loans.

In Canada, loan modifications won’t work either.

A borrower at a 65% total debt-to-gross income ratio is a debt slave

In Canada a borrower at 65% debt-to-gross income is a debt slave.

Lastly, demographics are not in the favor of the repeat buyer — especially at the mid-to-higher end of the market — as baby boomers that were such a vital part of the bubble from 2001 through 2007 are not moving up anytime soon.

In Canada, demographics are not in favour of the repeat buyer

In a normal housing market, the repeat buyer drives volume, followed far behind by first timers and then investors. In this market, the repeat buyer is by and large absent relative to historic averages leaving all the heavy lifting up to first timers and investors who want low priced properties, preferably Foreclosures, REO and short sales. Thus, anything that disrupts the flow of distressed real estate prevents a housing bottom and subsequent recovery.

In Canada, we are still in a normal housing market, repeat buyers are still in and we do not depend on the sale of distressed property.

Effective negative equity begins at the point at which the homeowner can’t sell the house and re-buy another, which requires paying a Realtor 6% on the sale and putting 10% to 20% down depending on the type of loan needed.

In Canada, effective negative equity begins at the point at which the homeowner can’t sell the house and buy another.

When national house prices fall another 10% to 20%, entire states will be consumed by effective negative equity putting even more pressure on real estate supply and demand fundamentals.

In Canada, there haven’t been any reductions in price. None. Garth mentions the possibility of a 15% reduction. My feeling is that we are standing on the edge of a cliff and one morning we will see entire provinces consumed by effective negative equity.

Bottom Line: Whether the borrower is at a 95% LTV or a 140% LTV, they are in an effective negative equity position. Then it all comes down to debt-to-income ratios.

In Canada, whether the borrower is at a 95% LTV or a 140% LTV, they are in an effective negative equity position.

#20 Haiku on 03.29.11 at 11:35 pm

BPOE= Butt Pirate Over Exagerator

#21 cornstars on 03.29.11 at 11:36 pm

Hi Garth , wages have not gone up in two years , we might see .25 cent / hr this year , wow 2 bucks a day ! oh BPOE richmond will sink with the first earth quake !

#22 Utopia on 03.29.11 at 11:38 pm

Great article today.

You have asked the right question Garth and it is one that should lead readers to the correct conclusion that seem to evade most people (including most of the very biased realtard class).

It is the question that nobody really wants to answer and the question that actually invites a response to the pestering questions about the future of real estate and how it might grow beyond its current bonds.

And the question is this…….”Have you had a raise lately”?

(That is the key that gives a truthful indication of the future trend and one that provides some evidence of the real downside potential of our markets and it should shut the door on the debate once and for all for those who are really paying attention)

#23 Zarathustra on 03.29.11 at 11:40 pm

“Did I mention Richmond houses up 22% in the last 12 months.”

hmmm lets see… Richmond is a sandbar about 3 inches above sea level sitting on top of a major fault line with a better than 50% chance of a major quake over the next few decades. And hey, since this is the very top of the market, it seems like a great time to get into a bidding war. Get my realtor on the line – ASAP!

#24 Hoof-Hearted on 03.29.11 at 11:43 pm

#16 Jon B

No…BPOE is correct.

If the average selling price is say, $950,000…list it for $925,000

All of a sudden, when dim sum is over, Mercedes and Beamers will line up around the block and a bidding war will ensue. Easy to drive it up over $1 Million aka save face

Further proof:

Gas prices: Go to Granville and Buswell Petro Canada in Richmond .

About 5-6 PM the price lowers a few cents a litre…count the BMW’s / Mercedes / Land Rover . etc that line up 10 deep for each pump to save maybe $5 on a tank full.

Bait the hook with blood, it attracts sucker/sharks.

Maybe I will send Garth a photo.

#25 Brandon on 03.29.11 at 11:44 pm

Money talks and bullshit walks; cash is king; scared money doesn’t make money sheeple!

#26 Abitibidoug on 03.29.11 at 11:47 pm

64 grand for a house? If I lived in Phoenix I would have bought one by now. It makes you wonder, why aren’t all those Asian buyers, who supposedly are in a buying frenzy in over priced Vancouver, scooping up those dirt cheap houses in Phoenix instead?

#27 Irrational Exuberance on 03.29.11 at 11:49 pm

I think BPOE let the cat out of the bag tonight with his rather over the top comment. It’s apparent that he posts here only to get a rise out of people, and probably has little to do with what he really thinks/knows/feels. A good buddy of mine used to do this all the time when around new people… just talk some preposterous trash to see how people reacted.

If spewing verbal poo poo to see how angry you can make people is your idea of good entertainment, then you are probably emotionally stunted. I think this explains why BPOE has no concern for his lack of credibility, as he has no interest in being credible in the first place. Just a pathetic source of pathetic amusement for a pathetic person.
Moving forward, I will not even spare the two seconds to read what rubbish BPOE has spewed, and suggest others follow my lead. And don’t even bother replying to his posts… ignore a pimple long enough and it will eventually go away (lets hope).

#28 Hoof-Hearted on 03.29.11 at 11:51 pm


Why do Canadian grade A suckers think they can get an Arizona condo so cheap


I posted a while back the brutal tax laws the US has.

YOUTUBE ” David Ingram” .

If you have anyone (other than yourself or minor)do work on your US Real Estate, HOMELAND SECURITY can toss your ass in jail.

If you visit the US for a combined 181 days over a few years…the US Gov’t will tax you on global income…ie even if you didn’t make a penny in the US.

The warmer climes of the US seem to be the worst, the state laws are all different, thus be on top.

These are the death throes of a country whose economy is in free fall.

#29 HouseBuster on 03.29.11 at 11:56 pm

What if oil goes up and houses go down? Can’t there be inflation in oil and deflation in housing?

#30 dd on 03.29.11 at 11:57 pm

Garth … I see your bond buddy Rosenberg sees Canada as A – OK when it comes to real estate.

#31 TaxHaven on 03.30.11 at 12:02 am

“Well, this week’s news is that house prices in 18 or 20 major US cities have plopped again, led by a 9.1% collapse in – you guessed it – Phoenix. The betting is now that housing will soon be in a double-dip recession, with values hitting new lows. Foreclosures are expected to rise 20% in 2011.”

So why ‘Buy America’ now?

Prices are still falling. Why are you so very convinced that U.S. housing prices will NOT (a la Japan) fall & stay low for DECADES…? ~~and Japan was ‘a nation of savers,’ unlike Americans…

I said it’s a long-term strategy – a five-year hold. Of course you can wait until prices recover and start to rise. That would be a typical Canadian move. — Garth

#32 freedom_2008 on 03.30.11 at 12:04 am

Garth: “Renting will also mean having to file an annual US tax return, and being nailed for any cash flow surplus. Bummer.”

And more, as a Canadian, you are NOT allowed to do anywork yourself on your US house, if you rent it out, NOT even painting. If you do and people there report you to US homeland security, you could be put in jail and be kicked out and not allowed to be back to US again.

Please see link below:

#33 Glenn on 03.30.11 at 12:08 am

As an American, it never ceases to amaze me how Canadians think Arizona is Calgary South. Arizona is swarms of unemployed pissed-off Americans, a couple million pissed-off illegal Mexicans, a batshit insane sheriff named Joe Arpaio, and an economy that has no hope whatsoever.

Buying a home in the Southwest is roughly as intelligent as buying a home in Haiti. It sure is cheap, but you get what you pay for. As they say, real estate is about three things. Location, location, and location.

If you like the idea of the locals playing smash-and-grab 15 minutes after you leave (or sign the rental agreement) then have at it! Otherwise, try to regain a grasp of reality.

#34 Into The Sunset on 03.30.11 at 12:10 am

S.B. your comment isn’t cute.

Are you impressed by how clever you believe you are?

Please find another blog.

#35 Min in Mission on 03.30.11 at 12:10 am

#17 – LOL. But so true!!!

#36 John on 03.30.11 at 12:15 am

BPOE #15. You sound as brain dead as the road kill in Richmond are going to be within the next 12 to 24 months, or less. Is somebody paying you to cheerlead or are you just naturally perky in the extreme?

#37 Jojo on 03.30.11 at 12:22 am

Quote: GARTH!
“We have 70% home ownership, and rising. They are at 66% and falling. We think it’s different here.”

Yes Garth,it’s different here, OK!
Never ever mess the Goverment with economy or RE, and this bubble on RE or Stock Market will collapse maybe this year or maybe after 3 years.
Only the “Big guys know when they’ll pull the triger”.

I’ve told you so, long time ago, in Jan/2009 live time oportunity to buy House or Stocks.
Now stay away from everything, when sh.t hit the fan, than we’ll see Toronto, Vancouver,Calgary like Detroit . It’s comming but not today.

#38 Tim on 03.30.11 at 12:24 am

“mild 15% correction in Canadian house values, and a protracted recovery, would finish off more of your friends and relatives than bubonic plague. ”

A mild 15% correction…that would put us, about where the market was 8 months ago?

Why do we have a reading problem today? — Garth

#39 Tim on 03.30.11 at 12:26 am

Rosenburg: Canadian Housing is OK

Trying to protect the value of his own home?

#40 not 1st on 03.30.11 at 12:29 am

Buying a house in the deflated U.S. market is only a good idea in theory, in practice its not feasible. taxes are much higher on property in the U.S. and maintaining a property 1000 miles away is a problem. Better to stay in Canada, buy what you can afford and sit tight and watch the american implosion from afar.

#41 Jeez on 03.30.11 at 12:37 am

BPOE , I have 6 properties in 4 countries. I rent in Canada….because right now only LOSERS buy in Canada.
When the value is right , I will buy in Canada too…but right now its way overpriced.

#42 VICTORIA TEA PARTY on 03.30.11 at 12:43 am


Some months ago I posted a piece criticising this practice of Canadians buying US real estate.

I wrote that for Canadians to dive into the US real estate market, at this time (when coupled with US taxes and the distance to those new investment nirvanas), would have negative consequences for many. Shur Nuff.

So, Crystal, with her increasingly worthless piece of Arizona desert is an object lesson for the rest of you wannabe Canuck free-booters. Forget it!

To re-cap: Americans, inspite of their ongoing Great Depression 2.0, STILL have that old Yankee-trader (snake-oil salesman) DNA circulating throughout their culture. It’s a product of their hard-scrabble ancestors’ revolutionary zeal and their desire for “freedom” and enterprise.

Canadians who think they can outsmart that kind of mind-set are just as stupid as can be. Stay away from that cultural minefield unless you have the guts to see your way across that no-man’s land.

So, while the nice lady tries to flog that piece of tumbleweed paradise, during this period of continuing American asset deflation, take a look at the flip-side of this economic disaster. Inflation! It’s everywhere there! Contained in the prices of all that Americans buy every day. Everything!

For instance why do they pay $4.00 US a gallon to load up their turbo-charged pickups? Could it be because of the machinations of those OTHER snake-oil salesmen? Ya know, the ones from OPEC?

Ya think?

Reports the Financial Times of London:

Fatih Birol, chief economist at the IEA (International Energy Agency) says OPEC is looking forward to bringing in $1 trillion US worth of revenues this year, a first, should oil prices stay above $100.00 US a barrel. Of course they will! And much, much more.

Why? Because continuing unrest in the Middle East is bound to hamper future exploration and production; as well some OPECers have been hoarding their resources for future considerations.

So as dry holes start sprouting up, in good old Araby and demand keeps on keeping on, watch for inflation to get a lot stronger.

Yet another reason to remain on the frozen Canadian tundra. In between neighbourhood squirrel-punching jamborees you’ll have lots of time to juggle your own inflationary cost of living with your desperate need to pay debt.

Sounds boring compared to that great tumbleweed life, right? So, like, when’s that 3:10 to Yuma leavin’?

#43 kat on 03.30.11 at 12:49 am

All I’m hearing from my vancouver mortgage pals is how much money is pouring in from overseas.

Are we saying I am supposed to pay $1500 per month in rent? Or put $100K down on a $400K apartment and pay $1600 all in per month? Or am I supposed to pay rent and wait for some 10% dip in spite of the constant influx of foreign investors?

#44 Brian on 03.30.11 at 12:50 am

Hey garth why do idiots like #15 -BPOE and #17 – Crazy post stupid comments on your blog. These are the type of people that think Real estate is only gonna go up in Richmond & Vancouver. What they don’t probably realize is that when the bank rates go up…and they will get back to normal, that house that cost 1.3 million dollars with a 2.25 VRM won’t be so cheap when you have a VRM of 5.25. Who’s gonna be able to afford that…oh wait the Asian are gonna come save us. Makes me laugh!

#45 Arthur Buttock on 03.30.11 at 12:55 am

I lost the plot…

Tell me again, why the market in Canada is so different and wont suffer the same demise as the US ??

#46 Bobby on 03.30.11 at 12:55 am

I was out and about yesterday and visited two home reno stores here in Victoria. Employees at both retailers said things were really slow. One said she had relatives who were in the building trades who were looking for work.

Looked at one house recently that had been on the market over 3 months. There have been 3 price reductions and still no takers. Still lots of homes sitting on the market that don’t seem to be moving. Some have been taken off the market outright.

Will be interesting to see the March stats.

#47 Industrial Guy on 03.30.11 at 12:56 am

Fluoride in Water Linked to Lower IQ in Anti-Fluoride Activists.

Junk science on the Internet may support a paranoid view of the World but:
1. The conclusions of the junk science community concerning the toxicity of Fluoride in drinking water is simply wrong. As a community, they share a lot in common with the Man never landed on the Moon and 9/11 was an inside job truthers. Sure, anything consumed in grotesquely excessive amounts can harm you … even kill you. Water poisoning for example is caused by excessive consumption of water during a short period of time. It can be fatal. Should every faucet in Canada carry at least a warning sticker?
2. Spreading fears and false information to others makes the purveyors of junk science a true danger to society. Since Fluoride in drinking water is a small issue. The mediocre success of this tin hat crowd would only costs us as a society a lot of our teeth.

Here’s where it gets serious.
Hearsay, manipulation and movie stars convinced parents to refuse vaccinating their children over fears concerning Autism. This triumph of ignorance contributed to an outbreak of polio and measles in the USA. The author of the study, Dr. Andrew Wakefield later recanted. Admitting that his findings were falsified.

#48 Utopia on 03.30.11 at 1:04 am

#12 Ralph Cramdown

“What I don’t understand is our trade deficit. We’re running one. Here we are, “hewers of wood and drawers of water” and commodities are at a record high (except uranium). Shouldn’t we be running a trade surplus”?

Ralph, keep in mind that despite the solid sales of oil, potash, lumber and a wide variety of other resources we sell that it is the Canadian dollars strength that is wreaking havoc on our manufacturers and therefore on our national income at this time.

The effect is killing off exports and hobbling our ability to earn an income from aviation, transport, technology, medical apparatus, telecommunications equipment, autos, engineering services and a whole host of other products and services.

But why do we have a high Canadian dollar? In answer to that, it is ironically partially because we have a strong commodity based export economy.

This is a double edged sword and to be honest we are generally better off with a weaker dollar and stronger manufacturing base.

But that is not the case right now and much of the Ontario and Quebec manufacturing heartland has been ravaged by currency forces that have rendered us non-competitive.

Selling “stuff” out of the ground is only representative of a small proportion of the Canadian economy. Less than 7% in fact and so we cannot rely on it to build a solid revenue stream to sustain the whole economy over the long term.

Think for just ten seconds of how many people you know personally who work directly for a mine, for a fishery, for a forestry company or even for a water bottling plant that exports their product abroad…..

Nobody right? You get the point. We are more a service based economy than a commodity exporter. The numbers prove it too. Also, much of our national income and revenues are derived from manufactured goods complimentary to raw materials production and the strong dollar now works aganst both.

You might feel richer as a tourist heading South but we are being gutted day by day by the high dollar as it kills what little we had in the way of incomes derived from manufactured exports and services abroad.

It hurts our commodity producers as well.

#49 Nostradamus Le Mad Vlad on 03.30.11 at 1:04 am

Cooked — rare, medium-rare, medium, well-done or blackened cajun-style?

“. . . $5,000 a year just to maintain . . .” — With a deflating asset and increased costs of ownership, a home is clearly not an investment. Shelter, yes. Investment, nyet.
Happy New Year! Errr, not quite. Wal Mart’s first collection of the year. Not pornographic, and that is a good thing!

7:40 clip Huge plutonium leak at sea and on land.

Fukushima Two choices — bad or worse, and Radiation in food.

#15 BPOE — HAARP Either the SAF or NMF is next, then throw in Yellowstone for good measure. HAARP may provide enough destabilization for the megaquake to follow on in a few weeks. The NMF is twenty times larger than the SAF, plus — Links in. Canadian ‘quakes.

Hyperinflation As said before, HI is purely political, but with all the garbage happening thruout, this may be part and parcel of it.

14:08 clip Not smart fiscal management. Then again, I’m not much of a politician either.

Liquidators “Whether Japan needs a few hundred volunteers to shovel boric acid on burning plutonium, or whether Japan needs 800,000 draftees, as in the Soviet Union, somebody’s got to do it.”

Headline says it best.

Interesting Chart Why then, is the US so desperate to start wars in the Middle East? Is it to steal their oil? Look at the chart.

Superbug A-H1N1 isn’t needed anymore, and (apparently) this bug is now in 38, not 35 states.

The US has been in almost permanent war since the end of WW2, so who is the driving force(s) behind it? Plus US — Bull in a china shop.

Journey to the centre of the earth, with map incl.

Shitstorm of the Century This century is only a decade old.

#50 Ex-Cowtown on 03.30.11 at 1:05 am

Benjamin Tal is an idiot:

The guy contradicts himself so many different ways it is unbelievable. My head hurts just trying to follow what the hell ever he is talking about.

He concedes that the real estate market is tanking, but doesn’t get that 25% of the GDP in Canada is construction related. He doesn’t get it: RE tanking means no more high paying construction jobs. This loss of jobs was a major cause of the stubbornly high unemployment rate and is a continuing problem. The same thing is coming down the pipe in Canada, and he just glosses it all over.

Painful to listen to.

#51 Traveling Renter on 03.30.11 at 1:06 am

Just got this email from a Rural BC realtor. Not sure why the continuous price drops but my thoughts are the buyers have left the building…

Reduced from $ 1,490,000 to $ 1,150,000 to $ 950,000 and now to $ 890,000…

Give it another year and it should be under $400K

#52 Realtor panic in GTA on 03.30.11 at 1:14 am

Word is realtors in the GTA are in a panic as the angry red dots is hitting MLS faster then people are buying. Realtors are seeing a BUYERS STRIKE and when you look at the last 9-10 months of falling sales it doesn’t take a realtor to figure out the housing crash is well under way. Is it any wonder why realtors spend their empty days posting on greaterfool? Make no mistake the drop from 35-30 year is having a HUGE impact on the already weak housing market. Homes are hitting the market so fast REALTORS ARE NOT PUTTING OUT ‘for sale” signs since it would be obvious to everyone the housing crash is beyond repair and realtor propaganda would be useless. SIL against my advise is house horny . Her realtor told her “house prices always go up” No joke. She put an offer for a homes 30G below asking which I told her was to much. Anyhow her agent said they need to to increase their offer and SIL said ok 25G below asking and agent said that offer would give the agent a bad name. SIL said forget about it. A week later her agent called and said to go see the house again and they “maybe” will take the 30G below asking offer. SIL said I’ll wait until they come down even more in price. It’s starting to happen and BUYERS ARE ON STRIKE.
Buyers set the price not sellers. pass it on.

#53 $froma$ia-The mother of all Bubbles on 03.30.11 at 1:14 am

bpoe-I can ensure you when you were born your parents didn’t say”Gee I hope one day little Billy or Sally will get a good job so they can rent”

nO they said get into a price war with idiots that want to put their fortune below see level.

to be continued…

#54 Utopia on 03.30.11 at 1:16 am

Sorry Ralph, I neglected to even mention how commodity contracts priced in US dollars (the norm) can negatively impact on government resource revenues as currencies fluctuate. But that is another story.

#55 Dan Gabriel on 03.30.11 at 1:19 am

Some of the real estate bulls here -Toronto-stick to the mantra that “The new immigrants are buying.”
My question is, Arizona also gets some immigrants, last I checked, so does Florida, what happened to their housing markets?…

#56 Micawber on 03.30.11 at 1:20 am

My wife and I bought real estate in Arizona last July. We have lived through the continuing decline yet our experience was a lot different than described in your posting.

First of all the $5K per year in maintenance seems crazy-outrageous. We put in $1.5K when we bought and $0 since. We know sometime in the next 5 years we will have to shell out ~$3K for an air conditioner. Other than than we anticipate < $1K per year, variable.

We have no plans to make annual trips down to deal with anything. The property manager we hired completely insulates us from these issues.

We didn't have to wait long to find a tenant. It took three weeks. The property manager found the tenant without us having to do anything. Mind you, he set the rent, not us. This raised our eyebrows, but as the cheques roll in month after month, we feel less and less inclined to argue.

We have seen evidence of the continuing decline in property values. At one point we estimate that the market value of the property was ~16% lower than what we paid. It has recovered since then.

So why would we be so positive about an investment that you could reasonably say has 'tanked'?

The free cash flow on initial investment, after management fees and HOA is north of 10%. Still have to pay property taxes $1.5K, yearly leasing fee and taxes (probably 0 for a few years because we are required to depreciate). That's pretty good. When we created our analysis spreadsheet prior to purchasing we realized that our yield (after-tax) might be as as low as 4%. That's still good compared to dividend stocks (P&G is 3.x% before tax).

We also knew that we could not be sure that the prices wouldn't continue to go down. No surprise that they did go down. We had to be prepared for that. The key is to a) have a reasonable conviction that the purchase price is less than the real value, b) make sure that the cash flow will be positive even under a high vacancy rate c) have some reassurance that you won't need the capital before prices recover.

Under those three conditions, a 16% paper loss isn't a disaster, just natural inability to time the market.

Something I learned when we did travel down to Phoenix to view properties. Location matters. We contacted an agent before we went and forwarded a list of properties that we wanted to see. This list was full of multi-plexes for under $100K. The spreadsheets were to die for! Funny thing is that the real-estate agent phone us up the night before we were to fly down and he refused to show us any of the properties! WTF?!

Well we'd already bought our tickets, so I asked him to show us some of his recommendations. He showed us beautiful 3bedroom places for ~100k in a place called San Tan Valley (a little further than Queen Creek). These places were amazing for the price. Still, it was a long commute and there weren't any jobs there. We needed to find a place that would still be attractive if oil prices spiked to $250. So we asked to look at condos for less that $100k. We found some that were very attractive and less than a 30min commute to downtown and about half that to the nearest high-tech jobs. We eventually bought one for $82K. It was ~1000sqft.

So we bought a 1000sqft condo for $82K and are happy and feeling secure while your emailer bought a 2400sqrt for $64K and is miserable and needs to get out. And I think I know why.

We used our final day in Phoenix to drive ourselves to some of the postings that we originally asked to see. While at no point did we fear for our lives, it was obvious to see why a renter would choose not to rent there (I'm understating here).

These days when we see postings for houses with absurdly low prices, we don't stress out thinking that we missed out on a bigger bargain. We missed out on a big headache in return for a reasonable investment.

I think the morale is "Don't be (too) greedy." Warren Buffet has some apropos saying about a cigar butt, I believe.

Sorry for the long comment, but I don't comment often (like never) and I think some people may find this helpful.

#57 Jas on 03.30.11 at 1:23 am

BPOE is a disgraced RE vulture. Get your head out of your ass. Lol.

#58 BC Bring Cash on 03.30.11 at 1:25 am

Took a drive along Fraser Hwy through Langley BC today and seen a sign outside a Condo development. It read ” They walked, you win”. In other words the development is sparsely occupied by losers (if at all) who paid too much. Sounds like the developer is desperate to flog his product to unsuspecting suckers. Langley is on a downward spiral like so many other parts of our great nation.

#59 daystar on 03.30.11 at 1:29 am

#14 SquareNinja

Detroit is also the home of Kid Rock. (it’s gotta be worth something)

#60 Big D on 03.30.11 at 1:38 am

#15 BPOE

Can I get some of whatever you smoked? Wow, you’ve given up even trying to base your comments on anything. Should we all put 100% of what we own into Ditchmond real estate since it’s a guaranteed 20+% annual return? I’d double my money in 3 1/2 years!

Of course, someone would just have to buy my house for $2M. I guess one of those Chinese millionaires with a suitcase full of cash could do it. I heard they’re all dying to live in Liquefaction Central.

#61 ExExpat on 03.30.11 at 1:40 am

BPOE, you crack me up, although I think you probably get a good laugh out of your own material, obviously you aren’t serious. I know this as I go through Richmond somewhat regularly.

But I do think you are a real estate agent who wouldn’t be above servicing someone who is foolish enough to take your bait, which is a little creepy.

#62 Prufrock on 03.30.11 at 1:48 am

Given your bile, I suspect you’re the very sort of basement dweller you scorn. Tsk, self-loathing is a terrible thing….

#63 Blobby on 03.30.11 at 1:57 am

>Yes, it is going to getvreally ugly out there!

Of course it is.. why else do you think the tories did everything in their power to cause an election just before it all goes tits up?

Judging by their past record, i’d say the poo will start to hit the fan around 1 month following the election REGARDLESS of who gets in power.

You heard it here first.

#64 The Original Dave on 03.30.11 at 1:57 am

Renting is a disgrace to your heritage. I can ensure you when you were born your parents didn’t say”Gee I hope one day little Billy or Sally will get a good job so they can rent”


Could not have said it better myself!


it’s funny how most people who made a fortune in real estate (including some family members of mine), started out………………………..renting. Yay. Timing and patience is what made them their money in real estate. Those that were thinking “buy at any price” which is typically at the top of the market, are still working for as they’re in their 60’s and should be retiring.

#65 Blobby on 03.30.11 at 1:58 am

Remember back in 2008 just before the election we were told (by a certain party) that Canada wasnt going to have a recession?

What short memories people have…

#66 Coho on 03.30.11 at 2:08 am

It seems odd that people think the housing market and the economy in general is still cyclical even in light of unprecedented events such as the bleeding of good paying jobs overseas, Wall Street smoke n mirrors, market manipulation, etc. Interest rates lower than anytime in history have only delayed the inevitable. It is like having stepped on a child’s toy and giving it an ice cream cone to stop the crying. But when the cone is finished, that child’s attention will turn back to the broken toy, and worse yet, it’ll be hopped up on sugar making it wail all the more!

The momentum has been and still is against against average people. The pendulum is going the wrong way and it aint just gonna start swinging back in our favour just because. People need to start speaking out.

It’s not even the same old same old status quo anymore. Things are getting much worse. More war, shooting and otherwise. Extreme weather. BP oil spill. Japan nuke crisis. Bigger earthquakes more often. Unprecedented flooding. Drought. Failed crops. Looming food shortage.

Remember Haiti? Only a small fraction of the money pledged has reached that country and it’s been more than a year! Last time Penn was on CNN, the figure was less than 10% if I recall correctly. If the money flowed out of bureaucracies as freely as charities coming out of the woodwork after every crisis, there wouldn’t be a million people still living in tents. Even George W. and Willy Clinton got in on the action. Those two are a couple of dandies, just like the two crows Heckle and Jeckle. Yes, give your money to them…because they care.

We’re going to have to hold our politicians’ feet to the fire. We have to stop worrying and focusing on ourselves or our personal situations. Everyone is eventually going to get hit. It really is a war against the middle class and they’re picking off one group at a time because they don’t want to deal with a stampede of disgruntled citizens.

We need to step back to get the bigger picture, which includes those we elect. There’s no excuse for ignorance and denial on the direction we’re headed. The attitude of “at least I’m (my family) is OK” doesn’t cut it. There are too many people being set up for a lot of suffering. Those elected to office need to grow a pair and do what is right. Stem the wealth drain from the people of Canada into the pockets of the rich elite and the ruling class!

Greg W, Oakville: Actually I’m amazed the NDP and Liberals have addressed the issue of fluoridation. The thrust behind the implementation of this toxin comes from powers beyond government. It is probably just lip service to go with the crumbs they‘re offering the voters in this election. And the rhetoric continues to ring ever more hollow. In Australia, almost 80% of the people in an area which was targeted for fluoridation voted against it and it was still rammed through. So much for the peoples’ voice or people power. Same as with the amalgamation of shires…rammed through against the peoples’ wishes.
Remember who our MP’s pledge their allegiance to. It aint to the country nor to the people of Canada. But, at least the Queen waves to us because she knows the little people like to be noticed.

#67 wes_coast on 03.30.11 at 2:08 am

Did BPOE mention the Richmond BC is below sea level and is only kept remotely dry by a system of dykes?
Anyone know why the Tsunami in Japan was able to trave 10KM’s inland? The land was at 2 meters above sea level.
Did BPOE mention we have a similar subduction zone fault line in the ocean off the BC coast?
The only thing we need BPOE to sell us on is the installation of 6 nuclear reactors just off the air port and we’ll be all set.

If you buy in Richmond you don’t even get land. You get dried mud that is proven to turn into pea soup during the earthquake (until the Tsunami washes ashore)

Give your head a shake before the Juan De Fuca plate does ya jack ass

#68 rickster-bc on 03.30.11 at 2:27 am

I’m just planning to head down to Phoenix next month to check out the deals. If it looks good, I might float some stink bids and see what I can come up with. Plan to hold at least 5 years and rent out using a PM. Who cares if the prices drop another 10% if, over the long term, they recover and start back up. I see this as diversification, and maybe an excuse to head to sunny weather every once in awhile to check on the property. The best time to buy is when everybody thinks its terrible, and Phoenix is pretty terrible right now. The best time to sell is when everybody thinks things are going great, like in Richmond.

#69 not asian on 03.30.11 at 2:38 am

#15 BPOE

In Richmond BC volume of sales for detached homes last 30 days down 33% same time last year. Although prices are still high.

Holy S**t!! That’s a dramatic drop. Where are the chinese buyers?

#70 RoninBC on 03.30.11 at 2:41 am

#15 BPOE, I totally agree. Richmond and the west side of Vancouver are different than ANY other market in Canada. Reason? Asian money. All cash. The new Chinese millionaires love it here, not TO.

I admit the properties are ridiculousy overvalued but they don’t care. They want in NOW.

A mild 15% correction Garth mentions would still make it unaffordable for most. BTW, what hapened to the 30% or more correction predicted on this blog that’s supposed to hit this area?? I’m long getting tired of waiting and predict it will NEVER happen.

#71 reality guy on 03.30.11 at 2:48 am


Humm I guess you just criticized all the East Indians and Chinese who live in separate units of their monster houses.

BTW will one day rule most of Hong-cover or Poon-cougar.

Yeah richmond is hot right now, because its the best burial plot in the lower mainland.

When the big one hits the last place I want to be is in Richmond. Even the bridges can sink like quicksand.

#72 Utopia on 03.30.11 at 2:52 am

I just read Jack Laytons plan to reduce interest rates on credit cards and thus save Canadians an estimated 700 dollars each year in charges for credit.

Wow. Go Jack.

He is a genius in coming up with a means to give away corporate income in order to buy votes while simultaneously crushing access to credit as the big companies withdraw from our market.

Real genius pal. Did you really think that one through?

Then I heard of the Liberal plan to “buy” the youth vote by offering 1000 dollars per year in free money for education.

Where is my barf bag? Do they think young people are so stupid that they will sell out their basic values for such a pittance of a contribution to their higher education? Do they even think seriously that those same people actually vote (they don’t).

Do they not think that the offer made previously to forgive student loan debt for medical and nursing students who work in small towns might not cause all other faculties to feel resentful that they are not quite worthy to a future Liberal regime?

Gee, I wonder.

And is Ignatieff comfortable being cozy with pandering to the voting preference of an aging demographic on the health care isssue while simultaneously disenfranchising and being divisive with the majority of the youth vote they so desperately seek?

I am not impressed with the policies of the Liberals nor do I think the NDP has a platform of common sense.

Both should be shuttered to the sidelines until they can come up with good solid ideas that resonate with the public and make good economic sense.

And yes, I am still solidly Conservative.

#73 Soft Duck on 03.30.11 at 3:09 am

I’ll say this time and time again…sure US real estate is in the depths of a recession…but the situation is hardly as dire as people make it out to be in areas where people want to live. I turn again to Scottsdale…an upscale suburb of Phoenix where there’s a good deal of healthy employers within the immediate vicinity:

This place changed hands for $670,000 and was purchased for $600,000 in 2004. 3000 sq ft…and in a neighbourhood people actually want to live in! Hardly the stuff of 80% reductions in value…

Here’s a sweet Victorian in a nice part of San Fran:

Paid 497K in 1995…sold for 2M a couple of months ago…with ~250K in ugly-ish renos.

Even in the US…home of one of the worst real estate markets in the world…things are still selling and people are actually getting some money out if they live in a nice house in a good location.

#74 Aussie Roy on 03.30.11 at 3:32 am

Garth more common sense, great article.

Aussie Update


Nightmare for residents trapped in Spanish ghost towns. Half-finished developments languishing amid dust and weeds reveal the scale of a burst property bubble Spain will take years to recover from.

#75 Cato on 03.30.11 at 4:22 am

Personally would rather see sharp violent drop and just get it over with but the Canadian market isn’t as efficient as the US in clearing out losers. CMHC is completely unprepared for even a marginal uptick in loan loss rates, the US housing market might look bad but at least it has tools to heal.

Trouble with asset bubbles is they never re-inflate, dot-com bubble should have served as a warning but of course it happened again in housing . It could be another 50 years before tech stocks of that era once again reach their bubble high. Housing really isn’t any different, its not unreasonable to think house in Phoenix might float well below replacement cost for years.

The inflation/deflation debate is really two sides of same coin. Look close enough and you’ll see sharp bouts of deflation brought on by the continued unwinding asset bubble followed by sharp inflationary reaction brought on by massive central bank intervention attempting to reflate. Process will be repeated again and again, its how system is designed to work. Middle class is ground down, lower class is irrelevant but for wall street times have never been better.

#76 Aussie Roy on 03.30.11 at 4:36 am

Great overview of the Aussie tax system.

“A tax system that encouraged borrowing and speculating, and penalised working and saving, is, of course, rather hard to imagine. Unless you are Australian because its the system we now have”.

#77 Changing forecasts on 03.30.11 at 5:16 am

Hey Garth,
15% drop?
two years ago is was 40%. why the change?
I would have expected as houses went higher that the drop would be greater?
I had a 25% gain in two years on my house.
And they still sell in a week on my street, and none for sale now as summer comes.

Learn to read. It was an example. — Garth

#78 Seller Beware on 03.30.11 at 7:00 am

Crystal placed her bet. She must accept loses or gains. She will be sharing her loses.

#79 bigrider on 03.30.11 at 7:33 am

Garth from today ” if we stagger through deflationary period the losers…wil be those with stock laden portfolios.”

Agreed, but you have been advocating a 60/40 split between equity ETF’s(stocks essentially) and bond ETF’s. Do you really think the bond portions rise in a deflationary period will offset the equity ETF’s decline?

I think not.

Of course a fixed income component will mitigate equity declines. That was the experience in 2008-9. — Garth

#80 Nemesis on 03.30.11 at 7:40 am

“Its continuing crisis is a potential trigger for continent-wide deflation.” – Hon. GT

Nolo contendre…

“I seriously doubt there will be neighbourhoods anywhere [in Canada] in which houses lose 80% of their value…” – Hon. GT

“It’s early days. A few skeletons are bound to keep jumping out of the closet.” – Alan Oswald Moore (Watchmen/V for Vendetta)

#81 John in Vancouver on 03.30.11 at 7:53 am

>>> 15% drop?
two years ago is was 40%. why the change?

<<< Learn to read. It was an example. — Garth
Well how about making a prediction about house prices that you **are** willing to stand behind Garth?

For example, do you think that Canadian house prices will ** ever ** fall below the level they were at back when you started your call for them to fall?

Wait and see. I can warn, the rest is up to you. — Garth

#82 Moneta on 03.30.11 at 8:09 am

In Australia, almost 80% of the people in an area which was targeted for fluoridation voted against it and it was still rammed through. So much for the peoples’ voice or people power.
That’s why I wonder if looking beyond the needs of your family is even worth it at this point in the game.

For example, when from 2003 to 2005, I was calling the US credit bubble I was ridiculed. Today, most don’t recognize I was right. They remember me as the perma bear.

I personally believe that trying to stop what is happening today is like standing in front of a moving train.

In the Western world, we have been brain washed into believing that we can control everything. Action is the name of the game. No one can just sit and wait for things to just naturally fall into place happen as they often do.

When you have the flu, the only thing you can do is nurse it and bide your time. We don’t know enough to stop it. Well, I think this mess we are in is so complex, there is no way we can know how to fix it. It’s like the flu. We have to endure it.

#83 Smoking Man on 03.30.11 at 8:17 am

#52 Realtor panic in GTA

Buyers on Strike in GTA you say………….

Wish I could publish pic’s of all the sold signs in etobicoke south by the lake….. Walk the dogs, house for sale. Next day SOLD……..

#84 andthen on 03.30.11 at 8:30 am

This cant be good

Ontario Finance Minister Dwight Duncan says his government will introduce a 10 per cent rebate program for electricity bills, but admits rates will jump 46 per cent over the next five years.

#85 Scare Crow on 03.30.11 at 8:41 am

Garth – that pic is classic – well done!! Oh that can represent alot of different professions – but realestate agent tops them all …

I just can’t figure people like Crystal – first, no one can actually predict a bottom or top – in a few years, the price she paid could well have been just near the bottom before the market once again (human nature – we don’t learn) and the market will hit the double digit increases..and Crystal will tell the world how they made a killing…(eyes rolling).

But why do people ask garth when is a good time to unload or buy … what’s up with that, no disrespect Garth – I take your comments seriously – but people, Garth doesn’t have a crystal ball (hey – that could actually turn into a joke) – and if G-Man can see into the future – forget the housing market – Garth, what are this saturday’s lottery numbers…geezz – why do some people require their hands to be held at times of uncertainty….sad

#86 S.B. on 03.30.11 at 9:03 am

I was 1st! My comment was prescient – what is so hard to understand? A 500k condo (such as Owe-limpic village) is worth 250k at best. And yes, this blog has a tradition of poking fun at ‘old people’. Lighten up!
6 lines of text, read and move on. Next.

#87 Love this Blog on 03.30.11 at 9:17 am

#20 BPOE = Butt Pirate over exxagerator

TOO funny!!

#88 Timing is Everything on 03.30.11 at 9:23 am

I said it’s a long-term strategy – a five-year hold. Of course you can wait until prices recover and start to rise. That would be a typical Canadian move. — Garth

@ #33 Glenn and #31 TaxHaven…

Why bother? I agree with Glenn…

BTW Glenn, It seems a lot of Canucks go ‘squirrely’ after enduring many years of harsh Canadian winters. The brain goes numb or something. Weird.

#89 Herb on 03.30.11 at 9:34 am

#72 Utopia,

“…I am still solidly Conservative.” Gee, I never could have guessed!

Tell me, what sold you? Was it the campaign promise of a “Family Tax Cut” five years down the road if returned to power, God was willing and the creek didn’t rise? The evident dedication to truth? Utter disregard of partisan considerations in government operations? Devotion to democratic processes? Courteous political discourse? The fact that the CPC is like any other political party, only more so? Harper’s piano playing?

Do tell. I don’t know what I am, but it won’t be Conservative unless you convince me.

#90 bridgepigeon on 03.30.11 at 9:37 am

47 Industrial Guy

Pssst…..building 7…

#91 bigrider on 03.30.11 at 9:41 am

Garth- A 60/40 split between equity and fixed income will definitely be a net losing proposition in a deflationary environment.

In no way will a 40% allocation to any fixed income offset a serious deflationary decline on a 60% allocation to equity. The net result would still be a significant loss.

Place your bets with the full knowledge that there are /is no perfect formula, only a move +or – on the efficient risk/reward frontier.

Don’t exaggerate to make a point. I did not suggest a 1930s ‘serious deflationary decline’, but rather said we have a very good chance of moving towards a deflationary period. Equity markets are likely overvalued now, so having a 40% fixed income component could make the difference between a 20% dive on an equity-based portfolio and a 0% adjustment on one that’s balanced. There is no conjecture involved here. It’s a simple case of negative correlation. — Garth

#92 something fishy on 03.30.11 at 9:46 am

Every market making you think having cash is a bad thing. Even on this blog.
The savers are doomed no matter what the outcomes, that’s how it feels right now

Cash is no strategy. — Garth

#93 bigrider on 03.30.11 at 9:47 am

By the way, everyone who posts here has an agenda. Everyone’s agenda usually becomes quite clear based on their respective arguments pro/anti RE etc.

I am just going to come out and say it. I want RE to decline severly. Before I am attacked, I am a homeowner, fully paid for in a upscale part of the GTA with more of my net worth in financial assets.

Why you may ask I wish for decline? Because I am surrounded by RE flippers, humpers, landlords, builders et all who continue to tell me that financial assets are for suckers and the only true wealthy people have made it through RE. As much as I know that not to be the case, empirical evidence around my little world does weigh against me and hence my ability to enlighten these associates is hampered severly.

Bring on the decline already !!

#94 Ryder on 03.30.11 at 9:49 am


I was in Edmonton in 2007 and saw how the prices balooned there. Nowadays I am in Regina and am seeing the prices are increasing every month here.

Don’t you think that a 2 bed apartment for 400 k in Regina is bit too much?

(It is nice..but not that much)

Any place boasting of ‘grand European fountains’ on the prairie is to be avoided at all costs. — Garth

#95 bigrider on 03.30.11 at 9:51 am

Garth in #91 “Don’t exaggerate to make a point…”

I agree and explanation clear and understood. I thought you should have offered that clarity right from the get go for the masses here.

Was not trying to annoy you in anyway…this time..LOL

#96 Tom from Mississauga on 03.30.11 at 10:06 am

Ontario’s brightest Liberal Don Drummond will be reforming Ontario’s public secvice. So the budget said yesterday. Here’s his take on personal finance:–5-big-trends-that-will-affect-your-finances

Why is he a ‘Liberal’? — Garth

#97 Johannes de Silentio on 03.30.11 at 10:09 am

Long time listener, first time caller. Thanks to this blog I sold the condo just in time and now, finally, have no debt and a small amount to invest.

Garth, if we’re going to be muddling through deflationary period, would it make sense to deviate from a 60/40 ratio of equity to fixed income? What if one makes the fixed income a higher proportion of the portfolio (say, 50/50 or even 40/60) – at least for the next year or so?

Depends on age, risk tolerance, amount of capital, assets chosen and makeup of net worth. A 40/60 fixed/growth mix has proven its durability through many cycles. — Garth

#98 Ret on 03.30.11 at 10:11 am

I would move to Phoenix in a heartbeat if I wasn’t held hostage by our free health care, which currently takes 46% of the Ontario budget. If the sand states set up a reasonably priced basic health care system for Canadians living in their state, the inventories of unsold homes would be cleared off in a year. Canadians would leave Canada by the tens of thousands.

#99 The InvestorsFriend (Shawn Allen) on 03.30.11 at 10:15 am


Someone bought a super bargain house for $64,000 and…

Now it’s worth $61,000, and falling. “It costs us about $5,000 a year just to maintain,” she says, “so what should we do?

A bargain house in the U.S. makes sense for those who WILL use it or can rent it, and can afford it. Not for people who buy low and think the market will immediately turn around. Not for people who don’t think about expenses in advance.

Get a grip, maybe sell to someone smarter. (You will find no shortage of same).

#100 The American on 03.30.11 at 10:17 am

At #69: Not Asian, that’s been my point all along… Where are all the Chinese buyers? Well, they sure as hell aren’t coming into Vancouver/Richmond in the droves they used to be. That all stopped a while ago. Some people just can’t let go of that notion, though.

#101 ris ames on 03.30.11 at 10:22 am

i’m near salmon arm, 07 gov assessment was 450,000
2010 was 371,000. i think around 250 – 300 could find
support maybe. the area is full of 2nd homes . what i think even when we find a value point the liquidity will
be near 0 and will be for a long time.

#102 fancy_pants on 03.30.11 at 10:25 am

Just b/c something is on sale doesn’t make it a deal…especially when it will continue to be discounted.

If those folks bought the house solely as an investment then that is unfortunate. If they bought it for enjoyment and were satisfied paying $64k then who cares if it is worth a little less $ down the road for a period of time… you can still enjoy it for the price you were satisfied paying for it.

Unchecked greed will always find a way to hurt you, be it time consumption, obsession or financial ruin. Contentment will always reward you with peace of mind. Be content with the purchase and enjoy your winters in sunny Arizona.

But if greed was the motivator then too bad you chose poorly b/c as they say “once bitten twice shy.” Now real deals may be eyed more cautiously as trojan horses and some may pass you by.

But the real secret is living within your means and being content with that. IMO the constant chase of $ may give you more but when it becomes a hunger in itself, it can rob you of “living life”.

So folks, enjoy your home down south and look at the “value” of it from a consumption perspective.

…ps. I would have sent flowers instead but your address is unknown. hehe

#103 TS on 03.30.11 at 10:29 am

To:#48 Utopia on 03.30.11 at 1:04 am

Excellent explanation. That is why it is going to get different here in Ontario. Buying a home is based on employment. Employment numbers are very fragile in Ontario. Our percentage of people involved in construction is significant. Federal stimulus program is over. New housing demand has been stolen from the future. Civil service hiring freeze. Wealth effect psychology will go the other way. The air has been let out of the bubble. Looks like a slow leak. That high dollar is killing Quebec and Ontario.Federal provincial politics will get nasty with the sharing formula.

#104 Oskar on 03.30.11 at 10:31 am

Hi Garth,

Do you think Stanberry’s prediction has any merit?

Thank you.

I think it’s junk. — Garth

#105 Cow Man on 03.30.11 at 10:44 am


Mr. Layton disappoints me; as do the other Leaders, just not to the same degree. So Mr. Layton wants to do to credit card addicts what Harper did to CMHC addicts. Lower the interest rates, resulting in twice as much debt. All the lower rates would do is encourage the users to take on more debt as they would be able to “service” more debt. Exactly what we do not need is more debt. Wake up Jack, this is the real world not some fuzzy socialist island.

#106 JoshL on 03.30.11 at 10:52 am

To all the BPOE haters out there … he’s kinda right … well, inversley right. Just replace Stock with Bre-X stock and then he’s right. Right now offers are going CRAZY in Richmond so it’s a great time to be a Seller. If you were lucky enough to live there to start with SELL. Just like Bre-X it was going up exponentially before it cratered. The only people who made money (you know real money that you can trade for food) are the ones that sold … not the ones who bought.

#107 Tom from Mississauga on 03.30.11 at 10:59 am

Why is he a ‘Liberal’? — Garth

Well the Liberals always get his opinion on what to do. I’m more PC but I’ll listen to anybody that’s intelligent. (Don’t get a swollen head now because I read your blog)

Too late. — Garth

#108 Daisy Mae on 03.30.11 at 11:01 am

Blobby on 03.30.11 at 1:58 am

“Remember back in 2008 just before the election we were told (by a certain party) that Canada wasnt going to have a recession? What short memories people have…”

Scary, isn’t it?

#109 Moneta on 03.30.11 at 11:01 am

It’s funny how little things can make a big impression.

We bought our house 2.5 years ago. It was obvious that it was staged. The furniture did not make sense. The entire house was repainted (full of streaks I guess trying to keep the jpb at 1 coat) and new stick-on tiles were installed on top of the vinyl. Half the rood was done and they put in a new carpet directly on the cement floor in the basement which was quickly finished just for the sale.

The wife was very nervous. I was not sure if it was just in her nature, if they were hiding stuff or if the new decor was just our of her comfort zone. Anyway, we do most of the work ourselves so we know what to look for and we got a good inspection.

When the deal closed, they gave the money to their kids (in their 30s) so they could buy their own houses. I couldn’t help thinking “yay, entitlement syndrome”. Two years later we’re still getting the son’s CRA papers. Hmmm.

Now we’re fixing up the bathroom and while opening the wall to fix some drywall, I discoverd scrunched up newspaper plastered over. Wondering if it was the industrious builder’s work or the previous owner’s, I unfolded it and checked for a date. 2008.

I don’t know if I should feel bad for the person who just bought in Arizona for 1.8 million thinking he only had 1K in annual maintenance or for the renters down the road.

#110 Alex on 03.30.11 at 11:05 am

#81, John in Vancouver. Dude, I’m not doing this to defend Garth’s prognostications, but you gotta look around, man. I keep babbling about this, but it’s true. There are *numerous” spots not far from you that have not only sunk back to their levels of two years ago, but are continuing to fall beyond that.

I closely follow the Okanagan and the Fraser Valley. It’s all down, and *still* the buyers aren’t there. Go to Chilliwack is a sea of red dots. Gorgeous brand new homes, with views, and TONS of them, for less than $400,000 apiece (and many as low as $350,000).

In the Okanagan, meanwhile, realtors are begging you to “bring us any offer,” yet nobody is. I know – I was there a week ago.

Squamish is another one. The place was supposed to go crazy post-Olympics. It’s crazy all right – crazy dead.

Now, if by “Canadian house prices,” you really meant “Vancouver” or “Richmond” house prices, I’d understand where you’re coming from. And I’m sure that, for you, living and likely working in the Vancouver area, you probably can’t move to any of these spots. But still, your generalization is way off-base.

Anyone who actually reads my posts knows that I repeat this over and over. But bubbles deflate from the outside in, and the deflation in many areas began quite some time ago.

It’s funny – I talk to people in Vancouver all the time who simply can’t believe it when I tell them what’s happening in the housing world *outside* their head in the sand zone.

#111 pathrik M on 03.30.11 at 11:09 am

See link below:

Interesting read – because I thought our lending standards were so much more conservative then those in the US.

#112 45north on 03.30.11 at 11:23 am

Alex: bubbles deflate from the outside in

that’s what happened in the States, that’s what’s happening here

#113 charles on 03.30.11 at 11:24 am

Pssst…Industrial Guy,
Spontaneous collase happens to obsolete industrial technical jobs, not concrete and steel skyscrappers.

#114 BPOE on 03.30.11 at 11:30 am

Are you tired of living on a flat plain? Don’t you want something to look at in the morning while you brush your teeth? Are you tired of patting other people on the back? Do you want to dedicate all your time to patting your own back? Well, I have the answer for you, folks. It’s Richmond! Richmond is the place to be people. It is beautiful and clean and has water and mountains. Yes, people, Richmond in beautiful, idyllic, self-centered British Columbia.

For a limited time you too can have a piece of Richmond. But you have to act fast! Richmond is disappearing before our eyes! For three easy payments of $1 million you can have a piece of this elusive beauty to call your own. Makes a great wedding gift, feather in your cap, or just to say I love you. Richmond is cheap, easy to use and folds flat for storage. It’s microwaveable and dishwasher safe. It also slices, dices and makes Julienne fries. Call now! Our operators are standing by to take your call. Have your credit card ready and your blinders in place. 1-800-BEST-PLC.

#115 Kevin in Winnipeg on 03.30.11 at 11:34 am

This is a confusing blog. Typical week here…..warnings, warnings, apocalyptic collapse, false alarm, stock up on squirrel, deflation, inflation, mild inflation, crash!, no crash just steady decline, buy US, buy bonds, sell bonds, don’t buy US, buy oil!, sell oil!, better stock up on squirrel just to be safe, etc….

No one likes a bipolar contrarian.

How can anyone think buying a house in Phoenix and starting a business would be even remotely a good idea at this time? I see this as thinning the stupidity out of the herd. If someone was retiring, that’s a different story.

Sorry to confuse you with multiple facts on the same site, Kev. Just go to your happy place. — Garth

#116 Sue on 03.30.11 at 11:45 am

Industrial Guy

You sound very ignorant. Can you honestly say that you can evaluate medical research and decide what is “junk” and what is real?

Maybe you should let a real expert decide, like say Dr. Russell Blaylock (neurosurgeon, nutrtional researcher, lecturer and author) ya think?

He is violently opposed to flouridation (even more than Greg in Oakville) and there are many others who are a hell of a lot more qualified than you.

I normally don’t say too much on this blog but ignorant people just really piss me off.

#117 charles on 03.30.11 at 11:48 am

2nd attempt at the english language.
Pssst…Industrial Guy,
Spontaneous collapse happens to obsolete industrial technical jobs, not concrete and steel skyscrapers.

#118 CandleFish on 03.30.11 at 11:53 am

Real estate crash in China. This well-done documentary about Chinese government ghost cities, we’re talking 65 million empty units! – is unbelievable, but true.

If you have money in commodities, you might want to reduce your position.

#119 Moneta on 03.30.11 at 11:54 am

Shouldn’t we be running a trade surplus?
We’re exporting primary sector low added value products and importing tertiary sector high added value products.

#120 charles on 03.30.11 at 11:55 am

Now that I’m good and pissed let me add that the advice Garth doles out here is for the rich. Buy bonds, buy in the States, get your dividents. That is for the rich.
For the other 98% of us buy physical silver and hang on. QEIII is a lock.

Who let you out of the basement? Silver’s for my spur tips. — Garth

#121 poco on 03.30.11 at 12:07 pm

#27 Irrational Exuberance–so true–BPOE is only a troll trying to get a rise out of everyone–and he succeeds some of the time
but notice over time how his posts have changed from BC being the BPOE–to the Lower mainland being the BPOE–to Vancouver –and now to the last stronghold of the RE market -Richmond
the game will soon be over for Mr BPOE-nothing more to rile the bloggers with his idiot rants when Richmond catches up to the price declines happening in the rest of the lower mainland
but he’ll be back to laugh and scorn those who did buy in this over inflated market with a new handle WPOE (worst)

still can’t believe the idiotic posts by some of the posters (38 Tim–43 Kat–81 John in Van)—wake up and give your head a good shake–do a little research into the true numbers–you must have missed this…..

#122 Cellar Dwellar on 03.30.11 at 12:17 pm

@ #27 Irrational Exuberance
Ignoring BPOE is Excellent advice ! A continuously oozing nose that begs attention but eventually dries up.

BPOE = Boring Petty Obnoxious Exaggerator.

#123 bill on 03.30.11 at 12:24 pm

bpoe=bovine pile of excrement….

hey bpoe what gear are you in?

#124 Aussie Roy on 03.30.11 at 12:30 pm


You’re not a smart property investor, you’re a @#&+

#125 WesternCanadian on 03.30.11 at 12:31 pm

Labor shortage anticipated in Alberta oil and gas sector.

Welcome back laborers from Ontario and Atlantic Canada, my rental properties are waiting for you.

Looking forward to you paying off my mortgage on my positive cash flow properties for the next 15 years!

#126 Dan in Victoria on 03.30.11 at 12:42 pm

Utopia @ 72
Then I heard of the liberal plan to “buy” the youth vote by offering $1000per year in free money for education .
Where is my barf bag.

Go big or go home is what I say.
Everybody should get a chunk.

Hey how much is that deficeit 50 billion or so?

#127 mkultra on 03.30.11 at 12:46 pm

All the glitters is not GOLD. Even the citizens of Qatar are living well….as in well beyond their means….read on:

#128 realpaul on 03.30.11 at 12:51 pm

The ‘unspeakable’ slide in tax revenue as property values slide is what the Keynsian-Labour-Bureaucrat lickspittles fear the most.

The PTB are doing everything they can to keep the ponzi scam going in Canada….but it will bare it’s ugly ass here as it has in the US and Britian. All the schemes scams and misdirected commentary from the real estate pimps cannot overcome the reality which states ( no seed will grow to the sky) that what goes up will come down…….and at very least revert to the mean average. This in Canada would mean that prices would revert back to the value ( plus or minus CPI – 2% p/a or less) where the government began it’s interferance campaign with ’emergency’ intrest rates in 2000. That would represent a precipitous fall from here…gosh…..and look exactly like what has happened in the US.

And what a calamity that will be for the civic service looking to keep pumping up wages and pensions ad perpetuum. When revenues fall dramatically, as they have in the US and UK the axe comes down. Hidden in the Ontario provincial budget doc tabled yesterday was the fact that the coffers are so far in the red that nothing except bankruptcy can save the McGuinty stooges from having to fess up. They glossed over the fact that the debt is now ‘officially’ over 250 billion…with a ‘B’. They state that they would ‘like’ to balance the books…someday. Ain’t gonna happen without massive cuts to the pigs in the trough mentality of ‘entitlements’.

The pimps are going to do everything they can to keep the scam afloat…out of desperation…but nothing will save this dead carcass from getting swept off the falls. The pimps still think they can tax you evermore, so that they can wallow in the trough…..what do you think?

#129 Traveling Renter on 03.30.11 at 1:02 pm

Another reckless article in the VanSun on using your home as an ATM

“More Canadians hitting up homes for loans”

I can see it now, boomers taking out the “equity” in the homes, home values dropping below inflated value and adding boomers to the same predicament as the house horny 5/35s. anyone getting one of these in the next 12 months is going to put themselves in a negative equity position. So sad.

#130 Mickey on 03.30.11 at 1:25 pm

Crystal, stop being a buttercup and suck it up.

#131 [email protected] on 03.30.11 at 1:34 pm

Bought a place in Az in the phoenix area. Trying to rent it out but having little trouble. Don’t really have any issue in having to wait for a good tenant. This is a home that will be a great retirement home for me in 10 years maybe even sooner. In the meantime I have plenty of family that can use the place for vacationing. Being able to escape for 6 months of the year to go down there will certainly be enjoyable. Pretty much sunny and beautiful every day, no snow shoveling and no cutting grass (well unless you really want a lawn) and if you enjoy golf well you can do that all year round at any of the thousand golf courses in the area.

And there are plenty of beautiful sought after communities. Scottsdale being one upscale area and other communities like Verrado
or Litchfield Park

Locals will tell you there are a lot of Canadians buying up property in the area. During my time there house shopping I have seen many. Mostly from the Alberta Calgary area.

#132 AM on 03.30.11 at 1:34 pm

#114 BPOE on 03.30.11 at 11:30 am

“Are you tired of living on a flat plain? Don’t you want something to look at in the morning while you brush your teeth? …It’s Richmond!”

Richmond is as flat as piss on a plate, you moron.

#133 BPOE on 03.30.11 at 1:35 pm

I see someone is using my handle as I did not type the below. Love the naysayers who know nothing about Richmond, who deny my FACTS that real estate went up 22% last year, The FACT that multiple bids are occuring everyday. The FACTS that entire neighbourhoods are being bulldozed for monster homes. The FACTS that buyers are flocking to buy with Cash. Alot of sore renters posting on this site
#114 BPOE on 03.30.11 at 11:30 am
Are you tired of living on a flat plain? Don’t you want something to look at in the morning while you brush your teeth? Are you tired of patting other people on the back? Do you want to dedicate all your time to patting your own back? Well, I have the answer for you, folks. It’s Richmond! Richmond is the place to be people. It is beautiful and clean and has water and mountains. Yes, people, Richmond in beautiful, idyllic, self-centered British Columbia.

For a limited time you too can have a piece of Richmond. But you have to act fast! Richmond is disappearing before our eyes! For three easy payments of $1 million you can have a piece of this elusive beauty to call your own. Makes a great wedding gift, feather in your cap, or just to say I love you. Richmond is cheap, easy to use and folds flat for storage. It’s microwaveable and dishwasher safe. It also slices, dices and makes Julienne fries. Call now! Our operators are standing by to take your call. Have your credit card ready and your blinders in place. 1-800-BEST-PLC

#134 Devore on 03.30.11 at 1:38 pm

#105 Cow Man

Mr. Layton disappoints me; as do the other Leaders, just not to the same degree. So Mr. Layton wants to do to credit card addicts what Harper did to CMHC addicts. Lower the interest rates, resulting in twice as much debt. All the lower rates would do is encourage the users to take on more debt as they would be able to “service” more debt.

That’s bogus economics. Credit card issuances are not backed by the government, it’s private credit. If interest rates are capped, there will just be less credit available, not more. Only a mind which believes credit is a free and bottomless entitlement could ever come up with that conclusion.

#135 Utopia on 03.30.11 at 1:46 pm

#89 Herb responding to #72 Utopia

Funny guy Herb (or gal….you never can be sure around here). Tell you what Herb, I’ll buy the beers and we can discuss it all evening. I don’t dislike Liberals nor do the NDP really offend me but I think they are off track right now and anyone offering new money for any new crackpot program at this time is just out to lunch.

Old style politics always demanded that parties came forward at election time with a host of goodies to sway the intentions of the electorate. We cannot afford that this time around.

What I want to see is a party who is telling it like it is and does not pretend to sugar coat the future. In the 90’s we got that from Jean Chretien and Paul Martin who bought forward a brilliantly crafted program in a document entitled “The Red Book”.

They gave it to us straight, told us there would be plenty of cuts and offered some hope at the end of the rainbow. We are not really in such different economic circumstances roday than we were then except we have not felt the consequences yet.

There is a whole lot of pain down the road though and I do not support policy that expands in any great way on social spending. The Liberals and the NDP can both keep their gift give-a-ways to themselves. We need a little leadership on economic issues right now and I think you already know how I feel on that topic.

Now about those beers. Can you arrange a ride home afterwards?

#136 BigAl (Original) on 03.30.11 at 2:19 pm

#47 Industrial Guy on 03.30.11 at 12:56 am

So people should shut up and not critically analyze anything?

Do you recall the formal purpose of an experiment in science? It is to disprove a theory – not to prove one.

Noone has proven (peer-reviewed or otherwise) the safety of vaccines, the safety of fluoride, etc. and you know it.

The term “junk science” is a politically loaded term used to dismiss ideas that one does not adhere to personally. It’s an easy, but highly deceptive, weapon in the ‘science’ information wars.

The purpose of rants like yours is not to open up science, discovery, and ideas to discussion and debate. It is to shut them down completely. THAT is not ‘good’ science.

#137 BPOE on 03.30.11 at 2:28 pm

Ok, I admit it. The truth is, I live in a rented basement suite (in Richmond) and used to go to a lot of Tom Vu seminars. I’ll be buying my first house really soon though, and will be a millionaire by the time I’m 50. Richmond is the centre of the universe, and you’re all missing the boat! Buy now or be priced out FOREVER!

#138 eddy on 03.30.11 at 2:42 pm

Max Keiser says-
‘Save lives! Walk away from mortgage!’
RussiaToday 12,684 videos Subscribe Alert iconSubscribed

#139 Fade to Black on 03.30.11 at 2:46 pm

Been in the Phoenix area now for 2 months. Looked at a bunch of properties. Lots of nice stuff but no hurry as there is more hidden house inventory here than ‘crates’ in a Stephen Spielberg warehouse.

The only buyers, as advised by the Realtor we spoke to, are Canadians who typically purchase low to mid level properties and some Latin Americans and rich Europeans picking up bankrupt trophy properties on the very, very cheep liquidated 80 to 90% off from 2006 highs).

Lots of ads in local newspapers for snowbird sales targeted exclusively at Canadians with custom expat financing designed for Canadians. however no tax advise package with the offer.

There are very modest properties here as low as $15K and a lot of cheep stuff in dodgy neighbourhoods for 25K. All cheeper than a modest new car. In the Okanagan same properties would go for 180K to 220K in current market. That is about a 85% reduction in equivalent square footage costs form peak on bankruot liquidations.

It seem Canuks are the ‘Hong Konkers’ of the Desert right now.

Lots of Alberta and even more Ontario snowbird license plates in parking lots. In Scottsdale, the toniest neighbourhood in all of Phoenix (think Shaunessy) you can buy any one of four modest but very serviceable condos (1 bedroom, 750 sq. feet) in a very well run complex, 12 years old, 1 block from the most exclusive shopping high end district in the entire state and 3 blocks from Scottsdale airport that most private jets fly from. All very high end.

Very safe, nice, high end neighbourhood. Best restaurants, clothing stores, cafes, movie theatres, light life. Very civilized and lively night scene. Very international scene with as many languages spoken on the street as you hear in downtown Vancouver. There is 1.5 million people within a 10 miles radius living here. So this is not an aberration but a very livable urban sophisticated town.

3000 square foot new concrete condo’s across street $1,000,000.00 in 2007 but no sales. Condo price in this complex $69 to $82 K. in planned very nice wood stucco building, tile roof, all amenities including, waled secure electronic keyed access to site, conference rooms, free public wireless, meeting rooms/offices, library, spa, weight room, sauna, etc., etc., etc., parklike grounds,

Asking price for low end of resale market about $110,000 of 2 bedroom mid to upper level. About 75% less than an Vancouver property with almost no services.

Taxes and fees pretty reasonable, but residency tax complications and US visa issue for part time residents horrendous. You can only be here for 4 months a year without blowing up your tax status. Very complicated for non US citizen owners.

Figure about $3,000.00 to $10,000 to get a solid legal and accounting package to keep you out of trouble with the Federal ‘Vig’. (Read IRS & Homeland Security)

Forget trying to rent, self-repair or fix up, or flip. Ain’t gonna happen.

Saw very few Mexicans. Seems they got the message. Entire areas around ASU downtown boarded up which used to be a migrant ghetto. Now empty.

Lots of low to mid level stuff between $450 and $600 per month. Good stuff in safe neighbourhood $700 to $1,000. per month. Some leases as short as 3 months.

Lots of 1 to 3 months free rent for any warm body of you go a year.

What do you get here that has been sorrily missing especially in BC is exceptional service and a very warm attitude to visitors.

Canadians are very well regarded here and very welcome.

Its not all doom and gloom. Clean air, great winters and most of the ball payers have left.

Not the time to buy yet as Case Shiller predicts about another 15% slide to bottom, which still seems in the cads. 20% increase in foreclosures expected this year on top of what is already in the pipeline.

If you are serious be a patient, talk to a good tax lawyer before you invest and before you even speak to realtor

My guess is that BC is about 24 months behind what has happened here and BC prices are where the US was about 4 months before the 2008 wipeout.

Don’t think it cannot happen in Vancouver. You are 1 earthquake away from re-setting values back to the mean and a half year away from a debt bomb that the fuse was lit a few 40 year mortgages bak in 08.

The Arizonians by their own humble admission now sorrily admit that they thought they were invincible here in 2007. Now they got religion. A major attitude switch, for the better, which means it will soon be time to buy at the bottom and expect a 12 year slow ride up if you can survive the US Federal gauntlet every time you want to get through the border.

Anyway it will be 85 degrees (29 Celsius) here today and too hot in another 3 weeks, so as the snow is almost gone up north it will be time to follow the Canada geese back north and hope we don’t get too much buckshot up our rears on the way back to colder pastures.

#140 BPOE on 03.30.11 at 2:49 pm

Not very cool dude. Come up with your own handle
#137 BPOE on 03.30.11 at 2:28 pm
Ok, I admit it. The truth is, I live in a rented basement suite (in Richmond) and used to go to a lot of Tom Vu seminars. I’ll be buying my first house really soon though, and will be a millionaire by the time I’m 50. Richmond is the centre of the universe, and you’re all missing the boat! Buy now or be priced out FOREVER!

#141 Industrial Guy on 03.30.11 at 2:59 pm

charles, Building 7 truthers have been discredited by real experts with REAL DEGREES in engineering. There was nothing magical about the collapse of building 7 ……
What you’re suggesting is this ….. The Government of the USA planned the entire event. So, basically 3,000 American citizens were incinerated by their government because of nothing more than the personal vanity of their President and his desire to invade Afghanistan.

Sue …ignorant no …… and neither am I easily manipulated by quackery and the selective use of questionable sources.
Your hero’s Blaylock Wellness Report contain claims of many health dangers, including fluoridated drinking water, fluoridated toothpaste, vaccines, dental amalgam, cholesterol drugs, pesticides, and aluminum cookware …. almost all of which have been discredited. Let’s look at one example …….

Even the recent news about the link between Atorvastatin (Lipitor) and diabetes is an example of manipulation. In a recent test at the University of California at San Francisco…. 8.7% of people who received Llipidor eventually got diabetes whereas only 6.1% of people who received the placebo developed diabetes. OH MY GOD!!! that’s a 37% difference! Ban Lipidor NOW!!!!! Of course, the overwhelming majority (over 90%) of individuals in all the trials did NOT get diabetes. I know, BORING!!! who wants to deal with facts, eh?

I understand the religious zeal which drives you to supporting these position.
Even physical evidence will not change your point of view …. ie the Birthers in the USA. You’re position makes sense to you and no evidence will change that.

#142 Industrial Guy on 03.30.11 at 3:09 pm

BigAl (Original)
I’m fully aware of what the Hegelian Dialectic is.

As for your claim that “Noone has proven (peer-reviewed or otherwise) the safety of vaccines, the safety of fluoride, etc. and you know it.”

Pardon me. I suggest you may want to consider a trip to your local University library and conduct a periodical search on those claims.

#143 Whistle punk on 03.30.11 at 3:14 pm

New construction is dead in most rural areas in BC. The construction currently happening is the projects that are being finishing up. There isn’t any new starts happening, most are doing renos on a current house.

This is the worst contractors have seen it in decades, some of these guys have been in business over 30 years. They have seen all the up and down moments and they are seeing it go down. The peak was 2007 where I’am it hung around like a bad fart till 2008. Started to slowly fall, not at a fast pace but it has been falling. Today it as at the point people are struggling to stay in business. I give it to the end of this year if nothing improves construction business will close up shop.

Heard many times over the saying the 1980s all over again.

The province of BC is in deep deep sh*t, many people are in denial especially in the Vancouver area.

I’am going to laugh when people are bitch slapped back into reality and they look around, oh boy we are in trouble.

Wonder what Global BC news would be preaching about when B.C.s economy colaspes.

#144 JayJay on 03.30.11 at 3:36 pm

Whoever is impersonating BPOE is funny as hell. Keep it up…… mee likey

#145 betamax on 03.30.11 at 3:36 pm

#119 Monet: “We’re exporting primary sector low added value products and importing tertiary sector high added value products.”

Exactly. We sell them rocks and sticks, and they sell us cars and plasmas.

#146 betamax on 03.30.11 at 3:39 pm

There are now 2 BPOE’s — one is an intentional parody, while the other is unintentional.

#147 Ralph Cramdown on 03.30.11 at 3:44 pm

I see no incongruity in the photo accompanying this fine article. When would one carry both a plunger and a car tire? Never, except when cleaning up a property before listing it for sale. This guy is obviously going the extra mile for his client!

#148 DM in C on 03.30.11 at 3:53 pm


Maybe it’s the Herald stories pushing them to AZ

HuffPost has an interesting (complete with spelling errors) slide show on US foreclosures

#149 Steven Rowlandson on 03.30.11 at 4:00 pm

Hello Garth.
This $64,000 house in Phoenix is now 61 grand. I think the people that bought at 64 grand should have waited longer and picked it up for 30 to 32 grand.
I would not be surprised if any thing requiring significant borrowing to buy is going back to 1960s price levels to be in line with peoples insignificant to non existant incomes. Everything comes full circle if you wait long enough Garth.


#150 VICTORIA TEA PARTY on 03.30.11 at 4:02 pm

#15 BPOE

All Richmond needs to settle out the final ACTUAL value of its real estate is a mag 8 earthquake. Like a bowl full of jelly. In such an eventuality for homes said to be worth 22 per cent more than in a previous year is like the following equation: 22% X 0 = 0!

Aside from that possibility, Richmond is what?

–Real estate over which jumbo jets and other aircraft use on approach and departure from the world-class YVR, and the location of occasional small aircraft crashes;

–A place of warehouses gobs of ’em;

–Crammed together small lot surburbs within the overall suburb that is called Richmond;

–Huge gray bridges and freeways transporting people to anywhere but Richmond;

–Yes, real estate has nowhere to go but up in a “city”, so-called, that resides six feet BELOW sea level. Watch those dikes;

What happens to a former farmer’s field? It gets lousy, with people and crappy looking buildings. Richmond is not all that it is cracked up to be, just a very noisy suburb next to another city that is pretty noisy too. Used to live there. And those cities are why I moved OUT.

#151 daystar on 03.30.11 at 4:06 pm

#72 Utopia on 03.30.11 at 2:52 am

What you are in essence saying is that Conservative policies, especially in the area of finance, is superior to Liberal policies and NDP policies can’t even be practically applied without wholesale failure? I urge you to read this link (humor me, you have the time to blog here, you have the time to read this).

Highlights: 2005 – 2009 from link:

Labour wages grew 17.8%
Inflation grew 6.2%
Growth in consumer credit (excluding mortgages) 43%
Growth in Mortgage credit 48%

So, a little 101 in federal finances. The Harper Conservatives upon entering the federal scene 5 years ago proclaimed upon their first budget and on, that federal surplus’s were evil, that anything other than a balanced budget meant overtaxation. Then, as the years went by, the deficit disappeared through record spending combined with taxcuts with deficits coming before the collapse of 08′. Then came a record 55.6 billion dollar deficit Harper said he wouldn’t run in the prior election. All throughout, lobbyist have had a field day with the Harper government with anything from tanks to planes, to jails, to excess spending on things that don’t make money but rather, just drain taxpayers dollars and all throughout, from the pleasing of AIG for the creation of a wealth effect to buy our votes from the get go in real estate, debt has become the monster we see now, but have not yet understood why.

So please… indulge me and tell me how Harper policies through CMHC have not encouraged in every way, shape and form, household debt shooting through the roof? They bought in 40 year nothing down CMHC regs for over 2 years (from 25/5 regs in 05′), and then coupled record low interest rates with 35/5 CMHC regs for close to 3 years, calling it “prudent”. The rise from 40 year nothing down regs automatically increased borrowing power by 40%. Coupling near zero fed rates (2% variable rates) with 35/5 CMHC regs increased borrowing power by a further 40%, increasing RE values as dramatically increased borrowing power gets “priced in” creating a wealth effect and residential/commercial builders boom.

The effects were dramatic. We saw “rapid overdevelopment” in real estate coupled with an unprecidented credit expansion, policies that ran their course in the U.S. in the early 2000’s only to sewer their economy over the last 5 years. Please… tell us all, if you can how Harper’s “conservative” policies have made Canada a better nation than it was before he took power?

Since the Harper government, debt has skyrocketed. Intergovernmental debt to GDP is now estimated at 83% in this nation, placing us 16th in the world of indebted nations. (All those nations with bond issues? Y’know, Greece, Portugal, Italy, Japan, Ireland, Iceland, y’know, all those nations that are at risk of bankrupcy? We are just behind them)

Since Harper has taken power, his love affair with debt has exploded. Canada’s federal debt is estimated to be $566.7 billion for 2010–11, up from $463.7 billion in 2008–09. Canada’s net foreign debt rose by $40.6-billion to $193.8-billion in the first quarter of 2010. The combined federal and provincial government deficit in the 2009–10 fiscal year reached $100-billion, and the federal deficit is forecast to be C$49.2 billion in 2010–11. Ah… these are ugly numbers by anyones imagination. While some of this debt spending is justified through infrastructure spending, the Harper government clearly overspent through a 2 year time frame, taking away most of the future infrastructure spending away for today. Spending went too far, too fast and now our government is highly sensitive to higher rate increases as a result of such rapid increases in debt but this debt burden wasn’t localized simply tot the feds. The provinces/municipalities are also at much higher risks to interest rate increases than they were prior.

Such wreckless government spending is clearly unsustainable and this “recovery” Flarehty/Harper speaks of is fragile by anyone’s standards and the reasons why should be obvious to us all but aren’t, it seems especially so to people like yourself which is why I’ve taken the time here to address your post.

There are 3 huge risks to a Canadian recovery at this point. Lets explore them.
1) A Chinese recession. This would bottom commodities (and currency for that matter as the money supply shrinks dramatically, think ’08. If our currency drops below .80 cents, and it will with a Chinese recession scenario, the bank of canada would be forced to raise rates to attract bond investors to prop up our currency. Higher interest rates coupled with our record debt levels would undoubedly create a recession in Canada much like the U.S. is suffering from as RE alone is responsible for 20% of our GDP).

2) Continued public/household debt. Public/household debt has soared under Harper’s policies. Blame it on opposition parties all one wants, but its Harper budgets that have ruled Canada for the last 5 years. The Liberals proposed 8 billion annually on infrastructure spending during the last federal election. We ended up with 24.5 billion annually under Harper (again, presumably to sustain a wealth effect to buy our votes with borrowed money). As our debt loads increase intergovernmentally as well as household, the risks continue to elevate towards higher interest rate sensitivity. Reduced spending power from debt service will create strong headwinds against any kind of sustantial recovery all on its own as Mark Carney has daily warned.

3) A U.S. recovery will mean a stronger U.S. dollar. A stronger U.S. dollar will mean a weaker Canadian dollar unless Canada can recover along with the U.S. This may not be the case as our debt burdens continue to escalate under Harpers economic policies increasing interest rates that sink Canada into a long… painful recession that in my opinion will be real estate led.

My conclusion? Canada could be headed into a perfect storm. A mild U.S. recovery beginning in 2011, continued pressures on the bond markets to borrow money because of structural deficits and possible Chinese hiccups in their economy will all contribute to higher interest rates that will expose Canada’s debt monster for what it truly is, a debt monster that has been fed in every way by Harper’s economic policies.

Sorry, but directly due to Harper’s policies and love affair with debt… asset deflation wins. The numbers speak for themselves. Federal/household debt over the last 2 years specifically is off the charts. The Harper governments relationships with lobbyists, banks and HMO’s (is there but a one of us who thinks the cost of drugs alone isn’t the number one main reason for ballooning health care costs and that the feds have done absolutely nothing other than protect HMO’s especially foreign in the area of price fixing in this regard?) Someone please tell me how economic policies that enslave all Canadians with debt burdens are in the best interests of Canadians, while foreign “interests” are the slave traders who benefit the most? Eutopia, are you up for that one?

Canada’s debt burdens thanks to Harpers policies are mainstream in case you aren’t keeping up.

#152 CrowdedElevatorFartz on 03.30.11 at 4:11 pm

@ #137 BPOE
…Tom Vu explains a lot….
I work for Richmond Elevator, wanna come ride an elevator with me :)
BPOE =Bowels Placed Over Ears

#153 CrowdedElevatorFartz on 03.30.11 at 4:12 pm

BPOE = Brain Putrification Obviously Evident

#154 CrowdedElevatorFartz on 03.30.11 at 4:13 pm

Richmond …. a Tsunami disaster waiting to happen.

#155 Herb on 03.30.11 at 4:20 pm

#135 Utopia,

hey, that’s a great offer! Trouble is I live in Ottawa and can smell by your boots that you’re a Westerner. If we ever overcome that geographic separation, I would not be averse to letting the beer flow. I wouldn’t even freeload all night.

#156 jess on 03.30.11 at 4:22 pm

revamped initialisms

“Ireland’s largest mortgage and insurance company has temporarily suspended its shares on the Irish and London stock exchanges ahead of a widely expected government bailout”

#157 CrowdedElevatorFartz on 03.30.11 at 4:41 pm

@ #140 BPOE

#158 Cap'n Tibbs on 03.30.11 at 4:45 pm

So you buy a whole, real house for less than $65K and need $420 bucks a month rental income to be cash flow positive and still find a pittance of an UNREALIZED LOSS to complain about?

Keee-cyst, @ 26 bucks a square foot the windows, fixtures, wiring and building materials could probably be sold for 65 large if desperation sets in.

#159 bill on 03.30.11 at 4:50 pm

hey bpoe
how about those pumphouses all over richmonds dykes?
can you imagine if there was a power failure that lasted longer than their backup gensets? would the fuel trucks be able to get to them?
do you suppose the historic flood levels of the fraser river have been properly accounted for.
and what about the honey combed dykes themselves?
a casual walk along the dyke by blundell and the west dyke shows that the muskrat population is increasing like, well rodents.
they love to tunnel. sort of like a beaver that digs….

oh and your alter ego is cool you are the one who isnt cool….

#160 Dan in Victoria on 03.30.11 at 5:02 pm

Thanks Lorne, would take a day for me to type that.

#161 Mister Obvious on 03.30.11 at 5:12 pm

#110 (Alex)

I see what you mean. I did a bit of poking around on MLS at Chilliwack, Kelowna and Penticton. There are some rather nicely appointed detached homes up in the hills for around the $500K mark and ocassonally even less. Most of them offer reasonably large lots. Certainly bigger than the postage-stamp sized offerings in the Greater Vancouver area.

Similar homes are selling for about $1.5M in Vancouver proper and maybe $1.3M in Burnaby or North Vancouver. Can these $800K to $1M price differentials be due to location alone? I’m doubting it.

Things are most definitely caving in at the outposts of la-la ville. Who’s next?… Victoria?

#162 Jim on 03.30.11 at 5:16 pm

I did see any details on Igantieff’s Pension Reform, but here are my ideas:

Canada Pension Plan ETF Account

details pays 8%, 100% guaranteed by Federal Government
pays dividend of 7% at age 65
can margin account up to 65% at prime plus 1%
interest fee account up to maximum of 2 million, thereafter at 10,000 max per year
free transfer on name on account to spouse
Can Never Remove Funds from account, just receive dividend at age 65
Can transfer funds to estate provided funds are transferred to CPP ETF Account in name of beneficiaries less 20%. In other words funds can be left to beneficiaries but never transferred out as a lump sum

Government will match employer contributions

Eliminate RRSP, RIF’s,
automatic approval 75,000 prime plus 1% loan to fund account


#163 bill on 03.30.11 at 5:20 pm

hinterland who’s who…….

they love ditches…..

#164 Sue on 03.30.11 at 5:22 pm

@ Industrial Guy
I am a pharmacist- it’s “Lipitor” (atorvastatin). Please check these details before posting bc it makes your argument less credible.

The main problem with Lipitor and other statins is that they have been proven to deplete levels of CoQ10 in the body. This is vital to muscle function and many people have muscle atrophy and weakness. The heart is a muscle and there is an alarming increase in Congestive Heart Failure. Mercck holds the patent to the combo pill (statin/CoQ10). You would think they would put out the combo and solve the problem.

NO, they sit on it for over 10 yrs because they just want to make sure no one else puts out the combo and shines a flashlight on what a toxic drug class this really is. Big Pharma is straight from hell and I have knowledge of their inner workings.
So, your post still makes you sound ignornant and dare I say, retarded.

#165 eaglebay on 03.30.11 at 5:24 pm

#151 daystar

Well, well.
Blaming the Harper Government. Too easy.
I thought that the Harper Government was a minority government. Am I to assume that the opposition was asleep at the switch.
How could the Conservatives pass any kind of budget without the opposition’s approval?
You make a good “liberal”. Typical.
Tell me what would the opposition (liberal) have done about the recession. This should be interesting.
Obvious partisanship.

#166 maxx on 03.30.11 at 5:49 pm

#46 Bobby- was speaking to a realtor today and her contractor husband who, previously had more work than he could handle, is now searching….and Spring has already sprung!
A few weeks ago, I was in a big box reno store, and remarked to the cashier that I must have come at a great time because it was almost empty. She replied that it had been like that for weeks.

#167 Mr. Plow on 03.30.11 at 5:53 pm

One of many reports backing my anecdotal evidence from yesterday…

Calgaryboy?? Maybe the people you know who can’t get work up there should look at a career change.

#168 Ronaldo on 03.30.11 at 6:40 pm a great video regarding Vancouver real estate….

#169 Herb on 03.30.11 at 6:47 pm

#164 Sue, #141 Industrial Guy,

there is another aspect of Lipitor that I can attest to from personal experience – nerve damage. After a piddly-assed little heart attack, I was put on Lipitor in ever increasing dosages 10 years ago, then wondered why I was having problems coordinating my feet when trying to run. When I started to fall down stone-cold sober on sidewalks and stairs, I finally got my family doctor to refer me to a neurologist.

Long and short of it: polyneuropathy, progressing nicely. No family history, no known exposure to toxins, and I haven’t drunk enough to accept alcohol as cause. Which leaves Lipitor, but no doctor is prepared to agree with me. Did run across a retired pharmacist who told me that the nerve implications of Lipitor were known during the FDA approval process, and now there are a couple of recognized studies that indicate a linkeage for a small percentage of patients. But don’t expect Pharma to admit to anything, or to stop advertising the wonders of statins on primetime TV.

On the postitive side, a cardiologist did suggest CoQ10 last year, but it hasn’t been able to resurrect dead nerves.

#170 Cow Man on 03.30.11 at 6:48 pm

#104 Devore

Thank you for the smile. I think that we all know that credit cards are not backed by governments. That in no way changes the point. Isn’t socialism wonderful? We can all make a living doing each others’ laundry.

#171 miketheengineer on 03.30.11 at 6:48 pm

Just in case you wanted to know, I saw this today. Here is the link:

And this was very interesting:

“The indications we have, from the reactor to radiation readings and the materials they are seeing, suggest that the core has melted through the bottom of the pressure vessel in unit two”

Interesting, very interesting.

#172 Ronaldo on 03.30.11 at 6:49 pm thought it might be time for a refresher on Real Estate prices in Vancouver from 1975 onwards…enjoy

#173 Ronaldo on 03.30.11 at 7:02 pm Almost a year and things are hotter than ever……maybe its time to take the quiz again for those that may have missed it…have fun

#174 Herb on 03.30.11 at 7:07 pm

#165 Eaglebay,

“Blaming the Harper Government. Too easy.”

Absolving the Harper Government. Impossible.

#175 The InvestorsFriend (Shawn Allen) on 03.30.11 at 7:12 pm

Number 149, Steven Rowlanson says:

This $64,000 house in Phoenix is now 61 grand. I think the people that bought at 64 grand should have waited longer and picked it up for 30 to 32 grand.

Thanks Steve, I troll this site daily looking for something really dumb that I can respnd to.

You are the second winner today! along with the buyers worrying about a $3k loss.

Call me when you ever make any money in any market.

I won’t hold my breath.

Why should a house sell WAY under its replacement cost in an attractive climate? Don’t you think $64 k already means they got the house for less than replacement cost with the land thrown in for free?

Why should a nice house in a nice area sell for $32k?

But you just keep waiting for that… You’ll buy then right?
From the overly timid we will never learn anything useful.

And who cares what you think? except for the amusement value?

#176 canali on 03.30.11 at 7:18 pm

though the wall st journal wrote a ominous story about cdn real estate, of course the editors of the Vancouver Sun counter with a BMO report:

#177 45north on 03.30.11 at 7:35 pm

daystar: If our currency drops below .80 cents, and it will with a Chinese recession scenario, the bank of canada would be forced to raise rates to attract bond investors to prop up our currency.

As our debt loads increase intergovernmentally as well as household, the risks continue to elevate towards higher interest rate sensitivity.

A stronger U.S. dollar will mean a weaker Canadian dollar unless Canada can recover along with the U.S. This may not be the case

as you say the perfect storm

#178 GregW, Oakville on 03.30.11 at 7:50 pm

Hi Garth, re: the debates

If the a Party Leader choices to take part in a debate process that discriminate against a Party running candidates in most Riding, with support of over a million Canadians last election.
That leaders actions will be telling me enough to no that they are just not at all qualified to be Canada’s PM at that point.

To think that denying Canadians the opportunity to here all ideas in a debate and then decide for our selves whom we’d like to be governed by throw out vote would be beyond contemp!!!

They have a choice! If they take part they are condoning it.

At which point we might as well just hand the keys to Canada over to the corporate fascist and move to some other country like North Korea.

#179 Nostradamus Le Mad Vlad on 03.30.11 at 7:51 pm

#144 JayJay — Speaking of BPOE, where is Mikey the Realtor?

#152 CrowdedElevatorFartz — “BPOE = Bowels Placed Over Ears”

You mean there’s more than one bowel on this blog?

#171 miketheengineer — Thanks for the link Mike, and it’s great tp see you’re still around!
How very convenient that 94% of the m$m is controlled by six individuals.

5:50 clip Japan on full alert. Complete meltdown may be underway, ‘tho not confirmed yet. US Rainwater Radiated.

Bailout Was not all it was cracked up to be, but taxpayers can pick the tab up. 8:54 clip “The entire financial system is a credit fraud that is still subsidized by trillions of our tax dollars and through the money printing of the Federal Reserve.”

JPM CEO says munis won’t make it. Chinese economist annoyed at dollar’s dominance.

16:51 clip US military dictatorship as the economy runs off a cliff? NATO Chief Interesting conundrum. With the possibility of a military dictatorship (requres military and police personnel), along with the wars in AfPakIraq, as well as Haiti, where does the Pentagon get new troops from? A draft?

The effects of a US govt. shutdown may lead to a double- or triple-dip, but it gives the WH – Pentagon plenty of ammo to impose martial law, a draft and military dictatorship.

Hu warns Sarkozy and Brainstorming (?). USAF costs in Libya each day.

The Toilet has nukes. The Bovine Excrometer stinks of FFs!

Gardening Becoming a necessity for people. One acre, fully planted can feed several.

BoA and JPM. ‘Nuff sed. Guess who picks up the tab?

8:06 clip on CNN. The NWO is clearly mentioned. Pillage “Join the US Army. Die making the world safe for compound interest!” St. Paul, the architect of modern Christianity, said “. . . for the love of money (compound interest) is the root of all evil.”

Irregular Warfare Now expanded to South America and Africa.

#180 cynic with a long view on 03.30.11 at 7:53 pm

Ok boys and girls…

Ya’ll are just so gol durn clever….debating inflation/deflation…..the relative value of bungalows in Burnaby……the likelihood of a tsunami hitting the lower fraser….

Heres a term you really should look up….

It might just put a proper perspective on just how clever we all are….

Catabolic Collapse

That is the term that applies to the human enterprise globally today…not next week…not next year…not in 10 years…not in 50 years……

Right now….

Economists (and honestly 99% of financial planners) are fundamently (due to psychological make up and world views) incapable of understanding that the much vaunted “market”… an artifice….it is not a force of nature.

But it is forces of nature that are taking a solid tooth hold on the soft squishy parts of the human enterprise.

Do none of you wonder why it is that the americans have essentially been engaged in unending wars for decades now?
Does no one wonder why the world economy is not bouncing back from “fiscal armaggedon” of 2008..or was it 2007?….
Does anyone ever wonder how it is that reported inflation is “low” but fiat currencies are purchasing less and less of “true value goods (food energy etc)

I hear the talking heads of the media and indeed the disembodied voices on the net claiming innumerable reasons…

“Deflation is king” (when obvious inflation is rising rapidly)……..”there is untapped oil everywhere”…..but the price keeps rising…and the rig counts are a joke…..

“Proper fiscal allocation” will save your future….I like this one especially well…..

The reality is …sadly but unmistakeably…and forever….we humans have hit the energy wall….and it is all downhill from here.

EROEI has now been forced into a metric that makes modern western lifestyles impossible.

That is why we have true unemployment stateside of 25%
That is why we have real inflation rates in the teens…..include food and energy and see what you see…..the truth…
That is why we are in a economic trap of our own making….because we are so arrogant and self assured that we actually thought that the world was made for us? We actually are so stupid to believe this rot.

You thought that Katrina was bad?…how about the black dragon in the GOM (it is still leaking)?……the Fukashima fiasco……?

The Earth does not care…..and she will now teach us (because our magic petro carpet is losing power FAST)…..that we are not special…that we are not above the true natural economy…..that imaginary constructs of paper (and yes even gold ultimately) are just that…imaginary…..

We are now inside of a depression that will never end……it cannot… energy is GONE forever…and with it the entire superstructure of a 500 year experiment in fantasy economics……

#181 bridgepigeon on 03.30.11 at 7:57 pm

So much crap going on in the world today, hard to get decent intel on any of it. A lot of ‘unknown unknowns…’
Our war against Libya could be a real hornet’s nest. One retaliation for us bombing them and bang, Patriot act, freedoms gone US style, it could happen real fast…
Trying to make sense of it:
Iraq al Qaeda = bad guys
Libyan al Qaeda rebels = good guys
Afghanistan al Qaeda = bad guys
Saudi Arabia al Qaeda = sometimes good guys
sometimes bad guys
I am limiting my vote this election to anyone who takes us out of this bs.

#182 daystar on 03.30.11 at 8:00 pm

#160 Dan in Victoria on 03.30.11 at 5:02 pm

It took me 2 hours. (I have a sore tummy today)

#165 eaglebay

You call me whatever you want (you will anyway). The numbers still speak for themselves and the great risk of voting down a budget or bring down the house for any other non confidence vote is to answer to Canadians why, risking a majority Conservative government and the loss of any form of real opposition if they fail to get their message across for whatever reason. You see it as you like (you are going to anyway) but the government in power, minority or otherwise, is the party that sets policy, its not the other way around.

Lets permit ourselves to speak the obvious, shall we? (unless we purposely limit our sense of awareness to suit our so called version of reality)
Its not as easy to oppose a Harper government as one thinks. Political parties have to actually be prepared for an election to bring down the house. Do you seriously think that at any time prior, the opposition had the will of the people or was even organized enough or had the finances to do so? I’m wondering if the opposition is organized enough, has the money or will have a fair shake by the media to oppose the Harper government even now. I would say the Bloc does, the greens sure don’t and the other 2 national parties, I guess time will tell.

Otherwise, you can brand me whatever stripe you like, it doesn’t change the fact that we have a debt monster in this nation, Harper’s done whatever he could to create it and all else is spin unless you are actually dumb enough to believe opposition parties set policy in government. The “governing” party sets policy, I’ve yet to see the opposition ever introduce a budget and the opposition can either follow or oppose and face the consequences of taking the nation to a federal election. To my knowledge, this is the first time the opposition has actually done so into what is now Harper’s 6th year of rule but in all reality, unless one is jaded by their own political preferences, its not all that difficult to understand why.

#183 Devore on 03.30.11 at 8:03 pm

#170 Cow Man

Yes, of course, gotta love those economic theories that tell us capping incentives (profits, risk premiums, etc) is good for consumers. When government dictates how much banks can charge to give people credit, the natural consequence will be a flood of cheap credit to relieve the financial pressures on hard working Canadians! Why hadn’t we done this earlier?!

This is analogous to governments telling landlords how much rent they can charge their tenants, which causes a flood of desirable and affordable rentals to come online. Naturally.

Wait, is that why rent controls are always such a spectacular success wherever they go?

#184 jess on 03.30.11 at 8:28 pm

..the auditors too few to fail?
the 4 become 3

30 March 2011 .A report by the House of Lords Economic Affairs Committee published today (Wednesday 30 March) has called for a competition probe into the Big Four auditors’ oligopoly. Their ‘complacency’ and ‘dereliction of duty’ contributed to financial crisis, the report found.

MPs to investigate corporate tax avoidanceTreasury select committee’s scrutiny will raise political temperature on multinationals’ tax bills

Alex Hawkes and Graeme Wearden, Monday 28 March 2011 21.14 BST

the executives of some of the worst offenders – will be called to answer questions before the committee about their “tax efficiency” practices. With a bit of luck, Sir Philip Green might even have to explain to his former employers why he felt that the £250m he dodged would be better spent on his lifestyle rather than schools and hospitals for the people who buy his products. The coalition has already been put on the back foot over tax avoidance, thanks in a large part to the hard work and dedication of UK Uncutters up and down the country. The Government mentioned several new anti tax-avoidance measures in last weeks budget, and is even discussing a blanket anti-avoidance law, similar to the one in Australia. This inquiry will ramp up the pressure on Ministers to introduce such a bill sooner rather than later.

#185 Alister on 03.30.11 at 8:37 pm

#165 – you’re right on – Harper should run his campaign pointing out all the bills that the Libs and NDP voted on, along with the cons.

#186 Alister on 03.30.11 at 8:44 pm

#166 – In my city in SW Ontario, I talked to a small engine shop that repairs and sells snowblowers, lawnmowers, leaf blowers etc. He’s closing up shop because he doesn’t earn a living anymore. He been around for years and is a class act for that kind of business. Expenses too high and no margin left.

Also went into a local restaurant for breakfast last week, and it was nearly deserted. Said to the owner that everyone must be in Florida to get warm. She said they’ve been there for months because its been dead since Christmas. She said she can’t hang in much longer with the punk sales.

#187 Alpha Bravo on 03.30.11 at 8:45 pm

#46 Bobby

“Still lots of homes sitting on the market that don’t seem to be moving. Some have been taken off the market outright.”


Similar observations in the GTA, Bobby…

#188 SaggyBottomBoomer on 03.30.11 at 8:55 pm

BPOE = Belligerent Poltroon Oblivious to Excrement

#189 CrowdedElevatorFartz on 03.30.11 at 9:05 pm

BPOE = Bi-Polar Orgasmic Experimenter

pssssst, BPOE, that offer still stands. Join me in a Richmond Elevator elevator and ………….

#190 Utopia on 03.30.11 at 9:16 pm

I just read the following article from Sundays Globe and Mail (my all time favourite rag) and thought others might be interested. It does a good job discussing the threats of inflation versus deflation in Canada. Have a look:


#155 Herb writing to #135 Utopia,

“Hey, that’s a great offer [about going for beers to talk politics]! Trouble is I live in Ottawa and can smell by your boots that you’re a Westerner.

You have no idea how Western Herb and you are right. I would be from the flatlands of the Saskatchewan prairies. Gods country. I really dislike horses by the way but if you were wondering, yes, I really can rope a calf! That is what it takes to impress the gals in these parts although I am bit old for it now. If you are ever out this way we might just go and get loaded together and then kick up some dust in the cattle pasture.


#151 daystar

Daystar! How are you buddy. I thought you had dropped off the edge of the world. Didn’t realize you were still following the blog. Hopefully you were not put off with the two or three posters who kept ribbing you about writing on-line books. I have the same afliction from time to time. Anyway, good to see you are back and in fine form as I can see.

That was a good rebuttal from you. And here I was actually thinking I was going to get away with tearing into the Liberals and NDP without any objections at all.!!!!!!

Then I got your note. Holy crap I thought at first. It’s from Liberal HQ and now they are really pissed (are you from Liberal HQ?). Anyway, I never really feel concerned about others feelings when it comes to politics. This is a blood sport is it not?

I will take a look at your article later and will be sure to humour you. You can be certain I already disagree with some of the substance of what you wrote (not all) but a point by point debate is not going to happen. I have a strong personal bias and have made my decision already so will not be changing my mind.

I have already articulated my opinion and points of view here. As have you. Good to hear from you again.

#191 Gregor Samsa on 03.30.11 at 10:08 pm

Daystar, I always enjoy reading your posts!

I was stunned when read the (very quiet and downplayed) headline that Canada’s national debt has hit it’s highest level in our nation’s history under Harper.

“At 11 minutes and 25 seconds after midnight on March 18th, the Debt Clock will roll over the $562,881,000,000 mark – the previous record set in 1997. At that time, the government will have re-borrowed the $105 billion in debt paid down between 1997 and 2008 according to its current projections.”

The next step: when the SHTF and one or more of your predictions come true, Harper will claim the cupboard is bare and chop our social safety nets to the bone (while maintaining military spending, which is at the highest level since WWII). It’s a sad state of affairs.

#192 Throwstone on 03.30.11 at 10:15 pm


I was trying to illustrate similar points to Utopia through earlier posts. But it seems his blind party loyalty and lack of objective political evaluation has robbed him of any reason and logic.

I however support your position. I also believe in the numbers. It is not too difficult to see how poorly a fiscal manager this government is. For the record I don’t give a shit if it’s the NDP/Libs/Green’s or the BlocQue….Bad is Bad…and the number’s don’t lie…unless of course you lie about the numbers……lets hope thats not the case (yet probable), then were really F#*KED!!!

#193 Utopia on 03.31.11 at 12:59 am

#192 Throwstone

I was trying to illustrate similar points to Utopia through earlier posts”


Oh settle down Throwstone, he is not really correct. If you read his comments carefully you will see plenty of lop-sided bias and more than a few bad assumptions creeping in. Like others here has fallen into the blame game trap while throwing about statistics that appear to back his contention.

Anyway, I am done commenting on politics for the duration of the election. Mostly because I know it gives Garth indigestion and takes the fun out of his blog but also because it is such a bore.

#194 pablo on 03.31.11 at 1:32 am

Well another federal election that no one except steve wanted, and look at all the partisan ramblings on the blog all trumpeting their own messiah. The candidates are doing what politicians have done since their ilk was first conceived on a wet rock in some obscure lagoon. They’re trying to buy the voter’s allegiance with their own money!
ME; I’m gonna vote green party, just because they won’t let that winney bitch in on the televised debates, and she thinks that’s so undemocratic. She, who hasn’t even been elected yet, what a loser. Well at least we won’t have the benefit of listening to her along with all the other lying windbags. Man that feels so much better now.

Two bedroom apt in Sask for 400k – hilarious- but what about that view; look out the window nothing but prairie as far as the eye can see, look out this window; the same, and this window; the same, hey look out this window; nope, it’s the same.

#195 Derek on 03.31.11 at 1:54 am


This has not ended well…

#196 mel on 03.31.11 at 3:43 am

To #42 Tea Party:

Hey man, get a life! Your postings take too much space on this blog.

#197 daystar on 03.31.11 at 3:48 am


I’m fine (except for a tummy ache), thanks for askin’ and hope you are the same (save the tummy ache). I’ve been a lil’ busy for interaction, but read most of Garths entries as I appreciate his drive, humor, efforts and most especially, intellect. :) I do have a habit of longwinded posts, they are fine and all when they aren’t repetitive (have a habit there too) and to the point, but y’know… ;)

No…, I’m not from Liberal HQ, lol, but I should be, they could use the help. Feelings… I try not to hurt them these days, maybe I’ve grown soft but one just never knows what another can take, glad you don’t take criticisms personally myself, and politics is a bloodsport of sorts. Its a mix of ideals blended with ego with extremes sometimes bold and less than beautiful. (chuckling)

Good to read you as well, my friend and will possibly catch you on the next one!

#191 – 192
Whoever forms this next government, it is going to be a difficult task to turn it around. I don’t believe the Cons can because its really not their goal to balance budgets. When any government spends 20% or more than they take in tax revenues, and expect the end to stimulus spending to be enough to turn it around, that they can just “grow” enough GDP to do the trick, they aren’t trying by a long shot. It’s like banking on GDP growing forever in the face of a real estate bubble about to go bust, with commodities headed for another serious correction. Nor do the Cons have any kind of economic plan for the made in Canada recession they are making for themselves. Denial of failed policy is not a well worn path to success.

Its worth repeating, the numbers don’t lie.

In the 2009-2010 tax year, Harper ran a $55.9 Billion dollar deficit. Revenue generated from federal taxes clocked in at $237 Billion. Spending clocked in at $293.2 billion. Readers, thats a whopping 23% more than we took in revenue. From April of 09′ to April of 2010, Canadians borrowed a whopping $100 billion from foreigners alone. I’m not making it up. What do we have to show for it, other than over priced homes? Friends, thats a good recipe for running a nation’s affairs into the ground.

In other words, to turn it around, the Cons would have to admit they’ve gone the wrong way. In some cases, they have but its still too little and far too late. If the Libs win, tax increases and spending cuts in the face of deflation and climbing interest rates won’t be an easy sell but thats the only option now, at least, for politicians who have Canada’s best interest at heart. The alternative is to continue to borrow and spend, kicking the can to the next generation, risking another currency crisis in Canada that is less than 5 years away with the potential for double digit interest rates at a time when Canadians have never been more indebted, especially with household debt. We could be the next Britian or worse… Greece in 5 short years if politicians don’t serve the public like they should have all along… today.

Of course… we know what that means if we elect a government that isn’t serious about tax increases and spending cuts. It means the next generation will have it worse than we did and it goes against the grain of an ideal we all should share but likely don’t, the ideal of leaving this world in better shape than we had found it, as our anscestors and descendants tried for the most part, doing the same for us. In essence, it means a profound loss not just of material wealth, but national identity and soul. I hope for Canada’s sake I’m wrong, but can all to easily see it coming. The numbers… just… don’t… lie.

#198 mel on 03.31.11 at 3:49 am

# 43 Ket:

You think you would know what this blog is all about by now. Forget about all these Chinese. Forget about all the talk between your ‘friends’, and the media.

For goodness sake, can’t you see that this housing is all about greed and nothing about houses.

But, since you do not have any self-control, go out and spend your money and put yourself out of your misery.

#199 BrianT on 03.31.11 at 6:50 am

#164Sue-Good points-two older family members have been prescribed this product by their local pusher-lots of horror stories out there about this product.

#200 Mickey on 03.31.11 at 10:35 am

Well … if it gets as bad as Garth says up here you can always head down to South Carolina where McDonaldas is offering 50 McNuggets for $10 and you can make it a combo by adding two super size drinks and two supersized fries for another $5.00. Heck that feeds a Canadian family of 4 for $3.75 a piece and they throw in free refills to boot. I don’t think I have ever seen a 50 pack in Canada for $10. Nor have I seen afordarble housing in some time. But hey piano lessons just got a whole lot cheaper. To bad the gas tax will eat up the savings.