Well, fellow dogs, my work here may be done. Seems the lonely torch is being passed on from failing hands to meaty new fingers. As my heretical views go mainstream, this wizened contrarian is destined to start a new quest. More news on that in a minute.
For the past three years, this messed-up blog so gleefully dissected by realtors, ridiculed by media weenies and shunned in mixed company everywhere, has chronicled the horny ascent of house lust. I’ve told you repeatedly why the market was unhealthy, obsessed, hormonal and unsustainable. That prices continued to advance over this time only underscored the fact houses are unaffordable and therefore laced with danger.
Right up until last night, I was hammering the same theme, showing you this may soon join other corrections that were so inevitable nobody saw them. Well, ‘nobody’ in the Biblical sense. Or like finding someone who actually voted Conservative.
And I’ve told you with awesome repetition why we will have a correction, likely followed by a lengthy period of lousy sales, falling prices and imploding real estate companies. Higher rates are obvious. So is excessive debt. Boomernomics, for sure. Real estate saturation obviously. Add tighter credit, structural unemployment and government austerity. But mostly, it’s been the noobs buying houses at any price which catapulted values to a point where most people could never afford the homes they own.
So, down she goes.
But, like I said, I’m irrelevant now. The new Harley-humping rebel is apparently Robert Hogue, senior economist with RBC. Says he of a market like Vancouver: “We fear it’s becoming increasingly disconnected from local demand conditions and vulnerable to a painful correction, especially once interest rates resume their ascent.”
I mean, in 2009 – even six months ago – did you ever imagine the country’s biggest bank would be forecasting a “painful correction” in real estate? But this is just the latest in a chorus of voices being raised in an attempt to do what this blog has toiled at – but sadly with less cheap sex, underwear or pneumatic fat people.
Granted, the numbers now are beyond comprehension. No, I don’t mean real estate valuations – the fact the average SFH in 416 is $775,000, and $1 million in Vancouver – but rather what it takes for an average family to get one. Even RBC has a kitten when it does the math. To own a lousy little bung in Vancouver requires 72.1% of the average family’s pre-tax income.
What does that mean, exactly?
Well, the average household income in that city is $83,130 – that’s gross, or pre-tax. So, 72.1% of that is $59,917. This average family would have a federal and provincial income tax bill of $18,992, leaving an after-tax disposable income of $64,138. Yeah, that means for the average family to buy the average bung, they’d have $4,221 left to pay for food, clothes, gas, cable and ammo. Uh-huh. Three hundred and fifty bucks a month.
And to think that the Vancouver Real Estate Board says the local market is showing, “a typical, solid month of residential home sales.” Clearly there’s nothing typical when residents can no longer afford houses, or solid when there’s more danger here than a date with Charlie Sheen.
And Toronto’s hardly better. Owning a SFH there takes 47.5% of a family’s pre-tax income, which leaves the average household (making $96,040) just $24,740, or two grand a month, for everything else – in a city where nothing’s cheap.
Thank goodness, as I said, some people are finally giving voice, as we morph into America, circa 2005. Like Van realtor Andrew Hasman, who says: “Anytime you have extremes in markets, it’s never healthy. You end up with a bubble. If the local economic base can’t support these levels, then at some point you’re going to have a lot of people burned big time. It’s not sustainable.”
Absolutely. Unhealthy at best. Wanton and depraved, more accurately. Our social obsession with real estate has created a society in which families go without retirement nest eggs, simple savings, or even adequate nutrition, so they can quench their house lust. Our debt mountain is now likely permanent, meaning sustained substandard economic growth as consumer spending wilts.
That came back to me in recent hours as I sat with a 40-year-old who thought he and his wife were doing fine before he met me. House in trendy Toronto neighbourhood, new car, no kids, two cool jobs. But it turns out the place he bought in a bidding war for $450,000 with thirty thousand and a credit card is worth less than he forked out. If he sold today he’s have to take a cheque to closing – and he must sell, since the $400,000 mortgage, property taxes, insurance, remedial repairs and utilities are killing them. And they have no savings, almost $100,000 in LOC debt, and a negative net worth of half a million.
How many more are like that? Don’t ask. You’ll wanna move into my bunker.
So, here we are. Fear’s now banker mainstream. Boring.
And I just ordered a new set of vulture wings.
264 comments ↓
first?
I guess I missed the part about your new quest, Garth?
And remember folks, the RBC housing affordabiity measures assume a 25% down payment.
“Once Interest Rates Begin Their Ascent”
Next month, next month, they’ll raise rates, next month, they’re always a month away.
The BOC rate will NOT be rising Garth. Economy is weak, high oil and food prices weakening consumer spending, and holding the line on inflation. Further, raising rates in Canada won’t do one bit of ANYTHING to curb WORLDWIDE demand for Crude or Food now that 7 Billion people are all starting to get to live like 500 million North Americans and Europeans do.
Canada raising interest rates will have as much impact on world commodities as Canada’s reducing CO2 would on global CO2 levels – Nadda.
Do you honestly think, after the last decade we have seen, that ANYONE is going to be leading the charge to increase BOC lending rates in Canada to anywhere near historic levels while watching the housing market and economy of Canada implode as a result?
You honestly think, after watching Japan for the last 30 years, that there won’t be a QE 3, 4, 5 in the US?
Nope.
The market may raise long term interest rates, but BOC rates are staying put.
Of course they will normalize. — Garth
The precipice…
$450k for a house in a “trendy Toronto neighbourhood” doesn’t sounds so bad!
Except — I’m not sure such a house exists?
Here’s what I see for around $450k:
The place where they shot the Blair Witch project
or
The tiny bungalow with 80’s kitchen
or
The skinny semi with tiles in every room
Are any of these worth getting in the hole $500k ???
I dunno. I in TO and I could live on 2 grand a month easy.
Food for two is now almost a grand a month. How about retirement savings? RESPs? Car payments? Are you a nun? — Garth
Aha… I get it now… it says “no comments”… you pee your pants and type “first!”. Damn, that is exciting!
But Garth, seriously, what were you alluding to? A new quest? Vulture wings?
Don’t keep us all guessing.
A must watch video by Mike Milken.
6 misunderstood principles of finance.
http://www.youtube.com/watch?v=fnnAnoVwzTo
Interesting charts yesterday.
If you look at silver’s chart, it looks scarily like the “bull trap”. I’m a silver bull – own about 100k in silver (bought during the “under the radar period”.
What to do, what to do.
It doesn’t sound like “F” is in any hurry to raise interest rates. Do you foresee prices flat lining even without a rate hike?
(a) F does not set rate policy. (b) Prices will fall anyway. — Garth
Japan has been described as a zombie economy since the bubble burst but 5 or 6% unemployment is cause for alarm here. While an employee is required to dedicate their life to their company these same companies are expected to retain their employees. A job here is still for like in a majority of companies but it is fraying around the edges now with 40% of new graduates securing only contract work presently. The Japanese wave that hit North American manufacturing in the 70s and 80s is being repeated in the form of a Chinese wave which is inundating Japanese manufacturing. The Japanese exhibit all of the best personal traits of 30s, 40s and 50s North American culture in spades and at sustained levels of 140%. If any country can survive and adapt to the Chinese tide it will be Japan.
First ahahahaha
…anyway as a consolation to the rest of you that ended up 2nd..
Pension board more likely a seller than a buyer in future, execs say
http://www.vancouversun.com/business/Pension+board+more+likely+seller+than+buyer+future+execs/4815512/story.html
If THEY are selling,whats the message….?
QUOTE
The cycle that allowed the Canada Pension Plan Investment Board to swoop in on more than 50 private market deals over the past year and make significant transactions a “defining theme” has ended, executives said Thursday.
The pension fund giant is expected “to transact substantially less in fiscal 2012 than we did in fiscal 2011” as a variety of factors drive valuations up, said Mark Wiseman, executive vicepresident of investment at CPPIB.
Increasing competition for assets means higher prices and lower returns, making CPPIB a more likely seller than buyer. The fund’s recent decision to take profits from an investment in online communication company Skype -to be recorded in fiscal 2012 -is likely to be characteristic of the year ahead, Wiseman said.
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AVERAGE FAMILY CAN’T AFFORD AVERAGE HOUSE? TRUE, BUT THE AVERAGE FAMILY IS NOT IN THAT SITUATION
As Garth says, reports by Royal Bank indicate that the average family in Vancouver must pay 72% of its income to afford the average house.
This is terrible!
Luckily it’s not really true at all. Let me explain…
And first let me be clear, I think Vancouver house prices ARE WAY too high and are at risk to fall.
But what about this story of the average family paying 72% of its income to afford an average house?
Well right off the bat you know it can’t be true, because the average family could not live that way. (See the figures Garth gave, it’s clear from Garth figures it could not work) And you know it can’t be true because no bank would lend people so much money that it took 72% of their income on housing costs.
Here’s the explanation. First of all a huge percentage of homeowners bought well before the recent price increases and so the average family with a home bought more than a couple years ago is certainly not paying that 72%.
Secondly the bottom 30% or more of earners don’t own a house at all and so they certainly don’t own this average house.
Thirdly the average income of recent homebuyers who do own this expensive average house is well above the average family income io the population. If the average actual recent buyer of a house has a famliy income of twice the average family income then the average buyer is paying only half that 72% or 36%.
Figures can be twisted and manipulated in many ways. Conclusions that look obvious may be totally false.
And now you know that 72% crap is just that, crap, just as all but a few nutters among you suspected. (okay quite a few nutters)
You’re welcome!
Garth, please insert insult below…
The numbers came from RBC. Rag on them. — Garth
Have you thought about targeting the commodities market next and the “China needs it so it’ll keep going up” mantra?
Yes, the housing correction will inevitably knock on the doors. But, it may not be from the higher interest rates as bond market and B of C seems to be more concerned about deflation, not inflation. The possibility of interest rate hike now looks like mirage. So, the correction that is to come may not be like a heart attack causing sudden death. It may be equated with cancer causing a slow death. It has survived so far with fairly high dosage of radiation aka low interest rates. Are we heading the Japanese way?
Please don’t stop writing, I enjoy your insights and sense of humor. It’s one of the bright spots at the end of my day. It’s also helped me realize that owning a home is not as important as people tell me!
new vulture wings? like for the harley?
Seems even the youngsters are starting to get it – had a discussion about Vancouver real estate during a class break and to my surprise a bunch of students started venting about the housing market. It appears it is starting to sink in that they will never be able to afford a house, and they scoffed at the idea of inheriting mom and dad’s McMansion – “That’s all they have for retirement – they will chew it up to fund their own expenses, so no hope of getting the house or help with a downpayment.” One student proudly proclaimed that he had just closed on a condo in Surrey for $300K – 30 year, 5% down. I asked him why he thought the bank would loan a kid like him so much money – he sort of looked confused, muttered “I dunno”, and admitted he had never thought about that. I took the opportunity to explain how CMHC and Ottawa had distorted the housing market by enabling people with no money (like him) to purchase property way beyond their normal capacity, leading to a huge but unsustainable increase in housing prices. When I got to the part about interest rates normalizing I thought he was going to toss his cookies! By the time I was finished his “great investment” was starting to look like a huge ball and chain. I think the rest of the class understood the message, so perhaps I (and by extension Garth) have saved a few kids from following the herd over the real estate cliff.
VINDICATION. I salute you Garth. It has started, REALLY started when the Banks and realtors are saying it.
Kudos to you.
House in trendy Toronto neighbourhood, new car, no kids, two cool jobs. But it turns out the place he bought in a bidding war for $450,000 with thirty thousand and a credit card
I thoroughly enjoy your blog, but your example today is out out lunch. Is that not $450K over asking? Where do you find a trendy Toronto home for that kind of money? Heck, houses a pitching wedge away from Little Somalia on Dixon (where I count six murders in three years,) and where you can wave to the pilots flyings out of Pearson are listing for 600K and selling quickly.
Leslieville two years ago. — Garth
I gotta point out that a SFH or ‘bung’ is likely not the ‘average’ home, and thus wouldn’t be purchased by the ‘average’ family. SFHs and bungs are likely being purchased by mover-upers, real estate speculators, international investors (people with money and people who have benefitted from the real estate boom) etc.
The ‘average’ home is likely a townhouse, or 2/3 bedroom condo, so that increases the affordability a little bit for the average family, although I do agree that prices, essentially everywhere in Canada, are unsustainable.
As an example of the unsustainability, I am fortunate enough to be making the average family income. However, my salary is not enough to support what I consider to be a middle class lifestyle. In fact, as you mention in your post, there is no room for savings, no RRSP, no TFSA, no RESP, no emergency fund, no cash left in the bank after payday.
My post number 5 above ends as follows:
Garth, please insert insult below…
The numbers came from RBC. Rag on them. — Garth
Yes, indeed, I was ragging on RBC, not Garth.
I was however in the mood for a better spanking than that… Can you send someone over?
I find the change in the ratio of family income compared to home prices over the decades particularly concerning. Home ownership in Vancouver is not worth it for many families.
Any room in your shelter? If not, can you ay least run for the leadership of the Liberals? ; )
I second Wendy, please don’t stop writing this blog. I love your books too – I read the last 3 and eagerly await “state secret” due in October.
Actually this blog directed me other great financial reads too.
Just closed on a house in Florida. Great location with direct sailboat access to the Gulf, beautiful old Florida rancher on .35 acre with mature landscaping. Six years of falling home prices, coupled with divorce and child payments led the seller to having to sell. He had a short sale all lined up, but it fell thru after 6 months of negotiation. So he decided to bite the bullet and sell on the open market. He came to the close with a check for $159,500. I can guarantee that when he bought that house, he never thought that would happen to him.
food for 4 (us), including booze and stinky cheese for grownups and lotsa veggies, “froot” and organic milk for da kids is around 1k per month.
Do you have a cow? — Garth
Robert Hogue, senior economist with RBC. Says he of a market like Vancouver: “We fear it’s becoming increasingly disconnected from local demand conditions and vulnerable to a painful correction, especially once interest rates resume their ascent.”
ascent means rise as in interest rates are going up
yeah Garth I guess you’re mainstream now but you know it’s one thing for RBC’s senior economist to make a statement and it’s another thing for it (RBC) to turn down mortgages for houses in Vancouver.
Why would they? At least they unleashed this guy. — Garth
FIRST IDIOT!!!!!!!!!!!!!!! (Who’s next???)
Oh no….the housing crash is here and getting worse. After one straight year of falling sales the spin doctors are running out of lies. How can you tell sellers the market is hot when product is sitting on the market month after month after month and even after price drops. People are maxed out on debt and inching closer to being bankrupt. Many people have to sell before they go bankrupt. Read an artical in the paper about GTA condo’s where forced landlords can not rent their condos for cash flow positive. It’s going to be a nasty crash.
Michael Levy was on the Bill Good show today saying that =DON`T worry be happy!
We have ASIAN money coming here.. boosting our sales.. and prices will go up, up, up, up!!!
and THAT`s why the sales value is 71% of income! it`s not the locals buying, it`s the ASIANS!! (Blame them) and they don`t care about income. That’s why the prices are going up so FAR! and he says it’s GOOD for Hongcouver!!
Another excellent post, Garth.
How many more are like that? Don’t ask. You’ll wanna move into my bunker.
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SSShhhhh!!!! Keep it down or your bunker will be more popular than a pair of lower bowl center ice Canucks tickets!
It disturbs me no more to find men base, unjust, or selfish than to see apes mischievous, wolves savage, or the vulture ravenous.~ Jean-Paul Sartre
I am sometimes amazed at the level of delusion that I read about in the commets section of this blog. Let me get this straight the BOC will not raise interest rates. Last time I looked the BOC made its money by interest rate policy. Not only does it print the currency but it sets the usuary on the currency. In other words why would it give the currency away to its constituent banks at low interest while these banks make a killing on loaning out the money at a much higher rate?
I’ve spoken to quite a few investment advisors who are finally waking up to cold reality of what this means, and to the personal implications when so many clients are levered up in RE. Its finally starting to dawn on all those who could have and should have known better what the long term implications are going to be. A little late to finally get religion.
Your works not done yet Garth, its just beginning. When people get stressed they get scared and start listening to nutjobs proclaiming end of the world or follow the oblivious into further oblivion. They’ll need to hear as many sane voices as possible as counterbalance. Pus, there is retribution to be done. Every politician, analyst, banker & bureaucrat tied to pumping this monster needs to be taken to woodshed and have tar beaten out of them so badly they never recover. When they attempt to change their colors canadians need to be reminded of who is to blame – these political animals can’t be allowed to escape unscathed and play part in a greater calamity. The next generation should not be made to pay for mistakes of parents and grandparents but if left to their own devices this is exactly what politicos will attempt to do.
Like all great asset bubbles throughout history the ramifications of collapse are widespread & long term. Housing is where it begins, but not where it ends. Unfortunately at this point many simply can’t be saved, its too late. Their choice is insolvency on one hand or suffer through a life of austerity on the other . With the right guidance hopefully enough can be saved and salvage some semblance of what it means to be canadian.
Vulturenomics! The real money is made at the bottom! And I’m happy that I have no debt!
#14 The InvestorsFriend (Shawn Allen)
Here is the article.
http://www.theglobeandmail.com/report-on-business/economy/housing/housing-costs-soar-in-vancouver/article2029516/
Come back Shane!!!
#12 Mr Buyer
Japan may have contributed to its own destruction by allowing its biggest corporations to open factories in China and send some of its ” retired” engineers over to train the mainlanders rather than finding them a better job at a baby company. The companies will still do well even if the Japanese citizens struggle.
Three great things about Japan:
Soft cream cones
Watermelon popsicles
Family restaurants !
Dozo yoroshiku oneigaishimasu
45th, Sorry, couldn’t resist!!!
it’s okay I just saw another plane load of HAM at YVR,
they’ll just keep on comin.
They don’t need mortgages.
More ASS please Garth.
Vituperatory ?
To all those people going on about rates not rising… You HAVE seen the latest inflation figures havent you?
Of course the rates are going up at the first chance they get.
The only question is – will the go up more than 1/4 a percent at a time?
I wouldnt be surprised if the first increase was by a half.
Fukushima update. There was indeed a melt down. It has been confined to withing the concrete containment vessel as designed. The reaction has been cooled as is continuing to be cooled. There is a large volume of cooling water within the concrete structure that is contaminated with radioactive material and it is leaking from the containment vessel but not due to any structural damage to the container but rather through piping problems of some sort. This is a huge disaster but exponentially smaller than the Chernobly incident. The japanese media is reporting that in the early moments of the incident North American FOX news reported that a nuclear reactor exploded in Shibuya (downtown Tokyo, the address turned out to be a Disco). These reports made it onto the front page of a newspaper in Iceland. I can only say that FOX dodged a bullet because Japan is not a lawsuit prone nation. The exodus of North Americans from Japan after the Quake was a direct result of exaggerations in the North American media. FOX should get nailed with a whopper of a lawsuit.
The RE correction will only begin when prices, after all what the bank, government and CREA do, stop increasing. Never expect the start of the correction because something done by gov. or banks (interest rates or policies). It is not in their interest to start any correction at all. They very well know where it will take them.
Will you actually do anything for your employer to lower your wage ? I didn’t think so.
May be Market Saturation. That’s was US’s detonating.
Watching Global BC news tonight they are now preaching people can’t afford realestate in Vancouver.
The realestate market is starting to crumble you can see it happening everywhere.
When things start to fall and the dust settles people are going to say oh crap what happened. The saying ” Maybe we should have beleived what was being said on the Greater Fool blog ”
Soon as I started reading this blog the urge to buy a house is gone, definatly an eye opener.
So, does that mean RBC will become more strict in their mortgage lending criteria? Unlikely…
After all CMHC is on the hook for any defaults. Who Dat? Me, you and every Tom, Dick and Harry who pays income tax.
Bend over and smile.
Garth will you please comment on Saskatoon & Regina housing market being over priced. Everytime I direct people to your blog they all say, he’s mostly talking about Vancouver & Toronto or Galgary. They all seem to think it’s different here.
Wiish I could read the blog. But – am wated won 1k in the wi
ndsor ceecers poker room fk can – read the tax farm slavew
Garth…Don’t tell me your buying now. This has only just begun.
Dam…
I had those Somali Pirates all lined up in a bidding war for local real estate.
They read this blog (translated in every language)and took off.
They even stole back the deposit
SOB’s !!!
If it’s that bunker you were showing off near Detroit, I’ll move in sure. I am still waiting for my invite to a retreat/conference/party. I want to meet your Harley detail crew. I know they wouldn’t detail my V-Star, being opposed to modern technology and all, but I’d be happy to watch them work on your over priced 60’s technology.
When I took the V-Star out of storage and put the battery back in, it started as if there hadn’t been a winter since we last saw each other. I used to have a Harley, and it started ok, but I’d have to run with the choke on practically until I had got to work. It’s true that there is less to go wrong with air-cooled regularly aspirated old technology, except for the fact that by comparison it’s wrong to begin with.
Quote:
“……nobody saw them. Well, ‘nobody’ in the Biblical sense.
Or like finding someone who actually voted Conservative.”
great Garth
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We Did….
Now can we get a Senate seat?
How about if we buy a vowel financed through CMHC ?
Ok we’ll buy a “Z” with 5% down over 40 years
Oh shit
Toronto “average household (making $96,040)”
Wow, that figure has increased over the past year… I thought incomes have been flat?
–
“Unhealthy. As my heretical views go mainstream . . .” — So you have finally capitulated to the m$m. Methinx not! There’s more chance of god showing up tomorrow to settle the NFL lockout, so let’s move on, shall we?
See Momma in the pic has one hand on the stroller, one on the Segueway, no seatbelt and no airbag. Is she jaywalking? Yep, that’s unhealthy!
“. . . this messed-up blog . . .” — That’s psychoblabble stuff, but at least the m$m is sitting up and paying attention to what you’ve been preaching. Easy to say I told you so, so don’t bother.
That’s why they are boring mainstream, and we’re not!
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Thought For The Day
“There is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than the creation of a new system. For the initiator has the enmity of all who would profit by the preservation of the old system and merely lukewarm defenders in those who would gain by the new one.” — Niccolo Machiavelli, The Prince, 1513 — wrh.com.
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Stress Reliever — A brief moment of mirth from a sponsor. Armageddon Part Deux First, The Alocapypse Sat. at 1800; next, KrakYerNuts, East of Javaskript. So two armageddons, time frames differ.
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Fukushima “But so-called “environmentalists” are more concerned about carbon taxes.”
Reality Check — he party’s over. 11:22 clip Odd news re: the IMF, etc.
Bankrupt NAmerica ‘Tho not in the normal way.
Iran Bovine Excrometer explodes and Iran One. FFs and accusations come first, followed by war. The Toilet is still after the US’s oil. Has anyone thought of flushing The Toilet down The Toilet? Hawaii One state, unemployment rises 12.5%. Wonder if there is a connection between rising unemployment and all the wars.
5:20 clip Hypocrites.
2:05 clip Ron Paul vs. Obama in 2012, but the world is blowing a gasket tomorrow at 6 p.m. Mascot Obama is Wall St.’s mascot.
If the ECB quits financing Greece, that would give China leverage to move in and help Greece. Another housing boom, this time in India.
Frame Up “. . . in liaison with France’s Nicolas Sarkozy, whose presidency has served the interests of the US at the expense of those of France and the European Union.”
UK — Public Pensions — US.
Cooked Tomatoes As good as statin drugs for fighting cholesterol. Big pharma won’t like this! Cancer Cure? First sentence is noteworthy.
Greed? Wins a lottery, still on foodstamps. Short clip.
PS I saw a new Sportster in a shop today which was really a departure for Harley in terms of design. They definately “Buell”ed it up. The tank was raised and some sort of air scoops were mounted underneath. It looked cool, but it was still air cooled, which means that total horsepower is still limited by the air cooling and tolerances for the rings and piston are still not as tight. Even in the dirt bike world they have known for years and years that to get the most out of the engine you need inductive cooling. Even Porsche relented on this years ago when they added a fan, and of course now they have a radiator too.
Edmonton was the most affordable major city in Canada. Sorry Garth, no crash in Edmonton.
#10 Daniel on 05.20.11 at 9:36 pm
Interesting charts yesterday.
If you look at silver’s chart, it looks scarily like the “bull trap”. I’m a silver bull – own about 100k in silver (bought during the “under the radar period”.
What to do, what to do.
==================================
Oh for the love of pete…… sell already!! How long until the next time it does it’s run….in about 20 years…..???
I just crunched the numbers at:
http://www.amortization-calc.com/
loan of $950,000 ( 5% down)
amortization period: 30yrs
interest rate of: 2.1% ( that’s the floating rate at Coast Capital Savings, this is what almost everyone I know who has bought in last year is paying or 2.25%)
The payment comes to :3560 a month or about 43,000 a year or about half of pretax income.
But I agree, I think prices are insane. My guess is we will not see major interest rate hikes, so no crash like the usa. More like 20 yr 2 or 3 percent price decline every year like Japan.
Actually Garth….
You haven’t even reached you prime.
After predicting the mess, it may be even more of a contribution to analyze the aftermath.
One reality hits ….lots of parties will be punch drunk.
The next quantum leap may be to assist in extrication and survival strategies after the crash.
Vancouver Condo Info was going to fold several months ago,….but the readers pleaded no..and still going strong.
Garth, you’re forgetting something #4David Jensen is stating as fact-LOWrates are here to stay, a .25% hike is a doomsday scenario. Quit with the normalized economics on interst rates-we are into a race to the bottom, al la carte China. 3% prime is here to stay because they have printed 20 trillion times more money over 20 years so we will not have 12% mtg rates. So low rates x more money-everyone is ok. Until the bali EVER again. Until the REPO man shows up, I say still 10-20 years away in Canada. And do remember 50% of people in RE have a brain, are paid off and living for nothing. like me. at 41. Garlic buck choy baby. They want it and can have it -for starting price of $1mill. in squalor. Cheap healthcare, great schooling, and the $1.6mll “expedited” citizenship money back in 5 years. Not kept like in the USA or Australia or anywhere normal. You hear the money machines on Monday am at HSBC burning the air up.
It’s called selling out. Thank you Canada. I’m moving to Cornwall or Stetller soon. After the 911 turbo stalls.
this has to be the top, one of Vancouver’s top realtors saying the market is unhealthy and a lot of people could get burned.
http://www.vancouverobserver.com/city/2011/05/20/leading-realtor-calls-vancouvers-housing-market-unhealthy#comment-16538
There were so many news articles today (globe and mail, vancouver Sun, to name a couple) about the seriously overvalued Vancouver market. I honestly can’t believe that anyone would buy now in Vancouver, or even go through with a “deal in the works”, I’d walk away from my deposit at this point, and consider myself lucky.
I would miss this blog so much – but I’m excited to see where your new wings take you! I hope we get to read about it!
how about bringing back the XURBIA site? it will be heck of a lot more relevant this time next year. generators, shotguns, squirrel recipes – far more interesting than van. real estate. or start a blog on dominique s-k, that story is about as non conspiratorial as the jfk assassination… real estate ain’t fun no more…
Take a look on MLS and see countless houses/condo’s that are empty and looking for a greaterfool to buy. I’ve see countless of these places that are begging people to either buy or rent as the greater fool is hoping you will be that sucker/greatest fool of all. Are people not smart enough to see an empty home = a troubled “owner’ who may have two mortgages now or simply has to sell before they go bust? Driving through the GTA you see a sea of for sale signs . Buyers have either been a little smarter(no) or people can not afford these bubble prices which have grown bigger then the US housing bubble at it’s peak .I stopped my BIL from buying a house as the agent wanted them to rise their bid. I told them their offer was fair and the agent told them they were being foolish. Sure enough the home did not sell and now the home three months later it’s on the market for $5000 less then the offer. Agents know nothing about economics / reality. These people are uneducated one month trained morons who repeat what they are told to say like monkeys.
Median prices for houses in Calgary are $2000 less than a year ago.
Wow! That’s quite the crash!
Condos are $13,000 lower than a year ago.
The hyperbole of the house haters is endless, but people’s appetites for owning a home are not. Reason and prudence is muddling the home markets, and I don’t see any crash on the horizon…just stagnation for years to come.
I guess May 21 2011 will be the beginning of the end of the world to some dump recent home buyer.
What people don’t understand is there is little difference between buying and renting when you take on a huge 600,000 dollar mortgage,
EXCEPT instead of paying your land lord, you are just paying the GREEDY Banks who are your new MASTERS. With more rules and regulation on what you can and cannot do. And also paying the Government on property taxes and etc which they can raise at any time.
Going to miss your daily photos. What next
The house meltdown in the states had a huge impact here in Japan but I do not think a Canadian meltdown will even make the newspapers here (well maybe). The English conversation school biz here in Japan grossed about 15trillion yen annually nation wide before the bubble burst, now it grosses 5trillion yen. Many large schools collapsed and a few went bankrupt stranding ESL teachers all over the country. I myself had to expand my teaching hours to maintain and actually increase my net a bit while small schools (but not small enough) closed all around me. I used to have a 2 year waiting list for a place in my classes now I am only at about 90% capacity (actually about 85 if I count group lessons that were converted to private lessons due to a lack of students) with maybe two or three calls every two months (used to be 3 or 4 calls a day). It is only through hard work and innovation that I have managed to survive the contraction. We seamed to be turning the corner when the earth quake hit but I just got three new students this week so it seems people are coming around again. I shut down the biz to go back to Canada to get a teacher’s certificate (dropped 30k doing so and a years income) but the Japanese are really focused on credentials and now I am the only teacher in town that is in fact a certified teacher. That is a big reason I have prevailed (still miss the years income though but I am still making an income so it is paying for itself through some weird math I am sure). The point being the burst had far reaching effects even in Japan so the Canadian burst will likely effect most every aspect of daily life.
#165 45North and #138 disciple from yesterday.
Thanks for taking the time to read my lengthy post. My apologies if it was long winded but the moment hit me after reading the days article and reviewing the charts. We are headed for a whole lot of pain and there is really no arguing with that anymore. I do incidentally anticipate a serious stock market correction before summer is out. Dow 9500 perhaps. Take care out there and cover your positions because the shit is going to hit the fan soon.
I copied the squirrel recipes by the way, 45north. Chicken of the Trees indeed. Laughed my bloody head off because it was too funny! Made me hungry too so I ordered in. KFC hits the spot some days and I can let my imagination do the rest.
It looks a lot like squirrel to me. (Really it does)
Hello. I was wondering which situation woul be better…
35 years old, approx. $70k/year
A). Zere heloc, zero credi card debt and debt free in every other department BUT no real savings or assets to speak of….
Or…
B). Big debt but with assets like a house , cabin etc.
#14 The InvestorsFriend (Shawn Allen) on 05.20.11 at 9:39
Shawn your wrong!!.
The average family can live on 72% of their pre-tax income if and only if housing prices keeps on going up.
Giving them more money to put on their line of credit / credit cards and etc. Vancouverites have been living on borrow time. When the housing starts to flatten so do their credits. Once the housing starts to go down, the Vancouver real estate investors playing on MARGIN will get called.
As more and more loans gets called, money lent by the banks will get tighter and risk increase, so does the credit card interest rates.
Its scary, because it can cause a chain reaction.
That is why Carney and and banks are so scared to raise rates.
You also have to wonder why the banks (who have been cheerleading this whole thing ) has suddenly turned around an Kabooshed it. Its a chess match and I believe the banks thinks it can obtain your invested money for pennies on the dollar. Remember you are playing against the “MASTERS of the Universe”. and I think some people are in for an arse whipping.
I can not help wondering if any home owners that got in about half way through the bubble are borrowing on the house’s equity now to stay afloat. I could hang in a long time that way and I am wondering if enough people did this would it attenuate or at least slow the decline in prices?
#19 pessimisticprof, a big hand for you. I try that everyday but seems like people want to act otherwise … Just learnt today that a dear friend bought a 600k house with her boyfriend … she is unemployed and the guy is self-employed with unstable income … 35% down and monthly mortgage payment amount to 1800 and she thinks they can afford it … I told her my view on the overpriced market and how it will crash and she starts denying and sought for my concurrence on her decision … Too bad didn’t get any from me I think I left her extremely uncomfortable with her life now …
Since when do we listen to RBC. their statements have as much politics attached to them as a politician. About as critical as the real estate boards.
#4 David Jensen on 05.20.11 at 9:18 pm
“Next month, next month, they’ll raise rates. Next month, they’re always a month away”.
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You might have a point there David. For the moment anyway. And it seems even Carney is backing away from rate increases. He has few options if the Americans cannot start getting their house in order. To raise rates now is to bring on a bigger boost to the Loonie and we hardly need that at this time. But the dam cannot be held back forever and interest rate rises are both inevitable and guaranteed. They cannot stay low forever though and the consensus view is for rate increases this year. Damn the torpedoes or what insane policies the Americans follow. We will see action one way or another in the coming months if we are to cut off the heroin of cheap money and end the rampant speculation that has become our economic Achilles heel. It cannot be avoided forever.
If it takes two average folks to feed themselves a grand a month, then my $400/month for two budget is a serious malnutrition. Perhaps, it is all that at home cooking and coupon shopping.
Either way, I agree with you Garth on housing bubble and other investments. I do not agree with you about rising interest rates. I think interest rates will be low for sometime. We will be going once again into deflation, much lower oil prices, growing unemployment, much lower canadian dollar….including Chinese, and European crisis.
People should have been buying USD, instead of housing. Once the U.S. stock market tanks, you could be buying it with your USD. I have been buying USD, and will be buying U.S. stocks once they correct in a big way.
Anyhow, all of this won’t matter in the end, remember, the end of the world is coming !
“As my heretical views go mainstream, this wizened contrarian is destined to start a new quest. More news on that in a minute” ~~ Garth Turner.
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What does that mean Garth? What Quest…?
2k a month of clean income is enough to live in a decent apartment for two people and good homemade food. You can also get a cheap car and cheap insurance. It’s all about budgeting and being happy with what you have. You do not have to be a nun Garth to survive on 2k a month. Ask the immigrants for more insight.
OK, but who wants to? — Garth
#14 The InvestorsFriend: “a huge percentage of homeowners bought well before the recent price increases”
Of course, but the 72% figure nonetheless functions as an indicator that prices are unsustainably high and destined to fall. That most bought earlier is irrelevant.
Garth, do explain how someone in 40s, with $400k mortgage, $100k LOC, underwater, with no savings, can possibly believe he is doing just fine?
On second thought, I don’t want to know.
#3 Ralph Cramdown
25% down?!
Just saw Property Virgins, who explained they had $80k+ to put down, and qualify for a $500k mortgage. The great seducer loudly exclaimed how this was a “very large” downpayment. lol, that’s not even 20%. I don’t see how more than a handful of first time buyers have more than 5% to put down, most of it probably on their credit card, the rest from parents drawing down their HELOC.
#27 – I’m with you. Family of 6 and not more than $1100 on food/mo, including very active teenagers.
We eat very well, too, thank you very much. No cows in the yard either.
Garth, am I getting this right ? Is this just a warning or are you actually done here now ? I don’t know what I’ll do without my daily fix.
Just a few thoughts for when you do choose to move on, — first, would you maybe just consider posting once a month to keep us up to date ? This is all happening so fast…(sense my humour.) And secondly, – I’m not sure how feasible this would be, but would you consider maintaining the site and adding some sort of forum where everyone can still come here to discuss RE ? I know that might sound unreasonable,…if not I guess we can just all meet up at VREAA or (gulp) Real Estate Talks…
Anyways, thanks very much for all you’ve done, sincerely. I’ve literally read every post now. Make sure to keep your blog posts and all the comments stored away somewhere safe now, — they’ll make good references/reminders next time around, – you know, it will be “different” that time too.
“The classic definition of a bubble,” he added, “is people buying on false expectations about future prices, and buying with the hope of selling in the future.”
http://www.nytimes.com/2005/12/25/business/yourmoney/25japan.html?pagewanted=all
If you look at silver’s chart, it looks scarily like the “bull trap”. I’m a silver bull – own about 100k in silver (bought during the “under the radar period”.
What to do, what to do.
Daniel – Gold and silver tend to reflect the amount of over all currency in circulation. Silver in particular is currently scarce because its used in all manner of electronics. Much of the silver that supposedly exists is being traded as paper, nothing more. When THAT is exposed to the market silver will explode, don’t sell low, its simple common sense
garth for Finance minister Ha!
As much as I personally would like to see rates rise to historic norms, I just don’t see the reasoning for it, nor do you provide it.
Repeating that they will rise in the face of others’ well argued points to the contrary is not persuasive at all.
The BOC, as indeed the central banks of numerous countries around the globe, has every incentive to keep the easy money going as long as possible – as misguided as that may be.
Why exactly do you think that is not the case?
Great post Garth… We seem to have an overabundance of people in Canada who live in some kind of a dream world. Your advice has been priceless for the people who listened.
Yup …. as we approach the dooms day hour …. know this .. all the Senate Seats are full … and King Steve of Canada is about to tax your buns off … and he thinks by cutting a few 1000 civil servants jobs as 250 people per day turn age 65 simple tax revenue will abound.
Remember when we had $13 Billion in surplus and a $3 Billion emergency fund … and yes y’all need a real down payment to buy a house …. and no self appointed King ….
Stand by …. the end is really in sight ….
Absolutely. Unhealthy at best. The society need to understand the FIRST problem is at the top : (some) Bankers , elite with people in the government who go with their program. Introducing 0 dollars cash down to buy a house, just like that! It completely change the rules in the middle of the game, to suit there program. They create the problem and they come with the solution later, so we can accept, as they are the savior. SECOND problem: We need collectively say stop.
Garth? Do you also see the selling off of stocks as boomers try to also cash out “high”?
Of course not. Over 80% of boomer net worth is in houses. Less than 10% in equities. People will need liquid assets, not illiquid bricks. — Garth
It never made much sense to me even as a child that an old house was worth more than when it was built, but everyone said so, so it must be true. Living in Asia and in particular Japan my childish understanding was reinforced. Why would anyone pay more money for an old house? Most of the properties snapped up in the Japanese bubble were new (especially in our small corner of japan). Old houses are like used cars, it is only the price of the land that holds value over any length of time (here in Japan). Anyways the earthquake shook my wife up very badly and she booked a flight for me to go house hunting. I mentioned to her a few times that Canada is presently at the peak of a housing bubble but the fourteen nuclear reactors outside our city kind of closed her mind. So off I went because she is right to be concerned. I got into a deal conditional upon a clear bill of health for the small place (3x bigger than our house here). I hired a retired civil engineer turned house inspector and paid him well and I had to return home. On the flight back I happened to see Wall Street 2 for the first time. It just pressed all my buttons anew (I knew there would be a correction I just do not know when or to what degree). I am very happy with my wife and I will do anything for her, even take a hit buying a house. She is a die hard penny pincher so she really surprised me when she sent me on this errand. She must have been really frightened by the earthquake. Anyways when the inspection returned a good deal of work needed to be done my wife let go of the idea of buying now. I will not put my family into debt willingly so we will live in a house that we can afford.
#30 GTA sales crash
“Read an article in the paper about GTA condo’s where forced landlords can not rent their condos for cash flow positive. It’s going to be a nasty crash”.
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It will get worse before it gets better too. In the US, rental rates dropped almost as fast as home prices fell which made everyone involved very uncomfortable.
The reason of course was that millions turned to renting out basement suites, spare rooms, the garage etcetera in order to keep money flowing and save the family home from falling into foreclosure. Over-supply put a hole in the pockets of commercial landlords everywhere.
Housing busts tend to bring on a huge surplus of rental space which increases competition and drives down prices further. Rental rates fall while rental building values can actually crash. Older ones especially.
But then the point of opportunity returns……
The easiest millions some folks ever made was buying up cash flow positive apartment buildings in Calgary in the nineties. They were practically giving them away then, often financed by the vendor himself.
Buildings came available for crazy unheard of prices. Seven, eight and twelve thousand dollars per unit costs. Only a total fool could not make a buck. I knew folks who got in on it. They went from being average working stiffs to making their whole income off properties that were almost given to them as gifts.
And right about then, property prices started taking off again. They did very, very nicely on the commercial and rental property side. Very nicely indeed.
Since F and the Cons created this housing bubble (intentional, because SH is an economist, so he knows how these things works), how are they going to spin this? Blame it on the banks? On the Americans?
On Iggy?
I’ve always called lottery tickets a tax on stupidity: only stupid people have to pay it. The 2006 dumbing down of the mortgage rules is the same: It’s been a stimulus plan that only fools had to pay for.
F and the Cons artificially created a healthy-looking economy long enough to get their majority government.
Well, congrats, Cons. You betrayed a generation of young Canadians into a lifetime of debt. You got your majority. You made fools of just about everyone.
Have fun governing over this mess for the next four years, and good luck getting another majority after the S$#@ hits the fan.
By the way (BTW), does anyone else see in the picture the potential for the little girl getting brained by the handle of the Segway? I have never rode one so I do not know if that handle call fall forward onto the ground (or on the little girl’s head).
yeah, i have to agree with the other posters – feeding 2 people doesn’t cost 1k a month. unless you are eating prime rib and new york strip and foie gras every day. my “family” of 2 plus cat probably spends somewhere around $300 to $400 a month. then again we cook most of our meals, don’t eat a lot of junk, and usually buy what’s on sale.
but yes, food prices have gone up a lot in the last year or two.
as for real estate – if there’s no slowdown / melt / crash, then we will end up with a thoroughly 2-tiered society of haves and have-nots. bankers and ceos can have houses, the rest of us can rent from them or from the REIT owned apartments. welcome back feudalism.
My two cents,
My wife and I spend at least 700 a month on food. We eat out maybe 3 times a year? Mind you, we don’t clip coupons and look for sales. We also buy organic produce when it’s appropriate, e.g. berries. We have red meat once a week, and the rest of the week is seafood/poulty/vegetarian. Every couple weeks we break down and get an awesome take out lebanese bbq chicken from Les Grillades. Anything less would require:
a) serious coupon clipping/sale searching which would drag on valuable free time.
b) buying low grade processed food – not really an option as I have an iron deficiency and my wife is breastfeeding a five month old.
c) a diet heavily supplemented with beans and rice, which is totally acceptable (my wife grew up in El Salvador and can perform some magic with those staples, but after a few days, totally boring.
d) if you’re still reading my post, you need to get a life. :)
BOC will gently prick this bubble. interest rates will only go up a little bit, cause that is all it will take to reset things down. 1 or 2 percent, that’s all. then they will bring rates back down, but by then, it won’t matter. the world will have it’s Japanese style decade
“VINDICATION. I salute you Garth. It has started, REALLY started when the Banks and realtors are saying it. Kudos to you.”
I suspect they knew. Just didn’t care.
#69 Mr Buyer…
You’re an ESL teacher??? Scary – your post is so full of grammatical miscues I first assumed you were an ESL student.
Best of luck to you, and your students.
Hope you don’t “effect” them as badly as your own teachers “seam” to have done!
“#57 Karl Hungus on 05.20.11 at 11:41 pm
Edmonton was the most affordable major city in Canada. Sorry Garth, no crash in Edmonton.”
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That’s laughable! Let’s face the facts, saying Edmonton is the most affordable city in Canada when Canada now has some of the most expensive housing in the world is like saying Mars is a more hospitable place to live than the Moon.
I am a born and raised Edmontonian. I know local housing prices as I have lived here almost my entire life. There is NO WAY in HE1L current prices are even close to where they should be in this god forsaken city. A house that you could buy for 200,000 dollars 8 years ago is still going for 430,000 today. They have come down from the wildly absurd 500,000 dollar levels but are still in the territory of the ridiculous. We are talking about a 1700 square foot, cheaply constructed house crammed onto a postage stamp size tiny lot.
Edmonton is grossly overpriced. I was talking to a friend the other day and we talked about how it has finally begun to warm up here. I than mentioned that the sad reality is the Fall and cold weather are only 4 months away and than we are back into 7 months of winter. Edmonton is a Northerly, cold and very blue collar city. It should have prices comparable to Michigan, New Jersey, etc. etc. An average house in this city should not be more than 200K at the most. Reality has not set in yet. We had our housing insanity peak back in 2007 and now I believe that reality is setting in. I have mentioned this before, a co-worker bought a flipper house at the peak than bailed on it a year later for approximately a 90K loss. They were living in the house but it one day hit him. He said he could not believe that he paid so much for such a piece of $%&$@. He got out while he could because he suddenly realized that the house that he paid over 400K for was not worth 150K to him in his opinion. When this sort of reality begins to set in and people realize the huge amounts of debt they have taken on for utter garbage, many will begin to bail and get out while they still can.
There is no worse feeling than being stuck in a grossly overpriced house with no way out knowing that this pile of wood and stucco has probably doomed you to a life of heavy mortgage debt and poverty.
Interest rates in Canada and the US are below the rate of inflation, as measured in 2011. If one measures inflation as it was calculated in 1990, interest rates are 2-3 times below the rate of inflation. Our current fading Canadian real estate boom should never have happened and is the direct result of manipulated interest rates and phony economic statistics.
If interest rates are allowed to settle at a market rate that reflects the risk associated with the massive North American debt loads, not only will real estate prices contract, GDP will take a knockout punch.
Please let me know if something has been overlooked in this analysis.
You can read story after story on the Internet of Americans who are now trapped by their house. They have gone from lusting and dreaming about home ownership to absolutely loathing and hating their house as a symbol of a loss of their freedom. They bought at the peak and now are underwater. They are trapped. If they were to sell today they would have to give a larger check that most have on top of the sale proceeds to cover the fact that their house has fallen significantly in value since they bought at the peak. Many have expressed that they would like to move or have good job opportunities elsewhere but they can’t, they are trapped. They are not only house poor, they are almost you could say under house arrest.
I think many people in Canada are missing how devastating this can be. To be a slave to your mortgage, a slave to the bank and a slave to your house is a terrible position to be in. This is never a problem when house prices are at reasonable and affordable levels. At reasonable price levels, you can still lose money when you sell but it would not be financially crippling. Unfortunately, many who have bought at the insane bubble levels of the last couple of years would lose their shirts or worse, never be able to sell.
Smoking man,
Look at your last 2 posts, dude. Are you for real? Ridiculing people and calling them losers who don’t want to buy into a falling asset. This blog is not pathetic but some of its contributors, well, you know. Luckily, you get a voice here as Garth doesn’t discriminate. Would you say the same about someone who didn’t buy into TSX at 15000? Come on, sober up. Go hug your kids and give them a huge down payment if you believe in real estate so much at this time. Better yet, put the house in your name so big gains and losses accrue to your name. Put your money where your mouth is, big shooter. I know you like to gamble. Dare ya.
Only The Bankers Laugh.
#66 Jeff on 05.21.11 at 12:50 am
“The hyperbole of the house haters is endless….”
Garth’s bloggers don’t hate houses, they hate market manipulation and dishonesty.
GT Man? Riding off into the sunset? Say it ain’t so, Joe… say it ain’t so….
I’m a bit surprised that RBC picked up on your theme. I had always expected that an interest rate hike would be needed to trigger the mess that is now washing down upon us. But maybe not. And apparently RBC sees that now as well.
The U.S. didn’t need an interest rate hike to trigger their problems, and the emergency crashing of interest rates down to all time lows didn’t stop it once it began. If anything, it may have screwed us even more in Canada as it allowed us to get in far deeper than the Yanks could have afforded to due to our artificially lower carrying costs.
Interest rate hikes will accelerate the problem, but it’s here anyway. As the Russians found out in the arms war with Ronald Reagan, when you piss all of your money away it doesn’t matter if your a capitalist or a communist; broke is broke.
At the end of the day, you simply run out of greater fools. Out where I’m living (Van Isle) prices are dropping like a stone. Neighbors are in a race to the bottom to cut their prices and properties are starting to flood the market. Anything over $400K is sitting.
But thanks to you GT, I’m a real man, secure in throwing off the shackles of HGTV defined sexual identity; My name is Joe and I’m a Canadian Renter (with a shitload of bank prefs, ETF’s and a growth component portfolio)!
Trading in your vulture wings?
Guess I’m too lazy. Hey, I just shaved myself bald & am working on jerky head movements…and developing a casual look of bored indifference…
Out here in Edmonton, I’ve talked to 2 people in the last week who think RE is a bout to make another charge…they both told me it’s about to go up another 20% in the next year! WTF? One had to wait 2 months for a solid offer on a McMansion that had 480K invested (built aug 07) listed 430K,sold @ 390K. Already building another 640K home…
(that’s if we all don’t kill each other first…21 murders ALREADY this year? Maybe I should grow claws, too)
A relative in Calgary has listed her property recently after an abortive attempt last spring (translation: no offers) Invested: 730K, wants 740K…2 bedroom “semi-detached” (read: duplex) high end finishing 1800 sq ft. Boomer wanna-be bilevel with a backyard the dog thinks is too small…local CREA pro informed her she might have to “fire sale” it for 699K. Looks like it’s gonna get rented out so someone else can ALMOST make the mortgage pymt.
What the hell is going on here? Since reality obviously has no bearing whatsoever on these people’s ability to prognosticate the future, they obviously are counting on a secure source of capital (or credit) to keep them going thru the tough times.
Y’know, compared to RE this new crop of ponycars is starting to look like good investment…at least I know that a brand new Boss 302 mustang will lose 10% of it’s value the moment I drive it off the lot, and I can make the payment on a couple day’s wages…
44 Mr Buyer: Fukushima is exponentially smaller than Chernobyl, etc……say what?
Everyone that wants or has children had better start doing some research on this. We are being lied to on many fronts. National security and economic interests control the info we are receiving.
Our fish, grown food, drinking water, are being poisoned on a global level, especially on the west coast of Can/US/Mex. Still no end in sight to this. After two months they finally admitted one reactor melted down the first day, but hey, it’s all good. Way to much at stake here to be honest with the public.
Turn off the tube, do a little non MSM research for your family. Even tinfoil heads like Nosty ;-) here are posting some good intel on this…
#31 grantmi. Michael Levy should get it straight. Last week he said Van RE has “stopped” “peaked”.
#107 maxx on 05.21.11 at 9:10 am
#66 Jeff on 05.21.11 at 12:50 am
“The hyperbole of the house haters is endless….”
Garth’s bloggers don’t hate houses, they hate market manipulation and dishonesty.
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I would go further, we are not house haters, we are debt haters!
I have owned a house, I no longer look at home ownership through rose colored glasses. I bought my house at the bottom, a few years before prices started becoming stupid. It was a very manageable debt, what I would consider acceptable debt as most debt in my opinion is unacceptable debt. The kind of debt that drains you month to month of a large chunk of your hard earned post tax earnings. The kind of debt that new home buyers are currently taking on is what i would consider foolish debt. They are paying Ferrari prices for a Hyundai. They are up to their necks in financing and they get on their knees and pray every time that the Bank Of Canada meets to discuss interest rates. Praying that these once in a Century low, “EMERGENCY LEVEL” interest rates will not do the inevitable, that is start their long and painful move back to normal levels. This would be the nail in the coffin for over 700,000 home owners who according to the Canadian Mortgage Associations own figures, are between 1-2% move in interest rates away from financial hardship.
That is the STARK reality where housing in Canada is and a glaring example of just how precarious our house of cards is at. That’s why, as some believe it will be a slow melt down, I tend to feel that that slow melt could turn into a Tsunami.
Local pastured meat bought direct from farmer, grass-fed milk and butter, wildly expensive exotic cheeses, piles of veges, random other cooking ingredients for two: <500 a month. Food bill for the year is typically 4-5k.
Oh, that's right. We live in the U.S. Now, admittedly the wine expenses are also 4-5k. So, if wine counts we are at 1k a month. I bet the Quebecois would count the wine. So, sure, 1k a month
Sounds like you are handing over the blog to someone else. I've been observing how you have to repeat/rehash in regular cycles without letting the material get stale. That must get a bit tedious. We'll be sad to see you off, if that's the case. A real hero sticks around to see his enemy's head on a stake outside the citadel.
Rumours of my demise are slightly exaggerated. — Garth
#105Jsan-Good point-I remember visiting friends who had purchased a large mansion in Georgia that had tumbled in value-they were having trouble selling the place and their demeanour and attitude toward the “home” had clearly turned sour. This is a place that was a real showpiece-way over the top, but when the market crashes a lot of the fun of the “home” vanishes with it.
Thanks for the affect/effect pointer. Maybe everything else I had to say is tripe because of the grammar. Yes I am an ESL teacher/ school owner so I am a bit red faced. You win. Enjoy your house.
#4 David Jensen on 05.20.11 at 9:18 pm
Didn’t take me long to read something I don’t agree with, and here’s why.
http://en.wikipedia.org/wiki/File:Federal_Funds_Rate_1954_thru_2009_effective.svg
In Febuary of 02′, GWB took over as president of the whitehouse and immediately, laws were passed to loosen credit like never before. Deregulation was swift and widespread in banking and particularly the mortgage sector. The nation was technically in a recession then and GWB came on national news to tell everyone he was going to irradicate homelessness and open the door wide to the american dream of everyone owning their own home. Visionary and sage in seer like fashion.
Greenspan went right along with George Bush’s plan by crashing central bank rates to 1% or less for the next 12 quarterlies. Go ahead readers, take a good long look at the link. Check out the teaser rates coupled with 40 year terms that drew home buyers in from every direction. A housing boom was on and valuations rose to zenith heights…. until Febuary of 05′.
Americans thought pretty much the same thing as David did here. “our nation is just recovering, our government would never raise rates, it would jeopardize our recovery. We’ve had low rates for years, its here to stay.”
Check out this graph again. Cheap rates weren’t there to stay:
http://en.wikipedia.org/wiki/File:Federal_Funds_Rate_1954_thru_2009_effective.svg
The shock of rising rates was immeditate. Notice the personal bankrupcy rate spikes generated by rising rates U.S. consumers couldn’t adjust to in the link below.
http://www.abiworld.org/statcharts/PersonalBankruptcyQuarter.pdf
Bankruptcy filings still trail the record 2.1 million in 2005, when 630,000 Americans sought protection from creditors in the two weeks before revisions to federal bankruptcy laws that October made it more difficult for individuals to erase debt. These revisions mirror the same recourse loan bankrupcy laws we have here in Canada (I urge you to look at the U.S. bankrupcy chart one more time, notice the sharp fall on the chart as a direct result of bankrupcy law revisions).
Again, in 2005, there were 2.1 million personal bankrupcies in the U.S. and the shock to the U.S. financial system was so extreme, congress rushed in bankrupcy laws that made it next to impossible to immediately walk away from mortgage debt, but the damage was done. Leman Brothers & Washington Mutual topped the largest bankrupcy filings in U.S. history.
Did the introduction of tougher laws delaying bankrupcies forcing debt to follow debtors fix the blowback caused by more than any other reason, low central bank rates over a 3 year stretch?
In 2009 there were 1.44 million bankruptcies, 32 percent increase from 2008.
http://www.mybanktracker.com/bank-news/2011/01/05/personal-bankruptcy-filings-reached-5year-high-2010/
Even with tigher bankrupcy laws introduced in 2006 (much the same as we have here in Canada), there were 1.52 million bankrupcies in 2010. Recourse loans only delayed the inevidable. American back in 04′ were breathing the same words David Jensen is right now and it didn’t save them.
But its different here, right?
http://www.bcrealtor.com/d_bkcan.htm
I mean… the U.S. had 12 full quarters of teaser fed rates to our lowly 9 (and counting). Mark Carney recently announced rate hikes won’t happen until likely September. We’ve had 1% or lower central bank rates since January of 09′, combined with 35 year terms and near zero down. Does that make us different? Its not like the U.S. ever had a city with single family homes flipping for a mil on average.
Doesn’t that make us different? ;)
Realtors and politicians (as professions) seem to be on the bottom of every public opinion poll. Highest? Usually firefighters. This may change your mind:
http://letsrollforums.com/happened-9-11-firemen-t24265.html?s=03b230935d2b7a83b7d87f60b4e9db77&
Please read another informative report of today’s fear in MEDIA (so it’s already late…):
http://www.financialpost.com/personal-finance/mortgages/Speculators+foreign+investors+betting+Toronto+condo+market/4817203/story.html
>#54 Investx on 05.20.11 at 11:36 pm
Toronto “average household (making $96,040)”
>Wow, that figure has increased over the past year… I thought incomes have been flat?
Average is a nearly useless number. Maybe you’ve been seeing the median cited, that would be a very useful number. The higher the income disparity the more useless average as a measure becomes. Disparity increasingly makes the average represent fewer and fewer actual households.
From a google search: (really really need that new 2011 census data)
Pet peeve of mine, the measure of housing affordability is the *median* multiple. People toss around the average multiple but that’s not a real measure. The disparity and skew between high and low ends of property do not necessarily match the disparity and skew of high ends of income.
“Food for two is now almost a grand a month.”
It certainly can be if you’re a price taker, but I’m feeding three, well, on far less. Spend five minutes reading the flyers every Friday morning, pick which two or three stores to target this week, drive to the ‘burbs and buy what’s on the list, put stuff in that smaller, colder compartment of the fridge which most people think is for ice cream and ice cubes. I bake, she cooks, we save (even factoring a V6 on premium gas). Of course, if you value your time at $100/hr, just buy whatever and thank people like me for keeping prices lower than otherwise…
Always marvel here at how many people see trees, not forests. — Garth
“Rates are going up the first chance they get”
LOL. They’ve had chances. About one a month for a while now. They keep deciding for no change. And they will continue to.
Look at Japan. Have interest rates there “normalized”.
Of course they haven’t. And they won’t.
An uninformed opinion. — Garth
#4 David Jensen on 05.20.11 at 9:18 pm
Ever heard of debt David? If you think the US is going to perpetually pump trillions more into the system you are sadly mistaken.
Tell me how anyone pays off debt when interest rates are this low…….
Can i buy your house off you at the bottom?
Mr. R.
Canada’s smarter, more literate (and less spittle-producing) Jim Cramer? I’ll tune in.
You see the trouble is I am not an English teacher by training. I am actually a Biochemist and certified secondary school Chemistry and Biology teacher (actually misspelled chemistry and misspelled just now thank god for the spell-check php script on this site). I really did not think I was being graded for spelling and grammar mistakes which I never seem to see until the email is sent or the post is submitted. Something about needing to come back later and have read over from another perspective (spelling, grammar and the like). As for ESL affect/effect is way down the list of priorities (just misspelled priorities, I am going to get this php script and use it for my websites) but I am familiar with the difference I assure you. I am writing for this blog as I would speak, imperfect I am sure but halfway reasonable and sane. As for my students, I am dedicated and do a half decent job for them. I have seen the classes they are subjected to in other schools and mine is one of the better gigs in town. I think as you review my posts you will see a conspicuous lack of commas. I am not a grammarian (just misspelled grammarian and misspelled) by nature ( the students I teach that are at advanced levels have a very high command of English grammar and are quite bored with being taught grammar to tell the truth, they are after usage but you would have to be an experienced ESL teacher to know that now wouldn’t you). I seam to have forgotten why is started this post. I just noticed the seems of my pants are frayed somewhat (or is it seem to have forgotten, wait I look it up in the dictionary). Perhaps you can continue point out my miscues as I am going along. You have touched a nerve. I was just chatting up until now. Now it feels like a job interview or something. I will have to proof read (which I do for professors and researchers here and they get published) but that is very much like the work I do all day and night long and I am actually relaxing here. You me I have to proof read all my posts from now on. That sounds like work. By the way, three question marks is actually incorrect. It would be unacceptable for journal publication. You only find that in manga (comic books) and other informal publications. Are you really renting in rosedale? I am going to retire the Mr Buyer and post under another moniker (misspelled moniker and misspelled again just now) so I do not have to proof read my posts (as people such as yourself know I am an ESL teacher and will be grading my English grammar, spelling and punctuation which is to much like work). Anyways I am very happy I did not buy the house because unlike many (I should put a comma here) we were laying down cold hard cash and it is my duty to keep as much of it as I can.
Daniel – #10,
Yes, silver pattern sure looks like a bull trap. If you bought under the radar, it means you’ve already made a killing so, to echo another poster, for the love of Pete, what are you waiting for – sell….but not all of it. Take some healthy profit from your gains and keep some for the upswing which, according to the fundamentals, should be coming. Prepare for a wild ride, so don’t invest your life savings here.
Regarding the Vancouver west side market, I continue to watch with great interest the dwindling listings. In summer 2009, there was upwards of 160 in the range of $750,000 to $1,500,000 with three bedrooms. Last week it was 62, which I think was the lowest number of listings I’ve ever seen. Prices aren’t coming down. Anecdotally, my friend in Douglas Park area, the neighbourhood of recent insane sales attributed to HAM, says that two bungs within houses of her bung sold within 4 days at 1.1 and 1.4 million. I told her to sell because we have got to be at the top. Almost all of the houses sold recently in my little hamlet are bulldozed.
On the other side of the coin, there are some properties that seem to be indistinguishable from the bungs that have recently sold and they languish month after month. This market has gone bipolar.
Interest rates? Up, down, status quo? And will it matter? It has to be up, but I’m with the herd on this one, any increase is going to be modest because anything more is going to make things very bad very quickly. The increase will make the newbies with the humungus mortgages rethink the budget, but I don’t see too much pain even for them if they decide to hunker down and stay put. Flippers who bet on big increases real quick and are playing it close to the line with their money may get burned a little more.
Spring’s here in Winterpeg (finally). Flood waters receding (slowly). We’re in the window between snow and mosquito season: nice temps, fresh air reminding us why we live here.
Still seems to be multiple offers on detached homes in Winnipeg. Could be because of a shortage of inventory, or maybe the home mania is alive and well here too. I have noticed a few more signs popping up in my neighbourhood. Not sure if it’s just the season or a sign of something else, like people bailing out while the going’s good.
Wonder what I could get for my 699 sq/ft shoebox? Not sure if the sell-and-rent strategy would pay off here in the ‘Peg. There’s a low inventory of rentals too.
Good thing I read this blog for my regular shot of reality, or I might be tempted to put an offer on an older 835 sq/ft bungalow asking 219,000. Still too much in my opinion.
102 Rosedale – not to mention run-on sentences and lack
of paragraphs……
I’ll give Mr. Buyer a D!
#119 AG Sage
Good points AG. Numbers can easily confuse the unwary.
After submitting my last post I see that there were a few mistakes other that no commas. I wrote you me when it should have been you see (need proper punctuation in this sentence ) and I used to when it should have been too (again no punctuation in this sentence). There are other problems as well but I will leave them as a homework assignment for mr/mrs/ms/miss Renting in Rosedale to identify. I am starting to sound like a teacher (I should have wrote I am starting to read like a teacher but in common usage it is perfectly acceptable to use sound especially informally). I am still relieved that we have all our cash (had a few spelling errors again). I noticed during my first few months of teaching that I destroyed the essence and flow of any communication my students were attempting with me so I decided to let many mistakes slide as I felt it was more important that the students gained confidence in their ability to successfully communicate in a foreign language (misspelled foreign for the millionth time). It is a real balancing act with the more advanced students as they really start to split hairs over grammar and meaning but for the most part it is better to let things slide (or rather point them out from time to time in passing) that are not errors in logic or relationship (but you would have to have done the job and cared enough to think about it to know that as well). Still happy to have the cash right now but will need a house sooner or later to live in not make a career out of (that is somewhat of a run on sentence as well totally devoid of punctuation). This is Mr Buyer going incognito… (… is actually a mathematical symbol representing and so on and should only be used at the ends of series in which one can accurately surmise the next member in the series) (I misspelled incognito, mathematical and accurately) (I also should not be using brackets in succession as I have)
RE: “And remember folks, the RBC housing affordabiity measures assume a 25% down payment.”
this is actually a good point, and which very little of similar studies show: just how much was the amount of down dep that the analysts used in their calculations?
GREATER FOOLS INDEED…
Financial Post today at page FP10 headlines “72% of income goes to housing in Vancouver”
They even state: “Homeowners put 72.1% of their pre-tax income home ownership costs…”
My GOD! These homeowners are living on 27.9% of pre-tax income for all expenses save housing. But wait! What about taxes including CPP and EI premiums? These must add up to a large chunk of 27.9%. So these homeowners must be living on approximately nothing for all expenses other than housing!!
But wait. That is impossible!
So who are the Greater Fools here? I think it includes the Financial Post columnist and anyone who believes this crap.
Yes housing is way expensive in Vancouver and yes the 72% figure tells us that. And yes it is useful to compare to Edmonton at 31.5%
But what the study really said was that IF (if my friends, if…)the average income earner WERE to buy the average house THEN it would cost 72.1% of their pre-tax income.
The conclusion is not that the average homeowner family in Vancouver IS in fact living on nothing and putting 72% of pre-tax income into housing.
The proper conclusion is that the average income family in Vancouver cannot afford the average house on the market today. Not even close.
That is disturbing. But the way the facts are twisted here in implying that lots of people are actually paying this 72% is insulting to the reader.
It seems someone other than an average income earner buys the average house. As long as those someones continue to pay the current price, houses may defy gravity. I suspect we will run out of those someones. And certainly if interest rates rise much we will and prices will drop.
But the fact is that the average income earner who is not currently buying an average house and can’t afford it has not stopped current prices and will not stop those prices. It’s the actual buyers and sellers that set the prices.
… You’re Welcome!
i guess further to my query above, is: how many average wage earning couples nowadays can even truly afford 25% down, in toronto or calgary or hongcouver…ooops, meant vancouver ;) ? funny these studies seldom give the down dep figure in their analysis.
#31 Grantmi,
Michael Levy is one of Michael Campbells sheep, if he doesn’t say nice things about real estate he will get turfed from the show.
I recall him back in 2007 calling for an outright major correction in real estate and Campbell wouldn’t even answer him. Three months later he changes his tune and calls for the bull to continue while prices were peaking at $1 million. The guy is a publicity ho out to pump his gold business.
RBC calling for a “painful correction” says it all. Watch for TD and others to follow suit. US sounding like they will have no choice but to raise rates soon spells the end to this madness. Immigrant Asians will be the new bagholders, let them drown, the greedy pricks.
I have to make one more post as Mr Buyer and say that I have good intel on Fukushima and it certainly has the potential to release more radio active contaminants than Chernobly but presently Chernobyl released 10 times more than Fukushima. The situation presently in Fukushima is tenuous but stablizing somewhat. Temperatures are down but continued cooling is required and the cooling system is presently an open loop in which more and more water is added and thus more and more contaminated water is accumulating and leaking. I am 400km from Fukushima and radio active isotopes are undetectable and background radiation is unchanged (it is monitored, recorded and posted online daily and has been so for years because we have 14 reactors just outside our city). This big money conspiracy hide the truth stuff is all well and fine but it is not like this is country full of no minds, it is one of the most advanced countries on earth, private citizens, universities and the government are monitoring levels. I have two research scientist types that are responsible for monitoring levels and their values are virtually the same as the published levels. The Japanese only appear to be lemmings, they have a long history going back thousands of years full of episodes in which the great unwashed did away with their rulers. I have to give a little on the withholding information thing but it has been my experience that the whole story eventually comes out. Long story short they appear to have an uneasy stability to the situation and are working the problem as effectively as anyone on earth can. I will grudgingly back away from the exponential difference between Chernobyl and Fukushima only because Fukushima has the potential to rival Chernobyl over time but it is stil an order of magnitude below Chernobyl and I am 400km away and uneffected by the disaster.
An uninformed opinion. — Garth
I with David Jensen on this one. Carney will do what the Bernank tells him to do. Zero for savers and retirees with the perpetual emergency. Lies more lies and statistics. Inflation and minimum wage for the plebs.
The Europeans know what`s going on and are trying to do something about it.
People think that making mortgage payments is forced saving. It’s not. It’s forced spending. Saving is when you put cash in the bank for future use. When you make a mortgage payment you do the opposite.
So people will say yes but I’m increasing my net worth and home equity by paying my mortgage. Maybe. But equity is an opinion. Savings in the bank are a hard number, a legal obligation by a bank to pay you, confirmed by a bank statement, enforceable in court and CDIC insurable. Very different from a woolly notion like “equity” which, as we’ve seen in the US recently, in Toronto in the 1990s and Alberta in the 1980s, can disappear like smoke.
Renting in Rosedale I am also assigning post 125 as homework.
G-Man…there has recently been a rout of organized religions in China. The sources I have tell that recruitment into ‘immigration churches’ is at an all time high. The missionairies are signing up new members and shuffling them off to Canada in record numbers. Many cases of dummy papers have been reported …the box boy become a ‘finishing carpenter’ and receives a bogus transcript from the ‘Holy Order of Carpenters University’ in YEE-Haw China.
We can expect this scam to run unabated until our own government gets smart. But….the Chinese Christian lobby is powerful in the conservative party. The Chinese churches tithe the new members ( like human smugglers) up the ying yang for the ‘costs’ of getting them into Canada once they’re here. Its a big business for the Chinese political; lobby that gets additional tax dollers from the Canadian taxpayers in subsidy’s. The head of one org….ryhmes with ‘CONFESS’ receives millions in personal compensation from the org….which he inherited from his other !!!!!!!!!!
Don’t expect prices to go down if locals are forced out and have to sleep in their parents bsmt and in vans and carparks. The Chinese inflow of stolen money will continue because they know that Canada will not deport them back to China. The ‘unusually affluent’ civil servants’ coming out of China should have been a red flag but of course the inherant weakness of a minority government and the pandering Harper had to do to keep the immigrany lobbies on his side to gain a majority have hamstrung the government…until now…..we now have the authority to stop the insanity.
When the RBC says that property is unaffordable they are only using local wages as the benchmark. A huge percentage of suburban Moms and seniors are lining up at the foodbanks every day……..80% of gross income to pay the mortgage has everyone hungry.
can somebody explain.
how come the olympic village has to go on a fire sale when the market is hot? This caused the tax payer losing millions. Is it because the money is free nobody care?
“Ever hear of debt”
Yup. Ever heard of the saying, when you owe the bank $1000, you have a problem, and when you owe the bank $1 Billion, the bank has a problem?
Well, the banks have a problem. All of them. And all the countries too.
Its not a problem that can be “saved and cut” away. Anyone who thinks the US can EVER cut spending and increase revenue by $2 Trillion a year in the face of their demographics is foolish.
Debt has been run up so high, for so long, by so many, that there is no other choice than to print money and inflate out of it. Rational economics can no longer be applied, because no government, ANYWHERE, will ever be the government that DELIBERATELY PLUNGES THE WORLD INTO ANOTHER GREAT DEPRESSION, which is what would happen if anyone even thought about raising interest rates a few hundred basis points.
Didn’t you learn anything from March 2009, when they changed the accounting rules for US banks to let them “pretend and extend”, or, perhaps “lie and deny” loan losses by marking to make believe, instead of to market?
Didn’t you learn when QE 1 became QE 2. Soon to be QE 3?
House prices in most of Canada have to go down. But they will go down IN SPITE OF LOW INTEREST RATES, and most of their loss will be a real loss against inflation, not a nominal value loss.
We’re in a world where you can borrow from Royal Bank at 2.25% VRM, than buy their Preferred’s which pay 4.9%. You can bank the bank.
Logic, and proportion, have fallen smartly dead.
Well, here in sunny (not) Victoria, my family has just moved into a 3,000 sq. ft. rental on 5 acres in the Royal Oak area. House has been recently updated by owner, with new insulation, windows, appliances…we pay $2300 a month to live here, easily affordable on our income, and no maintenance, no taxes. We have lived in Victoria for 14 years now and rented for most of those. We have no debt, considerable savings, and could buy today if we wanted to since my husband is a bank employee with preapproval.
But why, why would we buy? Why would we choose to impoverish our retirement by buying in this crazy market which has stayed crazy so long? I don’t even bother consider buying anymore when we need to move; just look for the best rental we can find, and we have therefore lived in several great houses we could never have afforded to buy in today’s market, in several of Victoria’s most sought-after neighborhoods: Oak Bay, Rockland, James Bay, and now here.
I do know one or two other families who rent, but by and large, we are considered to be very, very strange in the community. This amazes me. Our four kids have enjoyed six trips to Europe, many visits to Disneyland, summers in Vancouver so that they can do camps that we don’t get here in Victoria, music lessons, and now, the older ones, a university education paid for by their parents, all because WE CHOSE TO RENT!!!! This was after years of home ownership in Ontario. But if we had bought anytime in the last few years, our children would have had very different childhoods, we would have very different lives. But hey, we missed that holy grail of home ownership. What’s up with that? Must be something wrong with us.
Can you imagine if this guy turns out to be right.
I cannot think of a more sustainable trend than China growing and Chinese money entering Canada,” says Mr. Tal. “People say it’s crazy, crazy, but it’s the most sustainable trend I can think of.”
http://www.financialpost.com/personal-finance/mortgages/Speculators+foreign+investors+betting+Toronto+condo+market/4817203/story.html
$350 per month to run a household.
This based on average house price, average income, average expenses etc.
We all know that $350 per month is an unrealistic amount.
Therefore if the answer is unrealistic, then the equation or problem is also unrealistic.
In the analysis of real estate the use of averages is unrealistic.
The answers are always goofy.
And I’ve read alot of goofy real estate analytics posted here.
On average of course.
#31 grantmi, heard the same schill levy talking about how good it is for RE to go up? Good for nothing-except empty communities like Coal Harbour and Chinese being allowed to buy 5 homes per person per visit. Great if you’re still holding on to yours but once you’re out, you and your entire family are out forever. I live in Kerrisdale. ANY sales in Vcr E or Westside are 98% mainland Chinese. How is this any good? Where do they get their money? They come in with shopping bags full of it and aren”t asked a thing by the joke of a gov’t. Yet a citizen misses $40 of income and they drive you to the edge. Rev Can will finish you off like a mass murderer, who btw gets more respect and rights from the gov’t. Disaster.
So the question is who wouldn’t do it, if given the means and rights by our gracious gov’t.
Jsan, I dont believe that you live in Edmonton because you sound like you have no idea what you are talking about. All of my friends are making over $100,000 (as couples mind you), and can easily afford $300,000. Edmontons prices are pretty reasonable and the economy is just humming along nicely. Sounds like you are just pissed off because you missed the boat.
Mr Buyer
I don’t worry about the way things are written or spelled. I just cut to the meat and potatos.
My grandfather could barely read and write but he was as smart as they come with common sense.
Had a grade three education.
Retired owning four houses, carried the mortgages on a couple of them when he sold.
Smart guy.
On the other hand my dad is as smart as they come book wise but put a twenty dollar bill in his hand and all sense leaves him.
So I’m cursed, i’m in the middle of those two with my ramblings in broken redneck.
Jsan,
New Jersey has some expensive real estate if you look around places close to NYC and northern New Jersey around Morristown.
It’s taken a while to get going, but finally around here properties are tiptoeing out and appearing on the mls. Every day, more and more, and mainly at realistic prices. Overpriced ones have languished for a year or more and have re-listed at a lower rate (still not low enough for my liking).
I have been keeping a list of places that interest me, their original listing price, any reductions, and how long it has taken to sell – when any have sold. There are now so many on the list in this past couple of weeks I have had to break it up into relevant sections. So as I sit here rubbing my hands together in anticipation, my vulture wings are also growing.
I want the kind of place that many people want to get rid of (large house, acreage, outbuildings, out of town) so am happy to sit here tracking their progress, or lack of it, until the end of the summer when these sellers are feeling properly desperate and my vulture wings have unfurled to the greatest capacity.
(And no quarrels from you Garth, when I decide to swoop …!).
Hi Garth,
Is your next quest a financial education Holy Grail type of quest? Given the present state of the RE, equity, commodity, etc markets, are the vulture wings sprouting to potentially swoop in on a myriad of tasty carrion? Like Pavlov’s dog, I salivate as i contemplate your next quest. I’ll be there with my dancing shoes on.
Rookie57
80% correction? Hm, if that happens when average Van SFH gets to 5 million, that would mean coming back to 1 mil – still out of reach for most, like it is now…
#124 Mr Buyer on 05.21.11 at 11:08 am
Have you ever heard of paragraphs?
Just teasing.
Yeah … good save there, Mr. Buyer.
Garth we need our daily fix, don’t leave us!
Read the same article about the RBC report.
Calgary is at 35.9 percent and Edmonton is at 39… Both lower than Ottawa, Montreal and the National Average.
In fact at 35.9 and 31 Calgary and Edmonton affordability measures are very near the long term average.
Again, why I keep on repeating that Vancouver and Toronto are in a bubble but Alberta is not.
The numbers speak for themselves.
Let’s see if Garth actually responds with an argument based on the numbers or if he pulls his usual sarcasm and insults.
Alberta’s population is declining. Makes perfect sense. — Garth
Mr Buyer, at 124, 129
Get over it, allready
———————————-
Garth, are you not going to use your ‘vulture wings’ somehow, to salvage something within the L-party?
#105 Jsan
The American experience is indeed eye opening.
During the bubble, the volume of transactions was very very high. Everyone was getting into the real estate market one way or another. It would be hard to find anyone in the US who did not buy, buy a second house, or refinanced somewhere around the top of the market. As a result, a very large proportion of people were touched by the crash.
In Canada, refinancing is not as common, because there is no incentive to roll debt into the mortgage; interest is not tax deductible, and HELOC rates are same as mortgage rates, with much more flexible repayment terms. We see all the time statistics on Canadian mortgages and credit cards, and those are scary enough, but not so much on HELOCs and secured LOCs.
Maybe Garth can dig something up for us?
Read in the local Richmond paper today that city council was trying to get the local Chinese churches to build social housing on the land they buy out of the agricultural land reserve for their God Palaces. The Chinese want nothing to do with homes for poor Canadians anywhere around and forced the council to back off its request,
After the wild screaming from the Chinese community over a gay awareness campaign for the schools of Burnaby I think people will rue the day they didn’t understand wehat they were doing before they blew the doors off and let the deluge enter.
Nosty, file this one under ‘Dear God I Hope Not’:
US-Iran Escalation
Andrew Hasman is the realtor who got busted having his picture taken beside a beautiful pool overlooking an oceanview in West Vanc. Only trouble was he climbed over a fence onto a property that he didn’t have a listing for, to make the picture look good.So if he is complaining about Vancouver real estate……………it has begun!!!
Yesterday a Calgary Herald link was posted about a 20-something girl (5-year renter) who bought a “condo”.
Based upon the building’s name seen in the background of photo, here is a sold unit in same building:
http://www.cliffstevenson.com/Properties.php/Details/15
270k for an old 878 sq foot unit? In a 30+ yr old apartment building?? Those Maint. fees will only increase.
“Connaught Address
#305, 1334 – 14 Avenue SW, Harcourt Estates, Calgary, AB, T3C 0W2, Canada
Maintenance Fee$395/mo.”
#121 David Jensen
Why do idiots bring up Japan. Looked at their 20 year housing chart recently?
# 73 Mr. Buyer
What is wrong with you people on this blog?
Bubbles burst, prices correct to trend line (or overshoot it sometimes), chips fall where they may.
Inevitable and unstoppable.
Period.
Full stop.
Doesn’t matter if it is Canada, US, UK, Spain, Ireland, etc. Sorry, not different here or anywhere for that matter.
Bubble dynamics are bubble dynamics. Once engaged in a bubble, the bubble’s dynamics take over and the sheer size of the bubble dwarfs all efforts to forestall it.
Stop whining, denying, bargaining, explaining or complaining. The overly leveraged (less than 25% equity as of today’s prices) that do not sell soon will have no equity before they realize it.
Canada’s rising RE market is over and nothing, I repeat NOTHING said, done or enacted will stop what has already been put in motion.
People are about to be repaid for their lack of common sense.
About time!
# 121 David Jensen
How can I put this delicately, David?
Are you 4 f’ing years old?
House prices have declined as much as 80% in real terms (inflation adjusted) despite Japan having the LOWEST STUCTURAL INTEREST RATES FOR THE PAST 20 years!
American house prices are down 32% (over 40% in real terms) as a national average from the peak 5 or 6 years and in some markets, like Vegas and Phoenix and Miami are down 60% or more in places. The US interest rates have been at multi-generational lows during this entire collapse.
Rates don’t change the outcome of a bubble. Nothing changes the outcome of a bubble.
With respect to rate increases, hey the election is won, the honeymoon over, get ready to pay more as soon as can be arranged.
#163Pen-When you calculate US RE prices in gold or silver the decline over the last 5 yrs is breathtaking.
It’s also bitching in copper. — Garth
#99 I pity the fool who drinks soy milk on 05.21.11 at
…………..
Guess I need to get a life :-)
We’re only 2. We don’t have a ‘food’ budget, but I do check the flyers for what’s on sale and if there’s a really good buy on a non-perishable that I know we’ll eat, I buy lots. Same goes for some other stuff that I can freeze. Very rarely buy any processed foods – maybe a chicken at Costco, but then make my own chicken stock from the remainder.
Always have lots of fresh veggie ingredients in the fridge and I have a binder full of salad recipes for both summer and winter. We both love our ‘stinky’ but expensive cheeses. I eat v. little in comparison to my hubby & he’s been cutting down lately. We don’t eat a lot of beef. Sometimes I do inexpensive cuts in the pressure cooker (delicious). I also buy filet mignon at Costco. Fry some shrooms , add some red wine, cream, etc. and voila. We eat pork, poultry, etc. and eat seafood at least 1/2 a week. I could almost be a vegetarian.
I always had an iron deficiency – rejected from blood donations. Dr. wanted to give me injections several mos. ago, but I took B12 daily along with many other vitamins, etc. and now I’m ok. Also, hubby makes a great baby beef liver dinner smothered in onions, etc.
Our biggest expense in our wine!!!
#117 eddy on 05.21.11 at 10:35 am
The collapse of the World Trade Centres marked the end of USA as a center of world trade. It’s that simple. They should rebuilt them in China or somewhere…
And no, a bunch of people living in a 3rd World country did not gain a thing from the free fall collapses of WTC 1, 2, and 7. That’s all I have to say on this topic.
#44
The exodus of North Americans from Japan after the Quake was a direct result of exaggerations in the North American media.
—————————
Having lived in Japan for 9 years, it’s really everyone’s worry that the Japanese government and media can not be trusted to give the entire truth.
If the Japanese say the situation is bad, which they said it was, you know it’s a hell of a lot worse. So, it’s really a combination of not knowing who to trust.
Tokyo, where most foreigners live in Japan, is not at all far from the quake zone. Tokyo was badly shaken, rolling black outs, extremely large aftershocks, nuclear meltdown worries! Hoarding behavior and nothing to buy on supermarket shelves. Add this all together, and I can understand the exodus. The Japanese themselves would have left if they could have easily done so.
I was extremely relieved I was no longer living in Tokyo having to make the decision whether to leave or not. It would have been a hard decision to make, especially if you had children.
The Japanese do deserve our compassion and support, if you have the means, please consider a donation to the Red Cross. The areas affected are certainly not wealthy and those people will suffer for years. Foreign support does mean a lot to them.
# Mr Buyer
I take back my comments as I did not know that you were so disadvantaged and challenged.
I mean being a teacher and all…
#129 Mr Buyer
Hey, Mr Buyer, don’t worry about the grammar police. They often have nothing better to do than criticize other people. Why they even bother is beyond me because it seems such a waste of time.
Anyway, I have been enjoying your posts. Everything about Japan is fascinating to me.
http://en.wikipedia.org/wiki/Lost_Decade_(Japan)
#16 Areekkal – is this what you are referring to and does it look familiar….?
167
Do you honestly get your news from the media? Look at http://www.wired.com/wiredscience/2011/05/wisdom-of-crowds-decline.
I have lived in japan in the past and was there this spring. The hoarding behavior in Tokyo was a result of those who lived by the media. Media is hype, that’s what sells. How often do you see headlines otherwise? Hype feeds on hype. This is what Garth is saying in his blog here, so why are you here if you beleive the hype? Yes the earthqauke was bad but mainly fishing villages with 100 year old homes were hit. Modern buildings in the big centers were fine. The nuclear reactor is not sitting outside your front door and even Tokyo is 240 km from it. I had coworkers in BC buying iodine.. welcome to the herd.
This is what is really happening in Vancouver.
http://www.bloomberg.com/news/2011-05-16/chinese-spreading-wealth-make-vancouver-homes-pricier-than-nyc.html
This as well… anyone see a coorelation?
http://www.globaltvbc.com/world/Fake+health+care+cards+costing+many+millions/4819626/story.html
This is how they get in… or should I say are welcomed in
http://www.theglobeandmail.com/news/world/asia-pacific/how-chinas-crooked-consultants-help-the-rich-enter-canada/article1996240/
Well…..
Seeing how we are dealing with tips for cutting budgets…
I don’t see why the Enviro/Go – Green types haven’t tried a Joint Venture on this(i) recycling and (ii) cost effective food harvesting initiative.
http://www.youtube.com/watch?v=rFDgSKbapzY
Hi garth,
I hope you are not quitting.. Me personally have given me insight to the craziness out there. You given us direction and some pointers on why. It starts with basic math:
> when it costs a half or a third to rent why buy…the likehood of moving is high if you are single b/c job or relationship changes
> diversify and research …history shows that good companies provide good returns over the long run. u just got to find them ( REITs, Dividends etc)
> it just a house ….get over it. It doesn’t love u back. Granite countertops / stainless steel does not turn me on
I haven’t listen to everything you said. I buy individual stocks and I have sold them in the last week or so…waiting for a small correction.
The end of QE2, % rates ^ though probably in Sept but it will rise, wars, more bailouts and US housing still going down just not as fast
I saw lang and O’ leary television broadcast last nite.
They did mention ASian buyers influencing the Vancouver market. they also quoted an Econ/ housing expert : Housing will be stagnant 0-2% increase b/c economy is becoming better
i believe Kevin Oleary is happy with the foreign investments coming to Vancouverand everywhere else b/c they are bringing their money with them. Also the other night he mentions he rents as opposed to buying real estate. It makes sense . he has his money working for him.
he has alot of TV stuff and speaking engagements all over so he won’t be spending a lot of time at home
[…] pessimisticprof at greaterfool.ca 20 May 2011 9:50 pm – “I had a discussion about Vancouver real estate during a class break and to my surprise a bunch of students started venting about the housing market. It appears it is starting to sink in that they will never be able to afford a house, and they scoffed at the idea of inheriting mom and dad’s McMansion – “That’s all they have for retirement – they will chew it up to fund their own expenses, so no hope of getting the house or help with a downpayment.” One student proudly proclaimed that he had just closed on a condo in Surrey for $300K – 30 year, 5% down. I asked him why he thought the bank would loan a kid like him so much money – he sort of looked confused, muttered “I dunno”, and admitted he had never thought about that. I took the opportunity to explain how CMHC and Ottawa had distorted the housing market by enabling people with no money (like him) to purchase property way beyond their normal capacity, leading to a huge but unsustainable increase in housing prices. When I got to the part about interest rates normalizing I thought he was going to toss his cookies! By the time I was finished his “great investment” was starting to look like a huge ball and chain. I think the rest of the class understood the message, so perhaps I (and by extension Garth) have saved a few kids from following the herd over the real estate cliff.” […]
“Homeowners put 72.1% of their pre-tax income home ownership costs…”
“It seems someone other than an average income earner buys the average house.” (#131)
This statistic probably is not taking into account *Chinese* income…
Now that we know the world did no come to an end, it may be time for you to shut this site down, dawn the leathers and recharge your batteries Mr. Turner. Travel the untraveled roads of Ontario and enjoy life one day at a time.
http://theage.domain.com.au/home-investor-centre/a-decade-of-flat-property-prices-ahead-20110520-1ew2n.html
The invisible hand of the market is still in the cookie jar down under.
While I didn’t experience The Rapture today, I did come across something sort of apocalyptic in my local newspaper:
It was a letter to the editor written by the president of the local Real Estate Board. Strangely enough, he was urging all local candidates running in the Oct 6th provincial election to “support making home ownership more affordable.” He went on to quote a CMHC report which says that the average Canadian homeowner has a greater net worth than a renter ($377,000 vs. $64,000) and implied that homeowners are more likely to contribute to charity, to vote, and to volunteer their time in the community. He also stated that homeowners in their old age will not rely as heavily on government assistance as renters will. Wow……really, wow. How does one start to even dissect all that drivel?
Are they now smelling the fear that strongly that they have to resort to this? What happened to all the “housing only goes up” talk ? I can’t help but wonder if the local Real Estate Board is acting on its own initiative or if they have received orders from headquarters. I guess I’ll know if similarly-worded letters to the editor show up in other newspapers across the province.
So for me the nature of this letter portends one thing for sure ~ the time is nigh.
Garth, thanks for providing the early heads-up over the last long while. Because of you my ducks are in a row…..
Stephanie Pomboy, president of Macromavens LLC about the Federal Reserve’s efforts to boost the U.S. economy by lowering interest rates and engaging in quantitative easing .
http://www.creditwritedowns.com/2010/10/stephanie-pomboy-cautious-on-broader-economy-but-also-on-bonds.html
“Alberta’s population is declining. Makes perfect sense. — Garth”
Talking trash Garth:
“Statistics Canada reported Wednesday that the population on July 1 was up 120,800 from April 1, 2010.
Alberta, Saskatchewan and Manitoba posted the highest rates of population growth among the provinces, the federal government agency said.
Alberta’s population rose by 18,500, or 0.5 per cent, to 3,720,900, the highest increase rate among the provinces. Statistics Canada said almost half of the growth in Alberta’s population came from natural increase, the highest proportion among the provinces.
You sure fell for that one. — Garth
Re:#139 parallel universe on 05.21.11 at 12:31 pm
can somebody explain.
how come the olympic village has to go on a fire sale when the market is hot? This caused the tax payer losing millions. Is it because the money is free nobody care?
It’s the insiders using taxpayer money to give themselves SWEET-CHEAP deals on the remaining condos there.
I wouldn’t be surprised if that was orchestrated right from the start.
I wish someone could-would follow the money trail fo who’s buying in there right now at these cheaper (30 or more %) prices.
Mr Penpal you are quite right. It is my duty to be an example even when school is out. I will take the time to write well formed posts in the future.
–
Great having grandkids, ‘coz when birthdays come around we’re always happy to show up with presents, etc.
Parents supply cheeseburgers, hotdogs, icecream cake from DQ and all the other goodies. Being old farts has its advantages!
*
#71 Calgarian — Suggest option A, and use a TFSA as springboard to a good midlife and retirement. Follow Buffet’s advice — Buy low (penny stocks), sell high (in the $8-$14 / share range), place the net proceeds into a non-registered account.
Skip the banks altogether, find a good fee-based advisor and avoid the debt trap at all costs.
#77 mel — “Anyhow, all of this won’t matter in the end, remember, the end of the world is coming !”
True. The present cycle, the fourth of four ages ends in about 425K years, give or take. But as to the Christian pastor, today’s event at 1800 hrs. EST is the start; it will be completed five months hence.
Then we will resume our normal birth / life / death / rebirth cycles, with more interruptions!
#91 David B — “…. and no self appointed King …. Stand by …. the end is really in sight ….”
Mostly accurate, except there is no real ‘end’. The slide will continue long after Harper and the CPC are gone, and it doesn’t matter whether The Rhino Party or Karl Marx’s communist manifesto are foisted upon us.
#110 bridgepigeon — “Even tinfoil heads like Nosty :-) here are posting some good intel on this…”
G’day bridgepigeon, and thanks for the leg up! Latest — Fukushima and Fukushima One.
#112 Jsan — “. . . we are debt haters!”
Point noted — debt haters is a great term. Homes, like anything else come and go, but debt, until it is fully paid for via excessive interest, remains for as long as sheeple continue to view houses as an investment. They are not.
“Rumours of my demise are slightly exaggerated. — Garth” — Only just slightly, or a little bit dead?
#158 tkid — Indeed, as I mentioned earlier, lots of blunderbuss doublespeak from the Pentagon and WH, FFs (possibly one in America to justify war), and lastly, war.
The one thing is Iran’s Bushere nuke plant, now up and running, built by the Russians so that the Iran govt. can let their citizens have heat in the cold months, and in which the plutonium has been enriched to 18% or so (90% or more is needed to make WMD) , will be their prime target, which will unleash another Fukushima.
So it may be that a combination of Chinese and Russian forces will join to eliminate Dimona and Washington. We do live in interesting times.
*
From wrh.com — “NOTICE: It appears that DNS server tables were modified yesterday and the DDOS attack on DirectNIC may have been intended to delay automated repairs. DirectNIC is still sending out the wrong IP for many websites, including the the www version of this site. Everyone should make a point of running a full system scan with whatever anti-malware tools they have.
[THIS IS IMPORTANT] — “If the internet goes down, we should view it as another total failure by the inept and incompetent US Federal Government, which cannot keep the bridges from collapsing, the mines from caving in, the oil wells from exploding, Wall Street from wrecking the economy, or General Electric from selling poorly designed reactors that pour radiation all over the northern hemisphere. Politicians cannot grow anything, build anything, keep the power on, keep the internet running, can’t find let alone jail the hackers, or repair the crumbling infrastructure, but by golly they are really good at taxing us all for breathing and torturing Arab men for the crime of wearing cheap Casio watches!
“It is time to give someone else a chance at making this nation better for We The People.”
Could be the US-Iran war has been moved along quicker than expected, along with a few other things.
Karl Hungus, what can you buy for $300k in Edmonton? Condos or townhouses maybe….
Since all of Garth’s ‘prophecies’ are coming to pass it is important to build up our safety nets. Garth never gave us a recipe for squirrel but apparently it will qualify for comfort food:
http://eatocracy.cnn.com/2011/05/20/give-squirrel-a-whirl/?iref=obnetwork
Interest rates should decline in the aftermath of a housing price bubble collapse.
#184 Nostradamus Le Mad Vlad
Just curious…
How many staff do you have to research these posts of yours?
Also..are they illegal aliens….. or is it an offshore sweatshop?
Thx.
Parable re: ” End of the World”
Man dies.
Enters the afterlife…
Takes the Elevator(BTW no farting)..
Elevator doors open
Sees nothing but Frozen Wasteland
Man is very confused (????)
All of a sudden he gets it (!!!!!)
(_____X__) won the Stanley cup (sub in CANUCKS or LEAFS)
I just have to share this with y’all! Musicians on this blog will understand what a nice impromptu means and although this video is not an impromptu, it sure sounds like one.
Chillax… The world didn’t end today… Here’s something for ya:
http://www.youtube.com/watch?v=Us-TVg40ExM
Nostradamus: If the internet goes down, we should view it as another total failure by the inept and incompetent US Federal Government
conversely as is apparently the case, if the internet does not go down, we should view it as another success by the skilled and competent US Federal Government.
you cannot have it both ways
#10 Daniel
Go heavy long silver on May 26th this year just before the close for a day trade on the next day that being the 27th. Odds are if you just play double long you should make at least ten percent on the 27th if you sell in the afternoon. If the market has a bad stretch from Monday to Wednesday that week the odds look even better as the market usually flip-flops on Thursday and Friday. (The converse of Monday to Wednesday).
What a fool. — Garth
# 31 grantmi
Re: Michael Levy on the Bill Good show today. Yeah, I heard him too. What a schlub! They should call it the Bill Dufus show and feggedaboutit. They’ve got some kind of “who’s on first” routine they regularly haul out.
Bill: Michael why do we have so many foreign buyers, especially Chinese?
Michael: Well you know Bill blah, blah, investment, blah, rich, blah… and of course Vancouver is simply the best place to live in the world—everybody wants to move here.
Levy then went on to say that Chinese buyers for Richmond dried up because of the Japanese earthquake and fear of liquefaction. I nominate CKNW for the first to be liquefied in the NWO.
BTW if you have not seen the GWB and Condi Rice spoof of “who’s on first” called “Hu’s in China” do yourself a favor and watch it.
http://www.youtube.com/watch?v=HWVb7zpJ6I0
Calgary is still out of wack.
460k for a 46yr old 1100sq foot bung??
http://www.realtor.ca/propertyDetails.aspx?propertyId=10711833&PidKey=873368617
Everybody keep yer shorts on…I too was concerned and then I saw this….
http://bp3.blogger.com/_pMscxxELHEg/RxzD0s_7EYI/AAAAAAAABB4/ljDSXZhMG3o/s400/IMFresets.jpg
Canada is not the USA, I do not believe our RE will crash to the extent it did down there. Oh, it will “correct”, and in a few areas correct steeper than others but it is not doom and gloom……
#161 Devore on 05.21.11 at 4:14 pm
Not to mention Japan’s public debt is around 200% debt to GDP, tops in the western world and ahead of, say… Zimbabwi? 50% of every taxed dollar goes solely to interest on that debt, hardly an advantage for running a nation. If it wasn’t for the fact that 70% of their national debt is owned domestically and they have a history of running trade surplus’s (until lately, the earthquake there has yet to awaken the world with the hard negative numbers), their public debt would be a much greater issue than most realize, created mainly from central banking policies of near zero interest rates for so long.
Japan tried avoiding a RE bubble meltdown for 15 long years and in the process have created a debt monster that is now likely to lead to a rapidly devaluing currency and hyperinflation I think, beginning before year’s end. The only wise thing for governments to do is to not create RE bubbles in the first place but with the case of Japan, greed got in their way. Greed, then fear… then complacency and successive governments chose to kick the can while the problem grows out of control.
Its a mess there now, worse than Europe and still we find a few who think that obvious economic/political policy failures are somehow the example to follow.
still here eh?
http://www.youtube.com/watch?v=-hJQ18S6aag
a happy rapture day to you all…..
Heard something really funny today, a couple was asking a realtor what they could get for their place.
The funny part the realtor gave them the figure supposidly their jaws dropped to the ground. Guess what the figure given was 50 grand less than what they paid for the place. They were told property prices are dropping 30 to 50%.
The reality check will hit people like a ton of bricks, hello snap out of the dream world, realestate prices are falling.
I was told today the realtors figure by June of this year there will be 50% price reductions.
You will beable to lose count on how many people will lose money selling their house. So many overpaid for realestate they are all going take a bath if they need to sell.
The crying towls,KY jelly and hemorrhoid cushions will be flying off the drug store shelves when people need to sell the house they can’t afford anymore.
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#188 Hoof – Hearted — An utterly magnificent staff of one, unpaid and retired. Illegal aliens (from The Outer Limits)? Ssshhhh . . . CSIS might be reading this!
#191 45north — Noted, and one way or the other, all will be revealed.
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Japan ‘Superquake’ movement.
Talking Heads Spin the news to confuse sheeple, the US is in decline.
Second Half of 2011 Small but interesting chart for the end of the age of America, along with the rise of China. What Happens when Greece defaults. Good reading, as it can be applied to any situation, and Tough Times. Soros One possible reason why he flogged all his gold ETFs last week.
The Myth of the dollar. Second dot.com bubble? As if food prices weren’t high enough . . .
Good Money for being a proven liar.
Images of space, which anyone can view if they drive out into the country, where there are no city lights, look up and see.
Link in. Protests are moving west. First the UK, then NAmerica.
Monster Storm If y’all think the weather’s crummy here, try Saturn.
Mike T: Thanks for the video. I found it mesmerizing. Garth, hang tight. I enjoy this blog and visit it daily. Your writing is equally mesmerizing.
The artistry of the video and Garth’s musings…ummm!
Thank you!
#124 Mr Buyer: “I am actually a Biochemist”
Your grammar is not the most egregious problem.
One big paragraph = sloppy thinking.
You are completely unqualified for your job. That others are even less competent is no justification.
Whatever your intent, you are effectively cheating your students of the education they pay for and deserve. Do them a favour and go into another line of work.
There are a lot of complaints on the site lately about Chinese investment in Canadian real estate. The worries appear to express legitimate concerns on first reading however most of the words come across as ignorant in the end though.
Here are a few of the ideas.
“Those people” have more money than us. “They” have savings and live in a near tax-free environment. High prices for real estate that are killing us are irrelevant to them and “they” are pricing us out of our own market!!!! (that is just a small taste but here is more).
“They” are buying up the best our market has to offer and soon there will be no Canadians left in Vancouver! There will only be absentee Chinese owners in a big vacuous city of stinking rich millionaires ……etcetera, etcetera, etcetera.
The refrains are tiresome.
Lets bring a little reality back to the subject if we can. Chinese investment in Canadian real estate is actually beneficial to our economy. It might only be houses today but it still represents investment from abroad.
Canadians benefit when they can sell their homes to the highest bidder in all cash deals. We all benefit when others absorb our risk at the top of a market as that softens the blow for the rest of us.
Lets stop with all the racist fears please. Chinese investment, whether in homes or business, is beneficial to our economy right now. Let’s enjoy the fact there is foreign interest while it still exists.
Most other countries would give their eye-teeth to be showered with cash in just such circumstances.
Let me put this another way….What if the Chinese were flooding our real estate markets with investment cash at their lows?
Instead of buying up hundreds of properties at the peak, they bought tens of thousands of properties at the bottom of the market (just before prices broke to the upside again)?
You would not like that either, right. Which is just another way of saying you reject the Chinese and their money whether the market is in a bubble or in a trench. And that, my friends is a form of xenophobia.
Don’t like that? how about this then….
Do you think that Canadian and American companies should have full and open access to investing in Asia companies and property should we choose? To investing in China in particular?
Do you think we should make them uphold the values of open markets and all the virtues of free trade and common market idealogy arrangements?…..
Stop avoiding me. Just answer the damn questions.
How about this? Should Google Corp be allowed unfettered access to Chinese markets and customers when similar access is denied to Chinese companies operating in America?
You see, we have a problem over here in North America (and yes that includes Canada). We have a balance of trade disparity with much of Asia. Too many of our dollars have been spent into their economies which transfers our buying power into the hands of others.
We cannot close our economy to those dollars coming back forever though. We may not like the idea of Asians buying up our resources and business’s. We may even erect walls to protect our national interests and resist foreign intrusions (we do it regularly). We may even pass laws to limit ownership.
Can we also deny the rights to purchase property at fair market value though without crossing the line on restricting investment without it actually bordering on fear and racism?
Which do you prefer then,…. the purchase of Canada’s tar sands by the Chinese or the purchase or overpriced houses on the West Side of Vancouver?
Get with the game folks. If you don’t like what is happening then stop shopping for “made in China” products and start buying locally and from Canadian producers. In the meantime we had best welcome our new house guests.
We owe them big time. Now we will pay by selling them houses near the peak of the bubble. Good gracious! Can we really afford that?
Hope you got my drift.
There was one last point I neglected to make.
We often hear stories about how the Chinese have arrived in Vancouver or Toronto with literal bags of dollars.
You need to note that they did not come with bags of physical Renminbi. What that means is that they bought our dollars overseas and brought them back home to our country. Our money. Coming home.
The Chinese CANNOT buy our houses with their own currency. When these transactions are completed therefore, a portion of our balance of trade deficit is eliminated.
It is not all a bad thing. One way of another, those dollars are coming back to Canada. How we accept them is the real decision we have to make, not IF we will accept them.
In other words…..what will we allow the Chinese to buy with the dollars they earned out of our currency when we bought their goods in the past?
Show me the silver bubble:
http://maxkeiser.com/2011/05/19/stacy-blog-show-me-the-silver-bubble/
And at the peak of the last silver bull market – a time to which many are now comparing the current silver market – when it entered true parabolic stage, the total nominal value of investor holdings were $42.2 billion. $42,200,000,000 1980 dollars = $272,467,430,863.75 dollars in 2010.
So on an inflation adjusted basis the size of the holdings in 1980 were roughly about 19 times bigger at a time when the global population has grown by 50% (1980 global population – 4.4 billion). And in 1980, half of that 4.4 billion global population was behind the iron curtain and China was a micro economy of peasants far removed from the global economy.
Please…don’t…go…I…need…you…G…man
Please don’t go,
Please don’t go,
Oh, and btw, y’all just first-haters. Bam!
Daystar 196 you are close (if not right on the mark) in regards to domestic ownership of debt here in Japan. The real estate bubble burst here a long time ago with land prices falling 50% fairly quickly and crawling downwards up until the present.
#201 betamax I know it is hard to believe but I am one of the better examples of a teacher here. It has always been a shady industry on all sides and the students suffer. Your suggestion that I should abandon my students, especially in face of recent events, tells me that you are not a professional teacher. I assure you that I go through daily cycles of reflection and adaptation for the benefit of my students. This country has given me so much. I am afraid abandoning my post because you do not like my stream of conscious postings is simply not in the cards. Frankly, you are a big disappointed (a good example of the type of personality that has little understanding of duty). I know how unreasonable the artsy types can be, I expect more from a fellow scientist really.
Tim #87
Thanks for the input.
Was actually looking more at the charts of bubbles, etc. Silver hasn’t gone through the media phase yet where everyone is wanting a piece. In that case, Silver is only in the mid stage and still has to go up a lot more before it’s a true bubble.
If silver and gold to get to a true bubble, from looking at the past bubble charts, silver will have to go up another 150 – 1000%, at which time your cabbie will be telling you to buy, when that happens, sell.
Probably not the best investment strategy to hope you’re holding an asset that’s headed for a bubble, but still confident at silver prices in the $30 range not being in a bubble.
As for my cold hard writing abilities well I have proof read and edited journal articles that have been published in fields from tribology to molecular oncology research. This is not cross the t dot the i editing but taking Japanese scientific English and rewriting it as native scientific English. Some of these papers contain as much as 80% to 90% of my writing and they are now part of the primary literature (peer reviewed). I take it very seriously. Excuse if I do not take this blog quite so seriously (no offence, Garth it is a great blog). Lazy mind, really.
Regarding the “Chinese buyers of Canadian RE”
Did it not occur to all those worried about Mainland Chinese purchasing absurdly highly priced RE that foreign purchasers are ALWAYS the Greater Fools at the extremes of market pricing.
Foreigners are ALWAYS the last and the least well informed investor in any market. (the locals having been priced out or too smart to participate).
Always have been, always will be.
(think Dubai in 2008 /09, Pebble Beach CA and Rockefeller Plaza NYC in 1989, as examples.)
utopia
good explanation now can you explain why “round tripping” transfer pricing is good for canadians?
http://ftalphaville.ft.com/blog/2011/04/20/551141/
high external financing levels can turn out vulnerable in a crisis but also makes this absolutely irreplaceable insight on where the deposits originate:
More than anything else, what seems to drive nonresident deposit levels in Cyprus is the price of oil (see chart below); when oil prices are high, the levels of nonresident deposits in the Cypriot banking system increase. This link occurs through CIS [Commonwealth of Independent States] commodity-based shell companies that deposit transactional balances of their CIS-based legal subsidiaries engaged in oil, mineral, and metals exports, often involving transfer pricing and other tax minimization strategies. The Central Bank of Russia classifies Cyprus as the largest single source of FDI in the Russian Federation, with a total of $41.7 billion in cumulative inbound FDI into Russia’s non-financial sector between 2007 and 2010 (over 2.7x German levels)… Cyprus is also counted among the top FDI investing nations in several Central Asian countries (likely Russian capital reinvested via Cyprus, a process known informally as “round-tripping”).
http://www.kyivpost.com/news/nation/detail/76040/#ixzz1N5CWbINt
Ukrainian holdings maximize revenue channeled through Cyprus and minimize profits taxable in Ukraine. To do so they employ two mechanisms that enjoy worldwide notoriety for tax avoidance effects: transfer pricing and thin capitalization.
Transfer pricing means that subsidiaries belonging to one international holding skew the prices they charge each other so that company profit is realized where tax is least – invariably a tax haven. Offshore shareholders use thin capitalization schemes to provide funding to their onshore companies in the form of loans instead of equity. The onshore company’s debt can thus exceed its actual capitalization many times over, hence the term.
The point is that the company then pays interest to shareholders on these outsize loans, instead of declaring profits. Interest is tax deductible for the company in Ukraine and exempt from tax for the offshore shareholder under the terms of the Cyprus double taxation treaty.
The Organization for Economic Cooperation and Development (OECD) states have now declared war on both thin capitalization and transfer pricing, although there are huge difficulties in enforcing such clampdowns, especially regarding transfer pricing.
But in Ukraine, things are a whole lot easier. Both practices are completely legal.
Ukraine has no legislation against transfer pricing, and the Cyprus double tax treaty allows for thin capitalization, according to Pablo Saavedra, tax expert at the World Bank.
“Most of the ownership vehicles for Ukrainian companies that tapped foreign capital markets for equity are registered off-shore.”
==
Julius Baer pays €50m to end German tax evasion probeAdd a commentAdded 14 April 2011 by Dan Judge
=
Swisspartners was sold in 2005 to the Liechtensteinische Landesbank (LLB) of which the country of Liechtenstein, a notorious tax haven, holds 68% of the capital. Liechtenstein bank and government officials have been tied by German intelligence reports to international drug traffickers and other criminals.
Swisspartners Insurance Company was a subsidiary of Swisspartners Investment Network and Wealth Management, Zurich, partly owned by Julius Baer Bank. It had registrations, for tax and secrecy purposes, in the Cayman Islands and Liechtenstein, but was run out of Switzerland. Julius Baer Bank was SPIN’s partner and held policyholders’ portfolio accounts.
The deal was that clients would buy annuities with huge premiums, say $1 million, and after Swisspartners and Julius Baer took their commissions, the rest was invested in offshore funds whose records could not be examined either by Swiss authorities or by tax officials of any other country. The profits from the investments were kept in the funds or transferred to offshore accounts of the clients, who could handily avoid/evade taxes. 2008
http://thekomisarscoop.com/2008/03/ex-rock-impressario-tony-defries-lost-22-million-in-offshore-tax-evasion-scheme/
The LinkedIN IPO event was interesting…
I wonder if it was timed to fill a void in the investment cycle…they needed something since RE was tanking, so back to the dot.com days.
An interesting article called:
Religions, Banks and Power.
The author speculates that Smolensk was a bank job
http://winterpatriot.com/node/613
I hope these chinese pay in gold. They have way too much USD. Oh wait so are the US govt.
so the average household income in Toronto is $96,000. Multiplying that by 3.5, you’re given $336,000. That should be the average price for a home in Toronto.
I’m not sure what the average price is now. I thought average incomes in Toronto were in the $80k range.
I guess we can expect prices to come down to $336,000 and go below that price point (as all deflating bubbles do).
I’d love to see house prices in the mid to high $200k’s.
Over the last while I have been following a multi-part essay written by a fellow who calls it as he sees it. In this 3rd part he paints a pretty hard facts wake up call.
“The Road to Hell is Paved by Central Bankers, The Good, The Bad & The Ugly”
http://www.marketoracle.co.uk/Article28181.html
Complete essay archived here…
http://www.marketoracle.co.uk/UserInfo-James_Quinn.html <<< date yourself and read the ones titled by the spaghetti westerns.
And if those articles whetted your appetite for information, have this one for desert, a conversation of what could be in store for the US. Written and published last week in the Casey Report.
The Fall of the U.S. Empire and the Breakup of the Geopolitical Matrix
http://www.marketoracle.co.uk/Article28100.html
If someone has linked to these, my apologies.
#202 Utopia,
Good rant on the Chinese issue but you are missing some of the central concerns about the Chinese buyers coming these days.
Many of us remember the terrible impact of the immigrant investor programs in the 1990s. Many Chinese came from Hong Kong at the time and invested in shopping centres or other projects that got converted to residential homes. This “citizenship for sale” approach has a very dark side to it and we are back there again. Vancouver has managed to attract money from arms dealers from the Middle East, former Shah of Iran henchman and thugs from Africa the same way.
First of all, people from any country that buy their way into Canada usually make poor citizens. One of my best friends is an immigration lawyer born in Hong Kong and he can expatiate broadly on the difference in attitude. One group of Hong Kong immigrants from the 70s and 80s came to be part of the country.
The last group came as economic mercenaries. This has lead to all kinds of social problems and attitudes ranging from not having to pay taxes here to not wanting social housing or hospices built in “their” neighbourhoods. The attitude is that we wrote our cheque so leave us alone or we will go somewhere else. Citizenship for sale is a bad idea. Never mind the credibility that it does to our entire approach to immigration.
Secondly, your argument regarding the big picture is short sighted. Essentially you are saying that all of this is great because the people coming here are the factory managers and entrepreneurs who are gaining the excesses of the Chinese workers we employ. Never mind that the workers make $10.00 per day and send us their cheap goods. The people at the top are moving here, dropping cash in homes and bringing back our exported dollars. You think this is a sustainable trend?
Are we not missing the fact here that this only works for about the 1% of the population? There is little trickle down effect going on here because these people generally do not invest in Canada beyond their home purchases.
It is all an unsustainable ponzi scheme.
Utopia,
Explain to me how Asians buying houses here and driving up prices to well over 10 times the local income levels is a good thing. Explain how they price locally employed, tax paying Canadians out of Canadian cities is a good thing. How not reporting global assets or income and therefore not paying local taxes is a good thing. How they send their wives and kids here for a free education and health care while being employed in China is a good thing. Explain how the majority of new immigrants from China contribute absolutely nothing to Canadian society or culture and have not even a thought of learning English.
They should’nt be allowed to buy our companies or our real estate. They should buy our resources from Canadian companies so that all the profit and employment stays in Canada, what the hell is wrong with that?
I am all for social and cultural integration but we passed that line many years ago. Now we are simply selling out what is left of some previously beautifull and enjoyable Canadian cities and turning them into Shanghai and Beijing West for a new hoard of opportunistic johnny come latelys. You think this is good for Canada? Research Paris and Singapore immigration problems and you will get a glimpse of what has already started here.
Over immigration to the wrong kind of immigrants has distorted real estate markets, created false economies and is stoking racism. How is that a good thing again?
Few more links for you to ponder:
Who do you think owns the extra 4.5 million Care cards?
http://www.globaltvbc.com/world/Fake+health+care+cards+costing+many+millions/4819626/story.html
You really want to invite fraudsters into Canada? Do you think they will suddenly become morale just because they became Canadian? illegally
http://www.theglobeandmail.com/news/world/asia-pacific/how-chinas-crooked-consultants-help-the-rich-enter-canada/article1996240/
How is this good for Canadian culture?
http://www.bclocalnews.com/richmond_southdelta/richmondreview/opinion/letters/118685289.html
Now that 10 minutes of “economic activity” to buy a house followed by years of education and health care systems drag probably doesn’t seem like such a great idea does it.
Utopia,
One more link for you…
http://www.cbc.ca/news/canada/british-columbia/story/2011/04/11/bc-vancouver-ladner-residential-restrictions.html
Take a few minutes to read the comments and you will soon see what I mean about simmering racism.
Austrailia recently imposed restrictions on foreign ownership. Foreigners have to actually live and work there in order to own real estate there. What a concept!!! Around the same time China imposed laws that RE investors could only own 2 units. Oddly enough this is about the same time the Vancouver real estate went nuts. Which even more oddly cooincides perfectly with December 2010 when Jason Kenney re-opened the Immigrant Investor Program.
Politicians should think about the millions if not billions of dollars they could be taxing these people in order to live here. FLAHERTY! KENNEY! get your act together! you are leaving money on the table that could be going to lower the deficit.
Folks….there is still ZERO data measuring the % of buyers who are actually Chinese!
Remember that. This is a classic sign of a bubble. Foreign investors are the last to jump in and the first to lose big. Just like what happened all over the US.
Mr. R.
Mr. R
That data is not something you can’t google from your lazy boy. It is not collected therefore does not exist.
Average house price over $1M and average income just over $80K , do the math, it is not your average blue collar buying Van RE. Even CMHC is not that stupid.
Spend some time in Hongcouver or Lichmond, the evidence will hit you faster than an Asian driver in a T&T parking lot.
ok here is my issue: I want to get bigger house. I dont care about market down or up. However every time I go to see a house, there are 3-4 offers…so what;s going on, people are still buying house for sure! People keep telling me: the more you wait, the more expensive it gets.
I think some of you fail to understand how currency functions. Let me put this in more dramatic terms for you.
If we were to utilize every last one of our dollars to buy bobbles and pins and buttons manufactured in China then we would have no dollars left for ourselves.
We would have lots of bobbles and pins….they would have our money. Now cash is pretty much useless is it not? We all know that. It is just paper and electronic digits on a computer screen.
But in this world in which we live it is also the proxy for a financial claim on our country and its wealth. That includes houses. That includes Potash reserves and Uranium and Oil and everything else we have to offer.
Canada does not have the reserve currency for the globe you see. We are not the United States. The Chinese cannot go to Kenya or Malaysia or the Philippines for example and spend Canadian dollars thereby shifting the burden of currency repatriation onto others (and shifting the losses of current dollar devaluation in the process).
They have to spend our dollars here. In Canada.
So a huge trade imbalance can only be rectified by offsetting spending in our own economy. That means our dollars eventually come home to us in the form of asset trades with those who sold us goods in exchange for our cash.
In other words, we are always trading resources, engineering skills, real estate, manufactured goods and even medical services and food for all the “made in China” products we enjoy every day.
Get used to it. The Chinese are here to stay. They have earned the right to buy our property, our resources and our services at market value. We gave them that right by making purchases out of their economy and utilizing their labour and resources which now entitles them to something out of ours.
Today, that purchase is housing in Vancouver and Richmond. Tomorrow it will be a Gold find in the Kootenays or fleets of shiny new Bombardier planes and trains.
As far as I am concerned they can have the whole damn Lower Mainland during this bubble and they can happily let it all sit vacant with the lights on until the crash if that helps balance our trade with them.
It is just houses right. Remember all that good stuff y’all bought at Rona and Home Depot and Canadian Tire and Walmart? Remember? It was all made in China.
So now we are working for the man to pay the bill because our ignorant consumption habits and lack of savings means that the Chinese are becoming our landlord at the same time they are taking control of our natural resources and buying up our companies.
It will be magnified in the future. Get used to it.
I don’t think that Garth is going to leave us. No where did he write “it’s not you, it’s me..” I thought we were doing so well? I thought we were working towards a future together? What went wrong? I can change. We’ll work things out. DON’T LEAVE ME!
#202 Utopia on 05.22.11 at 1:55 am
Excellent points. For what its worth, I appreciate your taking the time out of your day to make them.
It reminds me of an old teacher that one would find hanging out in Ashrams who once said (a passivist, actually) that he believed those who demonstrated against the Viet Nam war actually made it worse, that demonstrating against the war further polarized the U.S. and actually prolonged the war, sending the nation in greater domestic chaos in the process. In other words, he thought the demonstrations and protests further hardened the hearts of the generals and leaders of the day and just made things worse.
I thought of this kind man’s words for a moment, and then I thought of what would have happened should no one have protested the war in Vietnam. There is an old saying by one Edmund Burke:
http://en.wikiquote.org/wiki/Edmund_Burke
“When bad men combine, the good must associate; else they will fall one by one, an unpitied sacrifice in a contemptible struggle.”
Extrapolated: “All that is needed for evil to triumph, is for good men to do nothing”.
Its funny, y’know, there is no record of Edmund Burke ever saying this more famed above quote or its other versions but Edmund certainly did imply it and historians, glad to rewrite history (just a little), did the rest.
I guess what I’m saying here is that you and I share some commonalities. The difference between us is how we approach them. You teach the basics of it, share the knowledge that is needed for those to make, with clarity, the right choices. In reality, all true masters react to personal attacks the same way… by doing the opposite. Taking the higher road, as they say, through the illumination of truths that are universal.
Many masters who serve the greater good shed light on the issues of the day and break it down to its barest simplicity so that even a child could understand without getting personal. They personify the old definition of “paradigm”, a word 2000 years ago once used to describe good alongside evil to the open shame of many. One needs not be personal to describe which side we find ourselves on but humble pie is served up… just the same.
Simplicity, as they say, is golden. Personal attacks are seldom used, if ever, as a reaction by the masters who serve the greater good for the obvious reasons most namely, because when one uses them in debate, often, we become just like those we attack personally and in a way, defeat ourselves.
I think of Jesus Christ at this time (perhaps because its a Roman holiday) and his “tactics” and the karmic fallout or consequences of his actions because it relates to what I’m saying here. Jesus was never one to be short of the usage of the word… “hypocrite”. At odds with religious cults and empirical powers, Jesus made enemies precisely because he at times, became “personal”.
Imagine for a moment what its like to be called a hypocrite. Its not flattering and is quite inflammatory. Take for example, the bigotted words found in this quote:
#157 realpaul on 05.21.11 at 3:35 pm
And then imagine a person like “real” Paul marching for gay awareness and giving to the poor. To me, it personifies hypocracy and yet, when one thinks of it, truly thinks of using such labels like the word “hypocrite” on a personal level to describe an group or individual to demonstrate what it is… look at where it got Jesus Christ. Cults hated him for it and the machinery of an empire crucified him over it.
I know, I know… “for God so loved this world, he gave his only begotten son to die for our sins”. Jesus spoke of the concept of “oneness” often, as any practicing Buddhist would. Interestingly, Jesus didn’t say he was “the light”, he said, I am “the way” and there is only one “way”, then and now. Having practiced oneness presumably to its fullest, (lord knows its what JC prayed for over and over the night before he died) it makes sense then that he could die for “our” sins including the sins of his own (in other words, in a way, it was partly his own karma coming back to him, albiet, the reaction was quite dark and extreme). It also makes full sense, assuming the practice of “oneness”, that Jesus could also proclaim “only but through me can one find the kingdom of God”, for “me” is “many who are one”… but I digress.
And often, still find myself in error (from time to time, oh, the humanity). ;)
Once again, I appreciate your efforts, Eutopia and special thanks to “real” paul for offering an excellent example of bigotry and hypocracy that better sheds light through polarization, the issues of our time. :)
Jack and Chan are sitting on the dock together watching the fish jump in the sea. Jack says “I would like to catch a fish but I don’t know how to make the equipment. Can you make me a fishing rod”?
“Sure” says Chan happily. “I will do it for ten dollars” and so he quickly assembles a good rod and reel from the materials at hand. In no time at all Jack gets a big one. He pays Chan ten dollars and heads home to cook the fish for dinner.
But when he gets there, his wife argues that there is not enough money leftover for rent anymore. “You stupid man” she shouts, “We needed that money for our debts to the landlord. Now go and talk to Chan and get some of it back quickly before he spends it on something else”
So Jack goes back to the dock. “Can you buy this fish from me” he asks Chan”?
“No problem” says Chan gladly. I will give you two dollars for your fish. As Jack is leaving, Chan shouts to him from the pier “Bring me more fish and I will be happy to buy them”
So Jack goes back to fishing that day to pay his bill for the rod and reel and after a long hard day he has six fish so now he has just enough money to pay his rent and feed his family too.
“You work for me now” says Chan with a grin as Jack hands over three of the fish and takes six of the eight remaining dollars back from Chan.
“Let me know when you need more bait and fishing line and tackle, I make that too” adds Chan. ‘We have a factory on the other side of the lake”. He smiles amiably from ear to ear.
When Jack gets home with two fish and most of the money his wife is very happy. “Where is the fishing rod though” she enquires?
“Oh that cheap crap was made by a Chinese guy” Jack answers. “Don’t worry, we will buy another one tomorrow. He has a factory on the other side of the lake”
“Oh, and by the by the way, he mentioned he wants to buy our house”
@124 Mr Buyer
Hilarious !
Utop
I think we all have a pretty solid understanding of basic math and econ 101 but thank you for the 4000 word refresh. The point you are missing is that our politicians are selling us out of Canada in order to fabricate some assemblance of GDP growth and barely get the country out of recession. They are hollowing out Canada from every angle. If you take housing out of GDP, Canada has been in a worsening recession since May 2008. They funded the recovery on the backs of Canadians through the CMHC. There are NO LIMITS on the amount you can insure to buy a house through CMHC. The US has a limit of $420K and in high price areas of $625K. Could you imagine what would happen to Canadian RE especially Van if Flats actually was prudent instead of saying it everytime someone stuck a microphone in his smug little leprechaun face?
Impose strict limitations on the number of properties like Austrailia and THEY (China) do and tax the bejesus out of them if they want to come here so bad. Otherwise stick to the set percentages of entinticity guidlines instead of auctioning passports to the highest most corrupt bidder.
The only people benefiting here are the ones that are selling their Vancouver homes and literally winning the lottery, which I assume you are one of. The point they are missing in their short sighted little heads is where are they going to live and where are their kids going to live. More importantly what is going to happen when either our gov figures out what is happening and decides to get their greedy little mits in one the action and/or the Chinese gov realizes the massive capitol outflow. The former I would not hold my breath on the latter I am hearing is coming and not soon enough.
#218 Veej on 05.22.11 at 12:04 pm
#216 Junius on 05.22.11 at 10:51 am
You both make good points so don’t take what I’m about to say as too inflammatory because I don’t agree with them all. Canadian citizenship should not be for sale but who made the rules? Does one truly believe we are the only nation in the world who sells citizenships? Look into it. Look into G20 policy, I urge you both (not that I’m warm to the idea of selling citizenships, but I’d like the freedom to do the same elsewhere if the circumstances presented themselves truth be told and this is a double standard I need to be aware of) Did the practice of selling citizenships originate from Asian persuasion? We don’t know but I doubt it. And its true, our immigration system is taken advantage of, of this, I have no doubt. But to imply that ALL immigrants take advantage of weaknessess/strengths in the system is a stretch.
Its like implying like realpaul does, that all the money that comes into Canada from China is “stolen”, or that the Chinese are “Christian” because it suits them when one can travel to China and quickly see that its Buddhist temples not Crosses that litter the lay of the land. This stuff is offensive to read quite simply because its not true and is the stuff that breeds war. We all had relations die in the last one…. lest we forget.
I’m simply saying, be careful what you say because the pendulum can swing too far the other way. Sure, there is a percentage of criminals coming from overseas… of that I have no doubt. Is it all immigrants in their entirety that buy a citizenship for sale here in Canada? Are you suggesting that some Chinese who come here really aren’t from the factory from the ground floor up? That none of them are honest and found their way through here by simply being ambitious and smart?
What would you do if you were in any of their own shoes, the shoes of an immigrant who had money or had none…. the shoes of an immigrant who had a degree and high profile background or was found wanting… are you so different under their circumstances?
The facts overall are plain. Some immigrants coming over to Canada will be corrupt with money in their pockets. And some will also be honest. Some will be bad for Canada… and some will be good. But to say that they are “all bad” or “all good” for that matter, is an ugly perversion of truth. Its like saying the same thing about Canadians in general when we know through the actions of others, that this is simply not true.
Until any of us can actually put true numbers to just what the percentages or honest/corrupt immigrants are, I suggest we begin looking at the good/evil within ourselves and work on the weeds in our own garden just a touch more. Its evidenced by what we submit on this very site that some of us need it (moreso than others).
We elected a majority government, and entrusted a minister by the name of Jason Kenney to deal these issues (a Conservative MP I actually like). We have grievances? React to media hype over Chinese immigrants buying into and inflating an already overbloated property bubble? Take it up with him. You’ve got problems with immigrants not paying taxes for 5 years and getting $2700 a month for their classified “units” (families) to live in a city? Take it up with Jason. You’ve got problems with the way financial background checks are done with immigrants in this nation, take it up with Jason Kenney. You’ve got Chinese credit fears over a real estate collapse in Vancouver/Toronto? Take it up with our immigration minister. Hear his side. Until then, what have we really got, besides… media hype and assumption?
You’ve got problems with skin color, different religions, different ways of doing things, take it up with God but while you are all taking it up with these individuals, take a good solid word of advice.
Hear your own words first and then apply it to yourself.
http://www.cic.gc.ca/english/index.asp
Just remember, there could actually come a time where we become an immigrant ourselves. Maybe own a property elsewhere outside of Canada… and how will we then wish to be treated?
What kind of rights will we wish for as travellers, owners of international properties and potentially citizens abroad ourselves?
Beware the double standard that is born by ignorant fools. Not implying that you both are ignorant fools, I’m saying beware the double standard because its the surest way to becoming one.
…Yeah, that means for the average family to buy the average bung, they’d have $4,221 left to pay for food, clothes, gas, cable and ammo. Uh-huh. Three hundred and fifty bucks a month…ITS 100% because of the banking cartel, the good news is : I just looked at a Google map that tracks all of the global demonstrations and protests against the banking occupation and there is 600 of them stretched out in towns and cities all over the world and that number is growing quickly. So this is a global insurrection. The *smart* people are waking up! We are breathing dow their neck!
#224 Daystar
OK, that was a pretty interesting post you left Daystar. Thanks for the vote of confidence. Do you have any idea what an obnoxious person I can be at times though?
It is just my nature get under the skin of others when I hear them talking goofy. The complaints and the thin case against the Chinese buying up houses in Vancouver and Toronto is based around such misleading confused thinking and lack of good information that it frays my nerves some days.
I have avoided the topic for months now but just finally had to say something. Hopefully my comments have added a little perspective to the debate.
This guy is out of his mind. Of course, he is a realturd.
“Some people hear this and say ‘Wow, what a crazy price,’” he said. “But I think the new buyers will do very well in coming years. This area has been undervalued.”
http://www.theglobeandmail.com/report-on-business/economy/housing/housing-costs-soar-in-vancouver/article2029516/
$350 per month buys plenty here in B.C.
BTW – BC really means “Bring Cash”. Better bring lots of it…
Garth your analysis only look at present day fundamentals and not smoking mans crystal ball.
Greece is a basket case and will cause financial bust 2 very shortly, to be fallowed by Spain and Portugal. Where will all the smart money go, to USA, nope, answer Canada.
This is a biggy, Looks like the yanks are going to elect Ron Paul, although you will never hear 1010am or 640am mention his name, read between the lines kids.
80% of USA wealth is owned by 20% , they know if Ron Paul gets elected, It aint going to be business as usual. Guess where they will be sticking most of their mola.$$$$, Europe, ba hahahah, Nope CANADA.
Rates are going nowhere but down as our bonds are going to get gobbled up, like a hungry Shark feeding on the singing fat lady.
BOC will not raise the overnight rate during Financial Crisis 2.
Wages will rise and rates will dive. The working man in Canada is finally going to get a break…….after 30 years of Bank of Canada punishment.
I should start charging people for my advice. :)
#10 Daniel – Anyone holding silver should probably decide reasoning behind holding it. If its a fiat hedge I’d jump horses and move position into Gold. Central banks are holding gold exclusively as a reserve currency, silver isn’t factoring into any high level strategy. If its speculative position then I’d probably continue to trade it. The paper derivative market dwarfs the physical market making it an easy target for manipulation. I pulled trigger on paper positions when Eric Janszen made his silver call – I am now starting to moving profits from that trade into physical and hope to see silver in the mid-20s to move into full position. I suspect someone is going to attempt to destroy the derivatives market and send physical soaring for brief period of time.
#202 Utopia – The issue is one of global fairness in capital structure. You need to realize the long term ramifications this unbalance has created. How can you proclaim free market exists when one one group who exist in low or no tax jurisdiction can accumulate wealth unfettered while domestic entrepreneurs have wealth stolen from them in oppressive tax regime. Who do you think has the advantage in pursuing opportunity & building wealth in the long term.
Personally I’ve grown to accept this is how the country wants to be played. I learned early from the master (Paul Martin) that on this stage patriotism just doesn’t pay. Better to incorporate offshore and pursue global opportunities. Of course under this regime I create no canadian jobs, I pay little canadian tax but this is how the country wants it. Canada would rather give the advantage to foreign capital and say to hell with the domestic entrepreneur. I doubt this fair weather capital will stick around in the long run so the country has a serious problem but in the near term its easier then dealing with structural flaws of Canadian economy. Before anyone decides to label me unpatriotic I’ve worn this country’s uniform in the CAF and paid far more into this society by age 30 then most babyboomers will ever pay their entire lives. The boomer generation were the architects of this capital structure, I just live in it.
#140 David Jensen – I agree with your assessment, this is how keynesian experiment eventually ends. Unfortunately under keynes’ model losses are socialized – the banks themselves will face few long term repercussions. The losses have been and will continue to be transferred onto the public account to be paid through taxation or currency debasement. The next generation will live under austerity to pay this socialized debt they had no hand in creating.
my finish grandfather left finland …1890 he didn’t like the taste of tree bark ….
In my last few posts I have attempted to explain in rough terms how and why our money is to come home to us as a result of trade imbalances.
I don’t know if I have done a very good job of it.
We need to understand though that we are not the same as America in one very important respect. We do not have a reserve currency that allows our creditors to utilize Canadian dollars in shifting the burden of our thoughtless purchases of imported goods onto third parties.
This should also help to explain to you the mechanics by which inflation is exported abroad by US fiscal and monetary policies.
Foreign creditors holding US dollars can use those funds beneficially to buy from each and every country that still accepts US Dollars. This reduces the number of US dollars that will return to America immediately and enables foreigners (creditors) to buy up goods and resources in neighboring countries.
Most of the world still freely accepts US dollars in trade at the time of this post. With the exception of Russia, Brazil and China (perhaps a few others too) who have created special arrangements to trade in their own currencies, the rest of the globe will still accepts Greenbacks as willingly as the Euro or Sterling.
Canada does not enjoy that benefit.
Despite the fact that our economy is the most closely similar to that of the United States of anyone in the world, we must still pay directly for all our consumption demands from others out of our own purse. We behave like them but don’t enjoy exactly the same benefits.
We do not, for example, get to shift the burden of devaluation onto the Third World by virtue of a universally accepted dollar that everyone of our creditors can use at will across the globe.
This means that we must be much more careful in budgeting our national resources because it is those same resources that will ultimately be demanded and utilized for payment in lieu of debts by our creditors.
We won’t benefit by having other countries subsidize our excessive consumption. And yet we consume exactly like our American brethren.
We don’t seem to really get it up here.
And we might not like the outcome of it but those are the rules. Those have always been the rules. Trade imbalances like the one we currently have with Asia is therefore going to have a much bigger impact on the Canadian economy than a similar trade imbalance would have on the US economy.
Nor can we afford US style Keynsian largesse and the insanity that comes with running budget deficits to the moon. Austerity is certainly our path in the future, much as it has been for the English as they work to trim their debt and deficits (God Bless them).
But we are not there yet. We still spend and consume like drunken sailors here at home just like they do in the US. We behave as though we have a universally accepted reserve dollar. We do not.
In our case, the credits will transfer to those who ship us products in excess of our income in the form of commodity trades in payment.
That means that much of Asia, and China in particular, now have a claim on our national resources should they so choose to exercise that option.
How else would we pay them? With manufactured goods perhaps at a time when our dollar is robust and set to rise further on dollar weakness? High priced goods entice nobody.
Ask yourself this one simple question. If you were in control of billions of dollars in buying power (Loonies), would you buy overpriced manufactured goods or would you just cut to the chase and invest in mines, mills, timber rights and all of the companies that process and produce them?
This is now our problem and it is why we are vulnerable to further declines in the Greenback. Our currency rises as theirs falls. Not a good thing when we are running current account deficits and building major trading imbalances with the worlds biggest manufacturer.
So while the capacity to manufacture expands daily in Asia, our own producers find themselves with their backs to the wall and bleeding heavily from the body blows of globalization efforts.
One thing that therefore needs to be urgently addressed by our policy makers is how we will accept the return of our dollars.
Can we make legislative or progressive changes to our basic trading relationships that might compel our creditors to invest in Canada beneficially while they simultaneously extract their pound of flesh from our economy? Can we get away with acting unilaterally when those same actions contravene international agreements?
It really is that simple. We need a national strategy. A set of guidelines. One that sees our dollars returned constructively while we pay our bills for all the goods we have already taken out of the countries we import goods from.
We do not have the luxury to shift our burdens and export inflation as they do in the US. We must pay our debts directly. Lets make it work in our favour.
Company linked to Ai Weiwei accused of tax evasion
http://www.ft.com/cms/s/0/f9fe1a88-8426-11e0-8b23-00144feabdc0.html#axzz1N78PdVN5
China has publicly accused a company linked to Ai Weiwei of tax evasion and destroying evidence, in the latest indication of the case the authorities are building against the detained dissident artist.
=====
Playing the old Al Capone card?
Just wonder if perhaps this is simply the start of the end…..both sides of the Pacific are tired of HAM and its negative effects and this is one way to stop it.
#202 Utopia: “[what if the Chinese] bought tens of thousands of properties at the bottom of the market….You would not like that either, right.”
Wrong. No one would care if they bought at the bottom.
“Which is just another way of saying you reject the Chinese and their money whether the market is in a bubble or in a trench. And that, my friends is a form of xenophobia.”
That, my friend, is a straw man.
http://en.wikipedia.org/wiki/Straw_man
#217 Veej
I have read your comments Veej.
I am not convinced by your reasoning though. It is very unfortunate that Vancouver is paying an outsized price for the consumption habits of the entire country but it is not our business how our major creditors spend their money here.
Nobody makes rules that suggest our dollars coming home should be equally distributed all across the country. The Chinese can invest at will under the current rules as they see fit in any jurisdiction they choose.
Right now they choose Vancouver and the lower mainland. They seem to enjoy massive speculation and gambling. Why should I care that they risk their money here?
Don’t like it? Then work to change the law.
If they want to satisfy their thirst for home ownership of bubble-priced housing then I say “all the best to you” and good luck.
In any event, it was not the Chinese who created the bubble in the first place. It was not their policies that created the circumstances that led to the current boom. They are merely the last ones drawn in to all the activity as a result of all the media attention.
You are barking up the wrong tree my friend and like many others who have come to this site in the past you have no concept of the fundamentals. Nor do you understand how and why the the bills of our trade imbalance must all be paid in the end even when it makes us uncomfortable at times.
My suggestion to you……..learn Mandarin.
Hopefully it is now starting to dawn on some of you people why the Liberal Party program of Cap and Trade would have been suicide for our economy right now.
As was the NDP pledge to double seniors pensions and dole out money to every Tom, Dick and Pierre who would vote for them. It is easy to introduce fresh expensive programs but impossible to remove them after the fact.
Without a lot of pain that is…
We need good stewardship of our economy at this time. We need a Conservative approach to balancing our budget and a solid emphasis on International considerations.
I am encouraged by the steps the Harper Government has taken recently as they have shown they are embarking on an agenda to put the focus on the right areas. Industry, international trade and agreements, support for small business and our a special emphasis on our foreign relationships.
The cabinet is packed with a terrific lineup of experience.
We cannot meanwhile afford to give away our relative advantage with expensive and wasteful experiments and programs at this time.
Let us get our house in order first.
Yesterday was the day Harold Camping predicted the world would end.
Many people believed him and screwed up their lives in doing so.
Garth Turner is real estates Harold Camping. He’s making money being contrarion.
The real estate market is soft, but it isn’t crashing and it won’t. Wake up folks. Do you really want to spend years and years of your life hoping for this scenario? It didn’t happen. Move on.
You just totally screwed up your rapture. — Garth
#206 Mr Buyer: “#201 betamax I know it is hard to believe but I am one of the better examples of a teacher here.”
It is not unbelievable; however, comparative virtues are often only virtuous in comparison. In the land of the blind, etc.
“I assure you that I go through daily cycles of reflection and adaptation for the benefit of my students.”
I am sincerely glad to know it.
“you do not like my stream of conscious postings”
Separate ideas demand separate paragraphs. That’s what paragraphs are: typographic divisions between differing content. A failure to make such distinctions indicates a failure to think and communicate clearly.
You have identified yourself as a professional teacher of English, and so I and others here naturally judge your posts accordingly. If I were to identify myself as an economist (I am not), I would similarly expect others to judge my econ-related content accordingly.
“Frankly, you are a big disappointed”
You rather affirm my point here.
“I expect more from a fellow scientist really.”
We expect a professional to maintain professional standards, hence our criticisms. I understand that you may wish to relax those standards in your off time — fair enough, but then post more anonymously.
Veej ……… keep up the good work. The Liberal nihilists that have flushed this country down the toilet with their self loathing are flailing in denial. The obvious is what we see on the ground…not as the Liberal haters have in mind in some future society of overstuffed penitents and Liberal navel gazers which ride the taxpayers backs.
Go burn a cross, will you? — Garth
Utopia — sorry to be argumentative above; I generally enjoy your posts and agree with much. But I do not agree that house prices inflated by hundreds of thousands of dollars are ‘fair trade’ because I also bought a cheap plasma from China. (I did — a 50″ 1080; it’s very nice.)
China has effectively exported its RE bubble speculation to Canada (Vancouver especially) and conflated it with our own, extending ours to even more ridiculous extremes.
Goosing a speculative bubble is quite a different thing — with far different long-term effects — than maintaining a balance of trade. But I’m sure you know that, despite your rhetoric above.
#238 betamax
Straw man eh? HaHaHa. I actually burst out laughing at your post because it was so flawed. You don’t seem to really know what it means.
Are you one of the racists by the way?
#234 Cato on 05.22.11
Thanks Cato,
I do actually realize the inequities in capital structure are an impediment to this country. A high tax regime has difficulty competing with a low tax regime, no question.
We have social benefits here though that do not exist in much of Asia. We have tremendous pension plans, a social safety net, inter-provincial transfers of wealth enabled by the Federal government to create equity across the nation and amongst the best medicare programs on earth.
We would not give that up to compete though. Would we.
#243 betamax on 05.22.11 at 4:27 pm
“Utopia — sorry to be argumentative above; I generally enjoy your posts and agree with much. China has effectively exported its RE bubble speculation to Canada (Vancouver especially) and conflated it with our own, extending ours to even more ridiculous extremes”
_____________________
No problem Betamax. I will withdraw my earlier comments in response to you. I agree actually that some of China’s spectacular property bubble and the Governments role in limiting speculation there is now having an impact on us.
This is all an outcome of Quantitative easing though which exported serious inflation from the US to China as a means to create global growth and inflate away dollars.
The Chinese got the worst end of this stick, trust me. We are only seeing a small offshoot of the bigger problem that is now developing over there. I don’t hold it against them. In relative terms, foreign investment in property in Canada is still representing the minority of new purchases.
We are our own worst enemy still. The Chinese money now entering the country just sticks out like a sore thumb though and it is easy to make them a target of our anger at times like these.
You can be sure they will be amongst the first to sell if they think they are going to lose money.
Why? Because the ones coming over to buy Canadian properties are already fairly sophisticated investors. They keep on top of the pulse. These speculation gains will be followed by spectacular sales if it ever goes South (it will) and then we will have a whole lot of new worries that don’t include Chinese property buyers.
For the people discussing Chinese investment in Canada. This article is a bit of an eye opener. Is Canada also on their laundry list?
“How foreigners will buy the U.S.”
“Think we’re in hock up to our eyeballs now? Wait till 2025.”
“That’s the message behind a World Bank report this week that imagines what the global economy will look like in a decade and a half. It is, to be blunt, a world in which Americans have sold everything that isn’t nailed down to finance our fabulous lifestyles.”
“The World Bank projects that while the U.S. economy will expand by perhaps 40% in constant dollar terms, net foreign ownership of U.S. assets – stocks, bonds and property in the hands mostly of China and other emerging Asian countries — will expand fivefold. This is the ownership society, though with others doing the owning.”
http://finance.fortune.cnn.com/2011/05/18/how-foreigners-will-buy-the-u-s/
Metro Van’s judgement day
The Truth of HAM $$$ is beyond obvious….more and more non deniers or converts are admitting it..propbaly in hopes to distance themselves from the pack that will be forced to admit it.
The lead edge boomers will see the retirement dream fade….debt levels so high amongst students…no REAL jobs….
The HAM money, and the open door(or any door?) policy to it was simply a sell out and a short term trickle down for a bogus GDP.
I can already see the auctioneers busy with bankruptcies…..
I see unrest as this clusterf*ck unfolds…turmoil….lots of related 6 O’clock news stories… cries to close the border.
Bad times….
utopia:
“Ten years after adopting the policy, Notre Dame remains the only major U.S. university that forbids license holders to put the school logo on any product from China, according to groups that track college merchandising. ..
Notre Dame said its policy on Chinese products is tied to workers’ conditions in the world’s most populous nation. A standards code adopted by the Catholic university in 1997 requires freedom of association and the “right for workers to organize and form independent labor unions of their own choosing.” It implemented the ban on Chinese products four years later.
Notre Dame is also a member of the Fair Labor Association and the Worker Rights Consortium, groups that monitor specific factories for universities.
http://www.bloomberg.com/news/2011-05-17/notre-dame-says-no-to-made-in-china-on-fighting-irish-goods.html
News:
http://www.theglobeandmail.com/news/national/toronto/globe-to/faulty-towers-the-hidden-dangers-of-low-condo-maintenance-fees/article2030464/
I like the you are a big disappointed line. I actually read the post once over to minimize boners like that and did not see it until now. It was entirely by accident but the assertions still stand (somewhat bruised and tattered).
#240 Utopia on 05.22.11 at 4:09 pm
& #243 realpaul on 05.22.11 at 4:21 pm
Thanks for reminding me why I think both of you are prigs.
>He went on to quote a CMHC report which says that the average Canadian homeowner has a greater net worth than a renter ($377,000 vs. $64,000) and implied that homeowners are more likely to contribute to charity, to vote,
What an utterly bogus pack of rubbish. Group 1 contains Bill Gates’ clones and group 2 contains the single moms trying to pull together enough coins for a new pair of shoes for the kid. Confusing correlation and causality is the last bastion of the sleazy statistician.
The 24 billionaires in Canada are worth ~95 billion collectively. If the remaining 20 million homeowners were hopeless zombies wandering in the cornfields of Ontario, the average net worth would still be $5000. Just because of 24 people.
This is when I knew the USA was in trouble, via the way back machine….. are we any different in BC?
http://money.cnn.com/magazines/fortune/fortune_archive/2005/05/30/8261260/index.htm
#246 Utopia – I believe we will have no choice but to give up much of the social infrastructure you describe whether we want to or not. Coming out of WW2 we were given a substantial advantage over rest of world, our industrial infrastructure escaped the war unscathed. It gave us a tremendous economic advantage in post war period and it took one generation under a centrally planned economy to destroy it. If we had a true free market the trade imbalances between east and west could not have developed. But it was more politically tenable to create a series of economic bubbles, we allowed our leaders to keep these imbalances going to provide lifestyle our economy could simply not support.
The problem going forward is our economic momentum has been lost, regardless of what we feel we are entitled to austerity will be forced upon us at some point. The massive foreign trade imbalances will not be repatriated for our benefit – that wealth will be used by foreign governments to compete for world resources. Parts of Canada will benefit from this, much of Canada will not.
In the long term the west will re-assert itself after the eastern ascendancy. China is under belief that they can pick and choose certain freedoms while denying others, in long run I’ll be willing to bet our freedoms carry the day.
My prediction will be the US takes one more kick at keynesian can and goes all-in in under belief that large large enough stimulus will restart growth. It will fail. The fallout for this act will be a crisis in bond markets, serious inflation,massive spending cuts and social/political unrest. Canada quickly becomes a country of haves & have nots – unlike the US we’ll attempt to hold onto our social infrastructure at all costs but this act will result taxation the economy can’t absorb and capital flees taking jobs with it. It’ll be the next generation growing up under austerity who will realize there are no short cuts and that the economy can’t be managed for political benefit , hopefully they’ll be the generation that actually gets it right.
Two condo horror stories. I think they are a scam. Developers/builder, insurance, and maintainence companies get rich off you.
http://www.theglobeandmail.com/news/national/toronto/globe-to/faulty-towers-the-hidden-dangers-of-low-condo-maintenance-fees/article2030464/page2/
http://www.theglobeandmail.com/news/opinions/opinion/the-lowdown-on-living-in-the-sky/article2021685/
must add key quote from first article, second page – jingle mail in Toronto!
“She’s also worried about receiving a repair bill that she estimates could cost her $25,000 per unit – and she owns two in the tower. It’s a daunting sum.
Others have less conviction. At least two of the units that are for sale are being unloaded by lenders that have taken possession from tenants who have walked away from the units. That could make a bad situation worse for those left behind, as empty units mean higher maintenance fees for everyone else.”
Xenophobia and tribalism is not an abnormality people its normal behavior for humans, get used to it.
As the economy continues to slide into the crapper even the most open minded liberals will change their tune. When currency/money flows like water the majority are open minded because they can afford it.
When the cash flow dries up its no more mister liberal guy. One of the things that is going to bring that about is the decline and crash of real estate sales and prices.
When you are steadily getting poorer instead of wealthier all the sudden you wonder why, how and who the villains are? Expect interesting time ahead.
#106 Only The Bankers Laugh on 05.21.11 at 9:08 am
Said
“Look at your last 2 posts, dude. Are you for real? Ridiculing people and calling them losers”
“Go hug your kids and give them a huge down payment if you believe in real estate so much at this time.”
________________________________________
Dude I never called anyone a loser…I call people bubble heads, it’s a mentality a way of thinking that in all honesty will not hurt you too much, but you will never have the thrill to know what it feels like to go all in and win. Bubble heads are too smart…
As far as my kids go, if the bum’s could hold down a job for more than a few months I would fork over and give them some mola. I would tell then to buy a small bungalow on a 50ft lot knok it down and build two semis if the re market lost 50% value you would still make a profit.
But problem is I brought them up the way I was brought up, no guidance, no discipline, free thinkers, screw your teachers and the man.
It works for me, and one kid, but the other two well they need a bit more time…….. to get with the program. I think they are closit bubble heads……
#253 Live Under Your Means
“Thanks for reminding me why I think both of you are prigs”.
———————————————
You are welcome, of course. This is a true democracy. Feel free to add any idiotic commentary you please if you don’t like my politics.
WASHINGTON (CN) – Banks insured by the Federal Deposit Insurance Corporation wishing to engage in retail foreign exchange trades must receive written consent from the FDIC, according to new regulations proposed to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Insured banks that already have a foreign exchange trade desk must file with the FDIC. The filing must include a description of the bank’s foreign exchange business, the manner in which it is conducted, the amount of the institution’s existing or proposed investment in foreign trades and description of the target customers for the retail foreign exchange business.
The proposed regulations expressly prohibit a bank’s traders from engaging in fraudulent conduct or from acting as counterparty to transactions that involve their own customers.
Consumer protections under the proposed rules are extensive, requiring that insured bank’s obtain signed acknowledgement from their customers that they understand the risks involved in foreign exchange trades.
Banks will have to maintain extensive records of their foreign exchange transactions including the name and address of each of their customers, ledgers of all credits, debits and charges against their accounts.
What took sooo long
Apple to Pay $16.5M for Shareholder Deception – Courthouse News …19 May 2011… claims that Apple Inc. and several executives and board members backdated employee stock options for more than a decade and issued false …
http://www.courthousenews.com/2011/05/19/36701.htm – Cached
#252 Mr Buyer: “…the assertions still stand (somewhat bruised and tattered).”
LOL. Fair enough. I’ve seen a few expat ESL teachers who should have been nowhere near a classroom, and perhaps I was too quick to count you among them.
#245 Utopia: “Straw man eh?….You don’t seem to really know what it means.
You created a position — i.e. both bubble and trench — then argued against it. Perhaps I misunderstood?
“Are you one of the racists by the way?”
I’ll ask my wife. She’s an immigrant from mainland China, so she should have a good handle on it.
I see your later post, thanks, and I guess we’ll have to agree to disagree on the effects, though we do agree on the eventual outcome.