Supply & demand

There’s never been a real estate boom that lasted. No market’s risen limitlessly. Every bubble’s burst. The only news is a whole different bunch of people have to learn an old lesson over and again. Never without loss.

Those losses have started across swaths of Ontario, up the Okanagan, into Alberta and just about everyplace there’s a lake, a dock and a boat. Recreational real estate is deceased. Rural and suburban spreads are on life support. Given a slowing economy and swelling risks, the malady will spread. Those who think they can hide in Toronto or Vancouver, should listen to Penny.

She’s been reading this miserable under-sexed blog for a few weeks now and moved to Toronto after living in two areas (San Francisco & New York) where everybody used to say, ‘it’s different here.’ It wasn’t.

“This is the third time I’ve seen this crazy real estate mania. The first time was while living in San Francisco in the late 90’s. This was fueled by the easy money flowing around the dot.com boom. Values of homes doubled over a period of only 5 years. Homes that were complete dumps with all sorts of issues would be listed on Monday, have an open house on Sunday and get multiple offers over asking.  After the dot.com bust in late 2000, it all stopped and the house we sold in 2000, now after ~11 years, is selling for 15% over what we sold it for back then. Not exactly a great “investment”.

“After leaving San Francisco and moving to NY, we purchased a nice home in a rural area. It was all wonderful until 9/11 and the lowering of interest rates created a fire in the real estate markets all over the US. Even in upstate NY, where the average family income was $45K and an average home was $100K, prices for homes surged 15-20%/yr. In the end, small farm houses that you could have purchased for $150K in 2000 were asking $500K.

“In the end, the taxes and carry costs doubled.  We decided to sell, and found a greater fool (Thank GOD !) last summer. Even with the escalating values over those years, we barely broke even. The new owners are already under-water.

“My husband and I now live full time in Toronto. We purchased a small loft here about 4 years ago and have no mortgage. We were lucky to be able to take advantage of a stronger dollar back then. Now we see the same thing happening here in Toronto. It’s so sad… I don’t understand why the BOC doesn’t raise rates *now* to put the brakes on this thing. (It’s probably too late now anyway.) I suppose it’s similar to the US where the banks and the Gov are too cozy. In the end, the banks will make a ton of money on interest, the real estate people will have made a killing on commissions and the governments will continue harvesting more tax based on increased property tax revenues. The only loser(s) are the average folk who now have to work a lifetime just to afford a roof over their heads.”

Close, Penny, but not exactly.

Not only do bubbles – almost always fed by easy credit – make houses unaffordable, but they leave deep gorges of debt in their wake. Real estate values revert to the mean (or crash through it, as in the US now) and anyone who bought during the ascent stands a good chance of ending up with more mortgage than equity. That’s exactly how 28% of American families slipped under water.

Of course in Canada, where we have state-sanctioned 5% down payments and 95% of debt for most recent buyers, negative equity is always just a few bad weeks away. And that brings us to the greatest risk of all – the effects of a housing downturn on consumer spending. After all, two-thirds of the economy results from us all buying stuff from each other, and homeowners with no equity, and no way to walk, won’t be buying too many flat screens or Chryslers.

Meanwhile those blog dogs panting to see the high and mighty leveled in a houseageddon, reducing their million-dollar homes to garden shed status, might be interested in this. A new Zillow study proves that in the US real estate crash now continuing, cheap houses took the biggest hit. Since the market peak, they’ve crashed 63% in value, while luxury homes fell 38%.

For example, where Penny used to live – San Francisco – the ritzy digs lost 24% of their value while lower-priced homes tumbled by 54%.

Simple reasons. First-timers don’t buy palaces. People with little equity are the first to be wiped out, with a wave of emotional sales taking place among the condos, towns and row houses the virgins once flocked to. Second, people with big houses tend to be older, have more equity, other assets and more financial staying power. They typically don’t need to sell in a storm. Third, banks shamelessly shoveled inexperienced, unprepared buyers into homes they could only carry with the cheapest of loans, and in an expanding economy. In Canada, this has been done to epidemic proportions.

And then there’s speculation. As I’ve told you, almost half of all the condos being sold in Toronto these days (about 18,000 will go this year) are being snapped by speckers and flippers. When the winds shift and dreamed-of profits vanish, huge numbers of properties will be dumped – typically one or two-bedroom boxes, further corroding the low end of the market. And don’t even get me started on those nimrods who have been camping outside sales offices in Burnaby…

That housing prices will fall is a given. The schedule, market by market, is already revealing itself.

This is 1999. Your house is Nortel. There’s nothing new.

230 comments ↓

#1 not 1st on 06.06.11 at 8:52 pm

They lived in San Fran, New York and now Toronto? Sounds like this couple is chasing the bubble wherever it goes next.

Don’t you mean Phoenix, Miami and Vancouver? — Garth

#2 vancity-renter on 06.06.11 at 8:53 pm

first??!

#3 disciple on 06.06.11 at 8:57 pm

Milk is less than half the price south of the border (price controls) and don’t get me started on the price of butter…I see that milk jug in the middle as half full, well, maybe 40% but they don’t fill ’em up to the top anyway. But why keep the empty one in there?

#4 Mr. Lee on 06.06.11 at 8:57 pm

Your arguments and points sir will soon be realized.
I see this trend in Calgary, the increase in the money supply provided to us courtesy of C, F et al…has lead reckless borrowing and reckless lending backed by tax payer insurance. These low interest rate policies have made first of second time home buyers buy estate dwellings. This has increased the price of the average home and set up many people for a hard lesson in accrued interest and or the effects of having to pay a crushing mortgage payment while the price of gas increases to a toonie a litre and loaf increases to $7.
With these realities, consumer spending predicated on disposable income will vaporize. With it the confidence in home ownership.

#5 Publius Enigma on 06.06.11 at 8:59 pm

How did this over-sexed blog suddenly become under-sexed?

I’m lonely. — Garth

#6 Aaron - Melbourne on 06.06.11 at 9:00 pm

THIS is Australia’s most heavily discounted property:

http://smh.domain.com.au/the-home-that-no-one-will-buy-20110604-1fmid.html

#7 rosie on 06.06.11 at 9:00 pm

Well done Garth. This entry nailed it.

#8 squidly77 on 06.06.11 at 9:01 pm

That the Canadian real estate market will meltdown is 100% certain.

#9 Bill Gable on 06.06.11 at 9:03 pm

May Building permits fell of a cliff here on the Lower Mainland – and it is picking up speed – but – rockheads here seem to only care about the excerable Canucks or putting on a big show. NICE BMW!
I keep coming back to the anecdotal retail incidents that I notice. Today at one of the large Drug Stores – a guy used his credit card to buy a $6.99 thumb drive.

I asked the head cashier at Safeway – roughly how many people use credit cards versus cash for food (*I know this guy and is the asst mgr and we have been friendly since the store opened) – he guessed that 75% used cards.
Credit cards for FOOD? That used to be illegal back in the day.

So – something ugly is already here. Meanwhile the dunderheads all talk hockey.

Sad.

#10 Raj on 06.06.11 at 9:10 pm

With the market continuing to go higher, buyers (like myself), seem to be able to afford less and less. At the same time, sellers are getting greedy by the minute. Heck, list your house a bit under market and watch the fish take the bait!

Looking at it from an economics point of view (assuming I have an inkling), each incremental increase means I (the buyer) am getting less value, hence decide to consume less of it. Right now, I have taken myself pretty much out of the equation, as it really isn’t worth it. The pendulum has swung so far over, that it would be purely stupid to get in front of this train being recklessly driven.

I have seen first hand how swayed the market is in the sellers favor. Just not sure when the rest of the buying public will sit back and scrutinize the purchase at least as much as they would when they try to save a few cents driving to another gas station.

Save pennies but risk G’s!

This is the Canadian way? And I thought we were a bunch of risk averse people.

#11 kc on 06.06.11 at 9:10 pm

Global tonight was previewing tomorrows National. they are running a “HAM” pump and dump special…. 5:30 pacific…. They will focus on Toronto and what looks like Van… check your local listings….

#12 Debtisforever on 06.06.11 at 9:11 pm

“Meanwhile those blog dogs panting to see the high and mighty leveled in a houseageddon, reducing their million-dollar homes to garden shed status, might be interested in this”

Yes well, in Vancouver, a million dollar house looks exactly like a garden-shed. Bungalows in my hood sell for $800k (pre-bubble they were about $250k, maybe less, says my SO who has lived here since birth). I dunno about you but I don’t consider $800k “cheap”. I’d be pretty happy with a bungalow for $250k (still a hefty sum with mortgage rates at 7%). And I’ve got 30% down.

#13 Cognizant on 06.06.11 at 9:12 pm

Nortel? Yep, looks about right.
http://tinyurl.com/3z67ujr

#14 vancity-renter on 06.06.11 at 9:12 pm

Regarding those nimrods camped outside to snatch up the condos in Burnaby and New West over the last few days… I have 3 nimrod friends, one bought 3 condos and the other two, one each. They make maybe 50-65k per year and I know they have no savings and live on LOC. Actually, the guy who bought 3 “retired” at 31 and has been flipping condos for years but recently returned to the work force as a consultant.

Not that it matters too much, but all three are Asian (although born in Canada and/or immigrated here when children). There is a 2-tier system I notice… my Caucasian friends and colleagues mostly either rent, or live in the suburbs and bought in when a detached house in Maple Ridge went for $125k. My Asian friends (most grew up here) almost all live in $600k+ condos downtown or Burnaby… some in $900k+ townhomes. I’m talking about a group of professional-types in the age range of 30-36… most of us all make about the same (low, compared to Toronto) salary. One difference is that my Asian friends lived at home throughout university and even into their 30’s, totally rent-free (although they all bough fancy cars that cost a bundle) whereas my non-Asian friends mostly left home after high school and rented from 18-20 years old. The batch in the swanky condos look down on us renters. You wouldn’t believe how many conversations turn toward how I am keeping my family in poverty by not getting in NOW. I’ve seen some posts about the Caucasian population becoming the renting serfs of Vancouver/Toronto, taking skytrain in to the city to be maids and baristas for the wealthy Asians who own all of downtown and have all retired and made millions from RE. The problem with this scenario is that from this point on, nobody can crack in, they are just selling to each other and all hoping to either flip to a rich mainlander (they only want detached homes in certain neighborhoods) or get renters (some have tried to rent a 450 square-foot box near Stadium station (a craphole area with high crime) for $2000+/month.
I feel the crash coming soon, and I think I know who will be hurt the most by it in Vancouver. Not the foreign-born Asians, not the baby boomers, and not the renters. It will be 90% Asian-Canadians and 10% Caucasians who have also tasted the Kool-Aid… at least with respect to downtown condos.
I don’t want a crash but I know it is coming.

#15 Steevo on 06.06.11 at 9:14 pm

Powerful post.

#16 BC Bring Cash on 06.06.11 at 9:15 pm

Garth you talk about Nimrods. I often wondered where that term came from. here’s a link to wikipedia that may shed some light on the topic.
http://en.wikipedia.org/wiki/NIMROD

#17 Boombust on 06.06.11 at 9:16 pm

Like I say, “Bring it on.”

I’m sick of waiting.

I WILL wait some more, though.

#18 Cory on 06.06.11 at 9:19 pm

Even me, a hardcore realist who saw the lunacy of it all, am starting to doubt myself. I keep saying after June 18 is should be all over since I believe mortgages can be pre approved for 3 months so I think we are seeing the residual effects of the “rush” before the changes took effect.

I can’t figure it out. I thought I had.

#19 Mr. Reality on 06.06.11 at 9:22 pm

The funny thing is the markets and the general population really do not see what is coming. The negative sentiment in the news is only just coming forward.

When the first sell off occurs on the TSX the horny homeowners will start to panic. That will start the chain reaction. All we are waiting for is that one shoe to drop and BANG! It will unravel.

Something tells me that shoe will be from European descent and affect the credit markets like nothing we have seen in a long time. Canada survived 200/09, we will not survive the next one…….

Shorting has never felt better!

Mr. R.

#20 TurnerNation on 06.06.11 at 9:58 pm

1. From Yahoo news source:

“The law school class of 2010 is making news for all the wrong reasons. The budding legal minds who managed to find employment last year have set a new record–only 68.4 percent of them are in jobs that require them to pass the bar exam, the lowest share since the Association for Legal Professionals began collecting data.

Another 10.7 percent of the class of 2010 are in jobs that require or prefer a J.D., while 8.6 percent have jobs that require neither a law degree nor bar passage. The class’ overall employment rate–for jobs in and out of the legal profession–is lower than it’s been for any class since 1996, at 87.6 percent. So counting unemployed new graduates, the actual percentage of those in jobs that require bar passage is even lower, at 60 percent.

In 2009, almost 30 percent of law students said they expected to graduate with more than $120,000 in debt. Another 15 percent said they would owe more than $100,000.”

2. Picked up a free local Toronto taxi magazine.
Quotes: 10-year driver says his worst year ever, hotels are 1/2 full. Most drivers earn min. wage or less take home.
Also they claim city flooded streets with too many taxi plates over the years.

#21 Marty on 06.06.11 at 10:02 pm

Dear Garth

Do something on Montreal. People earn really low wages here yet prices are going through the roof. I don’t know anyone who can afford a SFH anywhere near the city centre.

Please, do an exposee on Montreal. It is no longer cheap and this is really effecting the town’s joie de vivre. No spare money equals no cash for restaurants, nightclubs and general frivolity. You can really feel the lack of available cash these days. It’s sad.

#22 Behavioral Finance on 06.06.11 at 10:04 pm

Bill Gable
There is nothing ugly about using credit cards for food. For one it is convenient. Second of all if you have rewards credit card and you pay it off every month you may as well use a credit card when you buy groceries. Many rewards programs give you 2% cash back for buying groceries which adds up in a year. Obviously people usually spend more when shopping with a credit card so the strategy is to go with a list when you go grocery shopping.

#23 BC Bring Cash on 06.06.11 at 10:07 pm

A further explanation of the term Nimrod
http://en.wikipedia.org/wiki/Nimrod_(disambiguation)

#24 shanks on 06.06.11 at 10:09 pm

Disciple, never mind the milk south of the boarder, it has always been full of growth hormone and antibiotics, and now is full of radiation!

Nice link Vlad re hot particles, very informative transcript, thanks again!

Garth, this “under-sexed” blog keeps me coming back to the internet, without it I dont know what i would do with my time, so please keep it up : )

#25 Min in Mission on 06.06.11 at 10:16 pm

Seems kind of strange to me, looking back. Bought (read mortgaged) my home about 6 years ago. 5% down. Bought a two storey, about 1250 sq ft per floor, on a decent lot. About 60% paid for now. Could have bought twice the house – price wise. We wanted to enjoy life, not have a huge worry every month. When we bought, we looked for the house that we liked the best, and one we could afford. The “real estate agent” couldn’t understand.

This article is one more that shows how “human nature” is not really aligned with “common sense”. I have no intention to sell, the market would have to drop a lot before it becomes a problem. It would be nice if it went up a bit in 8 to 12 years though!!!

#26 Adam on 06.06.11 at 10:18 pm

Speaking of crap homes… Have you see the new homes in milton? Talk about cookie cutter crap houses.

#27 Hoof - Hearted on 06.06.11 at 10:29 pm

My take on home-aggedon

We had HAM from Hong Kong….that dried up.

Then Mainland HAM. That will dry up.

I sense a revolution by those who will wake up from the CMHC keg party, and people will see it was one big scam.

When RE crashes, which it will….Gov’ts have allowed for the creation of too much supply…think about it…what other commodity (besides $$) does Gov’t ultimately control (esp. Local Gov’t zonings )allow a glut to occur ?

People equity will collapse the ripple will result in higher taxes more poverty, repeat, a vicious circle.

HAM can bail anytime…even leave the keys…….keep in mind they are by definition dual citizens.

#28 Keith on 06.06.11 at 10:30 pm

To the bears: When the stock markets and real estate markets crashed in 2008 globally, the Vancouver market dropped 18 percent before resuming an upward climb. The bursting of the bubble may be less dramatic than you think/hope. There are many factors of support in the market.
Most posters on this blog are focussed on the relationship between income and real estate – real estate values in Vancouver have been divorced from pay levels for decades. Bubbles burst when there is a dramatic contraction of credit – there is no dramatic contraction in the offing:
– Bank of Canada has indicated interest rates will “increase” not jump dramatically
– Canadian dollar is 1.02 and Ontario has a huge manufacturing sector, a political and economic interest rate inhibitor
– Federal budget projected to be balanced in 2014, less demand for credit
– Sixty percent of Vancouver residents are renters, representing a huge pool of demand at any lower price
-Tons of baby boomers with substantial retirement assets – yes they are out there, who would love to make even five percent on the cash allocation of their portfolio
– Most of the homes in Vancouver include a rental suite in a city with a vacancy rate of about one percent = extra income
– Even in strata units plenty of roomates paying a lot of money for a spare bedroom or couch

The market in Vancouver will and should correct. Don’t be surprised if the peak to trough of real estate value is a lower percentage than you hope.

#29 KamiKid on 06.06.11 at 10:42 pm

Why can’t I read the comments. Am I First ? Let it fall, Let it fall….

#30 fiendish Thingy on 06.06.11 at 11:06 pm

Garth-
Column in local (Santa Cruz, CA) paper yesterday recommending preferred stocks, however, cautioned that they must be held until “call date”, typically five years. Not very liquid. Are Canadian preferred’s different? Sorry if I missed something in a previous blog, repetition is good for retention :-)

BTW, re: Nimrod-

http://en.wikipedia.org/wiki/Nimrod_(Bible)

Tower of Babylon reference seems appropriate…

There is complete liquidity with the preferreds of major Canadian corps. — Garth

#31 Tim on 06.06.11 at 11:08 pm

Re#14 Downtown condos will be the first to tank, there are way too many. They’ve packed people in like sardines and many dupes who were foolish enough to want to be where the action is – Starbucks and hi rises and not much else lol- now want out. They complain about the noise and the traffic. Well what does one expect when they buy in one of the densest areas of Canada. These things, many which are characterless and shoddily built will drop like a lead weight when sentiment turns. Who wants to live in a characterless 600 square foot box in a noisy neighborhood in a no-fun city?

#32 defunker on 06.06.11 at 11:10 pm

#9 Bill Gable

Just because a person uses their credit card for every purchase, doesn’t mean they’re not paying it off every month. There are plenty of incentives to use a credit card instead of a debit card or cash.

#33 TS on 06.06.11 at 11:13 pm

Third, banks shamelessly shoveled inexperienced, unprepared buyers into homes they could only carry with the cheapest of loans, and in an expanding economy. In Canada, this has been done to epidemic proportions.

I do not blame the Banks. I blame the Insurer of those loans. Hmm I guess we elected them….

#34 Wendy on 06.06.11 at 11:17 pm

#9 Bill
“I asked the head cashier at Safeway – roughly how many people use credit cards versus cash for food (*I know this guy and is the asst mgr and we have been friendly since the store opened) – he guessed that 75% used cards.
Credit cards for FOOD? That used to be illegal back in the day.”

I’ll admit I use my cc to buy all my groceries, I rack up the airmiles that way then just pay it off at the end of the month. Do the same with my cable, phone, cell. Beats paying multiple bills all through the month. I just pay one at the end of each month.

Of course I know I am a hell of a lot more disciplined than a lot of people

#35 Hoof - Hearted on 06.06.11 at 11:23 pm

#20 TurnerNation

Exactly. These institutions have been outed as expanding enrollment to increase revenue and lying re: degree applicable job placement.

Higher Education system is on par with CMHC

#36 Onemorething on 06.06.11 at 11:26 pm

This is 1999. Your house is Nortel. There’s nothing new.

Garth – Priceless!

That is why after 3 splits we took profits off the table and negotiated an awesome exit package.

Remember all the SVP’s with all the Nortel retirement money tied up who had 9 lives during the downsizing who still saw a paper worth of upwards of $10M go to 250K. Debts likely in the millions! Never to make that level of cash again! And out of reach for anyone to hire them!

Take profits – or learn your lesson the hard way!

#37 specuskeptic on 06.06.11 at 11:41 pm

“Real estate values revert to the mean (or crash through it, as in the US now) and anyone who bought during the ascent stands a good chance of ending up with more mortgage than equity.”

I think a refresher on what this actually means would boost your already strong case.

I’m assuming you are referring to price/income and price/rent ratios when you refer to historical norms. When people see that in area X, the historical average has been Y and is now Y+3,4,5 etc., it has an impact well over “real estate is hella ‘spensive these days”. Except, replace X with Toronto, Calgary, Vancouver and real world data a la that famous Case-Schiller chart from the US and you will be able to wrap up your case that day – the jury won’t even have to leave the courtroom!

#38 Utopia on 06.06.11 at 11:47 pm

“That housing prices will fall is a given. The schedule, market by market, is already revealing itself. This is {like} 1999. Your house is Nortel.” ~~ G.Turner.
—————————————————–

Absolutely right Garth. Market by market is the name of the game. How could it be any other way? This country of ours is just so large and our resources and industry differ so widely from province to province that it is just natural to expect regional differences to play a role in the correction that is coming.

No city or Province will mirror any other, dollar for dollar.

Yet it is not different here (or anywhere else for that matter) as all bubbles end the same and we see evidence of this in the outcome of every major bust and deflation as you have already noted above.

Strangely though, even I have found myself coming under the spell of the “It’s different here” mantra.

I should know better. And yet I also sometimes think Saskatchewan has an immunity against the unstoppable tide that will define the coming correction.

It does not.

There are just so many voices though insisting that this time is not the same as the last time. I cannot argue with them all everyday. Their sense of total disbelief in the possibility of a coming correction is simply overwhelming some days. It is unrelenting, even stupid in it’s shortsightedness.

Ugh!

I am consoled in my thinking by the statistics though. The markets are indeed softening as they well should be by now and at this moment the correction is totally predictable and certain.

Let’s all hope it is not too harsh on the doubters.

#39 Mark on 06.06.11 at 11:51 pm

China’s rich, primarily driven by a sense of insecurity, are taking money out of their country. Many are actually preparing to move elsewhere.

According to a new study, almost 60% of China’s “high net worth individuals,” defined as those possessing more than 10 million yuan in investable assets, are either considering emigration through investment programs or are completing the emigration process. The survey, conducted by China Merchants Bank and Bain & Co., also reports that 27% of those with more than 100 million yuan in investable assets have already emigrated and 47% of them are thinking about leaving the Motherland.

The stunning results correspond to reports that the U.S. Treasury unit monitoring illegal money flows has, since the beginning of last summer, detected a surge in hidden cash transfers out of China.

Almost all of the funds supporting emigration applications were spirited out of China in violation of Beijing’s strict rules. The country leads the world in illicit fund transfers, according to Global Financial Integrity, a nonprofit. The estimated total of China’s outbound flows from 2000 to 2008 was a staggering $2.18 trillion.

The flood of “hot money” leaving China picked up in the last quarter of 2008. That was when the Chinese central government announced its stimulus plan, which initiated a new phase in the partial renationalization of the economy. Then, Premier Wen Jiabao started pouring state cash into the state sector and state financial institutions began diverting credit to state-sponsored infrastructure. As a result of the stimulus program, about 95% of China’s growth in 2009 was attributable to investment, and almost all of the investment had come from the state. The percentage for 2010 will not be too far off of that.

Beijing’s plan, however, was good for private entrepreneurs who, although shut out of many portions of the economy by state enterprises, rode the resulting asset bubbles to even greater wealth. The number of the country’s high net worth individuals according to the China Merchants-Bain study will reach 585,000 this year, almost double the figure for 2008.

The emigration of China’s wealthy has, not surprisingly, triggered controversy. “We have been working hard to develop the economy in the past 30 years, but now these elite members of society are fleeing with the majority of the wealth,” said economic analyst Zhong Dajun to the Global Times, the Communist Party-run newspaper. “The loss may be even higher than all the foreign investment we have attracted. It is as if, when the time of harvest comes, we find the fruits have all gone to others’ baskets.” Zhong should not be shocked. Beijing, since 2008, has been targeting private entrepreneurs and abusing them even more than usual, so it is natural they are now trying to protect themselves from a rapacious state.

And the situation is bound to get even worse if Xi Jinping becomes the next Party general secretary at the end of next year, as just about everyone expects. Xi will undoubtedly bring his fellow “princelings” into positions of political power.

The princelings, descendents of former leaders of the People’s Republic, will surely use their new political clout to consolidate their grip on the economy. This means, among other things, that others, especially owners of private domestic enterprises, will have even fewer opportunities than they do today.

“We can only hope the rich people stay out of patriotism,” says Xia Xueluan of Peking University. Patriotism, these days, may be the only thing keeping Chinese entrepreneurs in China.

And, from the look of things, it is not enough. The country’s wealthy are going on shopping tours for U.S. real estate and, if they have not done so already, are moving their families abroad. There has, in the last five years, been a 73% increase in Chinese investment immigrants to the United States. Countries, like Canada, are raising their minimum investment requirements for investment-immigrant candidates due to the sheer size of the tide of Chinese cash.

Chinese cash is largely responsible for the third wave of buying from Asia into Vancouver. In an “unprecedented” surge of business for brokerages in that city in February, Chinese buyers snapped up homes, townhouses, and condominiums as sales skyrocketed 70% over the preceding month.

As foreigners pour into China, China’s entrepreneurs are taking their money out. Which group do you think knows more about what is going on?
http://blogs.forbes.com/gordonchang/2011/06/05/chinese-entrepreneurs-are-leaving-china/

#40 Jan Etter on 06.06.11 at 11:52 pm

“This is 1999. Your house is Nortel.”

I’m on board with 99% of what you say on this blog but every so often you make a statement that serves as ammunition to those that deride you. This is one of them. Poetic licence is one thing but taken out of context statements such as these damage your credibility. And I care because if I direct people to your blog and they read statements like these, both of us lose credibility.

“Friday, March 7, 2008
…On July 26, 2000, its shares were trading for as much as $124.50. That’s equivalent, on a split-adjusted basis, to $1,245 in today’s market.

So Friday’s $6.71 closing price equates to a loss of 99.5 per cent of the company’s market value in less than eight years.”

http://www.cbc.ca/news/business/story/2008/03/07/nortel.html

I said 1999, not 2008. — Garth

#41 Hoof - Hearted on 06.06.11 at 11:54 pm

Going over some stats in Richmond

Only 41% are Canadian Born

38% mother tongue is Chinese

29% are employed in sales or service

Single Family Homes are 13% of new construction

#42 Nostradamus Le Mad Vlad on 06.06.11 at 11:58 pm


“I suppose it’s similar to the US where the banks and the Gov are too cozy.” — That is the problem — the ONLY problem — in a nutshell.

The banks tell govts. what laws they want written up to protect them, and govts. follow thru, so banks get a cushy ride and citizens get to pick up the tab.

“Your house is Nortel. There’s nothing new.” — Yet people still line up for condos. Harper is right in one thing — we won’t even recognize Canada when the dust finally settles.
*
The Banxters and The Corpocracy They want it all and they want it NOW! Hey boyz, shove it where the sun don’t shine! 5:24 clip US$ tri. missing from US Fed.; Debt 4 Dummies! Hell, even I can understand this! Derivatives US$600 trillion (Rothschilds). Spain Bankrupt? EU Debt Write-Off; HMS Dickheads Unlimited Actually, this is The Good Ship Apocalypse, and we’re on it.

Finland’s housing bubble (igloos?), and No return. Canada Post As CUPW hits the streets, the USPS is grinding toward death. GW Elites Battling for ME oil.

GMO Foods For zombies only. The rest of us can drink vast quantities of corn flakes! Eat Dirt! It’s good for us! Better than GM frankenfoods.

Cure fir AIDS / HIV? For one man, it’s been successful.

Govt. Interference in families in Oz.

E.coli Thought Brussels had something to do with sprouts (pointy-eared politicians)!

Control Freaks “. . . but according to his [Harper] own dictatorial sense of Divine Right, a toxic blend of neo-con economic theology and sociopathic biblical literalism.”

Swimming Orangutan Apparently, the crocs give this one space!

Obama Just as dubya before, he wants to involve as many countries as possible. Why? The US is the largest military force in the world, and spend like there’s no tomorrow. Possibly this is the reason.

The Joys of Motherhood Last pic is good!

#43 Utopia on 06.07.11 at 12:07 am

#3 disciple

Milk (by the liter) costs more than gas most days.
Oil products mostly come from the other side of the planet.
They arrive by ship after a long voyage over the Atlantic.
They get processed in the big refineries in the US.
It is a complicated process.
It then gets shipped to Canada by truck or pipe.
We get gas and diesel for our autos that way.
Milk though, comes from a dairy. Usually they are local.
Most of them are within 100 kilometers of your house.
The milk is heated in plants and pasteurized for safety.
This is a very simple process.
It also gets delivered by truck to the store.

But you often pay more for a liter a milk that was produced in your own region than you pay for a liter of fuel for your vehicle that came from overseas.

This is not a complaint against Milk producers.

#44 Reg on 06.07.11 at 12:09 am

Solution for all the “losers” out there:

Move to the prairies, buy a cheap house in a small town, plant potatoes and get a seasonal job working for a local farmer. Spend the winters next to your wood furnance eating deer sausage and making babies.

Way better life then working your ars off forever just to pay a mortgage. Life is too short.

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

#45 Dark Sad Monster Bunny on 06.07.11 at 12:17 am

9 Bill – The use of CC to buy groceries may indicate nothing. Mrs. Bunny (the desiginated grocery acquirer) only uses her CC when buying groceries at one of the
local major chains. One bill at the end of the month, a
couple of keystrokes on-line and its paid.

I use CC for most major purchases, especially if it adds to the warranty. I’ve already saved the money. The cashier
has no idea if I pay the CC off or not.

#46 Kim on 06.07.11 at 12:20 am

Better to be lonely… than to be part of the herd. (:

#47 604genX on 06.07.11 at 12:25 am

@vancity_renter. Interesting comments, thanks. What level of debt do the Canadian-Asian buyer have? Are they loaded up on 5/35 CMHC, or do they have a large cushion of equity? Conventional wisdom about downtown condos is they will be wiped out once the slowdown hits because all the buyers/specers/investors used waaaaay too much debt. I haven’t heard the Asian angle before.

#48 poco on 06.07.11 at 12:50 am

#10–Raj
With the market continuing to go higher, buyers (like myself), seem to be able to afford less and less. At the same time, sellers are getting greedy by the minute. Heck, list your house a bit under market and watch the fish take the bait!
Looking at it from an economics point of view (assuming I have an inkling), each incremental increase means I (the buyer) am getting less value, hence decide to consume less of it. Right now, I have taken myself pretty much out of the equation, as it really isn’t worth it. The pendulum has swung so far over, that it would be purely stupid to get in front of this train being recklessly driven.
I have seen first hand how swayed the market is in the sellers favor. Just not sure when the rest of the buying public will sit back and scrutinize the purchase at least as much as they would when they try to save a few cents driving to another gas station.
______________________________________________
Do you not do any research into the housing market?
Do you not read any of the other posts with regards to the falling market?
Do you not believe posters like–Carp–J.B. and Josh (a couple of posts back)who told of their experience of escaping from the housing market with a loss after owning for several years
For someone who seems intent on buying a deflating asset, you don’t sound like you know a thing about the market.

#49 the Raj on 06.07.11 at 12:50 am

” Rates have no where to go- but up” – Japan (18 years ago)

#50 Utopia on 06.07.11 at 12:51 am

#16 BC Bring Cash wrote…

“Garth you talk about Nimrods. I often wondered where that term came from…”
——————————————————

This might shed a little more light on the term BC-Bring-Cash. There is a castle in the Golan Heights of Israel called the Nimrod Fortress. It has been there since the time of the Crusades and it is really an incredible and interesting archaeological site.

It was built in the thirteenth century by a nephew of Saladin to be a base from which to repel the attacks of the Crusaders from Europe. I spent a lot of time there many years ago and remember it very well.

http://en.wikipedia.org/wiki/Nimrod_Fortress

#51 Burnt Norton on 06.07.11 at 12:54 am

#14 vancity-renter on 06.06.11 at 9:12 pm

“Not that it matters too much but…”

———————————————

You were right about that as far as it concerns your 3 Asian friends representing a major trend in Vancouver RE demographics.

I grew up here and have many friends of all backgrounds. Sorry bud, but I see no such differential between Asians and or Greeks or Italians or Scots, 1st generation or 3rd generation or what have you.

This is how prejudice can creep into an analysis of cultural influences on an economy in a diverse community. Anecdotes and hearsay become facts and resentment ensues as a result of mostly baseless propaganda.

The real issue is that most young Vancouverites are faced with having to keep up with peers heavy in debt but rich in lifestyle. That generation will eventually have to deal with the consequences, although I suspect that most of them will simply shrug off bankruptcy, run home to mommy and daddy, blame the bank for lending them too much money in the first place, and blame the government for not teaching them how to be more responsible.

#52 canadarocks69 on 06.07.11 at 12:57 am

#9 Bill Gable: so whats the problem with using a credit card for everyday purchases i do it as much as possible and you know why so i can collect the airmiles which i then use for airline flights.The credit card bill is paid off every month so i’m never charged intrest. Don’t assume that everybody that uses creditcards doesen’t have the money to make that purchase.

#53 Something about Gary on 06.07.11 at 1:08 am

Look around you. . .the demographics are changing. . .the white lazy folk will be slaves to the Asian rich newly elite. But it shouldn’t matter, because this country was never ours or theirs. . .the anglo saxon youth of today are slothful and over privledged. . .they want not to work lousy jobs or to study hard, and so they will pay the price.

#54 reality guy on 06.07.11 at 1:21 am

This should be interesting on June 09

http://www.hkex.com.hk/eng/newsconsul/hkexnews/2011/110602news.htm

THE STOCK EXCHANGE OF HONG KONG LIMITED
(A wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited)

Admission of Hui Xian Real Estate Investment Trust to List of Designated Securities for Short Selling

The Stock Exchange of Hong Kong Limited, a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx), announces that with effect from 9 June 2011 (Thursday), Hui Xian Real Estate Investment Trust (Stock code: 87001) will be admitted to the list of designated securities eligible for short selling.

The latest list of all designated securities eligible for short selling is available on the HKEx website.

#55 Vancouver_Bear on 06.07.11 at 1:30 am

GO BRUINS GO!!!!!
BOOOOO KANUCKS!

#56 Devore on 06.07.11 at 1:34 am

Penny is right. A healthy rise in interest rates would chill everyone right out. But it is also unnecessary. This thing is keeling over on its own. The pols like it this way, so blame can be easily diverted. Why rock the boat now.

#57 Devore on 06.07.11 at 1:50 am

#6 Aaron – Melbourne

The house is in a seemingly terrible location, right at an intersection of two major roads.

Soon, this quote will be repeated across Canada too:

“Put simply, house prices are falling. The figures can’t be disputed by real estate optimists any longer,” he said.

Throughout 2010 and 2011, xREBs have been able to use an apparently endless combination of average, median, YoY, MoM, aggregate, per market segment, per region, etc, statistics, to spin the increasingly abysmal stats towards the most positive. Anything looks shaky, it’s a “balanced market”. Two months in a row, it’s the cold weather, elections, hot weather, playoffs, too much rain, alien abductions, too much sun.

At some point, they will have to admit the obvious, but only once it is obvious, and not a day sooner. For now, we can observe the market lose steam and do the Wylie Coyote cliff dive in slow motion, region by region, neighbourhood by neighbourhood, street by street. It’s here, even in the buoyant Lower Mainland.

#58 Devore on 06.07.11 at 1:53 am

#9 Bill Gable

Credit cards for FOOD? That used to be illegal back in the day.

It never used to be illegal, and today it gives 2% back. Keep your cash and ATM fees, I’ll take my discount.

#59 rp1 on 06.07.11 at 1:53 am

#9 Bill Gable: I use my credit card for everything because it gives me 2% back. I know that is the retailer’s fee, so I always try to pay cash at small retailers. Anyways, don’t mistake the use of credit for the need to use credit. For groceries especially it helps to have it all on one statement.

#60 garthForPM on 06.07.11 at 1:56 am

“Those losses have started across swaths of Ontario, up the Okanagan, into Alberta and just about everyplace there’s a lake, a dock and a boat. Recreational real estate is deceased.”

gath, I’m following your advise just sold my van city condo, but I did a google search for falling prices in canadian recreational real estate and couldn’t find much. what are your sources? Thanks

#61 six-figure-renter on 06.07.11 at 2:32 am

looks like there is a way to drive house prices down where mainland chinese bought property…good job UBC

http://www.youtube.com/watch?v=oubUKlNBpIw&feature=player_embedded

#62 daystar on 06.07.11 at 3:11 am

http://www.theglobeandmail.com/report-on-business/canadian-household-debt-soars/article1564658/

We’ve got a debt monster in Canada and RE pumpers are sure to encourage Canadians taking on even more ’cause “rates are low”. 375,000 mortgage holders are struggling with central bank rates at 1%. What will they do with a mere 2 point uptick in rates?

http://www.ctv.ca/CTVNews/Canada/20100216/household_debt_100216/

#63 Deliverator on 06.07.11 at 4:50 am

I asked the head cashier at Safeway – roughly how many people use credit cards versus cash for food (*I know this guy and is the asst mgr and we have been friendly since the store opened) – he guessed that 75% used cards. Credit cards for FOOD? That used to be illegal back in the day.

Where have you been? I use a credit card for 100% of my food purchases, because I get 1% cash back on all of the purchases I make with the card.

It makes no difference what one uses to pay for something. Whether these people are paying the full balance on all their cards at the beginning of the month, as I do, is what matters.

#64 Tim on 06.07.11 at 5:31 am

There’s never been a real estate boom that lasted. No market’s risen limitlessly

The same thing can be said about currencies backed by nothing, aka FIAT reserve notes, just a thought

#65 Guan-Di on 06.07.11 at 5:56 am

Bill Gable:

Interesting anecdote, however, just because you use cash to pay for a purchase does not mean it did not come from an overdraft, pay day loan shop or cash advance. Just because you pay for something with a card does not mean it doesn’t get paid off in full every month. My partner and I use our card to collect points for flights. The balance is paid every month and we get free airfare for every other family vacation which is a lot more than we would get paying cash. Credit cards are also a great way to track spending as cash can evaporate without trace so it can make budgeting easier. What you have to watch for is the number of people who have to swipe multiple cards to get the $6.99 to clear, you should ask your Safeway buddy about that, I’m sure he has more than a few tales to tell. I know I’ve seen it more than once.

#66 Cow Man on 06.07.11 at 6:20 am

Amigos:

#9 Bill Gable

In the past I thought as you do, regarding the use of credit cards to buy groceries. Then I woke up. The grocery chain we use has its own Mastercard. Every time one the credit card to buy groceries, you get points. Points for using your own reusable grocery bags as well. Bonus points on some items. In 5 months we have accumulated 125,357 points. About $125 worth of groceries. We accumulate them until December and buy all of our holiday supplies with points. Paying the balance every month. If you buy gas at the same chain you get 2.5 cents per liter accumulated for groceries as well. The posted price of the gas is usually lower than the Petro Canada across the street. Sometimes perception is not reality.

#67 Tripp on 06.07.11 at 6:33 am

Here in Ottawa, phase one of a new condo has just been released Saturday, very good location, prices from high 200s to 2.2 mil.

Over 1,500 people lined up for 150 units, obviously 90% of them failed to get one.

Soon they will be grateful to have wasted time for that latte and miss the good spot in line.

#68 jerry on 06.07.11 at 7:35 am

In the event that there is a housing crash and if there are many owners who get faced with short sales or foreclosures, I was wondering if Canadian Banks might be more prepared to facilitate faster and more efficient sales and closings.

It seemed that in the early years of the USA crash, prospective buyers and offers were tied up in long frustrating processes (sometimes holding offers for 4 months or more). I suspect many deals fell through, buyers walked, owners gave up, banks were left with empty houses.

#69 Matt on 06.07.11 at 7:36 am

Dear Garth,

I echo what a previous poster said about doing an exposee on Montreal. Our comparatively lower wages, higher prices and higher taxes mixed in with a frothy market make for a noxious situation. And think about it, you can integrate:

– Hot French girls
– The NDP
– Your vast knowledge of Quebec culture

Wins all around.

PS – I forwarded your constant advice on preferred and REITs to my father who was giddy upon receiving his first payment. Thanks!

#70 HouseBuster on 06.07.11 at 7:39 am

If you want to see where housing is going just pull up a chart of lumber.

#71 Shane on 06.07.11 at 7:51 am

Garth, When is the Government going to make it mandatory when selling your house you need to do an energy audit?

Shane

Never, hopefully. — Garth

#72 Kevin on 06.07.11 at 8:01 am

“In the end, the banks will make a ton of money on interest, the real estate people will have made a killing on commissions and the governments will continue harvesting more tax based on increased property tax revenues.”

This is a gross distortion of how the various players in this game interact.

For one thing, the banks will make “a ton of money on interest” regardless of what the rates are, because their profit lies in the spread (the difference between what they charge borrowers, and what they pay savers), and by and large, the spread doesn’t change. When GICs pay 2%, mortgages cost 4%. When GICs pay 5%, mortgages cost 7%. Banks will make their money no matter what the rates are, so in the end, they don’t CARE what the rates are. They don’t make extra profit when rates are higher/lower. So they have no skin in this interest rate game.

The real estate people, sure, OK, they benefit from higher prices, because that spells higher commissions for them. However, they have very little control over the actual pricing of the market. They can’t magically make a couple qualify for more mortgage than the bank says they’re good for, and they can’t make buyers magically appear for a home priced way above what the local market will bear. All the real estate people can do is sit back and “hope” for higher prices.

As for the government, yes MUNICIPAL governments rake in higher property taxes when prices go up, but the FEDERAL government doesn’t see a penny of that. And it’s the federal government that guides the hand of the Bank of Canada and the CMHC. Municipal governments are powerless to direct the market.

So I think it’s very misleading to imply that the banks, real estate people, and municipal governments are in some sort of cahoots to manipulate the housing market to increase their profits. Banks profit the same no matter what, real estate people are powerless to fabricate buyers that don’t exist, and municipal government is not the same as federal government.

#73 Billy on 06.07.11 at 8:03 am

Most mortgages in Canada are insured by CMHC.

As I understand it, if a mortgage holder defaults on their mortgage the bank and/or CMHC will still make every effort to collect on any losses incurred when the foreclosed upon home is sold. WE can’t “walk away” from the debt like they did n the USA.

BUT…what about the Asians flocking to Van?

When the shit hits the fan and they find themselves under water can’t they just vacate Canada and wave bye bye to the debt?

If so, who is going to be on the hook for the Run-Away Asian Debt?

CMHC (i.e. taxpayers)?

Just asking.

CHMC insurance is required only for high-ratio mortgages, where there is loan-to-value of 80% or more (in other words a down payment of under 20%). — Garth

#74 Mr Buyer on 06.07.11 at 8:03 am

I got a feeling that the conservatives will not be seeing power again for 20 years or so after this hits the fan. I have to wonder what the RE vendors are thinking. Prices can simply double for no good reason other than manipulation of the supply of money and that will be okay. I do not understand why the Liberals or even the NDP could not prevail over the Conservatives this past election (actually I take that back, upon reflection I do not think the Liberals really wanted power until this mess has begun to play itself out hence their choice of leader). I can only guess that most of the people that voted are into real estate. It should have been a cake walk for the opposition in my mind. Just keep on the same message “an economist brought us here.” I have a feeling there will not be many real estate types cheering Mr Harper or the Conservatives on come next election or many elections after that. What is it that they are conserving exactly the acceleration of the deficit.

#75 45north on 06.07.11 at 8:07 am

six-figure-renter: there is a way to drive house prices down where mainland chinese bought property

funeral homes: ten years ago Tubman planned a new funeral home on Riverside Drive. Fiercely opposed by asian homeowners (Chinese) in nearby Quintera. The community association took the case to the Ontario Municipal Board and lost and then it appealed and lost there too.

http://www.greaterfool.ca/2011/01/13/guns-weenies/

#76 Jsan on 06.07.11 at 8:33 am

Ah Yes, Nortel. A company I know well, a company I used to work for. Back then I was new at the investing game but I still new a bubble when I saw one. When the stock was climbing to new all time highs a coworker asked me for advice as to whether he should buy. I told him to stay as far away as possible because the bubble would eventually burst. Over the next several months he moaned and groaned and blamed me as the stock kept going higher and higher. I had to listen to this day in and day out but I was very confident that eventually I would be vindicated. As has been said before, bubbles are easy to spot but hard to gauge where the top is. People can be stupid for much longer than we give them credit for.

Eventually the inevitable happened and the bubble burst, the stock crashed and my coworker saw the extent to what happens during a bubble. Many of the longer term coworkers of mine one day had very healthy Nortel investment plans and a month later had next to nothing.

Back in 2007 a friend said he was going to purchase a flipper property here in Alberta. Very typical naive person who like many dove in at the peak of the bubble believing that the party would go on forever. Once again I suggested to him that it was probably a bad idea. He ignored my suggestion bought a house and sold it 2 years later for a 90K loss or about a 25% haircut as the payments were just too much.

What I have noticed is during a bubble, people turn their brains and common sense off because they are convinced by others that “It’s different this time” or “it’s different here”. Any time you hear those two phrases run for the hills because you are in the middle of a mania driven asset bubble which as history proves over and over again, will inevitably come crashing down.

BTW, when Nortel stock was at it’s all time high (split adjusted) of around 124 dollars just before it crashed, there were analysts proclaiming that it would soar to 600 dollars. Why? because “it was different this time”.

#77 Paul on 06.07.11 at 8:37 am

I agree with Garth that outlying markets are starting to turn. I’ve been following the housing market in Guelph for a while. (I’ve always liked the town, and my wife and I are getting a bit tired of big city life.) Many houses have been on the market for months, and some have been reduced in price by 10% or more. Of course a really desirable property still sells quickly, but it’s certainly not a seller’s market there.

#78 Kevin on 06.07.11 at 8:55 am

My mortgage is up for renewal this summer.

Back in February, when banks increased their fixed mortgage rates, we locked in with ING at 3.89%, just as they were raising their rate to 4.09%. We figured this was it, rates were on the way up, and we were geniuses for locking in at the bottom.

Then back in April, ING lowered their rate down to 3.99%. OK, whatever, still a tenth above what we locked in.

I just noticed today, ING’s regular 5-year fixed rate is back down to 3.89%.

Any analysis on what all this means? Are rates EVER going to go up? Is ~4% for a 5-year fixed the “new normal?” Are the days of the 8% mortgage consigned to the pages of history?

Long rates are set in the bond market. Recent stock volatility has investors scooping bonds, raising prices and dropping yields. This has nothing to do with ING or the housing market. The BoC will be raising its rate later this year, beginning a trend of normalization. I suggest you stop obsessing about one-tenth of a point changes which you cannot control. Are your finances that tight? — Garth

#79 TS on 06.07.11 at 9:04 am

Garth, When is the Government going to make it mandatory when selling your house you need to do an energy audit?

Shane

Never, hopefully. — Garth

I agree with Garth just ask to see the last 12 months energy bills. Are we going to require an air quality audit next?
Do LEED-Certified Green Buildings Protect Human Health?

http://www.ehhi.org/leed/

#80 David B on 06.07.11 at 9:06 am

Boys oh boys aren’t we lucky we have strong Mr. H, F & C here in Canada things are much different!

From this morning’s WSJ

BY ROBBIE WHELAN
Almost 40% of homeowners who took out second mortgages—extracting cash from their residences to cover everything from vacations to medical bills—are underwater on their loans, more than twice the rate of owners who didn’t take out such loans.

The finding, in a report to be released Tuesday by real-estate data firm CoreLogic Inc., illustrates the consequences of easy borrowing amid the housing boom’s inflated prices. The report says 38% of borrowers who took cash out of their residences using home-equity loans are underwater, or owe more than their home is worth. By contrast, 18% of borrowers who don’t have these …

#81 Kevin on 06.07.11 at 9:07 am

@daystar:

“375,000 mortgage holders are struggling with central bank rates at 1%. What will they do with a mere 2 point uptick in rates?”

They renew RIGHT NOW and lock in the lowest rates our generation has ever seen. Then in 5-10 years, when they come up for renewal again, the balance will be lower, their salaries will be higher, the home will be worth more (read: they can downsize and harvest profit), or some combination of the above.

Problem successfully avoided.

Of course, that assumes that rates will have risen by then, and there is even a problem to be solved. It’s possible rates will still (or again) be at historic lows, and there’ll be no problem at all. “Unlikely,” you say? Tell that to Japan.

#82 Utopia on 06.07.11 at 9:14 am

John Mauldin, a popular economics commentator and analyst has an interesting article out today discussing the velocity of money (declining suddenly) and European Union risks as debt issues potentially unwind both the Euro and the banking system there. He writes:

“I think there will be new politicians with different mandates as it becomes clear that the costs of the bailout are going to fall on the tax-backs of the solvent countries and that austerity is going to mean hellishly bad deflation, high and rising employment, and depression in the indebted countries.

Not very optimistic sounding. He certainly echoes many of my own concerns here when it comes to global financial stability. Indeed, Europe has the potential to take us all down. John is not optimistic that this is even possible though.

I found his comments noting that US intervention during the financial crisis prevented bank-runs notable if only to refresh our memories of why holding too much cash can be a risk sometimes.

Lets keep in mind though that the circumstances that resulted in the credit crisis in the first place have never been adequately resolved. The global financial system is still fragile and distant memories of the past could come back to revisit us as harsh realities in our future.

It is not, therefore, too late to consider sheltering savings from a financial storm that John, amongst many others, believes will be returning. This is certainly not a good time for complacency with your personal investments nor a time to be caught strung out with a massive debt of your own either.

See John’s article called “A case of Economic Whiplash”

http://seekingalpha.com/article/273379-european-crisis-softening-u-s-data-a-case-of-economic-whiplash

#83 fancy_pants on 06.07.11 at 9:25 am

I don’t understand why the BOC doesn’t raise rates *now* to put the brakes on this thing.

Amen to that!

#84 Hoof - Hearted on 06.07.11 at 9:27 am

#71 Shane on 06.07.11 at 7:51 am

Garth, When is the Government going to make it mandatory when selling your house you need to do an energy audit?

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

Are you serious..are they even considering it…and if they do what purpose would it serve….

Caveat Emptor isn’t it….or just create more jobs that achieve nothing but thy can all sing koom bay ya.

#85 Mr. Reality on 06.07.11 at 9:28 am

#39 Mark on 06.06.11 at 11:51 pm

Thanks for the post Mark. So i wonder if those people leaving China are as bullish on their economy as every other country is in this world. Very interesting……

Mr. R.

#86 Dark Sad Monster Bunny on 06.07.11 at 9:42 am

66 Cow man – this sounds like the same deal Mrs Bunny has.

#87 Hoof - Hearted on 06.07.11 at 9:45 am

#79 TS

This “discovery” of so called energy efficient buildings trapping pollutants is OLDE NEWS…I recall it being noted by an SFU professor in the early 1980’s…is progress regurgitation …or dare I say recycling?

#88 Junius on 06.07.11 at 9:52 am

#74 Mr. Buyer,

You asked, ” I do not understand why the Liberals or even the NDP could not prevail over the Conservatives this past election (actually I take that back, upon reflection I do not think the Liberals really wanted power until this mess has begun to play itself out hence their choice of leader). I can only guess that most of the people that voted are into real estate.”

Real Estate wasn’t even made an issue by the minority parties. The creation of the bubble by Cons through the changes made to the CMHC was not even discussed. They got a free pass – this time.

I believe the problem is that people think if they speak of “bubbles” or “economic problems” and then they happen they will be blamed with causing it. So we get treated like mushrooms with constant cheers of “everything is going to be alright” despite the clear signs of trouble.

We can all agree that there is a strong emotional element to economic behaviour but eventually fundamentals do take over.

#89 Junius on 06.07.11 at 9:57 am

#82 Utopia,

Good post. I read Mauldin’s newsletters. He is very smart and tries hard to be objective.

Read his new book, “Endgame” if you can. Quite technical but very good. Essentially the conclusion is that gov’t stimulus cannot continue for much longer. Private debt and bank debt has become Sovereign debt and it has its limits. We are getting there soon.

#90 Junius on 06.07.11 at 10:00 am

#39 Mark,

Excellent post on China. This is consistent with what I have been told by my contacts in Asia and in the community.

Ham is real. Ham will continue for a time but it does have an end date. The Chinese gov’t will tighten on it over the coming months. The end is near.

#91 RL on 06.07.11 at 10:01 am

I was born and raised in Victoria and have lived here all my life. I bought a house in 1985 for $83000 and sold it in 2005 for $415000, then gave most of the profits to my ex. When I was growing up in Victoria there were 5 lumber mills and other heavy industry in Victoria providing good paying jobs for the masses. They are all gone now except the small shipbuilding/refit industry. If you have a full time job at Costco or Rona you are now at the top of the pile. Provincial Government jobs are in retraction – have to pay for the Olympics you know – and the Feds are about to do the same on that level. Everything else aside I can’t help but wonder how much longer people making $45000 a year can continue to buy $600000 homes here in Lotus Land…

#92 BrianT on 06.07.11 at 10:05 am

#73Billy-As per the CMHC “plan” these idiots have DOUBLED the burden on the taxpayer from 2007 to 2010 http://www.cmhc-schl.gc.ca/en/corp/about/anrecopl/upload/2011-2015_CPS_EN.pdf

#93 Hoof - Hearted on 06.07.11 at 10:15 am

In hindsight, do you think Mainland China saw the movie, read the book “Confessions of an Economic Hitman” and went ah so….simply sent their $$$$$$ hitmen here on masse to clusterf*ck and effectively takeover.

For all intents and purposes don’t they effectively rule via the influence they have now?

#94 vancity-renter on 06.07.11 at 10:28 am

Some people think my earlier post was racist… look at the news coverage of the nimrods waiting in line to buy the crappy condos in Burnaby, New West, wherever. I would say 100% Chinese, and they are all speaking Cantonese dialect which means probably HK extraction. This observation must mean something as the Chinese population, barring some concentrations in Vancouver and Richmond neighborhoods, and of course SFU, is well below 50%. I lived in a condo in Burnaby (renter, for a while) and was the only non-Chinese in the building that I knew of. These comments are not racist, they are my own observations and I wonder how this affects the Vancouver RE market compared to the perception of rich mainlanders buying the SFHs on the West Side.

#95 Devore on 06.07.11 at 10:44 am

#49 the Raj

” Rates have no where to go- but up” – Japan (18 years ago)

“Real estate always goes up” – Japan (18 years ago).

#96 BrianT on 06.07.11 at 10:46 am

These old British people are dangerous-you can’t trust them-they are sneaky http://www.telegraph.co.uk/travel/travelnews/8559732/Cruise-passengers-tell-of-seven-hour-security-revenge-nightmare.html

#97 Utopia on 06.07.11 at 10:51 am

#44 Reg said…

“Move to the prairies, buy a cheap house in a small town, plant potatoes and get a seasonal job working for a local farmer. Spend the winters next to your wood furnace eating deer sausage and making babies.

Way better life then working your arse off forever just to pay a mortgage. Life is too short”
——————————————-

You said it brother! Life is way too short out there in LaLa land and the other highly leveraged loony towns. It is a fools paradise out there for sure. The prairies beckon, but so few heed the call. (is that your girlfriend in the video by the way? Nice!)

#98 Jim on 06.07.11 at 11:05 am

@ #72 Kevin

As for the government, yes MUNICIPAL governments rake in higher property taxes when prices go up….

*****************************

Not true. When assessed valuations go up, the mill rate goes down. Municipal governments only “rake in” higher taxes when there is an approved budget increase. Without a budget increase, the mill rate would change annually to keep the overall tax intake constant.

#99 Mr. Plow on 06.07.11 at 11:11 am

#9 Bill Gable

Yes you are right, people everywhere are so screwed.

I just noticed the other day here in Edmonton that since about mid May a lot of people have been out walking, riding bikes etc…

Times are so tough they can’t afford to put gas in their cars anymore! They have probably run their credit cards up so high on food and $2.00 packs of gum…the fools.

Or maybe it coincided with the snow melting….?

And maybe people use their charge cards cause they want to collect points, or get cash back, or whatever.

#100 EX-Cowtown on 06.07.11 at 11:14 am

#91 RL

Amen to that. I fail to see how turning Victoria, Vancouver or Toronto into cities where Starbucks baristas are considered to have “good jobs” and our best ports tuned into condos are good things.

I know that heavy industries are not “sick” jobs, but remember, for the idiot playing the video game all day that some “sick” video game designer dreamed up, someone still has to work at a real job to allow that person to sit on their ass and be entertained, be it their mom, dad, or some other taxpayer.

Somebody, somewhere has to do something that creates enough value to justify $5 lattes or $80 video games or $200 whale watching boat rides.

Entertainment isn’t productive, it’s consumptive.

#101 JSS on 06.07.11 at 11:19 am

Let’s say you bought a house where you put 5% down, and pay CMHC fee. Fixed mortgage for 5 years.

What happens after 5 years when you renew and you still don’t have 20% equity in your house?

Do you have to pay CMHC fees again?

#102 Rocket Boy on 06.07.11 at 11:21 am

Penny qouted as saying “why don’t they raise interest rates to put a brake on real estate” –

One reason – it would create a disaster of biblical proporations (okay – okay, being dramatic ) –

Raise rates, will be the death of Ontario and Quebec manufacturing (that are still standing) as our dollar would soar against the lowly greenback –

Raise rates – foreign investors stampede to our dollar, creating even more pressure upwards –

Raise rates – create a panic with over indebted Canadians, nice way to freeze the economy in it’s tracks –

Raise rates – what industry is keeping the economy going (Ontario) – Construction – and the ten’s of thousands of related industries – Construction = stability .. Ontario will have little else when that ends!

Raise rates – as homeowners renew their mortgages -(at higher rates) and wage increases stagnant – they will offset these additional expenses by retracting from the economy / 60% of GDP generates from consumer spending – look out below!!

I hope most Canadians who are neck high in debt are trying to make changes to their financial well being by making moderate changes now…

My personal predictions is no rate hike (short term rates) until late 2012 .. the long term rates are another matter – when the Bond Markets get spooked by the current situation in Europe, all the cards are off the table –

#103 Bruce on 06.07.11 at 11:23 am

@Hoof-Hearted

Read your link. I never denied the impact volcanos can have. What is curiously missing is any talk of a volcano negating all human efforts towards climate change permanently in four days.

That has been debunked, sorry my friend. You’re a classic example of the phrase “a little knowledge can be extremely dangerous”

If your point is that volcanos can cause large short term fluctuations in climate, then thanks for that nugget of knowledge Captain Obvious.

#104 Mr. Plow on 06.07.11 at 11:26 am

#78 Kevin

Like Garth said BOC sets the rate which affects the variable rate mortgage, fixed rates are set by the bond market.

I would expect that variable rates will increase a small amount this year and a small amount next year. Fixed rates I think will continue to drop, I think we could see fixed rates and variable rates being almost identical in the near future.

Who really knows though, in the end we are all just guessing. I would be happy to just have a great rate for the next five years regardless of what happens.

#105 Utopia on 06.07.11 at 11:28 am

#89 Junius writing to #82 Utopia,

“Good post. I read Mauldin’s newsletters. He is very smart and tries hard to be objective”.
==============================

Thanks Junius. I agree. Actually john is brilliant. I have been following him for a long time and find his perspective refreshing because he remains objective without getting bogged down in every panic-driven conspiracy and end-of-the-world scenario that many other commentators seem to suffer from. I have the book finally too. “Endgame”, as you mentioned, is well worth the read. I think John was pretty blunt in his assessments and worries for the economy. We can only hope that some of his recommendations are heeded and followed in the US.

#106 daystar on 06.07.11 at 11:29 am

#81 Kevin on 06.07.11 at 9:07 am

I agree with your idea to lock in if floating, for sure to take advantage of lower rates but I don’t think there is a rush for those on variable just yet and the risk 5 years from now is that rates could be 3 to 4% higher than it is today so one should prepare for it. My guess is (and I’ve been wrong before with this, so if I’m right, I’m at best batting .500) that interest rates won’t go up in Canada until they go up in the U.S. and that won’t happen until housing finds its bottom there and financial institutions have enough strength in their balance sheets to absorb the effects of higher rates. It could be a couple more years of near zero to 1% central bank rates in Canada and a big part of the equation will also be energy prices which I think will be at the lowest, $60 a barrel and $3.25 for gas.

In the meantime, we should be asking ourselves if we want a balance sheet like the government of Japan. Its worth asking. Their public debt to GDP is at 200%, likely tops in the world with nations people have actually heard of. 50% of their taxes goes to interest on this debt with well below normal rates, I might add. Is this where we want to head? Be a nation that, in fear for its financial institutions crumbling from a collapsed real estate bubble keeps central bank rates at or near zero for a decade or more to keep households/corporations from declaring bankrupcy due to the brutal brunt or “normalized rates” or deflation caused by accute crumbling real estate values?

U.S. public debt is swelling for the same reason as Japan, a real estate bubble gone bust and we are following right behind them with a real estate bubble in Canada driven solely by credit (thanks Harper). Low rates might work for those who have less than 10 years left to live, but not the rest of us who have to live with such extreme public/household debt to GDP levels.

When one can see the destruction a real estate bubble has when deflating on a nation’s economy, a bubble created solely through credit, doesn’t a government that cares about their people do what they can to avoid becoming the next Japan, U.S. or Spain? Apparently not this government, valuations and skyrocketing household/public debt to GDP reflects the truth.

What I’m hoping for is the U.S. dollar to strengthen or at least stablize and a federal government that has the balls to raise taxes in personal taxes and corporations to a point (a corporate rise in taxation would be good if it was done sector by sector. Our feds should raise taxes on commodity based corps and our feds should lower taxes on manufacturing based corps due to our high dollar, with these tax rates floating with the annual average of the loonie compared to the U.S. dollar. As the loonie rises, taxation on manufacturing corps lowers while commodity based corps rises and as the loonie lowers, manufacturing corp taxation rises and commodity based taxation lowers. Taxation on corps in services should be at 18% with 20% in play until deficits are eliminated. Its either this, or raise the GST) while cutting government spending across the board. What I’d really like to see is stiffer regulations in the food & drug manufacturing industry, as well as price controls on drugs specifically but I can’t see this government having this kind of vision of a healthier nation saving on health care costs in Canada and thats a shame, a golden opportunity lost to cut health care spending through the simple increased health of Canadians in general with healthier food on the table.

If the U.S. dollar rises, the BoC can begin to raise rates again without shooting the dollar in 1.05 plus territory and cool off housing to avoid overall inflation. Otherwise if the U.S. dollar continues its slide against world currencies, interest rates will continue to stay low, household debt to GDP continues to grow and Canada puts itself in an ever increasing dangerous situation of higher rate sensitivity for when the inevidable comes… higher treasury rates out of the U.S. . Until U.S. housing finds its bottom, U.S. central bankers will continue to keep rates low giving their financial institutions time to put profit against losses in housing. It could be 2 more years, it could be next year… but eventually U.S. housing will find its bottom and take the risk out of raising rates. When rates do rise in the U.S., it will leave the loonie flatfooted. When that happens, rates will rise likely signifigantly here in Canada. I can’t see Mark Carney taking the way of Japan knowingly, I just can’t and why?

Biggest and smartest reason of all (and Mark knows it)? We are a commodity based nation, not a manufacturing based nation. To go the route of Japan knowingly, I think would be insane for this distinction alone so… expect higher rates and like you say and lock in for 5 to 10 expecting higher rates with renewal but one can float with variable if one has the choice, for a while yet. Potentially a year or more? Like I say, I’ve been wrong predicting rate timelines before…

#107 Derek on 06.07.11 at 11:42 am

Another excellent presentation from Steve Keen. This time he’s talking about what causes property prices to rise and fall. He proves that it’s not population changes. Would anyone on this blog be surprised to learn that the culprit he identifies is easy credit ?

Probably not, but Prof Keen has done the legwork to prove it beyond any reasonable doubt using historical data from Australia and the USA. And in his usual entertaining style.

Thinking – Really Thinking about Property Prices

This slide show is a must-see for anyone interested in what housing prices will be doing in the next few months in Australia or in Canada.

#108 Hoof - Hearted on 06.07.11 at 11:51 am

No more blasphemy…

NIMROD נִמְרֹד m Biblical
Meaning unknown, possibly of Akkadian origin or possibly meaning “rebel” in Hebrew

#109 Abitibidoug on 06.07.11 at 12:01 pm

Garth said: There’s never been a real estate boom that lasted. No market’s risen limitlessly. Every bubble’s burst.

I just don’t get it. We live in a time of far more knowledge and information than at any other time in history, far more than anyone could have even imagined back in the 1980’s or earlier, and this fact isn’t well known.

#110 daystar on 06.07.11 at 12:04 pm

#94 vancity-renter on 06.07.11 at 10:28 am

Your use of the word “nimrod” might have been a little shady but the rest of it checks out ok (at least with me)

#90 Junius on 06.07.11 at 10:00 am

vyw made some interesting points a couple days back concerning the number of immigrants coming into Canada that were from China being 30,000 last year. I thought that number would be much higher for some reason which is why I think its worth repeating. This lower number does logically in some way moderate the impact of Chinese buyers in housing in Canada except in key markets of Vancouver and the numbers buying in there are high end.

#216 vyw on 06.04.11 at 5:33 pm

“The impact of Asian buyers was flagged months ago but their impact is felt now especially at the high end of the market, raising average prices. Here is the May 2011 report:

http://www.rebgv.org/housing-price-index?region=all&type=all&date=2011-05-01.

The higher prices are localized in Richmond, Vancouver West-side and West Vancouver – and the number of sales are low ie. about 400 detached homes. Actually a number of other areas have seen no price increases and real estate prices are stable.” – vyw

#111 S on 06.07.11 at 12:06 pm

#9 Bill Gable on 06.06.11 at 9:03 pm

I agree with the rest of your comment, but you’re drawing some linear conclusions with regards to use of credit cards for food and small items. Many cards these days offer benefits and kickbacks that makes using them a smart move. I funded airline tickets to Europe and Asia that way. Getting a monthly statement itemizing all purchases and expenses is also helpful in monitoring household and business budget.

#112 Cookie Monster on 06.07.11 at 12:08 pm

#43 Utopia on 06.07.11 at 12:07 am

Great comparison, we just have to find cows that produce crude oil and wallah! Energy independence.

#113 TS on 06.07.11 at 12:14 pm

The Vanishing City

http://www.vanishingny.org/video/vny_trailer.html

http://www.vanishingny.org/

#114 Mr Buyer on 06.07.11 at 12:15 pm

I just had a frightening thought. Maybe almost everybody has a vested interest in keeping this going. Imagine if they pull it off and keep house prices as they are. Just imagine that.

#115 BrianT on 06.07.11 at 12:35 pm

Pretty wild article on the Big Apple-Queens NY with a population of 2.2 million is selling 830 properties A MONTH! Talk about a dead RE market http://seekingalpha.com/article/273162-new-york-city-home-prices-are-headed-for-collapse

#116 JohnnyBGood on 06.07.11 at 12:38 pm

What REALLY determines house prices?

An excellent presentation by Steve Keen at http://www.debtdeflation.com/blogs/

Look for the entry: My Property Debate Presentation.

Particularly relevant because of the similarities between Australia’s and Canada’s housing markets.

#117 Fred Bakster on 06.07.11 at 12:43 pm

BMO Report:
Vancouver home prices poised to fall 21%

http://ca.finance.yahoo.com/news/Vancouver-home-prices-poised-capress-3105641674.html?x=0

#118 David in Calgary on 06.07.11 at 12:52 pm

Supply and demand indeed…

I can buy a 3.6 acre island with a house in the Georgian Bay in Ontario for the same price as a decent house in Calgary. http://www.privateislandsonline.com/deepbayprivateisland.htm

#119 despeculated on 06.07.11 at 1:11 pm

http://money.cnn.com/2011/06/07/real_estate/walk_away_mortgage/index.htm?iid=HP_LN

“a recent survey by home finance company Fannie Mae found that while only about 27% of homeowners would even consider walking away, that’s up from 15% last year”

#120 grantmi on 06.07.11 at 1:17 pm

Wilbur Ross is calling for no ‘DOUBLE DIP’ recession for the US!!!

What you think??

http://bit.ly/kIn32U

#121 Wascaly Wabbit on 06.07.11 at 1:20 pm

Word Origin & History

Nimrod
“great hunter,” 1712, in ref. to the biblical son of Cush, referred to (Gen. x.8-9) as “a mighty hunter before the Lord.” It came to mean “geek, klutz” by 1983 in teenager slang, for unknown reasons. (Amateur theories include its occasional use in “Bugs Bunny” cartoon episodes featuring rabbit-hunting Elmer Fudd as a foil; its possible ironic use, among hunters, for a clumsy member of their fraternity; or a stereotype of deer hunters by the non-hunting population in the U.S.

#122 Fractional Reserve on 06.07.11 at 1:21 pm

For all of you thinking interest rates are going to rise in the near future here is what Bill Gross, found of PIMCO, the world’s largest mutual fund, has to say.

Gross said that “savers are being disadvantaged” 5 to 15 years when compared to creditors, as the U.S. keeps borrowing rates low to reduce its debt burden and that investors should look to corporate bonds instead of U.S. debt. Excerpts from the interview can be found below, courtesy of Bloomberg Television

You can read the whole article here:

http://www.dailyforexstock.com/index.php/2011/05/pimco%E2%80%99s-bill-gross-savers-at-disadvantage-for-years-when-compared-to-creditors/

#123 Tarlochan on 06.07.11 at 1:29 pm

Love this picture. worth million dollars. thanks

#124 Sparky on 06.07.11 at 1:33 pm

Re Posts #44/97.
Happily just sold in Southern Alberta for 80% of assessed value, if you believe in that shell game… decline will not be limited to the major cities, it’s gonna hurt everywhere. Only way out is if prime is kept low, which I suspect will be M.O. because it will erode the con base if they start loosing their houses… of course it is all the fault of the liberals.

#125 rory101 on 06.07.11 at 1:45 pm

#3 disciple

Maybe the milk jug is in the fridge because it is filled with water, ahhh nice cold drinking water …have a closer look. You were thinking ‘nimrods’. Say your sorry!

#126 Alex on 06.07.11 at 1:48 pm

#94 VanCity Renter: Your comments are NOT racist.

#127 Alex on 06.07.11 at 2:00 pm

Well, looky here. Another mainstream media headline that *isn’t* full of shit. We’ve seen a lot of this in the past few weeks. Am I dreaming? Is the truth finally out there in MSM land?

Sure looks like the tide is turning. I assume the rot is so bad that even the G&M and the BMO can’t paint rosy pictures out of it anymore.

Thouhg not quite as damning as it should be, it’s at least another step toward reality:

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/daily-mix/vancouver-primed-for-housing-correction-bmo/article2050160/

#128 jess on 06.07.11 at 2:04 pm

Rinse lather repeat…..The Crisis seem to always have an offshore story eh?

Hong Kong is a secrecy jurisdiction …offshore banking shadow market .

The Vultures
…the Argentinan benefactors were their own flight capitalists not bondholders in n. america and europe…

The two biggest sources of foreign investment into china in 2007 was Hong Kong and the British Virgin Islands.

“Round Tripping ” Treaty Shopping
Mauritius has over forty six tax treaties with major economies in asia,europe and africa.

channel for $ in and out it , for e.g. a wealthy Indian will send his money to mauritius where it is dressed up in a secrecy structure, then disguised as foreign investment, before being returned to India. The sender of the money can avoid Indian tax on Local earnings, Also used as a vehicle to create monopolies
page 165. Treasure Islands -Chapter the Deep Drains of Development Nicholas Shaxson

The report on BCCI is confidential even today on the grounds that it would disturb Britains “international partners. ”
=================
1) bankers lent these countries far more than they could productively absorb, then they taught local elites how to plunder the wealth, conceal it launder it and sneak of offshore
2) the imp helped bankers pressure these countries to service their debts under threat of financial strangulation. capital markets were deliberately opened up to foreign capital ‘whether or not there were adequate security laws,bank regulations or tax enforcers in place. ”
Jim Henry a former chief economist for McKinsey
his 2003 book Blood Bankers.
http://www.amazon.com/Blood-Bankers-Global-Underground-Economy/dp/1560257156

=============
“The biggest investors were political insiders who had bought into the fund knowing that their central banks would pay their dollar debts despit the high risk premiums…” Mr. Hudson discovered. …We realised who has all the yankee dollar claims on latin america, it was local oligarchies with offshore accounts. The dollar debt of Argentina in the early 1990’s was owed mainly to argentinian operation out of offshore banking centres. The major beneficiaries of foreign debt sevice were their own flight capitalists, not bondholders in n. america and europe .

============
robo stamper

“I don’t think the CDO market caused the crash in housing prices or the mortgage market,” said Puglisi, whose four-person shop, Puglisi and Associates, serves as an independent director to roughly 500 Delaware-based structured finance companies. “The deterioration in the housing and mortgage markets would have happened even if there had never been a CDO market.” http://www.reuters.com/article/2010/05/27/us-subprime-cdos-directors-idUSTRE64Q2ZC20100527

#129 Mister Obvious on 06.07.11 at 2:10 pm

#109 Abitibidoug

“I just don’t get it. We live in a time of far more knowledge and information than at any other time in history, far more than anyone could have even imagined back in the 1980′s or earlier, and this fact isn’t well known.”

Facts are not well known when few take the time to seek out the sources in which those facts are contained.

The generations coming along seem quite disinterested in any thoughtful analysis of historical cause and effect.

One could go to the library and take out a copy of “Greater Fool” or instead spend one’s time playing video games. I fear the choice has been made.

#130 disciple on 06.07.11 at 2:14 pm

#103 – Bruce…
I’m sorry to break your bubble, but man-made global warming is an outright fraud. Look up “carbon credit scam” to educate yourself. It’s simply not true at all that any human activity has anything to do with global climate change. The same institutions that are claiming global warming now were all warning of global freezing in the 70’s. It’s a mind game, a psy-op. The battle is always for your mind.

All of the planets in our solar system are undergoing a “warming” phenomenon. It is stupid to study the Earth as a closed system apart from the effects of the SUN. That’s why the Vatican has more than one super telescopic pointed at the sun, observing daily its effects. I won’t even get into how the sun is actually a black hole wormhole into other dimensions – that is too advanced for this blog…

#131 Larry T on 06.07.11 at 2:20 pm

A sad state of affairs in Vancouver was highlighted in the national media: “Vancouver’s House Prices Beyond the Reach of Non-Lottery Winners” was a line from a BMO Nesbitt Burns report mentioned in the Globe and Mail.

http://www.vancouverpropertynews.com/vancouver%E2%80%99s-house-prices-beyond-the-reach-of-non-lottery-winners/59/

The lotto max jackpot is $15 million this week, but that won’t buy you too much in Vancouver!

#132 Victor on 06.07.11 at 2:22 pm

Toronto: “Greater Toronto house prices have nearly doubled in the past decade, and now stand at a high 6.7-times family income, compared with 4.3-times in 2001. This is comparable to valuations in the late 1980s that were subsequently followed by a 25 per cent slide in prices. But the key difference now is that mortgage rates are under 4 per cent instead of near 14 per cent, which underpins affordability. That said, while high valuations might be sustainable in an ultra-low rate climate, they could come under pressure in a more normal rate environment. Given our outlook for a moderate increase in rates in the next two years, prices could soften or at least stabilize for a while. A possible overhang of condos could aggravate the weakness.”

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/daily-mix/vancouver-primed-for-housing-correction-bmo/article2050160/

#133 Gordeaux on 06.07.11 at 2:24 pm

#9 bill g — despite what all the naysayers are telling you I think you have a point. There is no way 70 percent of the store customers are paying their cards off monthly. Blog dogs are making big assumptions that all are as virtuous as them. And if that’s the case nobody would ever overpay for a house, right?

#134 Devore on 06.07.11 at 2:30 pm

#109 Abitibidoug

It’s different this time.

#135 disciple on 06.07.11 at 2:31 pm

#125 Rory…
I’m Canadian, so I have no trouble saying “sorry”; in fact, I say it probably 30 or so times daily. It substitutes for:
“What did you say?”
“Pardon me, while I pick which side of the walkway to proceed with and move to it while you walk on the other side”
“Oops, didn’t hear you coming around the corner”
“Oh, did I pick the wrong milk brand again, honey?”
“Excuse me for bothering you, but”
“xxxxx, sir, can I help you?”

It is said that if a culture has many synonyms for something, it highly venerates that thing, i.e…cash, bread, dough, bones, beans, bucks, moolah, money, coin, paper, …..would this apply to “sorry”?

We are a sorry bunch.

#136 joe larue on 06.07.11 at 2:42 pm

Cool (and scary) site that let’s you see the US national debt broken down in real time…..but don’t worry, it’s all under control because they have a plan.

http://www.usdebtclock.org/index.html

#137 Balsamic on 06.07.11 at 2:49 pm

http://www.theeconomicanalyst.com/content/tour-through-board-stats-may-2011

#138 Vancouver_Bear on 06.07.11 at 2:56 pm

#24 shanks on 06.06.11 at 10:09 pm

You have so much faith in Canadian farmers? Then watch CBC marketplace. It’s about superbugs found in chicken you buy from Canadian supermarkets, certified by Canadian food inspection, and there is no regulation exist on the amount of hormonal and antibiotic crap Canadian farmers can put into your food, they can use at their discretion as much as they prefer – http://www.cbc.ca/video/#/Shows/Marketplace/1350162261/ID=1791642808
Still wanna buy Canadian chicken? Go ahead, I stopped long time ago. I buy only organic from US it costs the same as Canadain with hormones and antibiotics.

#139 MM on 06.07.11 at 3:04 pm

#107 Derek
#116 JohnnyBGood

Thanks for the link to the Keen presentation. But is the argument circular: house prices rise when more people buy (ie. take on more debt)?

#140 Josh L on 06.07.11 at 3:05 pm

#9 Bill Gable,
Hate to tell you, but your anecdotal evidence is way off base. I use a credit card for almost EVERY purchase I make (except for lunch in the food court). Why pass up the points? They’re priced in anyways. I also pay off my credit card at the end of every month (ok I’m a little OCD, so it’s more like every day). The interest I pay on my card is exactly zero … but with the points we just got a free flight to Europe. Luckily my OCD extends into not buying things I don’t need, so using a credit card does not lead me into over spending.

You can’t judge a man’s wealth by what method he’s using to pay these days. Just by how many sleepless nights he has.

#141 charles on 06.07.11 at 3:14 pm

Garth please take a look to what’s happening in Woodbridge, ontario……people getting a lot more of asking price!!! any thoughts???

#142 Live Under Your Means on 06.07.11 at 3:20 pm

#76 Jsan on 06.07.11 at 8:33 am

Ah yes Nortel.

My hubby’s twin bro & his common law (CL) wife in Mtl created software for govt. & private cos. They ran the bus out of their newly built home. After a yr or so they felt it wasn’t professional enough so they leased office space nearby. Business was doing well so they hired other programmers. Then they bought lots of Nortel shares & said we should do the same. Then they bought a lot in a ritzy area for $60K and had architectural plans drawn up for a large, ultra modern home. They travelled and lived high off the hog. Bang – share prices collapsed, he discovered his CL wife of 18 yrs. (who managed their personal and business finances) was basically stealing from him & the business. They closed down the co. but still owed on the lease. Had to sell the lot for far less than they paid. They split. He retained the house but had to pay her off – for about 1/4 of its worth. I remember when visited us a few mos later and cried on my shoulder. Totally unlike him.

He met another lady, married & has an 8 yr. old son at 55. Earns good money with a good pension plan but they both like to live above their means. Other than his pension, they have nothing saved. Wife used to earn 65K. PIL’s deposit very little into their checquing acct. overseas. Rest goes into a savings acct which they can’t touch from Canada.

#143 JohnnyBGood on 06.07.11 at 3:22 pm

Although this has nothing directly to do with real estate, I could not resist:

COLUMBUS, Ohio – …many young adults actually feel empowered by their credit card and education debts, according to a new nationwide study.

Researchers found that the more credit card and college loan debt held by young adults aged 18 to 27, the higher their self-esteem and the more they felt like they were in control of their lives.

This reminds me of the anecdote about the naive man who, after discovering easy bank credit, said, “Yesterday I didn’t have two nickels to rub together. Today, I owe millions!”

Something not quite right here?

#144 triplenet on 06.07.11 at 3:28 pm

@ #72 Kevin
As for the government, yes MUNICIPAL governments rake in higher property taxes when prices go up….
* * * * * * * * *
Not true. When assessed valuations go up, the mill rate goes down. Municipal governments only “rake in” higher taxes when there is an approved budget increase. Without a budget increase, the mill rate would change annually to keep the overall tax intake constant.
* * * * * * * * * *
…….substantially more in-depth research will indicate that in fact you’re both in error.
Lots of normative statements on this site.

#145 Devore on 06.07.11 at 3:35 pm

#134 Gordeaux

despite what all the naysayers are telling you I think you have a point. There is no way 70 percent of the store customers are paying their cards off monthly. Blog dogs are making big assumptions that all are as virtuous as them.

Nothing to do with being virtuous. It is simply wrong to draw ANY conclusions from the guy in front of you at the grocery store paying a $6.50 tab with a credit card.

#146 Don on 06.07.11 at 3:38 pm

#6 Bill Gable

I don’t disagree with what you have said…but a fair number of people use a credit card to buy and pay off at the end of the month…as there are no fees on the card as compared to interact…but yes in general people are putting everything on credit.

#147 Live Under Your Means on 06.07.11 at 3:41 pm

#52 canadarocks69 on 06.07.11 at 12:57 am
#9 Bill Gable: so whats the problem with using a credit card for everyday purchases i do it as much as possible and you know why so i can collect the airmiles which i then use for airline flights.The credit card bill is paid off every month so i’m never charged intrest. Don’t assume that everybody that uses creditcards doesen’t have the money to make that purchase.

…………….

Agree, except that Scots next to us did the same thing but in order for them to go to visit family in Aberdeen from here on the East Coast, had to go to TO, stay in a hotel overnight, then London (stay in a hotel) and then onto Aberdeen. Plus, IIRC, those points are not available for regular & high season seats. Please correct me if I’m wrong.

I know that when I collect air mile points, they would be useless for travel where we go. I cash them in at Sobey’s.

#148 Burnt Norton on 06.07.11 at 3:44 pm

#143 JohnnyBGood on 06.07.11 at 3:22 pm

My point exactly.

IMO, as it relates to the RE bubble, this Generation Me debt-culture phenomenon is much more relevant than any ethnicity-based effect, real or imagined.

#149 disciple on 06.07.11 at 3:52 pm

#139 Vancouver Bear…

For fear of making myself sound even more wingnutty than usual, I have to let you know that Louis Pasteur was wrong. You read that correctly. Pasteur’s contemporary was Bechamp, and Pasteur stole much of his data from Bechamp, except for the most important part because it was not profitable. This is very important, so let me explain:

Microbes do not carry disease from the external environment to your internal system. You are actually born with every disease known to man. What happens is that when your physical body undergoes stress of any kind, your body reacts by producing disease to cope with that stress. You can literally suffer from anything from allergies to cancer, depending on the level or nature of stress. Antimicrobial agents like anitbiotics do indeed help to inhibit the growth of the microbial that your body has produced but they do not cure the cause of the disease. Your body’s immune system does that.

You literally do “catch a cold” via temperature shock (stress). A concept this simple does not make the medical mafia richer. It is absolutely possible to cure your particular sickness by helping your body to heal itself, and this can be physical or mental. Like I always say, the battle is for your mind, always has been…

You do not catch disease from another person or from your food…that is fear-mongering…a useful tool your rulers use against you…

#150 Utopia on 06.07.11 at 3:52 pm

#115 BrianT

Thanks Brian…that is one wild story alright. Imagine! I have to agree with the author there. When the banks start to foreclose all hell will break loose. Indeed, the New York market will face House-ageddon, a complete price collapse. Of course, it could never happen here or in Vancouver (sarc font).

Good to see so many of the Dawgs are reading from Seeking Alpha by the way.

#151 Hoof - Hearted on 06.07.11 at 4:00 pm

#131 TheBigLebowski

I used to chuckle when I heard all these conspiracy theories…

However, the dots not only connect, but are getting closer.

Beyond the debt enslavement… also note the subtle rise of the police state within so – called democracy.

The soldiers are amongst us …….our civil liberties have been overriden by both blanket and targetted laws under such labels as Homeland Security….or….or…..

Our politicians are rewarded for their betrayal , Judases the whole lot of them

#152 surferbob on 06.07.11 at 4:00 pm

BMO is spilling the beans about overvalued housing in vancouver
http://www.thestar.com/business/article/1004204–overvalued-vancouver-real-estate-could-see-a-major-drop

#153 Bobby on 06.07.11 at 4:06 pm

Drove out to the UVic area today here in Victoria. I was amazed at the number of homes for sale. Many had reduced signs and judging by the length of the grass beside the posts, many of these signs had been up for a long time.

Lots of empty new condos that have not yet sold.

Everyone I speak to talks about how poor the economy is. You can see signs of it everywhere.

It is going to get ugly out there!

#154 disciple on 06.07.11 at 4:08 pm

To continue with my last post (and last post of the day if there are not replies)…

The human body is very fragile. We are totally unlike the other primates, there are so many differences not only from our primate cousins (hair and nail growth, body strength, sensual acuity, etc…) but also from all other forms of life, that it seems we are not actually from this planet. Although I do believe the evidence indicates that human civilizations have been here for millions of years, the morphological dissimilarity with the rest of the so-called “primate” family leads me to fathom the possibility that Earth is only a recent stop on the long journey of humanity. Let me assure you that there is indeed not only a “Face” on Mars, but also a pyramid city right next to it. Arthur C. Clarke told us of the artificial moon of Saturn called Iapetus (two-faced because half of it is artificial like the Death Star)…I know, I know…I’m totally bonkers, right? Bear with me…our moon may also be artificial…only our true rulers perhaps know the truth.

To raise ourselves above that level we call beast, is to look up and above our earthly concerns and truly see the big picture. But the farther we look outwardly, it seems the further we need to look inwardly, only to discover that it is only our fear of the unknown and greed (maintaining the current illusion) that are holding us back from our ultimate destiny…whatever the future holds, it is the human mind that will ultimately grasp it.

#155 Devore on 06.07.11 at 4:09 pm

Only vaguely related to economics or housing, but in New Jersey precedent has just been set that only state accredited journalists can practice journalism.

#156 Brad in Cowtown on 06.07.11 at 4:18 pm

The more I analyze the Calgary situation, the more I think the “soft-landing theory” applies here.
Average price peaked in summer 2007, around 500k. Today, it’s around 480k. That’s 4 years later.

May stats for Calgary look relatively strong in my eyes. Certainly stronger than the doom and gloomers were forecasting (especially considering the new rules were supposed to cause a massive summer melt. Well… it’s summer – and the stats are firming up in Cowtown)

The greater fools might just be the folks who stubbornly waited. People like me.
Oh well, it’s only money.

#157 Hoof - Hearted on 06.07.11 at 4:22 pm

Wronged homeowners repossess bank
U.S. couple shows up with moving truck, court order to seize bank assets

http://www.cbc.ca/news/business/story/2011/06/07/us-foreclosure-bank.html

Months after Bank of America wrongly foreclosed on a house Warren and Maureen Nyerges had already paid for, they were still fighting to get reimbursed for the court battle.

So on Friday, their attorney showed up at a branch office in Naples with a moving truck and sheriff’s deputies who had a judge’s permission to seize the furniture if necessary. An hour later, the bank had written a check for $5,772.88.

“The branch manager was visibly shaken,” attorney Todd Allen said Monday, recalling the visit to the bank last week. “At that point I was willing to take the desk and the chair he was sitting in.”

#158 Bruce on 06.07.11 at 4:26 pm

#9 Bill Gable

If you are paying cash for food at the grocery store, and laughing at those of us who use cards, you’re not very financially astute.

I use my no-fee credit card (MBNA Smartcash) and get 3% cashback. Keep laughing as I collect a $50 cheque in the mail every few months thanks in large part to my cashback on groceries. By the way, I haven’t paid a cent of credit card interest in my life.

Credit cards are a dream come true to those who know how to use them.

#159 Utopia on 06.07.11 at 4:29 pm

#102 Rocket Boy

Some good points. Interestingly, the sudden drop in building permits indicates that a slowdown in the construction trades lies ahead if the trend is confirmed over the coming months. Unemployment will rise in that one sector initially anyway. Some retailers will suffer declining revenues if a real slowdown expands. Very predictable. We will have to keep an eye on the situation as it evolves. Todays article in the Globe suggesting Toronto has excess of units available for sale is indicative of the growing concern for the sustainability of the countries overpriced real estate markets. This is an important conversation to be having and it is fair to start lowering expectations of growth in real estate for the coming year. Nobody wants to see a damn crash in this country. A little talk can go a long way towards letting some of the air out of the gasbag we call housing in Canada.

Hopefully prices will deflate gently and in three to five years the economy can catch up with the exuberant buying that has taken place until now.

#160 Cato on 06.07.11 at 4:40 pm

#82 Utopia – I’m a fan of Mauldin, for anyone interested he has a free newsletter. I think he tends to stray too far into deflationist camp but I agree with most of his assertions. I believe we are in a multi-year, multi-stage deflationary crisis but under fiat system deflation is something central banks can counteract quite successfully. Witness the deflationary event at end of 2008 that only lasted 3 months, central banks intervened and pushed the crisis further down the road. Bernanke was dead serious in his assertion that during a deflationary event the Fed could dump money from helicopters onto the streets if it had to – aka Helicopter Ben. Can’t deny this approach works as a deflation killer.

Democracies will always chafe under austerity, citizens will not willingly live under it and will turf any politician who forces it on them. Governments will continue to print, even in the face of a fiat crisis. Greece and Ireland are proving EU bailout model is a failure – citizens will not accept austerity necessary to finance bailouts. The only viable model in a free society is the US model – monetize the debt, keep spending high and devalue the currency .

My prediction is the US will set the tone by stepping back and allowing deflation to take hold for short period of time. This may set off a correction and bleed out the froth in commodities but we won’t get the large event many are hoping for. The institutional money knows whats coming and its showing itself to be unwilling to budge from these valuations. There is no safety in fleeing to the USD as there was at end of ’08. Heading into fall we see announcement of another round of stimulus timed to the election cycle. Wallstreet will be more than happy to oblige, if you look at where the campaign money is going its clear who the Wallstreet favourite is. Wallstreet will push hard to keep their boy in power. With QE3 announcement we are back off to the races and an even larger crisis is pushed a little further down the road.

Situation for Canada is just as dire. With the US pursuing a weak dollar policy the BAC will have no choice but to intervene to save manufacturing jobs in vote rich Ontario. Deliberately devaluing the CAD will not go over well in bond markets – interest rates will spike which will be final nail in coffin for housing. BAC kills two birds with one stone, only downside is cost of living increase for ordinary canadians. Net effect will be Canada is split into a have and have not economies. Times will be great for the haves and miserable for the have nots. Since the have nots will far outnumber the haves odds are high we see a NDP/Liberal hybrid in power who’s solution to all our woes is taxation & spending. In 5 – 10 years we probably won’t even recognize the country. Maybe at that point we drag Garth kicking and screaming out of retirement and force him to be PM, at that point politicians will be so vilified no-one is going to want the job.

#161 Boycott on 06.07.11 at 4:40 pm

Boycott home buying until reasonable pricing, and spread this message.

http://www.facebook.com/#!/pages/Canada-home-buyers-boycott-now/203937936304340

#162 Koolaid Drinker on 06.07.11 at 4:46 pm

#94 vancity-renter.

If you don’t like the fact that Chinese buying up Vancouver then you should move out of there. Since you are the only non-Chinese person in your condo. Maybe you should try Markham and Richmond hill in Toronto.. Oh wait.. they are there too.
By the way, I am not a racist either. I hate everyone equally.

#163 BPOE on 06.07.11 at 4:55 pm

More great news for Vancouver and Gold. THEE STANDARD OF WEALTH
_______________________________________
So because loss of control could be this summer’s event, the potential is gold could have a very serious run to the upside this summer.
If QE is continued then the basic uptrend in gold now so solidly intact, will continue in its power uptrend, and you could expect a stronger gold market this summer. I’d be very careful about seasonality in gold…There’s every possibility that gold could put on a summer rally of distinction.

…A cessation of quantitive easing could open up the black hole of Calcutta for the general equities markets in a way that very few really understand. You could see thousands of points taken off that market in a very short period of time.

The only way to overcome that would be by whatever name you called it to start the QE again. That would be indicative of a total loss of control. So the question is what would the price of gold be if it became publicly undeniable that control of the economic functions for the believers no longer resided in Federal Reserves and central banks?
The answer is gold would do what it historically attempts to do and that is to balance the balance sheet of the United States of America’s external foreign debt…and when we do the calculations we come up with a figure that is in excess of $12,500.

#164 Trailer Park Boys on 06.07.11 at 5:03 pm

Organic Food ?

That’s for retards that haven’t even gotten their Grade 10 Diploma

What is it with these tree- hugging, cat- loving granola crunchers ?
We wouldn’t eat that organic crap, we might turn into
an NDP er..or worse BQ candidate….

Go watch some soft porn….and keep that beer belly in shape with some jalopeno ice cream.

#165 bigrider on 06.07.11 at 5:07 pm

#141 Charles- Don’t be a fool. It is no hotter for RE in Woodbridge than any othe rpart of the greater toronto area.

Other than it being Italian, and possibly the center of the universe to people that live there (I know a lot of them unfortunately) no different in overall price appreciation than any other part of GTA

#166 vyw on 06.07.11 at 5:18 pm

#133 posted an interesting article in the Globe on today’s BMO report on housing in three cities:
http://bmonesbittburns.com/economics/focus/20110610/feature.pdf.

From the Globe article: “The city has seen four corrections in the last 30 years — in 1981-82 (-30 per cent), 1990-91 (-14 per cent), 1995-96 (-20 per cent) and 2008-09 (21 per cent).”

2008-09 was -21%; prices have risen by 21% since, so a 20% correction will bring us back to 2009 prices about $700K for a detached home.

Back in 1982 and 1990, the sharp rise in interest rates contributed to the correction. But the BoC is in a tough spot to raise rates with the dollar at 1.02 – our exporters would suffer more losses and we’d be importing inflation.

#167 VICTORIA TEA PARTY on 06.07.11 at 5:26 pm

#91 LR

IT TAKES A (POTEMKIN) VILLAGE!

Right on; too many Victorians, at all income levels, are living an economic mystical experience based on debt, pipedreams, and self-serving egos.

And too many of them ALSO believe that this neck of woods is immune from every sort of outside harmful economic fall-out. So they spend. This attitude MAY work if folks, in this discussion, are pensioned off, working for government or in a recognized profession.

But, if someone is, instead, one of the legions of private sector wretches toiling in meaningless, crappy service jobs in this economic Potemkin Village, you’ve got a problem trying to make do here on rotating credit card minimum payments and 10 bucks an hour pay.

This is no way to run a railway. Just as the US has gutted its corporate research and development base, and thus future job growth by exporting its manufacturing elsewhere, Victoria has similarly sold its soul to our own bete-noir the environmentalist devil.

Our city’s resource industry base used to include the following: fishing, forestry, mining, roofing, paint manufacturing, large shipbuilding and so on. Too dirty, they said. Made lots of money, I said! What’s wrong with money?

Economic proportion has left the building and we are left with diaper wipers, baristas, insufferable real estate “industry” mavens and assorted other noisy special interests, world improvers and walks in the parks.

The return of a little heavy industry would be good, strengthening our tax base without violating our pristine scenery.

An improved shipyard is a good start. So, some of us hope for a little federal lolly when this apparently new warship-building program gets the final nod from Ottawa. Our new premier is on the case, we understand.

Oops. Maybe I spoke to soon. There are NO Tory MPs south of the Malahat; they’re NDPers (of course!) and we even have a Greenie! OMG!

Back to the Village!

#168 Mister Obvious on 06.07.11 at 5:47 pm

#145 Devore

“It is simply wrong to draw ANY conclusions from the guy in front of you at the grocery store paying a $6.50 tab with a credit card.

There is one conclusion I can draw. He doesn’t mind wasting the time of the people in line behind him.

#169 Imstupid on 06.07.11 at 5:47 pm

As stupid as I am I know one thing and that is if high net worth Chinese are moving assets out of china, it must be toast. Remember before a decline in any bubble the smart money exits. Then are the dumb asses that only took advise from people who already made money in the bubble rub up. It happens time and time again. If you go to 7-11 and hear the attendant taking about an investment it’s already to late. The run up happens long before and you as well as him will be looking for a greater fool.

As for our Chinese friends if they are exiting we are going to have a bug problem. Not in real-estate but in the economy. If China can no longer buy US bonds it shuts the economy down. I’ll explain why, china has a huge savings rate so their economy cannot be sustained domestically they need a cash cow and we know who it was. If the two do not continue the same relationship, I don’t think it can continue, watch out. Commodities will sink like a stone as will everything else. As a net exporter it won’t matter what our dollar is at because these two countries can not be replaced. This is what I think will happen ?. Too many variables. I know I’m tribg to have as much liquid assets as possible right now to see how it will play out. You all can decide for yourselves what you want to do.

#170 Seen this in the States and now its in Kelowna on 06.07.11 at 6:08 pm

@#60 garthForPM …

” I did a google search for falling prices in canadian recreational real estate and couldn’t find much. what are your sources? Thanks”

Here’s the summary from the Okanagan Real Estate Board… it doesn’t paint a pretty picture.

http://www.omreb.com/files/05%20-%20CO%20May%202011%20Statistics%20Media%20Release.pdf

#171 Devore on 06.07.11 at 6:41 pm

#153 Bobby

Victoria condos are definitely sick. So are townhouses to a certain extent, as well as SFH, although my understanding is there is something of a migration from the west into core, so core SFH still holding up well. Regardless, lower and FTB end of the market is doing so-so, which does not bode well.

#172 Bruce on 06.07.11 at 6:49 pm

#130 disciple

Thanks, I’ll be sure to notify top scientists that they have been neglecting to consider the sun…are you serious?

#173 Devore on 06.07.11 at 6:55 pm

#168 Mister Obvious

There is one conclusion I can draw. He doesn’t mind wasting the time of the people in line behind him.

Haha, ok, arguable whether it is faster to pay with cash, digging change out of your packets, or to swipe a card and sign a piece of paper.

I think we beat this one to death. Conclusion: credit card a tool, neither good nor evil.

#174 Bruce on 06.07.11 at 6:59 pm

#149, 154 disciple

Wow. What can I say. Good to know such enlightened folk like yourself fall into the anti man-made climate change camp.

#175 Think Tank on 06.07.11 at 7:16 pm

#164 just keep it up…you’ll die sooner than later..oh well

#176 TurnerNation on 06.07.11 at 7:18 pm

They hate our freedom of travel!! Taxes, fees, strip searches, secret “terror”/political prisoner lists, carbon tax BS, and so on.

GM CEO calls for $1 gas tax hike

By Chris Isidore @CNNMoney June 7, 2011: 2:28 PM ET

NEW YORK (CNNMoney) — General Motors CEO Dan Akerson said his company and his industry would be helped, not hurt, if consumers paid higher gas taxes.

In an interview published in Tuesday’s Detroit News, Akerson floated the idea of a $1 a gallon increase in the gas tax as a way to encourage buyers to purchase smaller, more fuel efficient cars. Greg Martin, spokesman for GM’s Washington office, confirmed that the quotes reflect Akerson’s and GM’s view.

Akerson said he would support a jump in the gas tax if it came instead of tighter fuel economy regulations that GM (GM, Fortune 500) and other automakers will have to meet in coming years. By the year 2025, automakers could be forced to hit fuel economy averages of as much as 62 mpg.

Akerson said that a higher gas tax, including an immediate 50-cent-a-gallon increase to take advantage of recent declines in gas prices, would probably make some of his Republican friends “puke.” But he said it would do more to help the environment than the pending fuel economy rules.

#177 Nostradamus Le Mad Vlad on 06.07.11 at 7:19 pm


Recall Dad’s (Nostradamus Jr.) prophecy? He stated “. . . the US is about to bankrupt the world . . .” — they may as well, as they have almost nothing left.

#130 disciple — “. . . the sun is actually a black hole wormhole into other dimensions . . .” — A wormhole? Take me there! Get me outta this swamp of bovine excrement, and the sooner the better!

#131 TheBigLebowski — “Canada is no different. Carney is a Goldman Sachs grad, placed in the position of running the BoC to insure that Canada stays on side with the global agenda.”

True, and the link yesterday supports that statement. Link said that Canada had now more than doubled their military budget — hence we are a warring nation, not a peacekeeping one — yet it flies in the face of what Cdns. would like.

But sheeple gave the CPC a majority, so what can we expect?

#143 JohnnyBGood — “Yesterday I didn’t have two nickels to rub together. Today, I owe millions!”

That is the CPC and Canada today, and guess who picks up the tab!
*
US$61.6 Trillion in unfunded liabilities. Wot, me worry? Not a chance — I’m too old! 2:27 clip The high cost of just getting by. The Razor’s Edge “Simply put: we are skating on the razor edge of a financial abyss.” M$M Unemployment worse than GD1. Depression Nine signs we may be living through one, ‘tho most sheeples don’t even know how to spell it. Obama “He has done everything possible to wreck this nation.” US Economic FutureFrom best to worst. Iceland “Iceland is handling the mortgage-based securities fraud the correct way. Throw the bankers in jail and fire the government that helped them loot the people. Icelanders make Americans look like pussies!” wrh.com. Ditto for Canada. 1:15 clip Dennis Kucinich says end the fed. Tipping Point for the economy heading south. Here is The Top Ten List. Debt? “. . . most of our money today is not created by governments. It is created by private banks as loans.”

Fukushima No melt-down, but melt-through.

Cocaine and Monsanto You can’t make this stuff up! Mauna Kea in Hawaii, blanketed with three inches of snow in June. AGW? Is this perverted bisexual GW? Whole Foods and GMO’s Ahhh hypocrisy — Thy name is Whole Foods.

3:37 clip IMF ‘giving’ Egypt US$3 bln. loan: “. . . but the number of conditions attached to the cash is likely to weigh hard on ordinary people. And as Paula Slier reports, some people fear Egypt’s sovereignty is being sold off.” That’s what TheBigLebowski said earlier; and Lockerbie All about The Green Book.

Sneaky Facebook in the UK. Twenty five per cent One in four US hackers is an FBI informant.

UK Gas prices up (surprised?). GE Salmon? Yuck. Wild Atlantic or Pacific, whichever is on sale.

No Shred Of Evidence There is only one country in the ME with nukes, and it ain’t Iran.

#178 BrianT on 06.07.11 at 7:29 pm

#160cato-Yes Ben could drop money onto the streets from helicopters as you suggest-he could also take a vow of poverty tomorrow and dedicate his life to helping Jimmy Carter build homes for the poor. What would lead you to believe either possibility is likely-there are probably about 100 million USA citizens who could use that helicopter drop right now-maybe Ben meant he could drop an unlimited amount of US taxpayer capital into the pockets of GS and JPM-the reporter misunderstood and an urban myth was born.

#179 BrianT on 06.07.11 at 7:38 pm

#174Bruce-Climate change zealots appear to be particularly narrow minded-a guy was arguing in an Australian newspaper the other day that “deniers” should be tattooed just like concentration camp victims. I don’t feel like debating the science right now but use a little bit of common sense-the guys that will get and are getting all the needed “climate change” money are KNOWN GRIFTERS. Newflash-these guys care as much about the climate of this planet as they care about fixing the homeless problem-meaning not at all.

#180 Bottoms_Up on 06.07.11 at 7:52 pm

#158 Bruce on 06.07.11 at 4:26 pm
—————————————-
The problem with credit cards is that they have been shown to be discriminatory against lower-income individuals (i.e. those that aren’t able to get credit and can only pay with cash). Using your credit card effectively transfers wealth from those lower-income individuals to YOU. Think about that the next time you are using your 3% cash back card.

#181 Bottoms_Up on 06.07.11 at 8:03 pm

#154 disciple on 06.07.11 at 4:08 pm
—————————————-
The human body is not that fragile. Sure, some of the ball-in-socket joints are, but just think about all the ‘jackass’ movie stunts and people on you tube doing stupid stuff and coming out OK. Also think about Horton getting hit last night in the Stanley cup finals (it was like a train ran over him). Sure, he was knocked out, but supposedly is doing OK and will play in the next game.

Also, it is true there are many physical characteristics that distinguish us from primates, but if you compare any two species there will always be differences. We share a common ancestor with mice even — and we are very much physically different than mice but our genetic code is very similar.

It’s great that you ask ‘why’ and probe for the true, just try to remember that conspiracy theories are just that — theory only.

#182 Buford Wilson on 06.07.11 at 8:05 pm

I bought a new 2500 sq ft house in Houston in 2007 for $214k. Now its market value on Zillow is $182k.

I’m not planning to sell it. But I’d hate to try to buy anything in Toronto or Vancouver. Or even Calgary.

#183 r on 06.07.11 at 8:08 pm

“Using your credit card effectively transfers wealth from those lower-income individuals to YOU”

eh? i’m pretty sure using my credit card means money out my pocket and into the bank’s. what are you nattering on about?

#184 Bottoms_Up on 06.07.11 at 8:09 pm

#151 Hoof – Hearted on 06.07.11 at 4:00 pm
——————————————
To believe in conspiracy theories is to believe that there is some master mind behind some super complex plan that would have had to be in action for eons. Who are these people behind the ‘master plan’ conspiracy? Where do they live? Why do they go through such effort to control the masses? Why haven’t they ever been discovered?

When one really thinks hard about conspiracy theories, one realizes that they would be so ultimately complex as to be impossible to enact. Economies are infinitely complex and there are many players.

Sure there is corruption in the world, but to suggest that there is some overall master plan I think is ludicrous.

#185 Bottoms_Up on 06.07.11 at 8:15 pm

#149 disciple on 06.07.11 at 3:52 pm
—————————————
Reading your take on illness one realizes just how much of a kook you really are (and I guess you would take that as a compliment).

I am a microbiologist by training (Ph.D.) and I can assure you that sickness is indeed caused by microbes (bacteria, viruses, parasites etc.).

Think about people born with SCID, otherwise known as people that need to live in a ‘bubble’. Any exposure to infectious agents harms these people because their immune systems are compromised.

You should look up Koch’s postulates.

And, I worked in a lab for many years, infecting cells with bacteria. Trust me, those cells don’t have an internal ‘stress’ system. They get very diseased when the microbes enter them.

#186 Utopia on 06.07.11 at 8:19 pm

Driving into Saskatoon today I went past a new billboard. It read simply: EXIT…Buy Real Estate Now! So I had too look it up. Turns out it is a newish company with a different business model. They function a little like a cross between a pyramid scheme and multi-level marketing. If a Realtor working for the company recruits some new blood then they get a 10% commission off everything the new person sells. For as long as that agent produces according to the website. Sounds a bit hare brained to me but maybe that is what it takes to recruit Realtors nowadays. Here is the link…

http://www.exitrealty.com/thinkresiduals.aspx

#187 BrianT on 06.07.11 at 8:19 pm

The Keiser report is always great but this one-153-is the best yet-Max and Stacey make global fraud reporting hilarious http://www.youtube.com/watch?v=zVI4OsgXrbY

#188 Bottoms_Up on 06.07.11 at 8:34 pm

#91 RL on 06.07.11 at 10:01 am
—————————————–
A few years ago there was the possibility of my locating to Victoria. I looked for a year for a job there (science research, academics, teaching etc.) and could not find anything worthwhile.

Victoria is a retirement town now……

#189 Hoof - Hearted on 06.07.11 at 8:42 pm

Why you should invest with Moammar Qaddaffi

http://inthearena.blogs.cnn.com/2011/06/02/goldman-sachs-worried-about-beheading/

#190 Herb on 06.07.11 at 8:44 pm

#176 Turner Nation,

yup, what’s good for General Motor is good for America and everyone else.

Force everyone to buy small cars, and GM will build them. But until then, they’ll just have to build the far more profitable gas guzzlers and promote them as the key to personal and sexual fulfillment.

Akersman deserves every cent of his salary for the incredible ability to say something like that while keeping a straight face.

#191 TurnerNation on 06.07.11 at 9:02 pm

diciple, some people are threatened by ideas. Why, it would negate the $50-100,000 they spent on “education” (which is mostly a form of learning almost fiction, I mean when did economic theory help anybody balance their chequebook?).

Real knowledge is held back from us. We drive our car using 100+ year old internal combustion engines, and fly around in planes with the 60-year old WW2 era jet engine technology.

After the trillions stolen from taxpayers under the guise of Cold War, Star Wars, War of Terror, does anyone really believe this is the best there is, that proplusion technology is not advanced for decades?
BTW there aren’t any ‘aliens’ only the hollywood images drummed into every child, and the space age military technology used while zipping around the planet. And it does not involve 100 year old internal combustion technology, you can bet on this.

#192 Abitibidoug on 06.07.11 at 9:03 pm

@129 Mister Obvious:
Good points you make. I’ve met many people, particularly in the younger demographic, who can’t understand why I have more interest in economics and money matters than junk like pop culture. Only nerds are interested in such subjects and how it affects them personally. It’s also why I think capitalism is largely fair, as those who put some effort into how they manage their money can be rewarded for their efforts by gaining or at worst not losing a lot of money.

#193 BrianT on 06.07.11 at 9:22 pm

#184Bottom-I gotta laugh every time someone brings up that tired red herring of yours. Look-you have your own “conspiracy theory” you are following blindly-it is that the MSM will selflessly keep you informed of all you need to know and your authority figures are likewise just working overtime to make sure you get your porridge at the perfect temperature. If you are not currently involved in a “conspiracy” and you would like to succeed I recommend you get in one very soon as your betters are not out there running around like lone wolves lost in the woods (the Bilderberg meeting is taking place in St Moritz right now-I assume your invite was misplaced).

#194 Bottoms_Up on 06.07.11 at 9:30 pm

#183 r on 06.07.11 at 8:08 pm
———————————–
If you had followed the thread you would have realized the discussion was about the perks one receives when using a credit card (assuming you use your card to gain perks only and that you always pay your balance every month thus not paying interest charges).

Credit card companies charge the store a significant percentage of the sales transaction when a customer uses the card (it can even be upwards of 4-5% for american express). Thus, in order for the store to make money, they raise the prices of their goods (to compensate for the $$ they send the credit card companies). Middle income and high income earners have credit cards and get rewards from the credit card companies by using them (upwards of 2-3% as one blogger noted). When all is said and done, the people using the credit cards get screwed because they’re paying higher prices in the store than they would otherwise have to pay. People paying cash get royally screwed because they pay the higher prices, and don’t get any kick-back.

The store wins, and the credit card company wins even more.

#195 Bottoms_Up on 06.07.11 at 9:36 pm

#191 TurnerNation on 06.07.11 at 9:02 pm
———————————————-
Yes, I’m threatened by the idea that eating bean sprouts (from Germany) that are contaminated with toxic E.coli can make me sick. Duh.

We also use ink to write, sail boats using wind, send paper mail around the world…how old are these technologies?

Duh, hello, there are constant innovations and new technologies emerging all the time.

#196 disciple on 06.07.11 at 9:52 pm

#185 Bottoms Up…

I am very familiar with Koch’s postulates, being a trained molecular biologist myself. You are a PhD and you do not realize that Koch’s postulates are NEVER actually observed in practice? Or you just conveniently ignore this FACT?

You have never realized that one cannot isolate a virus from supposedly virus-infected tissue ex vivo? A virus infection is never diagnosed ex vivo for this very reason. It is done through symptom recognition primarily.

I guess often that a “specialist” such as yourself is so convinced of the prevailing paradigm that only a “generalist” such as myself is able to penetrate the illusion for you. There is much fundamentally flawed with modern medicine that it is like Copernicus and Galileo all over again.

#197 Vancouver_Bear on 06.07.11 at 9:58 pm

#149 disciple on 06.07.11 at 3:52 pm

Ok, if you are the man who stands to his words, you must go to Germany and consume some e.coli contaminated veggies, since it’s already in you….you’ll do just fine….right? I doubt you will ever do it, now talk about fearmongering.

#198 disciple on 06.07.11 at 10:04 pm

Remember that the Earth-centred astronomy (and resulting stupidity arising from it) were taken for granted as TRUTH for thousands of years. Just because a school of thought has practicality or is believed strongly does not make it right. Don’t make this fundamental error.

Just because you can identify a bacterial culture by its Gram-stain or motility, or a virus by its genetic coding, does not for one minute, mean that the same bacterium cannot transform into another in vivo, same goes for a viral strand. I bet a million bucks you have never heard of Andre Bechamp. Your “free” education would never include this…

#199 disciple on 06.07.11 at 10:08 pm

I am a “scientist”. “Science” means literally the search for truth. I search for truth constantly. Yes, it’s that important to me,,..I started this quest when I was seven years old, will continue it till I croak.

There will be casualties along the way, my most cherished beliefs and illusions included.

#200 Bottoms_Up on 06.07.11 at 10:29 pm

#193 BrianT on 06.07.11 at 9:22 pm
————————————–
No, I’m not blindly following the MSM. I believe the media reports what’s interesting, what gets them ratings and what makes them money. I also know there are good reporters and bad. I also know that the same story can be spun by different media to serve their greater good, and that there are usually several sides to any ‘story’. This is not a conspiracy theory, just business. Yes, it sucks.

#201 Bottoms_Up on 06.07.11 at 10:33 pm

#196 disciple on 06.07.11 at 9:52 pm
—————————————-
Koch’s postulates aren’t practiced today because they would be immoral.

Hey, I know, I will harvest HIV from Disciple and then inject it into his first born to prove that the virus causes AIDS. Get real man.

And, virus can be harvest ex vivo. Where did you get your scientific training again?

#202 disciple on 06.07.11 at 10:33 pm

Mr. Vancouver Bear…
Buy me a ticket, I’ve always wanted to visit Germany…

Microbes are everywhere, you could eat a pound of dirt and not get sick unless the microbes you are ingesting set off a stress alert on your immune system. Your body creates the disease condition to fight off the stress by balancing the conditions to equilibrium.

There are various parasites that have taken up residence in your body over the years, yet you do not succumb to them unless there is a stress on your body or mind. The disease state is NOT the same as the cause of the disease. This is recognized very clearly in medicine.

I hope everyone reading this will not continue to get fooled…to remain in good health is to remain free of any stress induced disease state. Once your body is stressed, it may manifest any disease known to man.

My theory is not a new one, it is verified very easily when for example, TB patients show signs of other infections. Usually, this is explained by the notion that the immune system is compromised, but the truth is that once the body is in a disease state, it promotes growth of whatever microbe it thinks will help. In this regard, we have not even scratched the surface in understanding how the immune system works.

Look at vaccines: a total crap-shoot quackery. But very very profitable…and when I say profitable I ain’t kiddin’ folks…

#203 disciple on 06.07.11 at 10:34 pm

And speaking of Germany, you would have to be a common fool to not realize that the E.coli tragedy was not a bio-terror operation. Probably some kind of test…

#204 Bottoms_Up on 06.07.11 at 10:35 pm

#196 disciple on 06.07.11 at 9:52 pm
————————————–
And, viruses are harvested from patient samples and tested ALL THE TIME IN CANADA.

Take a look at the following website from the public health agency of canada:

http://www.phac-aspc.gc.ca/bid-bmi/dsd-dsm/rvdi-divr/index-eng.php

You’re crazy man.

#205 Bottoms_Up on 06.07.11 at 10:37 pm

#198 disciple on 06.07.11 at 10:04 pm
—————————————
The earth use to be taken as the centre of the universe because there was no proof to the contrary. And, actually, there is current evidence to indicate wherever one is within the universe appears as if it’s the centre, so they weren’t all wrong back then.

#206 Bottoms_Up on 06.07.11 at 10:41 pm

#202 disciple on 06.07.11 at 10:33 pm
—————————————-
Vaccines save countless lives and have eradicated very serious illnesses. What world are you from? Of course money is made from them. Just like money is made from selling condoms. But you don’t have any conspiracy theories about condoms do you?

#207 disciple on 06.07.11 at 10:44 pm

Last post I promise…I need to get some shut-eye anyway…

Those of you privileged primates who have never had to do an overnight shift for over a year, who have never eaten off silverware that wasn’t previously bathed in detergent, who would never share a cup even if it was alcohol, who have never had to eat four-day leftovers, heck, who have never French-kissed,…

I say…you’re living in a self-induced bubble, and once you step out of it, you’re gonna get really sick…because you will finally be introduced to microbes…and it will be your body’s way of getting healthy. Ironic…

#208 Bottoms_Up on 06.07.11 at 10:45 pm

#203 disciple on 06.07.11 at 10:34 pm
—————————————-
Just like Walkerton was a conspiracy to test a new E.coli bio-agent? I guess Jean Chretien commissioned that test?

Garth, where did you find this guy? Or is he a high-school student doing research on what happens when one goes ballistic on blogs? Blogging from his grandmas basement in west van perhaps? KOOOOOOK!!!!

#209 Buford Wilson on 06.07.11 at 11:21 pm

As a renowned socialist thinker, I can confirm that housing prices in Toronto will continue to rise until September 2014.

#210 Tony on 06.08.11 at 1:00 am

#73 Billy on 06.07.11 at 8:03 am

The taxpayer will be on the hook for everything and the CHMC will just be a distant memory… defunct.

#211 maxx on 06.08.11 at 5:45 am

#18 Cory on 06.06.11 at 9:19 pm

” Even me, a hardcore realist who saw the lunacy of it all, am starting to doubt myself. I keep saying after June 18 is should be all over since I believe mortgages can be pre approved for 3 months so I think we are seeing the residual effects of the “rush” before the changes took effect.
I can’t figure it out. I thought I had.”

Last Friday, I spoke with a teller acquaintance at my bank. (I poll all sorts of people frequently). The conversation turned to RE and I asked if she was an owner. She said that she is waiting because she believes prices are too high and that they will come down. Interest rates will be going up.

Yesterday, a RE agent friend who specializes in condos said that May was an awful month. She is very successful and not a dabbler. She said that she speaks to many people who have lost huge sums due to the 2007-08 sub-prime market crash and have never recovered. They used to buy what they wanted but now are holding off, buying smaller (IF they buy) and for the most part, waiting. She said that many people wonder if they’ll have enough money to last through their retirements and are not confident about the direction that the economy has been taking.

Some other RE agents regurgitate the current canned remarks from on high about sales being down because of the “wet Spring”. LMAOROFL. If I really wanted to buy, weather would not stop me buying. The RE industry had better wake up and realize that the buying public are emerging from the ether and start telling their listings that if they wish to sell, they had better start pricing downwards. That should clear out the fakes who are just trying it on for simple greed.

Therefore, I’m not touching the stuff until pricing reaches normal levels. I have the means to acquire, however I’m certainly not wasting my money on lining greedy owner’s pockets nor those of the RE cartels and banks.

#212 Billy on 06.08.11 at 5:46 am

Garth

Thanks for the reply concerning HAM and CMHC.
Ref #73 above

Your reply that CMHC insurance is only required if the mortgage is 80% or more implies that Asians are paying cash or carrying a smaller mortgage.

Is that the case?

Or are Asians taking advantage of low interest rates like everyone else?

Is HAM cash?

#213 maxx on 06.08.11 at 6:16 am

#56 Devore on 06.07.11 at 1:34 am

” Penny is right. A healthy rise in interest rates would chill everyone right out. But it is also unnecessary. This thing is keeling over on its own. The pols like it this way, so blame can be easily diverted. Why rock the boat now.”

Because the longer money remains cheap, the longer it will take to clear up the economic mess and sheeple will therefore continue mortgaging their futures as well as those of their children.

#214 maxx on 06.08.11 at 6:19 am

#62 daystar on 06.07.11 at 3:11 am

” We’ve got a debt monster in Canada and RE pumpers are sure to encourage Canadians taking on even more ’cause “rates are low”. 375,000 mortgage holders are struggling with central bank rates at 1%. What will they do with a mere 2 point uptick in rates?”

Become fiscally literate, learn to set priorities and manage their money properly.

#215 maxx on 06.08.11 at 6:30 am

#72 Kevin-

“This is a gross distortion of how the various players in this game interact.”

Good try. The tsunami of misinformation, disinformation, market manipulation (à la “buy now or be priced out forever”) and social engineering re: RE has been instrumental in pumping up prices. It has distorted normal demand way beyond reason and the players have made obscene profits from the hijacked financial wellbeing of sheeple. Always look for the motive.

#216 maxx on 06.08.11 at 7:05 am

#102 Rocket Boy on 06.07.11 at 11:21 am

Penny qouted as saying “why don’t they raise interest rates to put a brake on real estate” –

“One reason – it would create a disaster of biblical proporations (okay – okay, being dramatic ) -”

As is the rest of your post.

” Raise rates, will be the death of Ontario and Quebec manufacturing (that are still standing) as our dollar would soar against the lowly greenback…….”

The economy cannot be protected with cheap money. As for damage to industry, I call BS. Industry got itself into trouble by cowtowing to banks with balance sheets that screamed of jobs being slashed and pennies microtomed to goose the appearance of profit.

Fret not. People and industry will scramble and for the most part, survive. What will then emerge is a much more solid economy.

#217 maxx on 06.08.11 at 7:17 am

#157 Hoof – Hearted on 06.07.11 at 4:22 pm

” Wronged homeowners repossess bank
U.S. couple shows up with moving truck, court order to seize bank assets”

I take off my hat and bow to this brilliant (coup)le. Bravo!!

#218 Kevin on 06.08.11 at 7:56 am

@daystar:

“What I’m hoping for is the […] federal government that has the balls to raise taxes […] while cutting government spending across the board, [and] stiffer regulations in the food & drug manufacturing industry, as well as price controls on drugs”

So let me get this straight.

You think the way to fix the economy is for the government to take more of our money, but spend less, while forcing corporations to spend more (via the increased regulation) while charging less (via price controls).

And you think that’s the path to prosperity.

Really.

Wow.

#219 maxx on 06.08.11 at 8:07 am

#159 Utopia-

“Hopefully prices will deflate gently and in three to five years the economy can catch up with the exuberant buying that has taken place until now.”

Central banks et al. have been playing that “hopefully” game for some time now, eh what? What do you think they are thinking now?

#220 Kevin on 06.08.11 at 8:13 am

@Vancouver_Bear

“superbugs found in chicken you buy from Canadian supermarkets”

Yes. That’s why we COOK our chicken, instead of eating it raw.

Newsflash: Raw meat has bacteria on it. Cook it.

Nothing to see here, just sensationalist drive-by journalism.

#221 Kevin on 06.08.11 at 8:18 am

@disciple:

“You are actually born with every disease known to man.”

Aaaaaand … we’re done here. No point in reading anything after something as certifiably crazy as this.

#222 disciple on 06.08.11 at 9:08 am

Vaccines are primitive, are based on ONE faulty scientific paper commissioned by BIG PHARMA way back when, cause more harm than good, and simply do not work. What has eradicated diseases worldwide is the spread of proper sanitation; i.e., technology.

You can resort to name-calling if you like, I mean, this is a fun blog and all, but I have found throughout my many years that those who most vehemently oppose new ideas are people who would never accept that what they have been taught their whole lives is WRONG. Your battle is with yourself. As Bruce Lee taught, there is no enemy.

But that is the essence of science, and true scientists are not afraid of ridicule. It’s not too late for you to turn your back on the dark side. Join me…

#223 Gordon Kesler on 06.08.11 at 10:00 am

“A new Zillow study proves that in the US real estate crash now continuing, cheap houses took the biggest hit. Since the market peak, they’ve crashed 63% in value, while luxury homes fell 38%.”

Saw this happening in central Alberta in 2010. If it wasn’t new, it didn’t move.

#224 Bottoms_Up on 06.08.11 at 10:13 am

#221 Kevin on 06.08.11 at 8:18 am
—————————————-
hahaha. Exactly. He is now among the ranks of Nosty Jr. (although Nosty was a princess compared to him). My final letter to Disciple:

Dear Kook,

Congratulations on wasting cyberspace characters on absolute drivel. No longer will I read anything you post. Job well done.

Sincerely,

Realist based on facts

#225 Gadje on 06.08.11 at 10:27 am

Dont worry, be happy. First the boom, later the bust

#226 disciple on 06.08.11 at 10:55 am

#224 Bottoms_up
Ah, you’re a newbie who actually thinks I care what you post on a blog…btw, you hung yourself with these comments…and you called me crazy?

“”The earth use to be taken as the centre of the universe because there was no proof to the contrary. And, actually, there is current evidence to indicate wherever one is within the universe appears as if it’s the centre, so they weren’t all wrong back then.”””

Yes, actually, they were all wrong. And there was plenty of proof to the contrary, it’s just nobody bothered to look…I wonder why? You know why, actually, you probably don’t…never mind…pearl before swine…

#227 Kevin on 06.08.11 at 1:12 pm

@disciple:

It was the church that spread the myth that the Earth was the center of the universe.

Eventually, science matured enough to understand that this was not actually the case, and pointed out the church’s error. Specifically, a fellow by the name of Nicolaus Copernicus. When Galileo Galilei defended Copernicus’ groundbreaking research and discoveries, the church responded with gracious thanks and rich rewards for finally enlightening them.

I think.

I may have that last bit wrong.

#228 Boombust on 06.08.11 at 8:16 pm

I had to laugh…(again)

With a straight face, Jill Krop, tonight’s News anchor for Global TV News at 6 here in Vancouver, announced, with a straight face that if you are a “Telus” subscriber, you will be the LAST TO KNOW the hockey game results for tonight because “…Telus has a several seconds delay” due to…(whatever)

Who owns GLOBAL?

SHAW!

#229 Boombust on 06.08.11 at 8:18 pm

Uh oh. My mistake. That AMERICAN-sounding Chris Gailus is at it on Global News tonight. Ugh.

Same shit, different face.

#230 Boombust on 06.08.11 at 8:21 pm

Nope. It’s Jill. Chris was reporting from Boston.

Maybe they should BOTH tune in to CBC who is actually BROADCASTING the game. he he…