Serious money

So the top Bank of Canada dude chops his forecast for growth next year to a torpid two-and-a-half per cent. And yet the guys on TV last night – including the one now running the country – say the giant mama of a federal deficit will be gone in less than four years. Welcome to the Republic of Suck-and-Blow.

Obviously, with crappy growth, few remaining factories, too many out of work, families more in debt than ever and real estate draining cash flow and spending, this ain’t going to happen. And that brings me to taxes. In the years following this federal election, they’re probably going up. A lot.

There is but one way everybody over the age of 18 has to erase taxes on what their money earns. So let me acquiesce to a jillion emails asking for the basics (again) on the tax-free savings account. First and foremost, it is not for saving, but for investing. Putting a savings account or a GIC into this thing is like having a really hot sister. More on this in a moment.

Because this is the third year the TFSA’s been around, you can open one and stuff $15,000 into it. If you have a spouse, the two of you get thirty grand of room. If you have two late-stage teenagers in the basement, add another $30,000. This is starting to be serious money.

Each year you can put another $5,000 into each plan (that will rise modestly soon) and, if Mr. Harper wins and slays the deficit, that will become $10,000 a year. As I said the other day, that could be in 2014, or never. The key point here is that your TFSA contributions are not deductible from taxable income like RRSP money, but when you remove it, no tax is payable.

Also, you have to earn RRSP contribution room – it’s 18% of what you make – while TFSA room is handed out equally to everyone. Both plans allow you to ramp up money inside free of tax. So, you can invest in fast-growth stuff like emerging market EFTs or stock in your brother’s personal lubricant business. It doesn’t matter how much money you make, it’s all free – free of tax, and free to remove at any time without affecting your contribution limit.

This is flexibility you just don’t get with the RRSP, where a chunk of every withdrawal is sucked back by the feds. In fact, as TFSAs grow in size, they’ll completely eclipse the old retirement savings plan. The logic is simple: RRSPs made sense when people contributed during working years and took money out in retirement when their tax rates were lower. But does any 25-year-old today actually believe tax rates won’t gorge? Given the profligate way this country’s being run, we could see marginal rates mushroom over the next two decades – turning RRSPs into tax bombs.

Worse, money sheltered in these things must eventually be taken into income – like it or not. But TFSAs are forever. So creating a fat tax-free account is now the best defence against golden years full of KD and Meow Mix. No matter how much you have stashed there or how robust your earnings, this will not affect your taxable income or result in a clawback of government benefits.

It also allows family income-splitting in a far easier way than with RRSPs. You can take money out whenever you want, and stick it back in next year. And, as I said above, you can hold a huge array of assets in a TFSA, the worst possible ones being (a) cash (b) a savings account, (c) a high-interest savings account or (d) a GIC.

All of us get only one vehicle in which to inflate our money without limit or tax consequence, and this is it.

Given what’s coming after May 2nd, do it.

***

Finally, for comic relief, we whisk you to that gee-whiz place known as the newsroom at Global BC, where some idiot just told them something about ‘a bubble.’

Damn, but that anchress looks worried.

Update: Here’s a comment from Brian on how the video above (which aired Tuesday at noon) was altered for rebroadcast at 6 pm:
“Global’s dinner time version is a complete 180. The whole tone changed and the guy from Pacifica who was the main focus, is now in the back drop and isn’t even allowed to use his own words calling for a 25% correction. Infact the reporter injected her own lying words of “12 – 25%” when infact “12%” was never stated by the guy in the noon version. This is disgusting.”

And here it is. Re-edited and neutered.

203 comments ↓

#1 Alex on 04.12.11 at 10:24 pm

Is this true? Was this video altered? I might still have time to add this to my still-processing CRTC complaint against Global.

#2 Chaddywack on 04.12.11 at 10:27 pm

Yep saw that tonight on the local news…..Garth I think I remember you saying something about sales drop, prices bubble, and then wasn’t the third step the Mainstream Media starts talking…. :)

#3 Bill Grable on 04.12.11 at 10:29 pm

Open House today for neighbors here on Maui.

They have had about 4, I think, in the last while, I’ve lost count.

The Filipina agent sat on the Lanai, idly thumbing her lonely Iphone.
You could just about hear the birds coughing, it was so quiet.

I felt for her.

Meanwhile back in Vancouver – I heard that “The Fat Lady Sings” opens at the Orpheum – Friday.

#4 T.O. Bubble Boy on 04.12.11 at 10:30 pm

From the video clip: “…some realtors say they don’t see prices going anywhere but up”

Just *some*? I thought that was a question on the realtor exam?

#5 bsallergy on 04.12.11 at 10:35 pm

I’ll be happy to see Vancouver crash, not sure what the attraction is about living in a dank, moldy climate. World class my ass, provincial little town on the edge of nowhere.

If you’re going to piss away a million on a shack there you have to be nuts. The same amount would buy you something nice in a nice place like Nice.

Hear! hear! the crash is coming! but it might take a 705 decline to get houses in dampcouver to match incomes.

#6 bsallergy on 04.12.11 at 10:36 pm

70% decline

#7 NFN on 04.12.11 at 10:36 pm

You could just about hear the birds coughing, it was so quiet.

I felt for her.

————–

She’s in Hawaii where there are birds chirping!

Here in Canada there is still snow on the ground and it may snow again this weekend. Why people want to come here is beyond me.

#8 S.B. on 04.12.11 at 10:37 pm

At least three mall chain clothing stores went into bankruptcy wihin the past year or so: Cotton Ginny, Jacob, and now Tabi.

Recovery?? Naw.

Go Turner Nation!! :lol

TFSA = Turner Free Stock Account
GTA = Garth Turner Area

In Toronto some condo units command up to $900sq foot at the Festival Tower King/John Sts in Toronto (although I loathe linking to a realtor blog here):

http://torontorealtyblog.com/2011/04/08/900-per-square-foot-at-festival-tower/

Yet these same a-plenty 1-bedroom units rent for $2000 or less per month. Do the math…

http://tinyurl.com/3ctqjqv

#9 Sargon on 04.12.11 at 10:37 pm

Thanks for the TFSA refresher, Garth. Of course you could have referred the n00bers to the 100 other posts in which TFSA basics are explained.

Love the Vancouver #1 fan. “People in Alaska want to live in Vancouver. People in Austria want to live in Vancouver…people in Barbados want to live in Vancouver…people in Yemen want to live in Vancouver.”

#10 Dodged-A-Bullit-in Alberta on 04.12.11 at 10:40 pm

Greetings: “But TFSAs are forever” –Garth

Given the record of Ottawa lying to Canadians no matter who is in power, I would say this statement is wishful thinking.

#11 JohnnyBGood on 04.12.11 at 10:42 pm

Garth, you say that savings and GICs are the worst way to invest money in a TFSA. The may be true, but under the heading “Timing is Everything”: I started investing in earnest in equity and bond mutual funds in around 1999. At the time, I knew nothing about investing or the markets. I just bought funds because, well, that’s what you did to save for retirement. However, if I had put the same money in GICs over that 12 year period, today I wold have significantly more money. The inflation adjusted returns would not be stellar, but on the other hand, they would not be negative either. Perhaps I should have just bought a house in Vancouver.

Maybe you should stop having an amateur invest your money. — Garth

#12 Mikey the Realtor on 04.12.11 at 10:47 pm

Who cares of what some talking head says, if RE is going to correct then it will through market forces. I see an increase this year of 5% in Canada, get in or be priced out forever. Many unfortunately are already priced out and will be forever renters.

#13 nonplused on 04.12.11 at 10:51 pm

“People from all over the world want to live here.”

That is, until they get a load of BC taxes and Vancouver traffic.

Still going to hold out on the tax thing. They might try bumping the GST up (TSFA can’t save you from this), and municipalities are going to try putting on the squeeze until it becomes THE election issue, but on the income tax front higher rates have been tried and they don’t work. User fees could go up but people might just stop “using” stuff. After all, you don’t need a Park Pass unless you are going to Louise or Sunshine. They don’t check anywhere else. “Permits? We don’t need no stinking permits.” And the DMV? A small percentage of the vehicles on the road are not properly insured or licensed now. That can only go up as fees are increased.

#14 JohnnyBGood on 04.12.11 at 10:51 pm

You may be right. My amateurs were Fidelity, Manulife, TD, AIG, Dynamic. People like that.

Then serves you right. — Garth

#15 S.B. on 04.12.11 at 10:52 pm

Whoa, have to add this treasure trove of an ad to my last post:

The Realtor(s) says these rental units will not last long! ;)
Will Not Last Long!! This will end well?

http://toronto.kijiji.ca/c-housing-apartments-for-rent-1-bedroom-FESTIVAL-TOWER-RENTALS-80-John-St-W0QQAdIdZ274095320

THESE UNITS WILL NOT LAST LONG! Email me TODAY to book a viewing.

Unit # \ Price \ Bed \ Den \ Exp \ Parking

1508 \ 1599 \ 1 \ 1 \ N \ 0
3106 \ 1680 \ 1 \ 1 \ N \ 0
1708 \ 1699 \ 1 \ 1 \ N \ 0
1507 \ 1700 \ 1 \ 1 \ N \ 0
2005 \ 1700 \ 1 \ 0 \ W \ 0
1810 \ 1750 \ 1 \ 0 \ E \ 0
4009 \ 1790 \ 1 \ 0 \ E \ 0
1304 \ 1900 \ 1 \ 1 \ W \ 0
3004 \ 1900 \ 1 \ 0 \ W \ 0
2611 \ 1900 \ 1 \ 1 \ E \ 1
2104 \ 1950 \ 1 \ 1 \ W \ 1
1704 \ 1950 \ 1 \ 1 \ W \ 1
3010 \ 1990 \ 1 \ 1 \ E \ 1
3504 \ 2000 \ 1 \ 0 \ W \ 0
1205 \ 2375 \ 1 \ 0 \ W \ 0
2201 \ 2495 \ 2 \ 1 \ S \ 1
1301 \ 2500 \ 2 \ 0 \ S \ 1
1806 \ 2650 \ 2 \ 0 \ Nw \ 1
1607 \ 2700 \ 1 \ 1 \ N \ 0
2401 \ 2775 \ 2 \ 0 \ S \ 1
1906 \ 2850 \ 2 \ 0 \ Nw \ 1
2106 \ 2850 \ 2 \ 0 \ Nw \ 1
1701 \ 2900 \ 2 \ 0 \ S \ 1
2408 \ 3000 \ 1 \ 1 \ E \ 0
3401 \ 3500 \ 2 \ 0 \ S \ 1
3002 \ 3650 \ 2 \ 0 \ Sw \ 1

#16 AG Sage on 04.12.11 at 10:53 pm

>#3 Bill Grable on 04.12.11 at 10:29 pm

I’d love to buy a house on Kaua’i to retire in. But I’m trying not to cheer for prices that will decimate everyone, as hard as that is.

#17 JohnnyBGood on 04.12.11 at 10:55 pm

Live and learn.

#18 April on 04.12.11 at 10:56 pm

Alex, if only we could all sign your complaint. Of course we can write our own complaint too. That reporter’s lie should be exposed.

#19 wetcoaster on 04.12.11 at 10:56 pm

Maybe ReMax/LePage and Sarah Daniels,( the noon news real estate pumper) called and told her them to spin it bigtime or they pull some dollars out of the Global paycheck.

#20 Terry on 04.12.11 at 10:57 pm

Mr. Turner’s advice is irrelevant for poor and middle class Canadians and shows how out of touch he is with reality. Most Canadians don’t have 5k a year of after tax income (let alone 10k) to gamble away on risky investments. That’s why most Canadians put GICs and HISAs in their TFSAs, not because they’re too stupid to invest in stocks, as Mr Turner seems to think. If your after tax income was 25k (median income in Canada), you too, Mr Turner, would do the same. TFSA lifetime contributions should be limited to 50k and growth should be limited to 150k tax-free.

Who let you in? — Garth

#21 JohnnyBGood on 04.12.11 at 10:58 pm

BTW: Which of your books best covers investing in commercial real estate?

#22 Mister Obvious on 04.12.11 at 10:59 pm

A ‘Savings Free Account’ (SFA) is what the majority of Canadians probably have.

————-

#9 Sargon
Love the Vancouver #1 fan. “People in Alaska want to live in Vancouver. People in Austria want to live in Vancouver…people in Barbados want to live in Vancouver…people in Yemen want to live in Vancouver.”

The people of Vancouver, however, just want to live for today.

#23 AM on 04.12.11 at 11:00 pm

That video is pathetic. The fact that Vancouver is way overpriced is not news anymore. These stories are trotted out from time to time, but the “emotion” factor keeps people from seeing the fundamental facts.

What about the comment that “it’s time for the politicians to weigh in on debt to income” as it relates to house prices, it will never happen. As soon as a politician says that housing is overpriced, poof…it’s over…and what politician wants to be accused of bursting the bubble.

#24 Hoofy on 04.12.11 at 11:12 pm

Insulting me does not strengthen your argument. It weakens only you. I trust you’ll learn these things in time. Hope so, for your sake. — Garth

Was that irony?

Pity. — Garth

#25 Alex on 04.12.11 at 11:14 pm

I checked the Global site. The 25% version is still there. If anyone knows of an altered version, please post a link?

BTW, Mikey, dude, we ALL care what some “talking head” says. The news is here to report FACT, not the continuing LIES of the real estate “profession.” And what cruel, shameless pack of lies it is.

#26 All is knowledge. on 04.12.11 at 11:15 pm

As the stock market crashes, down over 3% this week alone, the better TFSA accounts in secure GIC’ s are.

I love the smell of confidence. — Garth

#27 JO on 04.12.11 at 11:16 pm

Don’t worry Garth – those scumbags in Ottawa will inevitable come for our savings one way or another. Mark my words – a surtax or some form of taxation on TFSAs is guaranteed in the next 5-7 years. History has shown the confiscation of savers’ money as a given in the current climate – inflation and outright taxation is sure to happen to help pay for inflated health care costs and PS pensions.

For all your RealTards on this blog who come and tell usto buy now or forever lose out…buzz off..you are junkies looking for your next commission fix…hope you have enjoyed the fraudulent conditions that have enriched the RE/Bank/Financial execs and grown the gov’t sector for the last 8-9 yrs pal. As usual, it will not end well…lets not confuse explosive, heavily subsidized credit growth for genuine economic growth. Gov’t and FIRE industry execs have imposed a massive, extremely regressive tax on the “middle class” and “working class” and transfered huge amounts of wealth to them. No society has ever grown sustainably rich through debt fuelled RE speculation.

JO

#28 TFSA on 04.12.11 at 11:18 pm

TFSAs are great. Wife and I enrolled straightaway, opened TD Waterhouse TFSA accounts, bought stock and now have around $55k ($10k cash).

Buying stock (tax free) during the utter depths of the 2008-2009 market was a godsend.

#29 realist on 04.12.11 at 11:20 pm

Looks like a soft landing to me. I know that doesn’t make headlines, as many posters apparently present with a ‘boom and bust’ mentality.

What if it’s just a whimper and not a crash / correction? How incredibly boring and well, Canadian would that be?

#30 C ROCK on 04.12.11 at 11:24 pm

#4 T.O. Bubble Boy on 04.12.11 at 10:30 pm
From the video clip: “…some realtors say they don’t see prices going anywhere but up”

Just *some*? I thought that was a question on the realtor exam?

That’s correct T.O.B.B. REALWHORES®
only require seventy percent to pass their exams. LOL

#31 Mister Obvious on 04.12.11 at 11:25 pm

#19 Wetcoaster

Sarah Daniels, ‘the noon news real estate pumper at Global’ used to do the morning traffic there about five years ago. But she had to get up at 3:00 AM and the pay was lousy. As I recall, Lynn Colliar (morning anchor at the time) didn’t seem to care for Sarah much although, naturally, nothing was ever said.

Anyway, Sarah got smart and started flogging real estate in Whiterock. Then she wrangled back a pumper spot on Global at a much more more civilized hour.

#32 Patz on 04.12.11 at 11:27 pm

Proving once again that old (hack) saw that figures don’t lie but liars can figure. Mr. Smugly from Royal Lepage lists all those places and countries yearning to be free–oops make that yearning to “live in Vancouver.” His last words, “it’s a place with an awful lot of demand.” Is it? Is the world and the rest of Canada beating down the doors to live in our wonderful city? Maybe, then again maybe not.

Garth please archive clips like that. They will make such satisfying viewing when TSHTF.

Meanwhile agentwill.com published his weekly stats for Greater Vancouver on Sunday. They make very interesting reading/viewing and don’t at all support the RE Pravda line.

Some highlights: sales spiked 3 weeks ago, took a 20% drop 2 weeks ago and a 3% drop last week. If you look at Will’s sales charts it appears that the next few weeks will tell the tale. The market has been so weird I won’t say sales couldn’t go back up but it’s hard to see how.
http://agentwill.com/weekly-stats/

#33 wes_coast on 04.12.11 at 11:28 pm

Wow. I saw the noon broadcast and my jaw dropped. I couldn’t believe this was on MSM. I half expected Garth to be in the background holding the producers hostage. Regardless, I can concur that there was no mention of 12 percent in the original broadcast. I don’t know what is more disgusting – that Global does this or that the population is gullable enough to be suckered by it.

#34 Gerge on 04.12.11 at 11:40 pm

The reporters at Global should work for Stephen Harper:
“‘You are a man who will shut down anything you can’t control. That’s the core of your vision of government … and it’s hostile to the values of democracy upon which this country is based.’

Iggy, calling it like it is…

#35 Hoof-Hearted on 04.12.11 at 11:41 pm

#27 JO

I agree.

Gov’t is desperate for cash and will claw back in one program what is supposedly lets you keep in another.

We seem to forget that up until the mid 1990’s we were allowed $100,000 in lifetime capital gains exemption till Chretien eliminated that.

Same shit different day.

=======

I thought the Federal Leadership debate was beyond pathetic. This country is in big trouble.

Gilles Douche-ceptive is scary.

Iggy and Layton must have had micro-chips planted in their heads with 8 track tape full of 1970’s rhetoric.

Harper didn’t look very good either.

#36 Devore on 04.12.11 at 11:42 pm

#11 JohnnyBGood

Do like the orange shorts guy says:

If you want your stock picks to stop losing money, you should stop picking stocks.

#37 Abitibidoug on 04.12.11 at 11:43 pm

It looks like some people are getting the message about over priced real estate. There is an article in the Globe and Mail business section, April 11, describing the possibility of a real estate correction and the consequences should it occur.

In response to posting #7 comment of: Here in Canada there is still snow on the ground and it may snow again this weekend. Why people want to come here is beyond me.
The weather is sunny and pleasantly warm in southwestern Ontario, and it’s a lot cheaper to live here than Vancouver!

In response to posting #25: If the stock markets correct more, then forget about boring GIC’s, and grab on to a good buying opportunity! They don’t come everyday.

#38 P F Murphy on 04.12.11 at 11:48 pm

I think that the Bank of Canada being afraid to allow the interest rate to rise shows just how close to a collapse we really are. I was wondering, given all these realty, bank and media opinions we hear stating “only up”, what are the chances of a class action law suit naming them for creating what might be seen as a false and misleading belief of the real estate market should a downturn occur? It would seek only the few $trillions plus damages and costs to cover the value lost by those buying into the market on flawed advice. I think that those anyone who profits from creating an incorrect illusion should pay, not those who buy in good faith, based on “expert” advice. Perhaps there is a lawyer out there who will start a file of articles and opinions that might be seen as ill-considered and/or deceptive? I know if I were on the jury, I would be receptive to such arguments.

#39 Northern_dirt on 04.12.11 at 11:50 pm

20 Terry on 04.12.11 at 10:57 pm

Mr. Turner’s advice is irrelevant for poor and middle class Canadians and shows how out of touch he is with reality. Most Canadians don’t have 5k a year of after tax income (let alone 10k) to gamble away on risky investments. That’s why most Canadians put GICs and HISAs in their TFSAs, not because they’re too stupid to invest in stocks, as Mr Turner seems to think. If your after tax income was 25k (median income in Canada), you too, Mr Turner, would do the same. TFSA lifetime contributions should be limited to 50k and growth should be limited to 150k tax-free.

Who let you in? — Garth
…………………………………………………………………………….

Seems I already read this post, as an article in the GandM last week, by some socialist from the Canadian Centre for Policy Alternatives. Though you failed to point out why the article you ripped off stated contribution limits should be $50K..

#40 The InvestorsFriend (Shawn Allen) on 04.12.11 at 11:58 pm

Tax Free savings Accounts are a gift. Use them if you can.

But note that all taxpayers are paying higher taxes to make up for the income tax foregone here. If I were middle class but mortgage poor or kid poor I would resent these things.

Maybe just another example of us boomers screwin’ over the young ‘uns.

So, we are all paying for these things, may as well take advantage.

#41 not 1st on 04.13.11 at 12:01 am

Where’ ozzie jurock when you need him?

Garth did you see my post about how foreign families load up on debt across many family members and then squeeze them all in to the property. Believe me, that happens and when one generation dies, the asset is split equally among the remaining members. Not defending VCs prices but there may be more to the story of how this demand is being generated.

#42 Patz on 04.13.11 at 12:08 am

The big RE story in Vancouver today was actually–ta da the Olympic/Village/False Creek –I can’t keep up with the name changes–development. City Hall says Vancouver is going to be out 50 large (remember “large” used to be $1,000, now it’s a mil) $50 million. Everybody together say, “Ah, it coulda been worse.” (Worse for who? you ask, Montreal?)

Wait a minute. It was worse. They didn’t include what Vancouver lost on the land. The developers didn’t pay $200 million for the land as per their contract. (Vancouver got a $50 million deposit which they kept.) So City is out $50 + $150 = $200 million. The largest loss in the city’s history!

But they say, wait. We only paid $27 million for the land so we didn’t really lose $150 million on the land, just $27 million. BUT they paid $27 million 25 years ago so you figure it out.

By the way, are you a Vancouver taxpayer?

#43 Jsan on 04.13.11 at 12:15 am

“#1 Alex on 04.12.11 at 10:24 pm

Is this true? Was this video altered? I might still have time to add this to my still-processing CRTC complaint against Global.”

——————————————————–

I put a complaint in to the CRTC awhile back in regards to Global TV’s ongoing, never ending pumping of real estate. Just after the Burnaby condo launch that Global TV news covered as a “news story” (that looked suspiciously more as an advertisement for the condo), Global TV news here in Edmonton once again did a “news story” about a brand new local condo that again looked more like an advertisement than the news. It’s flagrant and I am pretty sure it is illegal to try to pass off what look like real estate advertisements as news stories if this is their intention.

I got a response from the CRTC and they said the complaint was not what they handle but instead forwarded my complaint to the Canadian Broadcast Standards Council (CBSC). They contacted me and have submitted my complaint.

Everyone needs to start complaining about Global TV news and their non stop promoting of real estate and what appears to be new real estate development advertisements.

Here is the CBSC complaint form and it is worth some of you submitting a complaint regarding the broadcast from above and every other story that suspiciously seems more like an advertisement than the actual news. It’s one thing if this was an isolated incident the issue is it just keeps happening over and over again.

“CBSC Complaint Form”

http://www.cbsc.ca/english/complaint/form.php

#44 Patz on 04.13.11 at 12:16 am

Watching David Letterman as I blog and his guest is Ricky Gervais, who looks exactly like Garth’s younger brother–funny.

#45 xyz on 04.13.11 at 12:20 am

I can’t seem to get at the video… Either there is some overload or global is blocking traffic now that their snafu has been exposed… that or my 5 year old laptop sucks more than I want to admit

#46 JB on 04.13.11 at 12:23 am

Unlike the last two years, this years TFSA contribution I went total risk, I bought a few small cap stocks that (in my eyes) could go to the moon. My fiance and I pull in the Sask average household income and if it were not for the fact we’re holding out, living rent free we would have no means of taking full advantage of our TFSA’s.

I’m with #20 Terry on a few points, but you really fell off at the end. For those like us who only make average income, maybe have 25k each after taxes, if we decide to make the sacrifice of living at home in our mid-to-late twenties, why should we be capped if we are taking full advantage of the TFSA?

#47 Garth you're being mean again on 04.13.11 at 12:24 am

C’mon Garth, give Terry a break. He makes a good point. Have you ever tried to live on $25K per year as a family like he points out? Have you ever tried to feed a family on less than $20K per year?

I have. And it sucks.

Things changed for me, I am lucky now and make plenty of money. But buddy has a good point.

Go ahead and rip me a new one. Or make some condescending remark. Cause that’s what you do.

Garth, I have been a fan of yours for a long time and have bought your books, but seriously dude, you should show a little empathy sometimes. Goes a lot further than arrogance.

Come to think of it, you remind me of Steve H. BTW that is not a good thing.

***********************************
#20 Terry on 04.12.11 at 10:57 pm

Mr. Turner’s advice is irrelevant for poor and middle class Canadians and shows how out of touch he is with reality. Most Canadians don’t have 5k a year of after tax income (let alone 10k) to gamble away on risky investments.

#48 Chris on 04.13.11 at 12:31 am

It’s Chris from Connaught in Calgary.

Garth recently shared some of the statistics that I had sent him regarding the boom and bust in the Calgary condo market. (You can refer back to Garth’s previous post “Consequences” to see them).

http://www.greaterfool.ca/2011/04/07/consequences-3/

The reason why I shared those stats here was twofold:

1) I wanted to show that some Canadian markets had already corrected, such as Calgary’s condo market.

2) I wanted to demonstrate that all the realtors, pumpers, speculators, and others, who say that real estate can only go up, and that you have to buy now or be priced out forever, have been pulling the wool over people’s eyes for years. (I know, I know, most of us here know this already)…

More to that last point… The stats that I shared are all from the Calgary Real Estate Board. CREB’s own website, if you go to it, will only show you the stats for the past 13 months.

http://www.creb.com

Some archives… Woo hoo. A whole 13 months!

That’s downright deceiving. 13 months does not make for an “archive” that you can draw any clear conclusions from about the local real estate market…

Many real estate boards use this same tactic of providing very limited information. It isn’t just CREB who does this.

What this does is it encourages buyers to overlook what has actually happened to their market in the not-so-distant past. Or it encourages them to contact a realtor, who likely isn’t going to tell people how badly prices have fallen.

What you need is access to the stats over a much longer period of time to see what is really happening in any given market. A realtor with a vested interest in getting you to put every last penny into real estate is not your friend in this regard…

I’ve collected the CREB Calgary condo stats for the past 5 years. If you want to see them all, I’ve posted them all on-line in one big compressed ZIP file.

http://www.4shared.com/file/S34sAlxU/calgarycondos.html

(Sorry about the crappy website /download process. What can I say, it was free hosting).

Take a look at the month-by-month average sales and median sales for condos in Calgary. Take a look at any Calgary community you want to (and not just Connaught).

What you will see is largely what Garth said recently. Condo prices in Connaught, Calgary have largely gone back five years to 2006 prices. And that’s with $108 oil.

Don Campbell of REIN (Real Estate Investment Network) can disagree all he wants with what I am saying. Mr. Campbell will tell you that looking at statistics is like driving while looking at your rear view mirror. He said that recently in an interview.

I say, not looking at stats is like driving WITHOUT any rear view or side view mirrors at all. Damn dangerous.

So, who would you rather be?

The person who bought in February 2007, when the average sale price in Connaught was $382,158?

The person who bought in April 2007, when the median sale price in Connaught was $345,000?

The person who bought in March 2009, when the Average sale price in Connaught was $258,972?

The person who bought in April 2009, when the Median sale price in Connaught was $235,600?

I would rather be the person who saw the stats and knew the market was in a boom, and who also knew when the market had busted…

These are CREB’s own stats, and the numbers don’t lie. Calgary’s condo market has corrected significantly.
Real estate doesn’t always go up. I pity the greater fools who overpaid by $110,000 – $120,000. That’s gonna take a while to pay off.

The sad part is that CREB and many realtors will not show you any numbers that don’t support their “buy now or be priced out forever” mantra.

Real Estate is an asset class, and just like any other, it can go up or down, and has gone down significantly already in many parts of Canada, Cowtown included…

I am willing to bet that if you try hard enough, you can Google the past five years of single family home sales stats for Calgary, or Edmonton, or for other parts of the country. The information is out there…

As many people have said here before, “take the time to get educated”.

#49 poco on 04.13.11 at 12:41 am

#29 realist

Looks like a soft landing to me. I know that doesn’t make headlines, as many posters apparently present with a ‘boom and bust’ mentality.

What if it’s just a whimper and not a crash / correction? How incredibly boring and well, Canadian would that be?
_____________________________________________

i wonder if you might convince these sellers that the downturn is just going to be a whimper and not to worry–they can pay the difference back, say, over their lifetime !!!!! –that should do it !!!

mls#v873989-bought june 09–518.8k–now listed 430k
mls#v866458-bought july 08–363k–now listed335k
mls#v870619-bought june 08–375k–now listed 349.9

many– many– going like these

realist, maybe you should change your name to “the economist ” because they’ve been getting this market wrong for a long time

#50 domain on 04.13.11 at 12:42 am

It’s going to be a race between us and Australia to see who is the first, widely-declared, bubble burst.

I’ll bet on a tie…

#51 Paolo on 04.13.11 at 12:48 am

Noon News – 180 degrees by dinner time?

Why does anyone want to hear about a 25% decline in housing prices to balance things like the gentleman from Pacifica states. 25% would put prices inline with incomes, something that has been out of whack and growing for the past 10 years.

Mainland Chinese? I hear much about this on the blog. Been a few years since I’ve been to Vancouver but if I go there I expect everyone that owns a home to be a Mandarin speaking Canadian.

Groups come to Canada from various areas around the world and each has their time in the sun. Was it Italian immigrants that came to Canada post war that propped up housing in Toronto or Montreal? They thought so.

If you lived around Toronto in the early 1990s it was all the rich Hong Kong Chinese that propped up Markham etc… we all know how that bubble ended. My parents had a close friend, a Realtor, that lost everything. My father even lent her money to stay afloat which she could never pay him back. She lost her home as well as investment properties. She was big on Hong Kong money. My father saw right through it. I remember the heated discussions he would have with her. My dad is 80 right now, owns his home, and has a decent retirement income. He doesn’t know how lucky he is.

Port Union and Mattamy Homes? Poor new Canadians just want to plant roots and owning a home is the most important thing to them. That means 5 incomes, some even under the table, in a house packed with 3 families or 9 people or whatever, just to pay the bills and mortgage until some can get out and onto their own two feet. Again this cycle has been repeated by many over the past decades in Canada’s big cities.

Nothing new here. Nothing sustainable.

What’s not sustainable is near historically low interest rates, 35 or 40 year amortizations, artificially low interest rates propped up by gov’ts who are not providing the necessary oversight, CMHC, 5% down, no money down cash back mortgages, 20 – 30 somethings with little equity and big, long mortgages, baby boomer parents and in laws that give out advice that may have worked in the 1960s and 1970s to above 20 – 30 somethings who have no clue, massive consumer debt, banks who pass off risks (thanks to CMHC, thanks to each Canadian taxpayer who will soon be bailing them out), real estate boards, mainstream media, human nature, hormones, emotions, what appears like biannual federal elections, and on and on – – all the usual suspects.

I see articles in international media about how Canada avoided the financial troubles of other developed western nations. In the near future, I can see the headlines, stories about how it all went so wrong.

Canada, the Ireland of tomorrow…

And if a flying saucer landed in the GTA and thousands of millionaire extra terrestrials bought up all the listings on the market, that still would not prevent the inevitable.

Crazy…

And in the fallout, people will wonder how this all happened? How no one saw it coming? How this could not have been prevented? And we will be like our American cousins at that point.

#52 reality guy on 04.13.11 at 12:57 am

Hey Garth do you have the a URL link to both those videos

I want to post it on Facebook and several other social media site.

Its pretty clear to me CBC and Gobal are controlled by some greater power whom wants to keep the real-estate pyramid going.

I believe the truth can only be told via social media.

#53 r on 04.13.11 at 1:07 am

Garth, you know first hand what happens to people who stray from the land of rainbows and unicorns and wander into the forbidden realm of reality. Usually they are publicly humiliated then ritually sacrificed on the altar of hopium.

#54 BPOE on 04.13.11 at 1:09 am

TFSA represent an awesome opportunity for Canadians.

#55 Utopia on 04.13.11 at 1:10 am

#13 nonplused

Those were terrific comments you made about the bees nonplused. It gave me a whole new insight into your personality. Thanks for weighing in with your thoughts.

#56 Ronaldo on 04.13.11 at 1:12 am

#28 TFSA – I did similar to you. Opened TFSA in February of 09 just before the bank stocks bottomed on Feb. 23rd., bought Cdn Western Bank at 7.50 and threw in a junior gold stock HRG at .06 as a kicker…added the $5000 right after the new year in 2010 and 2011 and purchased several other stocks mainly in Energy, Potash, gold and silver stocks and warrants as well as various ETF’s (well diversified). As of today the value is just over $33,000.00 but has been as high as $35000.

As Garth says, you don’t want to be stashing GIC’s or interest bearing investments in your TFSA. This thing is a wealth builder the likes of which I’ve never seen.

For myself anyway, the RSP thing would have turned out to be a tax trap and have been melting them down over the past 3 years. If you want to make money in this game you have to follow the smart money.

When Gord Nixon, the CEO of RBC in February of 09 stated in an article in the Globe and Mail that he was investing his 2 million plus bonus in RBC stock, I figured that was good enough reason for me to do the same. Only I chose CWB which quadrupled since that time. I too used TD Webbroker and have been trading regularly in my TFSA account.

The funny thing was that when a friend of mine went to the RBC at the beginning of March of 09 to open an TFSA at my urging and to buy a certain fund of theirs that was heavy in Financials and Energy she was told that it was very risky and they suggested she buy GIC.

She insisted that she wanted this particular fund that I had suggested to her and the chap in the bank said that she would have to sign a release of liability should the fund lose her money. This is how nervous these people were to sell you anything other than GIC’s at this time. She decided to go to TD instead and has never looked back.

At this time the banks which had bottomed on February 23rd were coming back with a vengeance and by the time the account was opened (took a while), the fund had increased close to 15%. Of course we now know how quickly the bank stocks recovered from their lows and are back now to their highs of 2007.

Being a bit concerned with the level of the markets in recents weeks, I have invested the original 15000 in an Income Fund with PHN PHN660 which I quite like due to the nice mix of fixed income and equities. These funds also can be purchased via Webbroker or any other brokerage account with any bank same as any other stock onthe TSX or TSXV. Because of my level of trading my costs work out to $7.00 per trade which makes it bearable.

Another investment vehicle that I have done quite well with are warrants of various companies. These are little known to most casual investors and are similar to options. Just google “Canadian Warrants” and go to the tab on the left that shows “warrants”. These can provide excellent leverage particularly in a rising market. I would recommend running this by your Financial Advisor (not a bank or other mutual fund salesperson) before venturing into this area though since leverage works both ways.

There are certainly no shortage of ETF’s nowadays but I like the IShares and BMO etf’s as well as Claymore. For information on etf’s just Google TMX Money. This is the TSX website which provides investors with live quotes, business news, etf information, insider trades, etc etc. You can also set up portfolios to track your investments such as your TFSA, RSP or Regular trading account in real time. I find it extremely useful and saves me having to log into my TD account unless I am doing trading.

For persons new to this area of investing and wanting to go it on your own, check out
http://www.sources.com/listings/Subscribers/L4310.htm

Good luck and good investing. And thank you Garth for your continued great advice and assistance to all us blog dawgs. Hope to see you in Nanaimo again soon. Looking forward to your next book.

#57 Kate on 04.13.11 at 1:18 am

Garth, what would happen with TFSA when people having a lot of money in there will start retiring? It would look like they will be entitled to complete OAS and GIS since their incomes would be 0 even though they are free to withdraw any amount from TFSA and their TFSA would keep swelling with dividends? Won’t the government want to impose any tax then or limit OAS and GIS payments somehow?

#58 Increasing that 1% on 04.13.11 at 1:31 am

>speaking of birds chirping, above, …there are no Robins in parts of Downtown TO! April 12th and see not-a-one
too much competition with concrete? pigeons?
————————————————————–
>Noticed a number of stores on Yonge St. – south of Bloor/north of College- are empty/for lease=unusual for this area, used to be bustling along entire strip
————————————————————–
>With regards to Vancouver, wonder how is the public transit system there?

#59 SquareNinja on 04.13.11 at 1:31 am

#21 JohnnyBGood: E-mail me [email protected], and I’ll send you some good info. about investing in commercial real estate.

#60 Spiltbongwater on 04.13.11 at 1:35 am

How did I ever forget that the rich Iranians want to move to Vancouver as well as the rich Chinese. Facepalm.

#61 S on 04.13.11 at 1:39 am

“Worse, money sheltered in these things must eventually be taken into income – like it or not. But TFSAs are forever. So creating a fat tax-free account is now the best defence against golden years full of KD and Meow Mix.”

Actually, academics are already musing about how TFSA should affect one’s eligibility for federal benefits such as GIS etc in the future. This line of thinking has already been discussed on CBC radio recently and will no doubt gain momentum as governments are increasingly more strapped for cash. Honestly, knowing what budgetary constraints are in the pipeline it takes some truly wishful thinking to hold that at some point in the future ones registered liquid assets (regardless what container they are stored in) will not be taken into account when establishing his elligibility for government programs? We should be so lucky…

#62 TooExpensive on 04.13.11 at 1:42 am

Come on … serious. It is the first time Global (or any other local TV in Vancouver for that matter) mentions that not all is rosy and they finally put someone that disagrees that real estate always goes up and everyone here is mad that they didn’t run a full story on a real estate prices are about to fall down from the sky. Baby steps people, baby steps … and in fact the report from Pacifica Perspectives mentions a drop of at least 12% and up to 31%.

The way it works, stories on TV have to be re-cut because time slots on the 12pm and 6pm new shows are different. In fact, the 6pm show did not change its message at all, the world “bubble” was even mentioned.

Relax, MSM is starting to cover the other side of the coin that nobody can afford houses in Vancouver anymore and prices have only one way to go …

#63 TFSA on 04.13.11 at 1:42 am

The Global TV video says that the average Canadian has $100k in debt. Did I hear that right? That doesn’t sound like a lot. Why the concern?

#64 TakingResponsibility on 04.13.11 at 1:49 am

So grateful for Garth’s continued analysis and (sometimes sensational) articulation on the emotionality of real estate and have learned how the emotional desire for an (artificial) status leads to irrational decision-making. As well, GT’s exposé on political intrusion and powerful deception of corporate media is appreciated.

I am curious, however, how people here express their values with investment money. No judgment. Simply curious. Do you care what your investment supports or the returns on investment? Is BP part of your diverse portfolio, for instance?

Is it possible to understand ‘money’ as an expression of our life’s energy and use investment money to support life rather than to destroy it?

Or is that emotional?

*It was the title “Serious Money” that made me think about ‘kinds’ of money – Funny money, Dirty money, Laundered money, Foreign money, Clean money, “Ethical” money …

#65 The Original Dave on 04.13.11 at 2:20 am

Woodbridge Ontario is grand central station, the ‘woodstock’ of real estate agents. Most RE agents per capita for sure !

Such adages like ” Real estate is always a good investamento” and “naw-ting beatsa da owning of a you house” and the old time favorite “La terre e sempre la terre’” which translated means “land is always land” have all originated from this mini center of the universe.

LOL !!!!!!

—————————————

It’s gotten to the point that I’m racist against Italians………and I’m of Italian background. Definitely the most annoying people (in GTA that is). It’s all about the surface with the majority of them. They don’t care for depth nor do they have depth. All about the material things. I try to avoid them at all costs.

#66 tiedattutu on 04.13.11 at 2:24 am

realist,

Ah! The mythical soft landing. And from grotesque bubble levels too! I’ve heard tell of such things, but in 40 years haven’t seen one yet. Have plenty of crashes. Its good to see you are thoroughly steeped in fairly tales.

ps-you might want to change your handle.

#67 Jwb on 04.13.11 at 2:46 am

The msm in Australia is being pretty open about a price crash now. It took a year of zero price growth and a huge tick in inventory to do it though.

#68 What Party? on 04.13.11 at 4:05 am

Garth (or anyone)

What party will offer the best chances to stop the 30 year, 5% down mortgage madness? Who is our best shot at reducing our budget and raising interest rates?

#69 What Party? on 04.13.11 at 4:10 am

Calgary RE:

A very noticable drop in starter home* sales have been seen since March 19th. Less than 20% of all sales are now starter homes as first time buyers flee the market. Sales across the board are down from last month. Avg and Med prices are up due to lack of first time buyers and slowing sales.

Without first time buyers, moveup and estate buyers will have greater trouble selling causing an inventory traffic jam and then falling prices.

* Starter home in Calgary is definded as: less than 1350 sf, under $340k

#70 Blobby on 04.13.11 at 4:45 am

Garth – Crazy idea here. Could i invest my tfsa into my own small business? I.e. my tfsa becomes my soul 100% shareholder. And subsequently avoid tax on my business profits/income by paying dividends to my “investor”?

Then i pay myself out of the tfsa once a year and avoid the taxman?

Yeah, crazy. — Garth

#71 Blobby on 04.13.11 at 4:48 am

@20 : Terry..

quote “Most Canadians don’t have 5k a year of after tax income (let alone 10k) to gamble away on risky investments. ”

… But yet most have enough income to gamble 500k away on property….

#72 WINNIPEGER on 04.13.11 at 6:34 am

Goldman Sachs issues a warning to clients to sell their long positions in Canadian Stocks.

The dollar is dropping fast as is oil today……..

Oil will be 50 bucks a barrell by Fall.

#73 House on 04.13.11 at 6:44 am

“But TFSAs are forever.”

Is that like the forty year mortgage?

#74 X on 04.13.11 at 7:00 am

re #14 – ‘You may be right. My amateurs were Fidelity, Manulife, TD, AIG, Dynamic. People like that.’

I am willing to bet the aboe mentioned made out ok from your investments. ;)

re #20 – ‘TFSA lifetime contributions should be limited to 50k and growth should be limited to 150k tax-free.’

Hey why don’t you just limit how much we can all earn too. And you don’t have to take ‘risk’ to earn more than a GIC, you just have to get some knowledge. Good Luck.

re #26 – If you are worrying about a 3% decrease, then perhaps you should keep your money under your mattress. Although you would also miss every buying opportunity that presents itself.

re #71 – Great point.

You can lead them to water, but you can’t make them drink.

#75 Tired of taking it up the @ss on 04.13.11 at 7:05 am

(ShawnAllen) wrote: TFSA’s are a gift…but note that all taxpayers are paying higher taxes to make up for the income tax foregone here. ”

Sigh. Income does not belong to the government. Income belongs to the people who earned it. TFSAs just allow people who earned it to keep more of it. That is not a deficit that you or anyone have to make up for. The government could – should – spend less.

#76 pixelwhiplash on 04.13.11 at 7:46 am

@#47 and others of that ilk. Not sure how many people who comment here seem to forget this is a blog and as such represents Garth’s opinion. He calls it as he sees it. If you don’t like the interpretation then haunt some other blog. As for the ” I bought your books” etc. that sounds suspiciously like ” some of my best friends are bloggers”. Remember, his blog, his rules. And the Harper reference is laughable.

#77 MrC on 04.13.11 at 7:50 am

It is sad that people dont understand what risk really means when it comes to investing. Having a Mutual fund salesperson sell you big name mutual funds does not mean that you have a professional watching your money. It means they are making a commission every year off of you. If a person has held mutual funds for 11 years and hasn’t done better than the GIC return, there is something wrong with your investment strategy. Time to ask your salesperson some tough questions, or better yet, talk to someone else about proper investment strategy.

#78 Kevin on 04.13.11 at 8:16 am

My wife and I are holding our Emergency Fund in our TFSA’s, in a high-interest savings account. Why? Because interest is the worst kind of unearned income. It’s taxed at your full marginal rate. So sheltering it in a TFSA ensures maximal advantage.

Could we invest it in mutual funds and ETF’s? Of course – but our RRSP’s already hold a bunch of that, and this is our EMERGENCY FUND money. It needs to remain completely liquid, and low-risk. “Low risk” is not exactly synonymous with “Emerging market ETF.”

If we had an endless supply of money, we’d max out our RRSP’s, TFSA’s, and throw extra at the mortgage. But in the real world, we’ve got to prioritize. A married couple making good incomes get $18,000 each in RRSP room per year, or $36,000 total. Plus another $5,000 each in TFSA room. For a grand total of $46,000/year we could be saving.

Who has that kind of extra cash lying in their budget?

Apparently you have cash to waste. — Garth

#79 bigrider on 04.13.11 at 8:34 am

JohnnyBGood- #14 about investing since 1999 in Dynamic, fidelity funds etc and losing money. Garth’s reponse-” then serves you right”

Johnny if you had bought any of the Dynamic funds or fidelity you speak of in just about any allocation and HELD through the whole period you speak of, there is no way you have lost money. Take a look at the tremendous performance of both fund companies product lineup..give me a break.

Garth, shame on you for implying that these fund products have not made money for investors.

If you lost money ,then blame yourself for trying to market time, which I suspect you did, or your advisor for same, but not the products. You could have bought blindly and made a profit.

#80 bigrider on 04.13.11 at 8:46 am

#65 Original Dave ” it’s gotten to the point where I’m racist against Italians…I avoid them at all costs.

I think that’s a bit harsh. Problem with the our group as a whole Orig Dave is that they have made a lot of money, at least the older generation, it has been in the building and RE industry but without really understanding the macro economic backdrop that allowed them to do so during that time. They did not have the benefit of a formal education after all.

Dave their is an enormous amount of money, power and success in the Italian community to say the least so don’t be too hard on them but..

As a wise Italian man told me once ” you can take the man out of the farm but you can’t take the farm out of the man”

Something for us to ponder.

#81 Gwinegarden on 04.13.11 at 8:57 am

“But TFSAs are forever.”

Garth, Garth, Garth, you know, full well, that nothing that saves you money and costs the government, is forever. How long before someone, in power, realises just how much they are losing?

#82 Danforth on 04.13.11 at 9:01 am

TFSA’s will come to displace the RRSP.
Youngsters will get close to five decades of contribution room, and with the ammortized increases, approx a quarter million dollars in TFSA room over the span of a career!

I’d much rather pay 2K in tax on the 5K contribution up front, rather than paying 7K in tax on the 20K (which is what that 5K will be worth) i’ll withdraw from the TFSA in retirement years. Okay – the numbers are rough, but the point remains the same.

#83 Macrath on 04.13.11 at 9:16 am

Great evidence of the psy-ops ponzi racketeers controlling the real estate industry aided and abetted by the banksters and MSM.
Rentals are rare in my area despite the flood of empty homes on the MLS. There are also plenty of empty houses not listed or for rent. They seem to be holding foreclosures off the market in a vain attempt to control price declines. Will you be posting on how to find a deal like yours at $59 a square foot ?

#84 Aussie Roy on 04.13.11 at 9:17 am

Aussie Update

Unsurprisingly, unsold inventory is piling up. sqm Research says there are currently 356,600 properties for sale in Australia—almost 50 percent more than last year at this time.

http://www.thetrumpet.com/?q=8179.6823.0.0

As if out of thin air, a magical 46 per cent more property was offered for sale in February than a year earlier. Like the heavens opening after a long drought, desperate first home owners must have been thanking their lucky stars.

Let’s repeat that. Forty six percent more property appeared on the market, according to SQM Marketing. This is a staggering fact. We have been led to believe time after time that there is nowhere to live. Suddenly, almost 50 per cent more properties have hit the market in a few weeks. Where did this mystery supply come from?

The speculative hotspots of Darwin, Perth and Melbourne showed the largest increases in auctionable property.

http://www.onlineopinion.com.au/view.asp?article=11886&page=0

It seems almost nothing can diminish Australians’ love of property.

While a new survey has highlighted increases in the proportion of Australians that are under mortgage stress and believe property is overpriced, three quarters of respondents said they still intend to purchase property in the next five year, with almost 30% looking to buy in 2011.

http://www.smartcompany.com.au/property/201104130-property-buyers-worried-about-mortgage-stress-and-overvalued-prices-but-they-re-still-keen-to-buy-survey.html

Aussie Banks could be at risk when bubble bursts – Steve Keen.

http://www.debtdeflation.com/blogs/wp-content/uploads/2011/04/HousePricesBankSharesPartII.pdf

POP the real estate bubble has burst.

http://www.prosper.org.au/2011/04/12/pop-the-real-estate-bubble-has-burst/

Certainly would not have seen any of these kind of headlines just 3 months ago, the bubble seems to be deflating fast. The average Joe is just starting to question “prices are going to the moon”….

#85 Carruthers on 04.13.11 at 9:25 am

Slightly off topic, but do any of the Vancouver-based dogs here have any info on how much municipal tax there is on a 1-2 million dollar bungalow?

Just curious, but are we talking second mortgage-like monthly payments?

#86 Live Under Your Means on 04.13.11 at 9:30 am

Great up beat video – Get out the vote.

http://www.osstf.on.ca/Default.aspx?DN=dc0cf485-ccad-446a-9d1f-eca58dbeae2d

#87 kilby on 04.13.11 at 9:31 am

#43 Jsan. Submitted the CSBC form while ReMax was advertising on Global News in the background. Thanks for the suggestion. Everyone should submit something.

#88 Live Under Your Means on 04.13.11 at 9:40 am

Should have included the following in my previous post. There are lots of other videos. I’m glad that there ‘appears’ to be a bit of resurgence in young voters.

http://www.youtube.com/watch?v=a5v4KoyK0TY&feature=related

#89 45north on 04.13.11 at 9:52 am

tiedatutu: The mythical soft landing. And from grotesque bubble levels too! I’ve heard tell of such things, but in 40 years haven’t seen one yet.

yeah I remember there were posts on thehousingbubbleblog about a soft landing. Not any more.

oh yeah, is it TieDaTutut or TiedAtTuttu?

What Party: What party will offer the best chances to stop the 30 year, 5% down mortgage madness?

yeah what? Probably the reason I didn’t watch the leaders debate last night.

#90 False Facade on 04.13.11 at 9:58 am

Vancouver BC Real Estate Market Roller Coaster

http://www.youtube.com/watch?v=hqOn5XEm86A

#91 SAD on 04.13.11 at 10:01 am

I wonder if I will live long enough to see a small (at first) capital gains tax on the sale of a private residence or perhaps a 1% HST tax?

#92 bigrider on 04.13.11 at 10:02 am

Client 1) -invests 10k in his TFSA in investment A grows to 100k in 30 years , has 100k tax free.

Client2) – invests 10k in his RRSP in same investment A as client 1 , receives $4300 back in tax refund assuming top tax bracket ,takes $4300 and puts it in TFSA same investment A. His RRSP same 30 years out worth 100k taxed at 43% loses $43000 for a remainder of $57000, TFSA has $43000 same 30 years out, add them together, same 100k.

Moral of the story. Benefits of TFSA over RRSP strictly lie in what your belief tax rates will be like 30 years out from now and nothing more. I believe they will be higher so lean towards TFSA but do not exaggerate there benefit over RRSP.

#93 wetcoaster on 04.13.11 at 10:12 am

Neutered is right on. From “Is the Housing Bubble about to burst” to “Hot Market” is quite the drastic change of creative direction. The noon version was a dark warning right off the bat, the dinner time one was watered down. No mention of US market crashing at lesser/similar levels comment on the dinner version.

You would have to go hunting to find the Pacifica report, the guy firmly said 25%, not 12. That’s a massive difference in this bloated market.

#94 realist on 04.13.11 at 10:23 am

Statistics Canada reports today that exports fell 4.9 per cent in February, to $35.9 billion. As a result, the country’s trade surplus tumbled to $33 million in February from $382 million in January.

Canada’s trade deficit with countries other than the United States widened to $4.5 billion in February from $3.8 billion in January. Exports to the U.S declined 3.5%.

Anyone who thinks that our high dollar is not hurting exports (the bulk of our economy) is delusional. Raising interest rates will only make it worse going forward.

In fact, raising interest rates now would be the fastest way to tip us in to another recession, which it seems many posters here are cheering for.

Why? Is it all about schadenfreude? That’s just sick.

#95 Utopia on 04.13.11 at 10:27 am

If last nights debate was a Sub sandwich I would have to say that Harper was the meat and the bread, Ignatieff was the conflicting veggie content and Jack Layton was (without a doubt) the spices and the hot sauce.

I don’t vote NDP but how could you not love the guy. He has a such a devilish look in his eye, swings from the rafters with confidence and seems to have a natural talent for busting up any good house party. Jack was on top of his game and as confident as I have ever seen him. Don’t ever think a guy with a cane can’t be dangerous.

Why was Duceppe there?….Oh yeah, it’s a democracy….

#96 desmond on 04.13.11 at 10:29 am

If $5k is all you are allow to put in the tfsa, you might want to maximize your return by gambling the shit out of it. Your $5k will generate ZERO or more likely NEGATIVE returns given current interest rate environment and bogus government inflation figures.

This whole tfsa scheme is design for guys like Garth to thrive. Stocks, much like real estates, is a MUG’s game. Get it?

#97 Live Under Your Means on 04.13.11 at 10:30 am

#58 Increasing that 1% on 04.13.11 at 1:31 am

>speaking of birds chirping, above, …there are no Robins in parts of Downtown TO! April 12th and see not-a-one
too much competition with concrete? pigeons?
…………………………………

Re Robins – we had 8 last week on the front lawn. We have several bird feeders out back which attract finches, black cap chickadees, snow birds, pine siskunds, etc. We have a couple of bird books and try to identify rare ones that occasionally visit us. Stopped throwing out left overs on the back lawn years ago. A crow would see a left over, call his buddies, which attracted pigeons and humongous seagulls. DH had made a 4″ platform to feed ground feeders on the upper deck. Loved watching all the Morning Doves (23 at a time) and others, but seed would fall below and attracted rats and mice so no platform this year. I miss those birds tho.

Pardon my OT thoughts. I would never offer investment advice; I leave that to our FA in whom we have confidence.

#98 baller on 04.13.11 at 10:32 am

don’t stocks held within a TFSA have to be ones that are traded on a recognized exchange? In that case my brother in laws lubricant shop may not qualify…pls clarify.

#99 eddy on 04.13.11 at 10:33 am

Here is a guy who says financial meltdown starts in July:

http://www.thesurvivalistblog.net/opinion/july-latest-caveman/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+PlanPrepareSurvive+%28Survival+Tips+%3A+The+Survivalist+Blog%29

#100 Live Under Your Means on 04.13.11 at 10:37 am

#71 Blobby on 04.13.11 at 4:48 am
@20 : Terry..

quote “Most Canadians don’t have 5k a year of after tax income (let alone 10k) to gamble away on risky investments. ”

… But yet most have enough income to gamble 500k away on property….

……………..

So true!

#101 Herb on 04.13.11 at 10:39 am

The social and economic trouble with this country is that the majority don’t earn enough to have an unencumbered $5,000 a year to invest in anything, even consumer goods. Ever hear of “consumer debt”?

Us upper 7% Garthists are all right, but let us continue to blame those who are not so we’ll feel even better.

Unsurprisingly I’m with #20 and 47.

#102 The American on 04.13.11 at 10:44 am

Garth, thanks for posting this. It only goes to prove what I’ve been saying for months and that is that the Canadian media has been lying/spinning/falsifying data to its consumer base for years. As long as everyone buys into the “good” news, a market correction will take substantially longer and prolong the inevitable. A key driver in any economy is confidence and the government and media understand this. Constant pumping of good news helps keep that confidence alive, as well as lines the pockets of the network execs. It is, however, no substitute for the simple laws of economics in supply/demand. All things return to the mean, one way or another.

It is clear the message in the 6 p.m. broadcast was being spun to fare more favorable than the noon broadcast. Still, it isn’t “great” news from the 6 p.m. broadcast, but it is blowing more smoke up people’s asses. Perhaps they had to soften it a bit as not to shock people too much before they have their evening G&T. The noon broadcast is clearly made for those who are at home during the day and out of work, only to provide hope for them that they may too one day be able to afford their homes again LOL As I’ve said before, Vancouver correction will be in excess of 40% – guaranteed.

On a last note, I’ve witnessed this behavior in the U.S., starting back in 2006 where it began trickling from the East coast as it hadn’t even been deemed imaginable for a correction on the West coast. Make no mistake, however, that once the media begins these snipits of unfavorable information that it is indeed too late. It also means that a correction has probably been underway and well into fruition for at least 6 months by this point. These “warnings” are nothing more than a way to ease public mindset into the already changing market.

These snipits of not-so-great news will eventually roll into entire episodes of horrible news as the public eventually understands that there is no going back to “the good old days.” The media will also ease into understanding that soon they do not need the real estate pumpers’ funds to support their networks. They’re too afraid to bite the hand that feeds them.

What these slimy networks will discover, however, is that economies are fluid with ebs and flows of sources of cash flow. They’ll understand that bad news SELLS papers and publications like nothing else – much more than any singular revenue stream they were receiving from the real estate pumpers. This revenue will be replaced by others willing to provide revenue in way of advertisements for bankruptcy attorneys, announcements from banks/lenders about how “connected and supportive” they are to the communities they serve, do-it-yourself big-box hardware stores (as people have stopped purchasing new construction), local recreational announcements (as people will stop traveling abroad or across country as much), sponsored political debates for how to correct the downward swing, and so on. Their revenue sources become far more diversified in this context, and they will begin to understand they prefer this diversification of funds. As the bad news continues to pour in upon the consumers, the market will overcorrect (it always does), making things more difficult than what could have been imagined.

People will have to listen to this shit for YEARS, TRUST ME. Until people start to get tired of hearing it again and stop buying the papers and buying into all the bad news, and the media begins to take note that it is time to change it up again. This is when you’ll start to see trickles of positive information once again, which will create a flood of consumers purchasing their message again. It is merely a cycle – a long, tedious, damaging cycle to families and singles alike.

Stop believing EVERYTHING you hear/read on/in the television and the papers. You MUST be selective in what you read and keep in mind the fundamental laws of economics. This has served me quite well in this economic cycle within the U.S., and it will serve those well who choose not to be naive and spoon-fed all their information. Use your brains is what I’m saying.

#103 Moneta on 04.13.11 at 10:49 am

The rentier society:

http://www.youtube.com/watch?v=MtijSjRJB3c

People are confusing banks and their bankers. Bankers never lose unless you get a revolution. Which is almost never. Bankers will run their banks to the ground, get bailouts and reprice their options. As long as all banks suffer at the same time, what do they care?

Go look at UK and French bank history. You’ll see how many lives the banks have had there. Start with BNP.

Tanking real estate does not serve banks and their shareholders but it will serve the bankers.

Look at the US. Who owns the foreclosures? Who is picking up the best deals? Bankers and their friends of course. Remember the golden rule of money printing: the first one getting the freshly printed money wins.

The bankers WANT the rentier society. Money for nothing is what it is called. For them, nothing would be better than to pick up good real estate deals and reprice their options.

Now my first question is which party can stop these thieves?

My second question is can this phenomenon be stopped?

#104 warptweet on 04.13.11 at 10:50 am

I wonder why the CMHC manipulation is not an issue in this election. If banks had to eat their own losses housing prices would be normal today. I’m convinced that politicians will bankrupt our nation as long as they get another term in office. By the time the “shit hits the fan” they are long gone.

#105 Devore on 04.13.11 at 11:02 am

#40 The InvestorsFriend (Shawn Allen)

But note that all taxpayers are paying higher taxes to make up for the income tax foregone here. If I were middle class but mortgage poor or kid poor I would resent these things.

This is the kind of subsidy I can get behind. Much better than some stupid homebuyers credit.

#106 Fractional Reserve on 04.13.11 at 11:07 am

Marc Faber spells it out in this informative 6 minute video clip (it is very recent). We are in a crack up boom that is not going to end well. Real inflation is between 5-10% in North America and between 8-12% in China and India.

http://www.youtube.com/watch?v=JjNp7kg7rvg

#107 Fuzzy on 04.13.11 at 11:14 am

Here’s my set-up: I have 1 year’s worth of expenses in a “high-interest” savings account. Yeah, I know, it’s a waste, but its emergency money, or money to be used in case a can’t- ignore opportunity comes up and you need some cash real fast.

All other extra savings I make goes to TFSA (mostly growth ETFs, changing somewhat regularly), RRSP (mostly income ETFs changing infrequently), or non-registered accounts (tax efficient stuff).

In this setup, I have full flexibility, diversification, and even if total stock/bond-Armageddon happens and/or lose my job, I always have that emergency fund and won’t be caught with my pants down. Simple, no?

Even poor people can achieve this, it will take them a bit longer to get set up, but they will get all the benefits of flexibility, diversification & tax efficiency.

#108 Devore on 04.13.11 at 11:21 am

#46 JB

If you don’t make enough money to sustain your lifestyle and put away a miserly $5000/year, or cannot afford to do so while living on your own, then you are living beyond your means. You pool your resources with others, and grind away until you can improve your situation. That’s how it used to work, anyways, before everyone became entitled to their own personal 2000 square feet, even if they need other people’s money to do it.

I’m sure someone is already getting incensed even before I hit Submit.

#109 Evangeline on 04.13.11 at 11:25 am

((Goldman Sachs issues a warning to clients to sell their long positions in Canadian Stocks.))

could you please provide a source for the above?
tia

#110 DaBull on 04.13.11 at 11:27 am

#72 WINNIPEGER on 04.13.11 at 6:34 am

Goldman Sachs issues a warning to clients to sell their long positions in Canadian Stocks.

The dollar is dropping fast as is oil today……..

Oil will be 50 bucks a barrell by Fall.

Still wanna stick to your prediction?

PS: By the way GS stated that oil would crash to $105.00. Wow….

#111 realist on 04.13.11 at 11:44 am

Statistics Canada released its new housing price index yesterday for February which showed Canadian home values up 0.4 per cent compared with January.

The February gain was twice the 0.2 per cent that home prices rose in January.

Comparing February 2011 with February 2010, the Statistics Canada index was up 2.1 per cent.

Asset bubbles are most often defined by rapid price increases, which we are clearly not experiencing (outside of wild and crazy Vancouver).

#112 Evangeline on 04.13.11 at 11:44 am

((>speaking of birds chirping, above, …there are no Robins in parts of Downtown TO! April 12th and see not-a-one
too much competition with concrete? pigeons?))

Funny you should say that .. I have a little patch of green around where I live and I have never noticed as many robins as this year. Yes, the concrete would hamper them, they like worms. I don’t think robins and pigeons eat the same things. Robins eat berries, worms, etc. natural things.

#113 Moneta on 04.13.11 at 11:59 am

Now my first question is which party can stop these thieves?
————
Here is my idea. Being a politician should be a vocation so all politicicans should make a vow of quintile wealth.

Every year, just like the 6/49, a ball numbered from 1 to 5 will determine their annual income. Each number will represent a Cdn income quintile.

#114 bigrider on 04.13.11 at 11:59 am

Garth your annualized return has to be approaching zero for the year given past two days on the markets, especially given the fact that bonds have not rallied.

I think best a 60/40 allocation equity to bonds is up for year is less than 1%, 4% annualized, optimistically.

Not mine. Far more diversified. — Garth

#115 Cellar Dwellar on 04.13.11 at 12:01 pm

Global TV should be renamed to Goebbels TV.
The propaganda is just as blatant……

#116 Derek on 04.13.11 at 12:01 pm

#68 What Party? on 04.13.11 at 4:05 am asked:
What party will offer the best chances to stop the 30 year, 5% down mortgage madness? Who is our best shot at reducing our budget and raising interest rates?

Well call me crazy but the party that actually has the best shot at reducing the deficit is actually the Green Party. Why? Because they are the only Party which just might replace some of our more damaging taxes with Land Value Tax and implement a Citizen’s Dividend to replace EI, Social Security, Personal Tax allowances, etc. Economically speaking these are both extremely business friendly things to do. And they will reduce the deficit very effectively. Raising property taxes like LVT has much the same effect on property as raising interest rates, but the extra cash goes to reducing the deficit instead of increasing bank profits, so it’s preferable.

Of course the Green Party is about as likely to form the next government as I am. But that’s not what you asked.

#117 Live Under Your Means on 04.13.11 at 12:02 pm

FREE KITTENS

A pretty little girl named Suzy was standing on the sidewalk in front of her home. Next to her was a basket containing a number of tiny creatures; in her hand was a sign announcing FREE KITTENS..

Suddenly a line of big black cars pulled up beside her. Out of the lead car stepped a tall, bulky grinning man.

“Hi there little girl, I’m Mr. Harper. What do you have in the basket?” he asked.

“Kittens,” little Suzy said.

“How old are they?” asked Harper
Suzy replied, “They’re so young, their eyes aren’t even open yet.”

“And what kind of kittens are they?”

“Conservatives,” answered Suzy with a smile.

Harper was delighted. As soon as he returned to his car, he called his PR chief and told him about the little girl and the kittens.

Recognizing the perfect photo op, the two men agreed that Mr. Harper should return the next day; and in front of the assembled media, have the girl talk about her discerning kittens.

So the next day, Suzy was again standing on the sidewalk with her basket of “FREE KITTENS,” when another motorcade pulled up, this time followed by vans from CBC, CTV, and CNN.

Cameras and audio equipment were quickly set up, then Harper got out of his limo and walked over to little Suzy.

“Hello, again,” he said, “I’d love it if you would tell all my friends out there what kind of kittens you’re giving away.”

“Yes sir,” Suzy said. “They’re Liberals..”

Taken by surprise, Mr. Harper stammered, “But… But…. Yesterday, you told me they were Conservatives.”

Little Suzy smiled and said, “I know. But today, they have their eyes open.”

#118 Cellar Dwellar on 04.13.11 at 12:10 pm

@ #100 The American
That is THE BEST analysis of the Main Stream Media I have EVER read……
Excellent comments, I totally agree !

Sold my cottage on the east coast of Canada several years ago when i saw all the “bad news” in the Eastern US press. My realtor in PEI was nodding his head in agreement when I told him a wave of selling was going to hit PEI recreational prices when the US property bubble burst. It did. 4 cottages on my road. All built identically . Mine went first for 99k(nice profit) the last one was listed for 57k…….
Glad I dumped and jumped

#119 The American on 04.13.11 at 12:18 pm

AT #109: Realist, you are correct, except the rapid increase has ALREADY happened a few months ago in Canada. It is now slowing, which means it is done and the bubble is bursting.

#120 Alex on 04.13.11 at 12:18 pm

Garth, thanks for posting the altered version. It may be too late for me to add this to my complaint (and consider that I’ve already given them upwards of 4000 words in my two statements thus far), but this is otherwise a great piee of kindling to add to the fire.

#121 The American on 04.13.11 at 12:22 pm

At #107: Evangaline, here is a link supporting the statement, Goldman Sachs Recommends Dropping Canadian Stock. It was posted just a few hours ago.

http://www.ctv.ca/CTVNews/Canada/20110413/goldman-sachs-canadian-stocks-110413/

#122 SMOKING MAN on 04.13.11 at 12:27 pm

Got to hand it to you Garth. You just bought some farmland, a week later.

http://www.theglobeandmail.com/news/national/ontario/ontario-court-strikes-down-canadas-pot-laws/article1983105/

I suggest you click the link, it will help you pick a crop selection..:)

#123 BrianT on 04.13.11 at 12:27 pm

#100American-I don’t know what you have been reading about the USA “economic cycle” but IMO you don’t understand the math. Oil imports (a proxy for the actual economy) are back to 1991 levels. At this rate, the USA is going to be self sufficient in oil because the average American will not be able to afford imported oil. Food stamp usage is rocketing higher while bogus GDP “growth” is trumpeted. Here is a wild stat: if the USA fed guv seized all the wealth of every billionaire in the USA it would be something like 1.3 trillion dollars-it wouldn’t even pay for THIS YEAR’S DEFICIT!!! If that doesn’t tell you what the score is nothing will.

#124 Live Under Your Means on 04.13.11 at 12:27 pm

#40 The InvestorsFriend (Shawn Allen) on 04.12.11 at 11:58 pm
Tax Free savings Accounts are a gift. Use them if you can.

But note that all taxpayers are paying higher taxes to make up for the income tax foregone here. If I were middle class but mortgage poor or kid poor I would resent these things.

Maybe just another example of us boomers screwin’ over the young ‘uns.

So, we are all paying for these things, may as well take advantage.

……………….

Neighbour sent the following to me the other day.

What is ‘generation Y’ ?……………………..

I’ve always wondered this question myself……….

People born before 1946 were called The Silent Generation.

The Baby Boomers are those born between 1947 and 1959.

Generation X people have been born between 1960 and 1979.

Generation Y were born between 1980 and 2010………….

Why do we call the last group Generation Y ?

I think it’s because they say….

Y should I get a job ?

Y should I leave home and find my own place ?

Y should I get a car when I can borrow yours ?

Y should I clean my room ?

Y should I wash and iron my own clothes ?

Y should I buy any food ?

Wish I could include the cartoon from a Quebec daily. Basically its a young boy with his jeans hanging off his ass – showing his crack – Y :-)
……………….

I realize that not all gen Y’s are like that, but I see several on our street who have taken advantage of their parents’ generosity (including the neighbour who sent it to me) and she acknowledges it.

#125 nonsense on 04.13.11 at 12:31 pm

The USA is like a tired dog which no longer barks. The world economy is no longer about jobless homeless broke Americans who can’t afford a coffee let alone sneakers, but rather it is about about Brazil, Russia, India, and China and their wants. Their demands for consumer goods is gearing up and will make US demand look like a fly on the elephants behind. BRIC countires need raw materials for growth, the last thing they need is useless American TBILLs. Goldman Sachs is dreaming in yester years. After years and years and years of closing American factories and pumping trillions into China’s economy the Chinese economy is now self sustaining and will grow based in internal demand. The USA dollar is falling because the USA goverment is printing money, and hopes to devalue the dollar to create jobs. Look at the USA debt clock it is a joke.

#126 BrianT on 04.13.11 at 12:31 pm

#117American-Most sentient humans would take the investment advice of Charlie Sheen over any public missive issued by Goldman-the firm is renowned for screwing over their clients and pretty well anyone else stupid enough to listen to them.

#127 Junius on 04.13.11 at 12:33 pm

#109 realist,

You said, “Asset bubbles are most often defined by rapid price increases, which we are clearly not experiencing (outside of wild and crazy Vancouver).”

What you are seeing is proof that the correction is well under way. The percentage increases are based on lower volumes. They percentages are pulled up by the sales of homes in the higher end of the market and creates the illusion that the market is going up. However this does not last.

What happens next is that the prices drop at the bottom end because that is where the marginal sellers are. This will push average prices of sales down rapidly. The Re mafia industry will skew the statistics again to avoid this being the headline. However this is what is happening. Even in Vancouver.

#128 another gem from tony WRONG on 04.13.11 at 12:43 pm

i seriously doubt that the amount of money this dude gets paid to lie and cheat the canadian middle class is enough to help him sleep at night.

why tony? why?

http://www.moneyville.ca/article/973677–bungalows-are-gta-s-hottest-housing-bet?bn=1

#129 Crash on 04.13.11 at 12:45 pm

The most concerning thing about the re-editing of the Global story (other than the blatant spin) is they “quoted” a source who did not say what they said he did. This is journalism at it’s worst. I would think it is against the broadcasting standard of ethics.

#130 Kevin in Winnipeg on 04.13.11 at 12:45 pm

Meanwhile in Winnipeg…..7.1% gain in detached two-storeys last quarter, second only to Vancouver. Bye bye affordability.

http://www.winnipegfreepress.com/business/two-storey-digs-ride-price-rocket-119752004.html

#131 vreaa on 04.13.11 at 12:48 pm

Thanks Brian and Garth for bringing the Global news switch to our attention. We have transcribed the segments, for the record:

Global News Switch –
‘Real Estate Bubble?’ Story Becomes ‘Steady Climb’ Story

Transcript and stills of two news segments from Global, 12 Apr 2011

http://wp.me/pcq1o-28g

Between Noon and 6pm, the segments ‘Real Estate Bubble?’ headline has become ‘Steady Climb’, and AJ Sull’s self-stated “25%” becomes voice over “12 to 25%” mentioned by the announcer. The realtor drones on about foreign demand in both segments, using different words but saying the same thing.
Global have, however, in the second segment, introduced the idea of ‘patient buyers’, which we’ll give them credit for. That can’t be something the RE industry wants to see. Buyers becoming VERY patient will be part of the coming crash. -vreaa

#132 The American on 04.13.11 at 12:49 pm

At #125: BrianT, I don’t disagree with you. If you read the post, I didn’t agree with Goldman Sachs. I only provided the link as was requested by another reader on the blog. I had read it earlier this morning too.

#133 Live Under Your Means on 04.13.11 at 12:49 pm

#110 Evangeline on 04.13.11 at 11:44 am
((>speaking of birds chirping, above, …there are no Robins in parts of Downtown TO! April 12th and see not-a-one
too much competition with concrete? pigeons?))

Funny you should say that .. I have a little patch of green around where I live and I have never noticed as many robins as this year. Yes, the concrete would hamper them, they like worms. I don’t think robins and pigeons eat the same things. Robins eat berries, worms, etc. natural things.
……………………..

Re your last sentence Evangeline, here the Robins don’t seem to take to berries. I have several cotoneasters and 3 hollies out front, yet they never eat them. Years ago when the first Robins would arrive I’d put out different berries on the walkway and they shunned them. Yes, they looked for worms in the lawn and gardens instead. Anyway, that’s my experience. There was another species – beautiful & colourful birds – but can’t recall the name – that devoured my neighbour’s and my holly berries within a couple of hours.

#134 Joe on 04.13.11 at 12:53 pm

#20 Terry: “TFSA lifetime contributions should be limited to 50k and growth should be limited to 150k tax-free.”

I know a troll when I see one, especially with comments like that. Nice try.

#135 The American on 04.13.11 at 12:55 pm

At #123: BrianT, I’m not even sure what you’re talking about. First, I didn’t post at #100. Second, food stamp usage in the U.S. has declined in the past 8 months, every month. I could get into economics with you, but after reading your post, you’re a very short-sighted individual with little understanding of how a GLOBAL economy works. I’m an economutritionist, one of about three hundred world-wide. Its pointless to go back and forth with you. I’m done. You’re looking for a fight and I’m not giving it to you.

#136 realpaul on 04.13.11 at 1:06 pm

Want to talk about serious money? IMF reports that banks face 4 trillion tsunami of debt maturing over the next two years !!! Now if you think that won’t stoke inflation in commodity prices by the mad printing of money for a global QE 3, 4 5 &6 your pencils pretty dull.

http://business.financialpost.com/2011/04/13/banks-face-us3-6t-wall-of-maturing-debt-imf/

AND………where is the peripheral financing going to come from to pay for the spot fires that are already burning out of control????

How will this effect intrest rates? Just remember how the media was punting the ‘end of the real estate downturn’ a year ago just as the ALT-A tsunamo hit in the US and drove prices down even further. You can expect rates to jump at the banks while the taxpayer funds the BOC’s blind deliverance of the ZIRP ‘with no inflation’.

Bwahahahahahahahahahahahahahahahahahha !!!

#137 Stevo on 04.13.11 at 1:18 pm

Unbelievable cover story this month in Canadian Business – cover title “Real Estate Mania – how our obsession with home ownership has warped our economy, our finances and our lives.” Page 22, or below:

http://www.canadianbusiness.com/managing/strategy/article.jsp?content=20110425_10021_10021&page=1

#138 Jon L on 04.13.11 at 1:18 pm

One of the extremely rare articles in the Vancouver media that actually puts a realistic face on real estate: http://www.news1130.com/news/local/article/211769–a-whole-generation-is-pressured-to-buy-a-home-expert

A nice change from all that crap Postmedia puts out there.

#139 Live Under Your Means on 04.13.11 at 1:25 pm

#80 bigrider on 04.13.11 at 8:46 am

#65 Original Dave ” it’s gotten to the point where I’m racist against Italians…I avoid them at all costs.

I think that’s a bit harsh. Problem with the our group as a whole Orig Dave is that they have made a lot of money, at least the older generation, it has been in the building and RE industry but without really understanding the macro economic backdrop that allowed them to do so during that time. They did not have the benefit of a formal education after all.
……………………….

I grew up in Mtl. and most of my g’friends were immigrants from many European countries after the war. They worked their butts off to achieve a better life for they and their children. I’m still in touch with some. My father was an 1st gen. (mother 2nd gen) immigrant from 2 nordic countries. My parents and my friends’ parents helped to build this country. We lived through the Duplessis era (I even remember some of it) and my parents, were they alive, would cringe at what has happened to our democracy in Canada.

#140 Tom from Mississauga on 04.13.11 at 1:30 pm

BoC lowering growth next year, high loonie, American payrolls expanding. Would a contrarian jump into US stocks here? Or is that just common sense?

#141 Brad in Cowtown on 04.13.11 at 1:43 pm

to terry and #47

Try not to take it so personally. Garth condescends towards everyone equally. He has nothing against poor people. He might even let you into his bunker someday if your wife his hot.

I’m a little tired of all the whining in these comments. The stuff we read for free in this blog is jammed with valuable information. Stop being so sensitive about his lack of empathy. Ignore the remarks that hurt your feelings and be a sponge the rest of the time. Do I agree with Garth all the time? Definitely not. But I keep an open mind.

#142 Bench Warmer on 04.13.11 at 1:55 pm

About the Videos, I’m guessing Global thinks it has enough reality TV programing. No need to have reality based news.

#143 Bill on 04.13.11 at 2:16 pm

What happened to good old fashioned Christian values?

I shall not lie

It was clear throughout the debate that Prime Minister Harper has a hard time telling the truth.

There is no corporate tax cut…really
The new jets will not go over budget….what
The money spent on the G8 all went to items used for and connected to the event…ya right
His party was not in contempt of Parliament….ya and I president of the United States

Liar Liar pants on fire
Take the high road bring back the Progressive Conservatives who could win the right way

#144 realist on 04.13.11 at 2:18 pm

The American #119 wrote:

“AT #109: Realist, you are correct, except the rapid increase has ALREADY happened a few months ago in Canada. It is now slowing, which means it is done and the bubble is bursting.”
_____________________________________________
As I posted earlier today – it looks like a soft landing to me. Except for Vancouver, which despite all of the “theories” being proposed, is quite frankly inexplicable.

New home prices across Canada are up at roughly the rate of inflation YoY. GTA re-sale prices are up slightly better at around 5% per year for two years in a row. Nothing crazy or outlandish, however.

Price gains may well be moderate or flat for some time to come, just as we have been experiencing. The affordability index is well below danger territory in the GTA (33%) and interest rates are going nowhere fast.

Carefully measured future interest rate hikes will be mitigated somewhat by increased income as the months and years go by, which will serve to further cushion the market.

Why must the market always be defined as boom or bust?

#145 dddd on 04.13.11 at 2:19 pm

#85 Carruthers on 04.13.11 at 9:25 am
Slightly off topic, but do any of the Vancouver-based dogs here have any info on how much municipal tax there is on a 1-2 million dollar bungalow?
——————————————————

van city taxes are lower than suburbs and way lower than us cities from what i have seen.(ie 10k for a 1m house in seattle)
a 1m mkt price nice 2story on the east side would likely be assessed at 700-800k and pay around 4k/year.
i’d assume the same on the west side 2m house pays ~8k/yr

#146 Dave in Victoria on 04.13.11 at 2:49 pm

not sure what to make of it. i imagine the 15 sec. interview came from minutes of material, and perhaps off camera stuff too. his comment originally was that a 25% correction would bring housing and incomes closer in line with each other. the comment on the evening cast referenced a correction of 12-25% in housing prices themselves. different angles, different spin. a conspiracy?, a demand made by advertisers?, a maximization of limited resources and limited material due by a cash strapped industry?, who knows.

whatever. people sadly get their info from MSM, thus we’re all doomed to lowest common denominator trends and vicious extremes void of consideration and reflective thought.

#147 Evangeline on 04.13.11 at 2:55 pm

Live Under your Means
Maybe robins are fussy about what kind of berries? The ones around here like berries that fall from lilac trees.

American
I read the article from your link, thanks. I seem to recall that very recently one of the Canadian banks said that the high price of oil for Canadian consumers would hinder Canadian economic recovery. I’m not sure how the price of oil stocks and price at the pump relate to each other, but I think banks both south and north of the border, globally in fact, work together, so maybe GS was doing someone a favour?

#148 bystander on 04.13.11 at 3:02 pm

#12 Mikey the Realtor on 04.12.11 at 10:47 pm
” Who cares of what some talking head says, if RE is going to correct then it will through market forces. I see an increase this year of 5% in Canada, get in or be priced out forever. Many unfortunately are already priced out and will be forever renters.”

Wishful thinking.

People are repairing their damaged balance sheets, hence no money left to spend on RE. The shadow supply of properties is gigantic. All of those “investors” are so predictable – they prefer to take pain slowly and remain hopeful for market to go up. The market eventually will go up, but not until the “RE investors” will see their “gains” wiped out by the inflation and taxes. This will take years ans years and years. Meanwhile there are STILL NO BUYERS on the horizon. Interest rates at rock bottom and can’t go negative, the government prints money, but even this doesn’t help. Well there is also strengthening CAD, abut all it does is wipes the remains of manufacturing industry in this country. Despite all of the last minute government efforts, the RE is still going down. Slowly, but surely.
When last of the manufacturing in Canada closes it’s doors all we will have left with in this country is: THE GOVERNMENT and CONSUMERS there will be communism and everybody will be entitled to a free Apartment/House/McMansion.
Welcome to the reality

#149 betamax on 04.13.11 at 3:07 pm

#78 Kevin: “My wife and I are holding our Emergency Fund in our TFSA’s, in a high-interest savings account. Why? Because interest is the worst kind of unearned income. It’s taxed at your full marginal rate.”

$30,000 x 0.015% = $450.

$450 x .29 = $130

So you’re missing out on thousands of dollars more of tax-free gains so you can save $130. Clever.

#150 Roial1 on 04.13.11 at 3:08 pm

#9 Sargon
Love the Vancouver #1 fan. “People in Alaska want to live in Vancouver. People in Austria want to live in Vancouver…people in Barbados want to live in Vancouver…people in Yemen want to live in Vancouver.”

The people of Vancouver, however, are moving to the Comox Valley on beautiful Vancouver Island.
Where they are protected from the mainland by our over priced ferry boats.
(We are equiping them with limpet mines to use if the inflow of mainlanders gets too high.)

#151 Devore on 04.13.11 at 3:12 pm

#143 realist

Why must the market always be defined as boom or bust?

Because in our centrally planned western economies, that is what we’ve always had: credit expansion boom, and credit contraction bust. A balanced, stable market is about as much a myth as a soft landing.

#152 Roial1 on 04.13.11 at 3:15 pm

#147 bystander on 04.13.11 at 3:02 pm

Well there is also strengthening CAD, abut all it does is wipes the remains of manufacturing industry in this country.

The “so called” increase in the CDN$ is illusury.
Go to the “currency exchange” and look up our “Strong” dollar in respect to, say the “Thai Batt”. It is only the weekening of the US$ that makes ours look good.
We are going down like a rail from the “Titanic” with the US$.

#153 BPOE on 04.13.11 at 3:30 pm

Okay American so you get your 40% haircut based on what? Higher interest rates? Sooooo that 2 million dollar Dunbar home currently worth 2 million is according to your “guarantee” now going to be worth 1.2 million correct? What will be the difference in the carrying costs if your prediction were to come true. I’m all ears
{}{}{}{}{}}{}{}{}{}{
As I’ve said before, Vancouver correction will be in excess of 40% – guaranteed.

#154 tomohawk on 04.13.11 at 3:30 pm

I agree with the comments regarding saving money. During my 20s (late 80s, early 90s) I made a living playing in chess tournaments (seriously) and teaching a bit of chess. I made on average less than $7000 per year. But I still managed to save a thousand or so every year because I didn’t:

– own a car
– live alone (I had roommates)
– eat out much (maybe once per month)

and a dozen other simple lifestyle changes that anyone could do.

I had a great decade! The point is that you figure out what’s important to you and “sacrifice” the stuff that isn’t.

#155 poco on 04.13.11 at 3:31 pm

#102 The American–i agree with Cellar Dwellar–excellent post
________________________
On a last note, I’ve witnessed this behavior in the U.S., starting back in 2006 where it began trickling from the East coast as it hadn’t even been deemed imaginable for a correction on the West coast. Make no mistake, however, that once the media begins these snipits of unfavorable information that it is indeed too late. It also means that a correction has probably been underway and well into fruition for at least 6 months by this point. These “warnings” are nothing more than a way to ease public mindset into the already changing market.
______________________________________________

so true -many don’t see this until way too late–don’t know about Canadas’ east coast but the tri cities and beyond have been falling slowly since last spring–
lots of homeowners underwater
one of the posters was reporting (before xmas) on a van realtor–Yatermatters–who was doing an analysis of the various lower mainland real estate markets–year over year stats–we saw Richmond-Van west-Van east-West Van- North shore all up up up–then the last post was Coquitlam-stats were down
funny thing was that’s the last i saw of them- no more posts–Pt. Moody -Pt Coquitlam-Pitt Meadows-Maple Ridge –nothing –i guess the stats were so bad they couldn’t be released

Our local papers (The Now and Tri-city News) would publish the monthly real estate stats but that ended last Feb-2010-all negative for all five municipalities on the last published stats i saw–my god can’t have that !!!
–we are now lumped in with the GVREB numbers so the huge increases in Van and Richmond can “hide” our downturn
just my take on more manipulation

#156 betamax on 04.13.11 at 3:37 pm

#101 Herb: ” The social and economic trouble with this country is that the majority don’t earn enough to have an unencumbered $5,000 a year to invest in anything, even consumer goods. Ever hear of “consumer debt”?”

Yes, it’s debt that people rack up buying unnecessary consumer goods they can’t afford. And that indeed is the trouble with this country.

#108 Devore: “If you don’t make enough money to sustain your lifestyle and put away a miserly $5000/year, or cannot afford to do so while living on your own, then you are living beyond your means.”

Tell it, brother. People think they have a right to luxury in this society, even when they can’t afford it.

Twice a month, I take time out on a Saturday morning to wash & dry all of our dog & cat blankets at a nearby laundromat, and while I’m there people come in constantly to drop off their laundry and pay extra for the laundromat to wash and dry their clothes.

The laundromat is virtually empty of customers who come to wash their own clothes — 99% of the business is people dropping off laundry. I see these people coming in and they drive older vehicles and look like their clothes were bought at Walmart, but they all are too busy and apparently too wealthy to do their own laundry.

I’m much more wealthy than any of them, and I’m likely much busier than any of them, but I’m not going to pay $20 to have someone else do my laundry.

Meanwhile, these shmoes come in all puffed up with self-importance because they’re dropping off their laundry and pretending to be wealthy.

And that’s why these people never have any savings.

#157 bystander on 04.13.11 at 3:37 pm

Little boxes made of ticky tacky

http://www.youtube.com/watch?v=2_2lGkEU4Xs

#158 jess on 04.13.11 at 4:25 pm

..how many of the “rich” asians are classified as permanent?

3. What benefits do I have if I am a permanent resident of Canada?

Canadian permanent residents/landed immigrants and citizens enjoy all of the same rights and privileges (i.e. free health care, free elementary and secondary education, etc.) with three (3) exceptions:

(i) Permanent residents cannot vote;
(ii) Permanent residents cannot hold a Canadian passport;
(iii) Permanent residents can be deported for certain criminal convictions.

#159 Junius on 04.13.11 at 4:30 pm

#143 realist,

You said, “Carefully measured future interest rate hikes will be mitigated somewhat by increased income as the months and years go by, which will serve to further cushion the market.”

First of all, don’t forget that every 1% of interest rate rises adds roughly 9% per month the average monthly mortgage cost. If rates go up 3 or 4% over the next few years as they are likely to wages cannot possibly keep pace.

Any increases in wages will be eroded by rising costs of goods and services along with increased taxes. Look around you. Energy and food prices are up everywhere. All levels of gov’t are strapped and will be looking for money. We have an aging baby boomer demographic headed to retirement.

Meanwhile who is getting a wage increase? Not the public sector and certainly not the private sector.

And you call yourself a realist?

#160 Live Under Your Means on 04.13.11 at 4:37 pm

#146 Evangeline on 04.13.11 at 2:55 pm
Live Under your Means
Maybe robins are fussy about what kind of berries? The ones around here like berries that fall from lilac trees.
………………….

Good for you Evangeline. I’ve 4 lilac trees in the back, in bad need of rejuvenation, but I’ve never seen a berry from them nor a Robin beneath them. Just saying.

#161 now I get it! on 04.13.11 at 4:40 pm

#155 betamax…..now I realize why my clothes get so furry at the laundromat!

#162 Live Under Your Means on 04.13.11 at 4:44 pm

#146 Evangeline on 04.13.11 at 2:55 pm

Evangeline – might you be from the NS valley – based on your name?

#163 not 1st on 04.13.11 at 4:51 pm

BoC lowering growth next year, high loonie, American payrolls expanding. Would a contrarian jump into US stocks here? Or is that just common sense?

__________

Are you seriously off your rocker. The U.S. market ponzi scheme is 40% overvalued and due to fall when U.S. austerity kicks in and people realize they are broke and stop spending.

#164 jess on 04.13.11 at 5:01 pm

fake press reports /yes men?

Two activist groups, US Uncut and The Yes Men, took responsibility for the hoax, according to Igor Vamos, who identified himself as a member of the Yes Men. The groups sought to raise awareness of corporate tax policies that they consider unfair, especially at a time when the government is having difficulty funding social services.

http://finance.yahoo.com/news/GE-to-return-32-billion-to-US-apf-1098787320.html

#165 Mr. Plow on 04.13.11 at 5:24 pm

#128 Crash

Yes giving up your sources is against the Broadcasting Standard of Ethics.

Do you know why they are referred to as sources? Because they do not want their information or name published. If they were to be published, they would likely cease to be sources.

I know a lot of people who work in the media, and sources are what makes their world go round.

#166 Ron S on 04.13.11 at 5:26 pm

#157 jess on 04.13.11 at 4:25 pm
“What benefits do I have if I am a permanent resident of Canada?”
————————————
PR is a privilege and you can apply for Canadian citizenship after 3 yrs as PR in the country. I think its pretty simple and there are many people who followed same path including me. I am going to vote first time here.

#167 realist on 04.13.11 at 5:29 pm

@ Junius wrote: “Meanwhile who is getting a wage increase? Not the public sector and certainly not the private sector.”

Results from the 2011 Culpepper Salary Increase Budget Update Survey reveal that salary budgets for 2011, including salary increases, salary range increases, promotional increases, and variable incentives are all higher than 2010.

Additionally, the number of companies freezing salaries has significantly declined and salary cuts have nearly disappeared.

Base salary increases in Canada are projected to rise from 2.26% in 2010 to 2.83% in 2011.

#168 The American on 04.13.11 at 5:37 pm

At #162: Not 1st, actually, you’re wrong. Americans have already stopped spending, relative to prior years. In fact, Americans have more money to spend now than Canadians. Additionally, American households are less indebted than Canadian households, and Americans are saving MORE than Canadians at about three times the amount (7% savings vs. 1.8% savings).

The only thing 40% overvalued right now is the value of the CAD, which is really going to hurt in way of exports and manufacturing for Canadians. Additionally, the CAD hasn’t risen against other currencies. Instead, it has only not fallen relative to other economies that have due to economic recession. The Canadian correction is most definitely coming and signs of its beginning are here now. As with everything, even whole economies are relative to one another.

#169 The American on 04.13.11 at 5:40 pm

Okay, okay… The CAD isn’t 40% overvalued relative to historical values. But, it is about 30% overvalued right now relative to historic values and other currencies.

#170 r on 04.13.11 at 5:47 pm

“Base salary increases in Canada are projected to rise from 2.26% in 2010 to 2.83% in 2011.”

that’s a nice survey. the reality at my workplace says we’re not getting an increase this year.

#171 Junius on 04.13.11 at 5:54 pm

#166 realist,

You said, “Base salary increases in Canada are projected to rise from 2.26% in 2010 to 2.83% in 2011.”

So, to my point,

1) This is less than the current rate of inflation.
2) Would not be enough to offset a 1% rise in interest rates.
3) Is prior to the end of the current stimulus.

Furthermore this is a “projection.” It is meaningless until it actually happens.

#172 Nostradamus Le Mad Vlad on 04.13.11 at 5:56 pm

What a gorgeously boring day here in the Snoozekanagan. The following are skill-testing questions. No prize is awarded.
*
Subject: Animal quiz

This is a test for Smart People. TPTB have determined that you qualify. The following short quiz consists of four questions and will tell you whether you are qualified to be a professional.

Scroll down for each answer. The questions are NOT that difficult. But don’t scroll down UNTIL you have answered the question!

1. How do you put a giraffe into a refrigerator?

The correct answer is: Open the refrigerator, put in the giraffe, and close the door.

This question tests whether you tend to do simple things in an overly complicated way.

2. How do you put an elephant into a refrigerator?

Did you say, open the refrigerator, put in the elephant, and close the refrigerator? Wrong Answer.

Correct Answer: Open the refrigerator, take out the giraffe, put in the elephant and close the door. This tests your ability to think through the repercussions of your previous actions.

3. The Lion King is hosting an animal conference. All the animals attend, except one. Which animal does not attend?

Correct Answer: The Elephant. The elephant is in the refrigerator. You just put him in there. This tests your memory.

Okay, even if you did not answer the first three questions correctly, you still have one more chance to show your true abilities.

4. There is a river you must cross but it is used by crocodiles, and you do not have a boat. How do you manage it?

Correct Answer: You jump into the river and swim across. Have you not been listening? All the crocodiles are attending the animal conference. This tests whether you learn quickly from your mistakes.

According to Anderson Consulting Worldwide, around 90% of the professionals they tested got all questions wrong, but many preschoolers got several correct answers.

Anderson Consulting says this conclusively disproves the theory that most professionals have the brains of a four-year-old. They don’t have any brains at all.

Send this out to frustrate all of your smart friends.

PS: Just the fact that I sent it to you should make you feel good.
*
Not to begrudge Mikey the Realtor, BPOE and others, this is from a couple of days ago. Think C-H-F Are Bad? Check this out.

Remember him? 91 years old, and just about to start another world tour. No, it’s not Mick, Keith and the Stones!

Everything you’ve ever wanted to know about the ME, straight from a general’s mouth. First few paras. sums it up nicely, also gives a clear reason for the inside job of 9-11. Sarkozy Similarities to Napoleon?

Four Best Methods for off-grid food production. One acre of fertile land can produce lots of food.

Stem cells work, and Vitamin D Best sources.

Just like the Terrible Triumvirate Triple Three fault lines under Tokyo, the PNW has the Triad of Triplets. New to me, so I guess it’s a recent discovery.

#173 Media lies for realtors on 04.13.11 at 6:09 pm

Looks like Realtors will do and pay anything for propaganda of lies and the media will do their bidding for a price i am sure. The housing crash is getting worse and what we saw from global is proof. Realtors are fearing the BUYERS STRIKE as sale continue to crash. How will the realtors spin 11 months in a row of falling sales? This is going to happen in April as word is out that SALES ARE CRASHING FROM COAST TO COAST. Join the BUYERS STRIKE or face a crash between 25-50%.

#174 realist on 04.13.11 at 6:41 pm

@ #170 Junius wrote:

1) This is less than the current rate of inflation.
2) Would not be enough to offset a 1% rise in interest rates.
3) Is prior to the end of the current stimulus.

Furthermore this is a “projection.” It is meaningless until it actually happens.
_____________________________________________

Since the BoC has not raised rates since Sept. 2010, it will be a full year most likely until they start. Translation – any increase has already been mitigated by salary increases.

Remember, I said mitigate, not offset. Canadians will make their mortgage payments, even if they have to forego dining out once in a while, or other niceties.

As far as ‘projections’ go, aren’t we both ‘projecting’ higher interest rates – they haven’t occurred yet either.

#175 jess on 04.13.11 at 6:43 pm

165 Ron S

the chinese moms, (been here over several years,)
i play badminton with have no intention of becoming canadians citizens. They are 40+ with children in elementary /high school. They tell me it is easier to go back to china to visit their parents.

#176 The American on 04.13.11 at 6:53 pm

At #172: Ben, as much as I’d like to have the power to single-handedly bring the value of the dollar up, I simply do not. The devaluation of the dollar is quite deliberate and calculated at this point. It sure makes it easier to repay debt to China, hence why China is keeping their currency artificially low until recent news they will be slowly easing their value and bringing it up to par where it should be. They’ve undervalued their currency by 40%, which is why we’re having QE, QE2, QE3, etc.

The CAD will fall, however, even in the wake of QE due to the RE collapse that is underway there. It will take some time – probably upward of two years, but it will happen.

#177 morpheus on 04.13.11 at 7:14 pm

#167 American

You do realize that your government could only muster a measily $38 billion budget cut from a $1.6 trillion annual deficit right? That’s not exactly cutting your spending now is it. Austerity is in reference to government spending not consumers. Consumers will be left with higher taxes and less government services. The U.S. dollar is what it is relative to the CAD and other currencies not only because of your Ben Bernank QE debacle but the complete lack of fiscal discipline of your congress. BTW, the majority of U.S. consumers have been FORCED to save because they were removed from the credit trough have done so aka bankruptcy. Americans are debt addicts like everywhere else in the developed world they are just a must greater magnitude.

#178 Nostradamus Le Mad Vlad on 04.13.11 at 7:19 pm


3:55 clip The worst possible scenario is that the plutonium catches fire. Record levels of radiation headed toward US. The whole thing is falling to pieces.

Economy “This is just getting worse; and watch out for QE3, which will only destroy purchasing power and whatever savings people may have managed to save.” wrh.com. Keeping Capital in a depression — Cut the war budget! 3:09 clip.

NATO infighting. The west can’t fight wars, because they’re too busy fighting themselves. So much for the US stepping back and letting NATO run the show. Libya “Medvedev is absolutely correct on this. And remember: China has just lost billions in development deals to the unrest here.” wrh.com.

0:25 clip Zombies, a.k.a. Republocrats or LibsNDPCPCBlokheds.

Food Organic vs. non-organic.

NAU – SPP Texas ports going Chinese?

Yellowstone “The underground volcanic plume at Yellowstone in the US may be bigger than previously thought, according to a new study by geologists.” Same as Toba or bigger.

Soros “Soros wants national sovereignty replaced by centralized control over money, populations, resources and markets – an undemocratic ruler-serf society unfit to live in except for rulers and profiteers.” Obama “As Obama and Congress fiddle, America liquidates housing sector.”

Nice Medicaid and probably the health system here betting on how long we will live, but “nobody here gets out alive!”

#179 S.B. on 04.13.11 at 7:25 pm

Was this posted? This is one way to pay off your mortgage early.
:o

http://www.cp24.com/servlet/an/local/CTVNews/20110413/110413_oakville_fire/20110413/?hub=CP24Home

Firefighters battle massive fire at $6M Oakville home
Firefighters are still battling a stubborn blaze at a multimillion-dollar mansion that was under construction in a posh Oakville neighbourhood.

Fire officials say the house, which has an assessed value of $6 million, is a total loss.

The two-alarm blaze at 23 Ennisclare Dr. W., near Morrison Road and Lakeshore Road East, was reported at 5:50 a.m.

#180 Timing is Everything on 04.13.11 at 7:57 pm

Hey Nosty, off topic, like you’ve never done it ;)

Anywho…The real ‘No-Go zones’… Our memories are short, but our half-life(s) are long…

http://www.spiegel.de/international/world/0,1518,756369,00.html

#181 Junius on 04.13.11 at 8:14 pm

#174 realist,

You said, “As far as ‘projections’ go, aren’t we both ‘projecting’ higher interest rates – they haven’t occurred yet either.”

Splitting hairs. Interest rates have no where to go but up. Most economists are saying they will start going up in June. Meanwhile the bond market could impact them regardless of what the B of C does.

Sure they can “mitigate” but not in a vacuum. Less than 3% increases – even if they happen – will not keep pace with inflation and tax increases.

Face it. Affordability is set to erode substantially over the next few years.

#182 realpaul on 04.13.11 at 8:30 pm

Sorry gang…but let me point out how really screwed up the average Canadian is about TFSA’s RRSP’s or any saving vehicles at all. Most of the responses herein have been about what a ‘gift’ it is for the government to let you save any of YOUR money……

Don’t you see how far they’ve stuffed your head up your ass so that most people believe that the government is the rightful owner of your paycheque and they ‘garnt you a favour’ by letting you ‘keep a little’ to ‘save’? Sheeshhhh !!!

Most people should be outraged that they have to send those parasites a dime more than the minimum. Ernst & Young for Prime Minister……jail the special intrests and KEEP YOUR GOD-DAMNED GREASY FINGERS OUT OF MY BANK ACCOUNT !!

#183 Real estate junkie on 04.13.11 at 8:33 pm

Re: the Global story. If you read AJ Sull’s comments in the FP magazine, he says prices could drop anywhere from 12-31 percent. In the Global story, he said 25 percent. So when the reporter used 12-25 percent, she probably got that from background talks with him i’m guessing. I thought the piece was one of the only TV media stories to talk about the fact the market is overheated.

#184 Garth as censor? on 04.13.11 at 8:36 pm

Hey I thought if comments were on topic and non-offensive they got posted.

Garth are you now doing some sort of a cull?

I responded to poster #140 Brad in Cowtown but it never appeared? Huh?

You said you were leaving this blog. I just helped. Are you a drama queen and want a better exit? — Garth

#185 Timing is Everything on 04.13.11 at 8:51 pm

#179 S.B.

You’ll like this one…

http://blog.al.com/live/2010/05/clarke_county_pastor_pleads_gu.html
———————————————————
Mortgage fraud alive and well in Cow-town…The blame game…

‘Defendants in massive mortgage lawsuit blame BMO for letting fraud happen’

http://tinyurl.com/422s9ar

#186 SMOKING MAN on 04.13.11 at 8:57 pm

I love when these self-righteous, risk averse wimps and basement dwellers come on and tell everyone to live with in their means.

Screw that, I say live beyond your means, then watch how fast and magically your human brain evolves and finds away to make even more money.

For a lazy fat ass like me this strategy works great, cause if it wasn’t for living beyond my means I would never get of the couch.

#187 Cabot Lodge brylcreem & trenchcoat on 04.13.11 at 9:00 pm

#58

Noticed a number of stores on Yonge St. – south of Bloor/north of College- are empty/for lease=unusual for this area, used to be bustling along entire strip.

Always did come and go. Main thing to notice Yonge/Bloor is 1 Bloor or lack of it.

#188 S.B. on 04.13.11 at 10:12 pm

In the USA: I imagine cash-stapped boomers who gambled their retirement on overpriced spec condos (we can always rent it out!!) will compete for these retail jobs. :(

Teenage Wasteland: Jobless Rate For Young Is 25%—and Rising
CNBC.com | April 13, 2011 | 03:40 PM EDT

A quarter of teenagers were jobless in March, a surprising increase from February even as the unemployment rate for the rest of the population decreased.

This figure may only get worse if budget-strapped states raise the minimum wage, and it could also be a sign of greater structural damage underlying our economy, analysts said.

The unemployment rate for 16- to 19-year olds jumped back up to 24.5 percent in March, up from 23.9 percent the prior month, according to the latest jobs data from the Labor Department.

The total unemployment rate fell to 8.8 percent from 8.9 percent.

“Even when comprehending that teen employment is volatile in nature, the data that exists serves up some shock and awe,” said Brian Sozzi, a retail research analyst with Wall Street Strategies, in a note Wednesday. “If these (wage) increases do go through, the prospect for teen employment will remain grim as employers search for workers with advanced skills to fill positions.”

Twelve states including Illinois and Pennsylvania are considering a hike in the minimum wage. While this has been subject of a long-running debate, many economists and analysts say raising this pay bar may cause more teen layoffs, even as it helps those that manage to stay employed make more.

#189 a prairie dawg on 04.13.11 at 10:19 pm

They lost me last night. Not long after Jack used the ‘bling’ word (I’m still gagging), it eventually turned into a high school clique fight. I am so underwhelmed.

Voting has come down to picking the one you think will hurt you the least, and yet has the best chance of winning. Not always easy to do. Maybe this year I’ll spoil the ballot and pencil in “none of the above.” Or maybe my own name. lol

#190 Utopia on 04.13.11 at 10:21 pm

#112 Evangeline

I don’t think robins and pigeons eat the same things. Robins eat berries, worms, etc. natural things.
—————————————————————–

Pigeons eat natural things too. They have a preference for the seed family though and are less willing to chow down on grubs, insects and worms although a hungry (and smart) pigeon will eat what comes in reach if nothing else is available.

These are really wonderful birds actually and they have such a bad rap for no other reason than they have adapted well to human society. I really love the little critters actuaklly and have kept many in past years. Homers are a fascinating group and well worth the time and effort when you see the kind of skill they possess at covering many, many dozens of kilometers to return home to their roost.

And they are delicious (oops).

#191 Cellar Dwellar on 04.13.11 at 10:26 pm

@ #186 SMOKING MAN
“…..I love when these self-righteous, risk averse wimps and basement dwellers come on and tell everyone to live with in their means.

Screw that, I say live beyond your means, then watch how fast and magically your human brain evolves and finds away to make even more money….”

**********************************************
Apparently your still waiting for your brain to “evolve”

#192 Utopia on 04.13.11 at 10:37 pm

#125 BrianT to #117American

“Most sentient humans would take the investment advice of Charlie Sheen over any public missive issued by Goldman-the firm is renowned for screwing over their clients and pretty well anyone else stupid enough to listen to them”

—————————————————————–

You must be kidding Brian. Goldman Sachs moves markets when it issues statements like that just seen and this should be very obvious to you.

Have you not noticed that stock markets declined on cue, that most commodities fell and that oil lopped several bucks immediately after their warning on the downside risks of high commodity prices?

I mean, come on man! Back up your statements with facts.

#193 Utopia on 04.13.11 at 10:52 pm

#125 BrianT

I just want to add Brian that I think Goldman made a very good call on oil yesterday. The price had gone well above justifiable prices on the basis of the conflict in Libya and the Mid East.

Lets keep in mind that Libyan production (most of which goes to Italy), only amounts to 2% of global supply yet since the advent of the crisis there prices have spiked upwards of 25%.

That is “get out of Dodge” time for any good investor or speculator and therefore taking profits is the name of the game. I concur with them that oil will fall back towards a hundred dollars, possibly less over the coming weeks. It’s value was just not justified and too many speculative longs had entered the market.

Furthermore, there was an acknowledgement that high oil prices were already in the process of impacting demand in the US and Europe on the heels of oil futures expectations.

Goldmans term is “demand destruction” and it appropriately describes the risk to investors of holding long positions in an overpriced market where more downward pressure is apparent that growth opportunity.

#194 betamax on 04.14.11 at 1:38 am

#186 SMOKING MAN: “live beyond your means, then watch how fast and magically your human brain evolves and finds away to make even more money”

You’re confusing demographics with ability. You caught a wave.

#195 The American on 04.14.11 at 9:06 am

At #172: Ben, one a last note, if you’re living in Texas as a Canuck, it should make little to no difference if the USD is at $0.966 to the CAD. Your pay is relative to the cost of living in Texas – not Canada. It would only “suck” for you if you’re sending those funds back to Canada where you would then lose the value in the exchange, which would, of course, make you a criminal. It is called “flight of capital,” and it is illegal. I hope you’re using those USDs in the U.S. and not in Canada.

That would be much like a Mexican living in Texas, legal or illegal, and sending all those USDs back to his family in Mexico for their use.

#196 The American on 04.14.11 at 9:10 am

At #177: Morpheus, you state, “Americans are debt addicts like everywhere else in the developed world they are just a must greater magnitude.”

So, if Americans are debt addicts, would that make Canadians total debt junkies? Canadians are more indebted as consumers than Americans now. You do the math. Oh the delusion…

#197 The American on 04.14.11 at 9:16 am

At #144: dddd, you are correct. Taxes in Seattle are about 1% annually of the assessed value of the property. A $1,000,000 property is going to have taxes around $10,000/year.

Property taxes in the U.S. vary GREATLY from county to county. In Dallas, TX, for example, a $1,000,000 home will run about 3% of the assessed value, or $30,000/year.

As far as RE taxes are concerned, Seattle is DIRT CHEAP by U.S. standards.

#198 Evangeline on 04.14.11 at 9:24 am

#191 Utopia

I’m pleased to meet someone else who loves pigeons, seeing as so many people hate them, call them “rats with wings” and “vermin” and other names.

((These are really wonderful birds actually and they have such a bad rap for no other reason than they have adapted well to human society.))

I agree. Rock pigeons are not indiginous but they are beautiful and are amazing flyers. I’ve noticed that they like teeny tiny things to eat, (like sunflower seeds sans shell), they have to peck at larger morsels to break them apart. Even tiny little sparrows will snatch larger pieces of food from pigeons. My point to the person I was responding to is that robins and pigeons are not competing for food supply, as it was suggested that pigeons might be responsible for no robins in the concrete canyons.

As for eating pigeons, even the Bible has considered the bird family Columbidae “clean” (edible) animals for millenia. And there are even some pigeons that are war heroes.

#199 Hi Rez Jack on 04.14.11 at 10:02 am

What is HAM on this blog?

#200 Mr. Plow on 04.14.11 at 11:22 am

#200 Hi Rez Jack

Because I know that answer, means I probably come here too much.

HAM

Hot
Asian
Money

#201 Vancouver_Bear on 04.14.11 at 3:17 pm

#12 Mikey the Realtor on 04.12.11 at 10:47 pm

I am thinking about leaving to you to deal with the mess you’ve created and move to some place nicer then Canada…..and guess what…..nobody there has even a slight idea where Vancouver is/was/will be. Ciao.

#202 Ronaldo on 04.14.11 at 4:59 pm

http://imarketnews.com/node/29203

Seems housing prices not doing so well in Beijing.

#203 Hi Rez Jack on 04.14.11 at 6:02 pm

Re: # 202 Mr. Plow

Thanks for the definition! I never would have figured it out. The urban dictionary has a very different definition of HAM.

Cheers!

HRJ