Her name is Sarah. Twenties. I think she might be hot. “I love your blog,” she writes, “and have been reading it diligently every since it was introduced to me.  You are hilarious.”

So far, so good. If you can’t impress chicks with your raw animal swarthiness or Vance Hines pipes, I always say, then use your blog.

“You give me much hope, but I am now wondering what I should do?”

But wait! Sarah has the disease. Bad.

“I have friends who bought apartments about five years ago with nothing or near nothing down, and managed to make at least $100 K profit in three years or less.  So how does someone like me, who is slowly paying off student debt, and saving what I can (about $300/month) make $100,000 in a year or two?!  Even if I were to invest in the most high risk mutual funds, I wouldn’t make a profit like that…  I’d love to hear your advice.”

See what I mean? It’s a world in which young babes think they’re deprived if they don’t score a hundred large “in a year or two” by investing, like, nothing. For those who can’t see the insidious and distorting effects of a housing market bubble on the hormonally young, voila. This is not a good thing. More evidence, as I said recently, that this is starting to fell an awful lot like 1999 on Bay Street.

I well remember roaring around in the suicide seat of dot-com millionaire’s Viper, as his profitless company was raking in huge sums through financing rounds gobbled up by mesmerized, greedy investors convinced what was going up would levitate forever. He’d hired hundreds of employees to do stuff on computers, ride skateboards in the office tower hallways, and play pool in the chef-equipped corporate romper room.

Last I heard he was renting out surfboards from a beach hut somewhere. Viper, repossessed. Investors, reamed.

There is no bubble which endures. Surely, post-Nortel, post-dotcom, post-Bre-X, post-LinkedIn, post-Cabbage Patch Dolls, you would think we’d have learned. But, no. Sarah was probably ten when the Nasdaq lost 80% of its value – just months after everybody said, ‘it’s different this time.’ But nothing’s different when companies don’t make money – they fail. And so do real estate markets when people can no longer afford houses.

Just to make this more poignant, and the need to take cover more urgent, take note of what can happen when bubbles burst. The tech-heavy Nasdaq, for example, peaked at over 5,000 and today is at barely half that level – 11 years later. And the US housing market peaked in 2006, and five years later may now be only half way through the correction, according to the guru.

He’s economist Robert Shiller (the guy who correctly called both the dot-com crash and the housing bust). This week the Yale egghead said a further price decline of 10% to 25% over five years “wouldn’t surprise me at all. There’s no precedent for this statistically, so no way to predict.”

Of course, this would come atop the current 33% cratering in real estate values nationally (some markets, like in Phoenix, are off 80%). And the current housing mess is even worse than that of the Great Depression, because although the percentage declines are similar, in the 1930s the value of everything fell during rampant deflation. This time housing’s fall, relative to the economy, is dramatic. It’s also devastating since most middle-class families unwisely put most of their net worth in a single asset. Yeah, just like most of us.

That probably makes this the worst dive in North American history. And with enough people in Toronto and Vancouver and Calgary thinking like Sarah, it could be a template. Or, what about Japan? Could that be a model? After all, house prices fell for 15 straight years after that bubble burst, improved for a year, and have headed down again. Despite interest rates at about zero during the entire time, real estate shed two-thirds of its value.

Sarah should also know another bank has stepped up to prick the it’s-different-this-time balloon. Now Scotiabank says the post-crisis global housing recovery is shriveling faster than a guy in a cold lake. Why? “Increasing nervousness over global economic prospects alongside rising food and fuel prices and persistently high unemployment are keeping potential buyers on the sidelines.” And this: “The process of repairing bloated public and household balance sheets points to a protracted period of subpar economic growth among debt-heavy developed nations that will restrain household borrowing and spending.”

In fact, when you think about it, how can people anywhere keep paying more for houses when living costs are shooting higher and debt’s at record levels? Answer: they can’t.

So, Sarah, I sure hope your little condo-ensconced friends have turned their illusory paper gains into real ones.

And I hope you mature. Now, that’s hot.



#1 Mr. Lee on 06.09.11 at 9:07 pm

The ironic thing is the very same people that took the bath on the dot com crach were convinced to put their money in a safe asset that would always apprciate…..their houses……..and many fell for it again…….SUCKERS

#2 Debtisforever on 06.09.11 at 9:09 pm

Yup that’s about it. It’s not different this time. It’s just too bad it has to be an asset that families have relied on as a rock of financial stability for the past 50 years. Not so, anymore. So whenever I hear something positive on the tv or radio (or friends) about housing, I just ignore. Ignore, ignore and get on with my life. This will end. One day. And it won’t be good. But I will survive because I have no debt.

#3 Hoof - Hearted on 06.09.11 at 9:09 pm


#4 steve p on 06.09.11 at 9:10 pm

hey Sarah you tube is full of real estate crashes video’s.
Just type in real estate crash florida, or michigan or california or arizona. this is just for starters then play around and you can find more.

#5 Peter Pan on 06.09.11 at 9:11 pm

Garth, you might think Sarah’s hot, but be careful what kind of pictures you send to her Twitter account…. could come back to haunt you. Oh, that’s right, you’re not in politics anymore, so you can’t pull a “Weiner”.

#6 Hoof - Hearted on 06.09.11 at 9:11 pm

Her name is Sarah. Twenties. I think she must be hot. “I love your blog,” she writes, “and have been reading it diligently every since it was introduced to me. You are hilarious.” So far, so good. If you can’t impress chicks with your raw animal swarthiness or Vance Hines pipes, I always say, then use your blog.


What if you are
—- an elected official
—–with last name Weiner
—–and on Twitter….

#7 Duncan on 06.09.11 at 9:11 pm

With the shots you are taking at your readers…I hope you have a bunker

#8 enlightened on 06.09.11 at 9:14 pm

Other than the esteemed Mr. Turner’s published advice (of which I am reading through) – can anyone suggest a good primer for the neophyte Canadian investor? I’ve yet to find an advisor in the Thompson/Okanagan area I can work with – but would like to start building my TFSA. Thanks!

#9 MR Sheep on 06.09.11 at 9:15 pm

how many no money down people are in this market?

#10 Hashnugs Inthebong on 06.09.11 at 9:18 pm


#11 yukon don on 06.09.11 at 9:18 pm

Two years here in Penticton on May 23. Front page realestate guide , price 2007 $314 , listed $229 off 85 grand asking and still no takers. I mentioned before how there was one house under 300 grand two years ago , well now take your pick. Every spec home in Penticton , rental or low end house is up for sale. Gee make that every third house is up for sale and just make an offer. The asking price is just a hopefull sugestion. Condo , you want to talk condos , well how many hundred you you need? Hurry up and buy D.A. Mr realestate no show ? Go Canucks Go

#12 TurnerNation on 06.09.11 at 9:19 pm

For those who doubt this sometimes-anthropomorphic weblog’s message, it’s a great day to buy a house then!!

Tens of thousands of new Toronto condos are coming online within the next few years. Buy one, or two, or three. Borrow the 5% down. Do it. Do it now. And then “flip” them for easy profit.
It’s so easy what are you waiting for?? Lower interest rates? A majority government?

You, weblog reader-cum real estate investor: Load up on condos like they’re going out of style. :twisted:

#13 charles on 06.09.11 at 9:19 pm


#14 b on 06.09.11 at 9:19 pm

i’m looking to rent in liberty village any properties for rent

#15 Ben on 06.09.11 at 9:20 pm

not first

#16 Mikey the Realtor on 06.09.11 at 9:22 pm

Sarah, call me and bring your friends. A few properties just came on the market that are valued quite low, I can see a $90k+ rise on these in the next 2-3 years. Hurry! Italians and HAM are knocking my door down to get at these, they wont last.

#17 El Magnifico on 06.09.11 at 9:26 pm


Does this means that all your 2011 blog posts are free of use?

(PS: tell you webmaster that a simple PHP function will take care of updating it in the following years, until the bubble burst!)

#18 MikeT on 06.09.11 at 9:27 pm

Sarah, honey, your friends “made” the money only if they sold their condos for a profit of ~100k. If they still live in those condos, the “profits” are illusory and can go as easily as they came. Especially that the human nature is so irrational and bias plays a much grander role than we think. As soon as their condos start depreciating, the smart ones will exit as soon as they can, the not-so-smart ones will HOPE this is “temporary”, will hold onto their condos and will watch their equity evaporating. Same thing happened to Nortel investors who were told by talking heads on TV that Nortel is a strong buy at the peak and thought the fall is temporary and bought more of it at every dip.
So, if your friends sold their places – they really got lucky and should invest the profits in liquid assets (no new BMWs as rewards for “being smart”!), if they didn’t – wait and see what happens to them (it’s coming and it’s almost here).
You have the most valuable asset one can have and it’s called “discipline”. Keep saving, keep paying off your debt, keep looking for better jobs, don’t give yourself too big rewards for being disciplined, stay humble – you will learn the true value of prosperity and money. “Easy come – easy go” won’t be about you. Be patient – your time will come and your will do great.
As a father of two little girls, I prepare to instill in them these qualities. I will give them the very same advice I just gave you. It worked for me and for many-many-many other people.
Good luck! You are on the right path.

#19 shanks on 06.09.11 at 9:28 pm

yep greed will get you everytime… then again, so will fear. From what i can tell there is only need to fear right now if you are leveraged to the tits and think everything is normal and that nothing will ever change ever. oh, you might want to fear a little if you are bunkerless and stockpileless, and havent build your underground greenhouse that runs off LEDs and free energy…

#20 The Original Dave on 06.09.11 at 9:34 pm

G man, I wanted to add to your list of bubbles. Anyone remember the hockey card bubble? OMG I got another Eric Lindros rookie card!!!!!!

That was horrendous. I wasn’t even a teenager yet. Early 90’s, but I got caught in it. I thought prices of cards were going to go through the moon! A Lindros card would surely be worth hundreds of dollars ( a lot of money for me at the time) in a handful of years.

Line-ups. LINE-UPS of buyers trying to get their hands on some cards. New cards, old cards….whatever. New card companies emerged. We use to only have O-pee- Chee (Canada) and Topps (in U.S). About a half dozen emerged in the early 90’s when there was that buying panic. A glut of hockey cards were on the market but we all thought prices would just keep moving higher.

And then it happened. The card market died. There were too many cards out there. No one left to buy. Buying exhaustion (no interest rate fluctuation required…hehe). Most people were left holding thousands of hockey cards. We all had the same ones. The prices of those cards are still not where they were 20 years ago!

This was when I learned to be careful of buying panics. Welcome the crowd when they’re fighting to buy something that you have, but don’t be that person fighting with the crowd trying to buy the same thing they’re trying to buy.

That was my 2nd lesson in behavioural economics and why it’s important to avoid following the crowd. (Housing bust happened around same time…that was lesson 1).

Now, I go opposite.

#21 Bill Gable on 06.09.11 at 9:36 pm

Today the debt numbers for Canadians sounded exactly in lock step with what Mr. Turner has been railing about.

Canadians owe $1.50 for every $1.00 they make.
Average credit card debt = $26,000 (*OMG)

In Vancouver sales have cratered for Condos and homes in the reality end of the pool – while the higher end garbage has been skewing the numbers higher.

Lots of the Condos and homes in this rainy burg are garbage. Chipboard and built by people that were NOT the best trained (read = cheap labour) – and leaves problems for years.

Monster homes on 33 foot lots.

Tons of empty homes – in this building there is a 12 million dollar condo on the top floor – and the owner in Taiwan comes for the Fireworks display every summer, and that’s it. (* That was for your Viper story, Mr. Turner = things haven’t changed = it’s worse).

I live in a RENTAL. The monthly Condo fees my Chinese owner pays =$650.00 a month = the place is on the Market for a Million = 1 bedroom – and the windows all leak, and they just told the owners the 23 story Elevator number 2 has to be replaced, and they are getting a number for the owner.

This is getting scary.

Did you also see the story that young people feel ’empowered’ by the amount of debt they carry!

Oh, and one more thing – I wrote Harper and suggested they call the new cat at Rideau Hall = GARTH.

Somehow, I am thinking that isn’t going to fly. Unlike the PM – The PM is happy to take an 11 grand an hour Private Jet to watch Hockey in Boston (The Canucks SUCK) – nice to have a leader who ‘feels our pain”.


#22 Elmer on 06.09.11 at 9:36 pm

I find it amusing that you’re ridiculing a young person for wanting to buy a house after graduation, when your own generation did the same thing and back then it was considered the norm. Your generation was able to buy a house with 3x their income. They could also expect to have a job with a pension, a rarity today, not to mention they didn’t have to worry every day about losing their job to outsourcing. The boomers really screwed everything up for our generation, and now they go around criticizing us simply for wanting the same thing they had.

I raked Sarah for wanting to score $100,000 in a year or two without effort. I hope your generation soon learns to read. — Garth

#23 charles on 06.09.11 at 9:38 pm

“He’s economist Robert Shiller (the guy who correctly called both the dot-com crash and the housing bust). “..but the first one was Peter Schiff!

Funny and enterteiment


#24 chubbychops on 06.09.11 at 9:40 pm

It’s us again writing.

Yesterday we were in Kunming China. Your blog entitled “Marketing” was completely blocked. My husband was faced with a total blank! (much to his chagrin)

Today, we are back “home” in Thailand and my husband opened up the blog and VOILA everything is as it should be. (we are Canadians who dowsized life and are now retired and enjoying life in Thailand)

Just to let you know…..they are watching! So, when you visit China, be careful they may want your kidneys and i-Pod.

#25 NFN_NLN on 06.09.11 at 9:42 pm

I remember hearing about LinkedIn’s IPO. I feel sorry for all those paper millionaires. By the time they’re able to exercise those stocks/options it’s not going to be pretty. I had forgotten all about that stock until you mentioned it. The P/E is currently sitting at 1,900+. I’ve never shorted a stock in my life (not ballsy enough) but this I will have to consider.

This is no different then the FaceBook private equity scam. Goldman is trying to help those paper millionaires pull out their money, but they can’t go public… at least not with the BS numbers they’re trying to sell the public on. Going public would mean publicly releasing the financials. By then everyone would know what a fad it is. These sites are innovative and popular but they don’t generate the revenue to merit a market cap of 6 billion.

I can’t wait for the wheels to hit the pavement… and promptly fall off. The free market is suppose to efficiently guide the economy. Selling houses to one another is NOT an efficient allocation of manpower, and waiting in line for a house definitely isn’t.

#26 The Original Dave on 06.09.11 at 9:46 pm

I wanted to add something. Someone mentioned those that got burned during the dot com bust. Yes, after that happened, they looked for an investment that was a safe haven.

These people really don’t understand markets and market psychology. There is no safe haven investment. There’s only timing. I really am wondering if those that got burned during the dot com bust and will get burnt during this housing bust will finally learn the lesson. Will they realize there isn’t an investment that is a sure-shot. There’s only proper timing.

I know highly educated people that earn close to $300,000 per year that got burned in the dot com bust and are now primed to get burned in this bust. They bought tech. stocks and on paper were making money. They bought more as the mania ensued. They got clobbered. Same with real estate now. Same people bought a rental home a couple of years back, seen it increase in value, and are now looking to purchase an extra property here in Toronto!

How the heck do you protect these people from themselves?

#27 Hoof - Hearted on 06.09.11 at 9:46 pm

To Sarah:


I classmate got her Law Degree and worked for the BC Securities regulator (or whatever its called)…re Stock market

She said THE worst thing she observed was when someone got lucky on their first try at the given market ( in this case stocks) .

They don’t realize it was mostly luck…but instead feel omnipotent…a genius…and then often lose it all.

The house always wins if you keep playing the chips..

#28 Abitibidoug on 06.09.11 at 9:47 pm

Yes, but isn’t it different this time?

#29 ted23 on 06.09.11 at 9:58 pm

First, perhaps!

#30 Thetruth on 06.09.11 at 10:06 pm

If Canada became #2 on the global list of countries with regards to per capita annual immigration intake, the bubble would pop! Out of 200+ countries, we are number one. Why?

Yes, that simple.

#31 Love This Blog on 06.09.11 at 10:07 pm

#14 b,
I looked for you. No, there are no properties for rent. Next?

#32 Cato on 06.09.11 at 10:08 pm

Sarah and others need to learn there is a difference between investing and gambling. But how can they learn when gov’t creates the casino mentality in the first place. The dot com bubble like the housing bubble was caused by central bank policies. Can we create yet another bubble or have we simply run out of road?

The housing bubble may have been the last of the spectacular keynesian orgies. What Sarah needs to understand is the rich & powerful will always exploit the greed and fear of the naive. She can roll the dice and try to be one of the lucky lemmings – but more than likely she’ll end up slaughtered with the rest of the herd. There are no shortcuts to building wealth, and unfortunately climbing the ladder is going to be much harder for generation Y. Turn off the TV, start reading and learn how the game is played. Only then will you earn a spot at the head of the pack and live above your peers.

#33 Mr. Reality on 06.09.11 at 10:14 pm

When two of the 5 major banks start issuing warnings about housing, you need to stop and think. You just wait, the rest will follow with their own in the next couple weeks.

That’s the beauty about being Canadian, they will gladly take on your mortgage, but still warn you (unlike the US banks). A shred of morality exists.

If the other 3 major banks issue a warning, do what Mr. Reality is doing and short the crap out of the TSX.

Mr. Reality

#34 Hartley on 06.09.11 at 10:15 pm

don’t even bother dude.
think before you type.

#35 Mister Obvious on 06.09.11 at 10:16 pm

“I love your blog,” she writes, “and have been reading it diligently every since it was introduced to me.”

You may be a good reader Sarah, but I think your retention needs work. You sound like someone who ‘diligently’ follows Canadian politics but still isn’t quite sure who the prime minister is.

I’d place most of Garth’s advice within two general categories:

(1) How to get any significant wealth you may have accumulated by middle age working for you (instead of quickly evaporating), or…

(2) How to get started on a path that allows you to grow significant wealth by middle age (rather than become mired in debt).

Guess which one does not apply to you?

#36 TurnerNation on 06.09.11 at 10:17 pm

#14 b on 06.09.11 at 9:19 pm are you kidding?

Liberty Village is one big , crowded, new condo ghetto.

Look at the dozens of new, never lived in, condos for rent, from flippers and speckers:


#37 Industrial Guy on 06.09.11 at 10:21 pm

This is the future of Canada.

Some interesting numbers form the US Federal Reserve

“”The huge loss of consumption is due to loss of $8 trillion in bubble wealth,” said Dean Baker, co-director of Center for Economic and Policy Research.”
“Much of the lost household wealth came from declines in the value of real estate, which dropped $6 trillion, or nearly 30% of its value, from the end of 2006 to the end of last year.
And after posting modest gains in 2009 and the first half of 2010, the value of homes started to fall again in mid-2010.”

We’re just late to the slaughter thanks to our National obsession with maintaining our lifestyles no matter how much debt we pile on. $26,000 of non-mortgage debt per person in Canada is a truly crushing debt load. Any significant increase in interest rates will lead to an economy killing tsunami of personal bankruptcies. The rising interest rates will also cause the Canadian dollar to rise killing of more manufacturing jobs.

Higher energy costs have already set a fire under public sector union’s demand for wage increases. Our zooming petro-dollar is continuing to kill off Canada’s manufacturing sector. None of the Detroit Three, Toyota or Honda can justify continued production in Canada with a dollar hovering around $1.03 US. A recent report from the OECD says “The great challenge for Canada is productivity”. Basically, without the unofficial subsidy a 90 cent Canadian dollar gives manufacturers in this country. We have a significant productivity gap with other manufacturing countries.
The closure of Ford St Thomas and the GM Impala line in Oshawa is just the beginning. There will soon be another round of factory closings in Southern Ontario and a corresponding jump in the Provinces unemployment rate. In some towns it’s already started….

#38 Ralph Cramdown on 06.09.11 at 10:22 pm

This just in:

“It is clear that the public expects the Mayor and City Council to move forward with the commitment to repeal the Toronto Land Transfer Tax, and it is unlikely that they will forget about this. This is a significant tax: it costs the average Toronto home buyer almost $6,500, and when added to the Provincial Land Transfer Tax, average Toronto homebuyers face almost $14,000 in land transfer taxes. REALTORS® look forward to working with the Mayor and City Council on a reasonable approach to deliver on this promise, ” said Toronto Real Estate Board President Bill Johnston.

Translation: Screw the annual $250MM hole in the budget this tax represents, We® deserve that extra $6,500 for flipping pre-condos. Oh, and the people we sell them to, too.

#39 Tim on 06.09.11 at 10:22 pm

“And the US housing market peaked in 2006, and five years later may now be only half way through the correction, according to the guru.”

Several months ago you advocated looking into buying US Real Estate. Good thing I held off…

You also continually try to make parallels between the US and Canada, when they are vastly different economically and fiscally

#40 JohnnyBGood on 06.09.11 at 10:24 pm

I have always been disturbed by what is commonly referred to as “the wealth effect”: people treating (in this case) home value like cash in a piggy bank. When home values rise, there’s suddenly more cash in the piggy bank to spend. The old “your home as your ATM” phenomenon that helped to wipe out so many mortgagors in the States.

But asset values are based on market expectations. When expectations change… And expectations can change very suddenly.

The so-called “wealth” derived from higher market values is only realized if the asset (e.g. the home) is monetized (sold). If you have equity in your home, you can monetize some of that equity without selling your home. (However, keep in mind that, while value is abstract, debt is very real and must be paid back, with interest.)

Therefore, if you monetize your home equity, you should use it to generate a net, inflation-adjusted, positive cash flow. That’s what investing is about. And it’s how you can build real wealth, not the pretend kind.

But no, far too many of us look at our homes that may have gone up $100,000 in market value, and we think we are suddenly $100,000 richer. Are you sure about that? Better go check the piggy bank.

#41 Lisa on 06.09.11 at 10:26 pm

Some thoughts:
The Millenial generation (i.e. Sarah), recent grads and 20 somethings won’t make enough entry level income to even afford a starter home in this market.
Generation Xers are already in homes with young families…staying put for now.
Boomers will want to sell their homes soon but who will buy them? No strong market for the used Boomer home.
So, I do think that reverse mortgages will become a huge trend in the future as Boomers are stuck with their homes but no cash for living.
Plus, there IS a lot of free & cheap credit being handed out here in Canada…listen to the commercials on any AM
radio station, many encouraging homeowners to use their home as an ATM machine to pay off other debt…just like in the U.S.

#42 BC Bring Cash on 06.09.11 at 10:27 pm

Cabbage Patch Dolls (Kids). What a scam that was. The whole marketing ploy was to limit supply and to create a mania for almost everyone to own them. People were willing to trample each other to get their hands on one of these valuable investments. The pitch was that they are so rare they will be worth a fortune shortly. My Ex bought lots of them. Of course a child could not play with a doll. That would ruin their value. There they sat on a shelf in their original packaging and collected dust. Of course they sold likely millions of Dolls and therefore they became worthless as an investment. Just like Tulips or Nortel Stock.

#43 SMOKING MAN on 06.09.11 at 10:31 pm

To be or not to be a bubble head that is the question.

The vindictiveness of many posts on here are really tell me something, about the mind of a bubble head. #Losser……

Two years ago when the world was in gloom and doom Armageddon, I screamed in capital letters on The Globe and mail website BUY stocks BUY bonds BUY real estate. I was mocked, ridiculed made fun of, heck what does this un schooled drunken idiot who my 3 grader can speel better know.

Apparently allot. I was right they where wrong as usual. It’s gift.

Now the bubble heads who made their bet and sat on the sidelines Lost. Your only hope for redemption is for a full scale crash. Otherwise you are the greater fool.

The opposite is going to happen in CANADA

Bubble Heads look at wishfull thinking,
Price to income, wages, emergency low interest rates, blab la blab la bla.

Emergency low interest rates are the new norm get use too it.

Remember this kids Where ever money goes prosperity grows.

Canada my little student grass hoppers will be bombard with capital never before scene or imagined.

World events are setting the stage.

Ron Paul has a real shot, The Rich in USA will be investing tones of $$$ and sheltering capital in Canada, because they are scared of him.
The Chinese are in a panic and race to turn soon to be worthless green backs into hard assets.
Greece is making the smart money in the Euro Zone look for cover. HELLO CANADA.

Sahara want make a quick few 100k, buy now.

Altho Garth means well, and he writes like a god.

He is not even close when predicting the future……vs the smoking man.

He is to focused on reason and logic, and not what the over schooled un educated mob……will do next…

That is my specialty……

#44 Hoof - Hearted on 06.09.11 at 10:35 pm

Famous Quotes about Government & Banking Control and the New World Order


“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
– Henry Ford

“Today, America would be outraged if U.N. troops entered Los Angeles to restore order. Tomorrow they will be grateful! This is especially true if they were told that there were an outside threat from beyond, whether real or promulgated, that threatened our very existence. It is then that all peoples of the world will plead to deliver them from this evil. The one thing every man fears is the unknown. When presented with this scenario, individual rights will be willingly relinquished for the guarantee of their well-being granted to them by the World Government.”
– Henry Kissinger, Bilderberger Conference in Evians, France, 1991

“The drive of the Rockefellers and their allies is to create a one-world government combining super capitalism and Communism under the same tent, all under their control…. Do I mean conspiracy? Yes I do. I am convinced there is such a plot, international in scope, generations old in planning, and incredibly evil in intent.”
– Congressman Larry P. McDonald, 1976, killed in the Korean Airlines 747 that was shot down by the Soviets

“Some even believe we (the Rockefeller family) are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure – one world, if you will. If that’s the charge, I stand guilty, and I am proud of it.”
– David Rockefeller, Memoirs, page 405

“It is the system of nationalist individualism that has to go….We are living in the end of the sovereign states….In the great struggle to evoke a Westernized World Socialism, contemporary governments may vanish….Countless people…will hate the new world order….and will die protesting against it.” – H.G. Wells, in his book, “The New World Order”, 1940

We can’t be so fixated on our desire to preserve the rights of ordinary Americans.”
– Bill Clinton, USA Today on 3/11/93, page 2a

#45 Hoof - Hearted on 06.09.11 at 10:38 pm


#46 infernalmachine on 06.09.11 at 10:49 pm

Ah, sarah… I too am a 20-something. Maybe not a babe, but definitely not a condo owner. Why on earth would anybody our age want to go into so much debt for something we can rent flexibly for half the price? Plus when my stove/fridge broke the super fixed it. Free.
Be strong. Your friends can gloat now but you’re the one that won’t owe the bank 350-500K for 35 years. Yeuuuchhhh.

#47 Christopher on 06.09.11 at 11:01 pm

10 years ago I had a mortgaged free home and felt bad for all who rented and wanted a home. I was glad interest rates made it easy for the less fortunate to get there faster. Being a blessed renter today I again feel bad for all of those trapped in real estate and all the cost associated with being chained to a home. Lots of conflict with resale values and loss of interest as well as greed and sleepless nights. It would of been better if houses went up in value slower but Home owners would not want that so again I feel bad for them. Good luck trying to sell! It is not like it use to be not at all.

#48 wes_coast on 06.09.11 at 11:02 pm

The worst part about these clowns that brag about making a hundred grand of equity (not money cause most don’t have the balls to cash out and rent) is that they actually get cocky. Like they knew this was going to happen. Sure they felt the urge to buy when rates dropped and many lucked out with the timing. But if you asked them to explain the logic of how they made this money or why values went up they’d have no clue. I made a lot on a condo I flipped but no bragging here. I wanted out of renting. With low prices and low rates it made sense. I bought. When it doubled I cashed in my casino chips and went right back to renting. Likely will never be able to do that again as it was obviously a fluke. The pefect storm of post dot com – post 9/11 – never question Kenesian economics we cant lose mania.

The main point is it can’t be repeated without all the correct ingredients. Low price low rates. We now have high price low rates soon to be followed by high price high rates and then lower price high rates. How long until we go back to low price low rates? Who knows. Who cares. Waiting for that to come around you’ll miss so many other good opportunities. Don’t fear being priced out of the market. Fear missing 10 other trains because you keep wishing the first one you missed would just come back to get you. Its gone. Get over it. Find the next opportunity.

#49 Mark on 06.09.11 at 11:03 pm

“If the other 3 major banks issue a warning, do what Mr. Reality is doing and short the crap out of the TSX.”

I’d want to be *long* the TSX, long the ‘crap’ out of the TSX, because mortgages are going to be repaid, either by the homeowner or by the CMHC at 100 cents on the dollar, while the homeowners are going to lose all their equity as it is transferred to the bankers through higher interest rates and spreads against funding costs.

Not only will Canadian banks not go down because of a Canadian housing collapse, they will be stronger than ever. As will the gold sector because of all the quantitive easing (aka money printing) that the government will engage in to reflate the economy.

#50 Rene on 06.09.11 at 11:03 pm

So now they’re telling me I’m NOT richer than I think? Uh oh! It might be too late to tell my wife.

#51 grantmi on 06.09.11 at 11:07 pm

#3 Hoof – Hearted on 06.09.11 at 9:09 pm


Firsttttt Idiooooootttttttt

#52 grantmi on 06.09.11 at 11:11 pm

#10 Hashnugs Inthebong on 06.09.11 at 9:18 pm


Anohter Idoit!

#53 NFN_NLN on 06.09.11 at 11:18 pm

Squatter Nation: 5 years with no mortgage payment


Sometimes a housing crash can be fun…

#54 Dodged-a Bullit-in-Alberta on 06.09.11 at 11:21 pm

Greetings: Bubbles are delicious, the best are those up your nose. I have a Tickle-Me-Elmo, American version, no French on the box, battery still good. Will fund my retirement!!!!!!! Bubbles rock!!!!

#55 Nostradamus Le Mad Vlad on 06.09.11 at 11:32 pm

Sarah: Two posts to look at.

First, #16 Mikey the Realtor to get a much clearer perspective on why you should avoid RE for the next decade or two (BPOE is also good), plus to see how life is in The Land of Make-Believe Paper Returns; and

Second, #21 Bill Gable and his comments, such as:

“Canadians owe $1.50 for every $1.00 they make.
“Average credit card debt = $26,000 (*OMG)

“In Vancouver sales have cratered for Condos and homes in the reality end of the pool – while the higher end garbage has been skewing the numbers higher.”

Stay outta the debt trap by renting, build up a TFSA (emergency and possible pension fund) and keep expenses low. We ain’t seen nothing yet. A little research on Russia (c. late ’90s), Argentina and Zimbabwe should give food for thought.

“. . . an awful lot like 1999 on Bay Street. There is no bubble which endures.” — Then Y2K and the dot.com bubble burst, as RE will tank in 2012.
Communism Soros and Obama have both read and follow Karl Marx; US Debt Default Anything is possible in this day and age, no matter how outlandish it may seem. Pension Funds The loonies are running the asylum. Letter to 1100 State Senators Sound Money Bill. IMF financial terrorism. Link these two together — Global fiscal crisis deepening, and a clear idea of who is responsible appears. IMF – World Bank Does not bode well for the future. Detroit blacks out and Oil rises. Accelerating Signs point to a fast melt / slow melt.

Vast solar eruption leads to Coronal Mass Ejection Bumpy night 2nite, and it’s headed straight for here, to greet these people!

Reminder of homegrown terrorism. And now for little tin gods. Vampire Blair There are so many of these tin-pot dictators, incl. Harper and Obama, telling other countries what they should do. The west is desperate, grasping at straws.

Good for Peru! And Food Terrorism.

Assassinations “Trillions of dollars worth of illegal, unaudited, and tax-invisible transactions are covertly managed through the Swiss banking system via off-balance sheet accounts controlled ”

Links in. Healthy recipes (all recipes are healthy) — Pecan Pie with a few other perks added on.

#56 Mean Gene on 06.09.11 at 11:36 pm

Looks like we are having problems in dream land :P


#57 Sarah on 06.09.11 at 11:41 pm

@ Garth: 30’s, but still hot. You made me laugh out loud tonight, but still didn’t tell me what to do.

To the rest of you: Thanks so much for your advice, and I will do more reading. To clarify, my friends did sell and have that profit in their pretty little hands. This does not mean that I am a believer in purchasing a home. Just wondering what I should do as everyone around me has gone the ‘mainstream’ route, so I’m searching advice from elsewhere.

At MikeT: Thanks for your encouraging words; I will take your advice.

At Mister Obvious: Na. Canadian Politics has never been my thing.

#58 Bottoms_Up on 06.10.11 at 12:10 am

Every time I hear of ‘easy’ money I think one of two things:

1) it’s a scam


2) if it’s that easy to make then it’s that easy to lose.

I’m afraid that 0/40’s that have made $100,000 on paper stand to easily give it all back.

#59 Tim on 06.10.11 at 12:26 am


#60 DML on 06.10.11 at 12:39 am

Equity vanishes,debt remains.


#61 Ex-Cowtown on 06.10.11 at 12:52 am

#33 Mr. Reality:

That’s the beauty about being Canadian, they will gladly take on your mortgage, but still warn you (unlike the US banks). A shred of morality exists.


All banks are amoral (not immoral, we’ll leave that one to our esteemed blog-host).

All the banks are doing is giving everyone the heads up that they’ve turned off the tap now that they’re satisfied that the last of the greater fools is in the tub.

They don’t see any bottom feeders left to sucker in now, so they are telling everyone with HELOCS and soon to be underwater mortgages to put their big boy pants on and bring in a cheque book when it’s time to sell or re-new. This way they can blame the victims for the pillaging they’re going to take as they have been “warned”.

If I thought banks were anything other than psychopathic and amoral I wouldn’t hold their shares. At least this way they’re predictable. If they developed a sense of morality, their business would tank and take the economy with it.

#62 Dark Sad Monster Bunny on 06.10.11 at 1:13 am

21 Bill – I believe the $25K debt includes CC, LOC and
auto loans.

20 O Dave – ah yes, hockey cards. Got a few from late 60s early 70s. Espo, Beliveau. I think they’re valued at a few bucks. Worth keeping for hyper-inflation protection!

Re 26, I think Pape says it well – “There is no such thing as riskless”

#63 gmc on 06.10.11 at 1:18 am

here a good realestate deal, sell your 1.2 million dollar shack in BC and buy a beatiful home on some acreage and spend $260 000 for house and install several hundred thousand dollars in solar panels that the utilities are paying a premium for the green power, PAY BACK IN SIX YEARS. Where else can you get that kind of return in this uncertain markets. Constant check delivered to your door, enevn in the worst down turn you will always need power. Pay back six years,
do the math on a millions dollars worth of panels, how big a check is that to deal with every month: six year pay back.
cheers gmc

#64 Utopia on 06.10.11 at 1:58 am

OK, all who wrote to me yesterday. I read your posts and I got the message. Loud and clear. There is always tomorrow. I am pretty sure it will be a better day.

#65 Gretzky4Life on 06.10.11 at 2:08 am

#20 The Original Dave

You brought back fond memories of card mania. I would attend a mall card-fair every Sunday. I happened to have a Lindros “error” card at the time. But I dropped it once and it got a concussion.

#66 Utopia on 06.10.11 at 2:35 am

Victoria Tea Party..

“I don’t know what fundamental analysis says about China’s business climate, economy, whatever. I don’t really care. But it seems clear, according to the article, that a classic bubble has formed and it’s gotta go somewhere! Kablooey seems like a decent destination.”

Kablooey sounds about right to me.

Today the Wall Street Journal covered the Chinese property bubble. Seems that the hand-wringing and wailing has started as home prices are dropping sharply.

The R/E bubble there may actually be popping and this is somewhat coincidental to the pennant formation on the technical charts put out by Charles Hugh Smith on the Shanghai Stock Exchange. We did not actually need to be in China to know that trouble was brewing as the charts themselves were sending warning signals based on the buying behavior of Asian investors.

If China’s bubble is indeed bursting though we could see one hell of a rout in commodities as speculators rush to take profits off the table. Oil will likely drop again; silver will take another hit. Even Gold will lose a little luster for awhile.

Equities meanwhile will take a beating on both sides of the Pacific and the Loonie will drop below par. We will need further confirmation on the softening of prices in China of course but it represents a new worry and risk that the global economy is not really prepared for right now. I am already hearing rumblings that the bears are on the scene and getting short construction, cement, steel etcetera.

We shall see if they are correct.

In the meantime, Shanghai does look like it has broken down and I anticipate collateral damage in the coming days and weeks. That is code for taking cover and getting into cash positions until the smoke clears. I am no fan of financial carnage and I do expect an ugly tumble on the TSX that could arrive at any time now.

Here is the article and a 5 minute video from the WSJ.



#67 Whistle punk on 06.10.11 at 3:21 am

Let the stupid ones buy up the realestate it is their decision.

All people see is wow they sold their place and made a big profit and that is all they see. These stupid flipper shows you see on TV give people bad ideas.

As said by other commenters ” This isn’t going to end well ”

Interesting and scary to see what will happen by the end of this year. Safe to say the damage has been done the long term effects is yet to be seen.

#68 SE Asian Expat on 06.10.11 at 3:49 am

#24 Me too. Canadian and retired in Thailand and luvinit. Tax free investment portfolio in Hong Kong and villa in Phuket.

I sometimes miss the frost on the pumpkin, but I certainly don’t miss the crazy house prices, taxes and cost of living.

I wonder why more Canadians don’t spend more time here. The adventure is worth it.

#69 Onemorething on 06.10.11 at 4:52 am

All I remember about my late 20’s is taking a bit of a bath in Unionville in RE, learned my lesson trying to selling 1992.

Ask $329K, sold $258K. That was nothing compared to what is around the corner for the 20 somethings, or 30-40-50-60-70-80 somethings as well.

We didnt have internet or Garth back then so be grateful you do now!

#70 Imstupid on 06.10.11 at 5:22 am

Sarah, your friends did put put down money in the form of a mortgage. You can make a 100k if you got a margin loan for 8 times your income and invested it in the market. But wait that bank won’t give it to you because they know you will default on it and they would have to flip the bill. Your friends got their mortgages and they will default too. So ask yourself why.

#71 HappyPlace54 on 06.10.11 at 5:54 am

#22 Elmer – You are full of crap. I am of Garth’s generation and we did not buy houses after graduation. We rented for years (rental apartments, not condos in those days) and saved up a down payment before we bought. I’ve never had a company pension and will have to rely on my savings to fund my retirement.

#72 C on 06.10.11 at 5:59 am

Garth I’m liking your comparison of Canada’s current housing market and the 90’s tech bubble.

The 10%-15% decline we saw in CDN housing in 2008-2009 reminds me of the tech bubble in 1998. That year was a douzie. When techs came back after that decline in early ’99, everyone thought the worst was over and they piled into tech stocks and the tech bubble really took off! I think within the final of the bubble the Nasdaq went from 2,500 to 5,000 before popping around 5,100.

So here we have our CDN housing market acting like the Nasdaq did say in ’99? It smells the same, looks the same, buyers are acting the same, get in at any cost, never goes down, 98/2008 was the worst we’ll see, on and on……

Virgins are making $100K with nothing down but so were tech speculators in the 90’s. On the way up people do well, but as we see in the US real estate market today the aftermath is much worse.

Carney if you do read this blog, good job on sticking with the 1% BoC rate. That’s some good bubble priming. Greenspan is known as “bubbles” but you sure are doing your best to get that distinction as well.

Raise rates ASAP Carney. You’re going to get roasted in the future when this thing turns.

#73 SMOKING MAN on 06.10.11 at 6:04 am

#44 Hoof – Hearted on 06.09.11 at 10:35 pm

Here is the who is who list of Bilderberger Conference 2011. Now how did I know that?

Carney, Mark J., Governor, Bank of Canada
Clark, Edmund, President and CEO, TD Bank Financial Group
McKenna, Frank, Deputy Chair, TD Bank Financial Group
Orbinksi, James, Professor of Medicine and Political Science, University of Toronto
Prichard, J. Robert S., Chair, Torys LLP
Reisman, Heather, Chair and CEO, Indigo Books & Music Inc. Center, Brookings Institution

Alexander, Keith B., Commander, USCYBERCOM; Director, National Security Agency
Altman, Roger C., Chairman, Evercore Partners Inc.
Bezos, Jeff, Founder and CEO, Amazon.com
Collins, Timothy C., CEO, Ripplewood Holdings, LLC
Feldstein, Martin S., George F. Baker Professor of Economics, Harvard University
Hoffman, Reid, Co-founder and Executive Chairman, LinkedIn
Hughes, Chris R., Co-founder, Facebook
Jacobs, Kenneth M., Chairman & CEO, Lazard
Johnson, James A., Vice Chairman, Perseus, LLC
Jordan, Jr., Vernon E., Senior Managing Director, Lazard Frères & Co. LLC
Keane, John M., Senior Partner, SCP Partners; General, US Army, Retired
Kissinger, Henry A., Chairman, Kissinger Associates, Inc.
Kleinfeld, Klaus, Chairman and CEO, Alcoa
Kravis, Henry R., Co-Chairman and co-CEO, Kohlberg Kravis, Roberts & Co.
Kravis, Marie-Josée, Senior Fellow, Hudson Institute, Inc.
Li, Cheng, Senior Fellow and Director of Research, John L. Thornton China Center, Brookings Institution
Mundie, Craig J., Chief Research and Strategy Officer, Microsoft Corporation
Orszag, Peter R., Vice Chairman, Citigroup Global Markets, Inc.
Perle, Richard N., Resident Fellow, American Enterprise Institute for Public Policy Research
Rockefeller, David, Former Chairman, Chase Manhattan Bank
Rose, Charlie, Executive Editor and Anchor, Charlie Rose
Rubin, Robert E., Co-Chairman, Council on Foreign Relations; Former Secretary of the Treasury
Schmidt, Eric, Executive Chairman, Google Inc.
Steinberg, James B., Deputy Secretary of State
Thiel, Peter A., President, Clarium Capital Management, LLC
Varney, Christine A., Assistant Attorney General for Antitrust
Vaupel, James W., Founding Director, Max Planck Institute for Demographic Research
Warsh, Kevin, Former Governor, Federal Reserve Board
Wolfensohn, James D., Chairman, Wolfensohn & Company, LLC

#74 detalumis on 06.10.11 at 6:21 am

#22 Elmer. Enough with the boomer bashing and please study your history. Boomers are a 20 year cohort, those in the middle and later did not do as well as the first half did. Many are in their early 50’s not 60’s okay? I know plenty of boomers in this age bracket who have been outsourced aplenty including myself. I know some guys that lost their jobs 4 and 5 times. We also got to graduate when there was 13% unemployment and pay 16% mortage rates for our first houses which actually made them more expensive relatively speaking than they are today. In my cohort there were zero jobs for nursing grads for e.g. they all had to move to the U.S. if they wanted to work.

I seriously think boomer bashing is encouraged so that along with many of us having no jobs and no pensions we also will get to turn 65 and see all the senior benefits squashed because we were all so, so profligate.

#75 betamax on 06.10.11 at 7:00 am

SMOKING MAN — it’s called fooled by randomness.

#76 Sail1 on 06.10.11 at 7:05 am

The sad part is that our youth believes this.

Another benefit when you consider buying a house is that it is a levered investment generating a rate of return much higher than simple price appreciation. That 5 or 10 per cent down payment yields an overall rate of return well above the return from stock or bond markets.


#77 Atomic on 06.10.11 at 7:22 am

#25 NFN_NLN on 06.09.11 at 9:42 pm

“This is no different then the FaceBook private equity scam. Goldman is trying to help those paper millionaires pull out their money, but they can’t go public… at least not with the BS numbers they’re trying to sell the public on.”

I was wondering if TV channels get paid to promote/pump FaceBook too?? I see it on CBC etc.

#78 TurnerNation on 06.10.11 at 7:22 am

Bloomberg: Canada Jobless Rate Unexpectedly Declines in May to Its Lowest Since 2009
By Greg Quinn – Jun 10, 2011 7:48 AM ET .

Canada’s jobless rate unexpectedly declined in May to the lowest since January 2009 as the economy added workers for the seventh time in eight months.

The unemployment rate fell to 7.4 percent last month from April’s 7.6 percent, Statistics Canada said today in Ottawa, as employment rose by 22,300. Economists forecast 20,000 new jobs and no change in the jobless rate, according to the median estimates in Bloomberg surveys.

Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney have said they are relying on business spending to drive the economy as government stimulus winds down after the recession. The Bank of Canada says growth is likely to slow to a 2 percent annual pace in the April-June period after a 3.9 percent first-quarter rate, and policy makers said May 31 they will raise the benchmark interest rate from 1 percent “eventually” with the economy reaching full output next year.

#79 BoomerBoy on 06.10.11 at 7:58 am

#57 Sarah,

“Just wondering what I should do as everyone around me has gone the ‘mainstream’ route, so I’m searching advice from elsewhere.”

Aside from staying put and saving money for a larger down payment. There is another option. Finish the basement.

While it’s not really an investment, it will provide you with additional living space – which appears to be the biggest ‘lifestyle’ problem for your family at present.

P.S. if you do most of the work yourself, you will break-even on future sale. If you contract it out, expect to get half or less back on sale recovery. Sadly, there really is no free lunch.

Good luck.

#80 BrianT on 06.10.11 at 8:21 am

Here is the electricity company of Saudi Arabia mentioning that the country will be out of crude oil by 2030 if domestic consumption trends continue-remember that peak oil is just a crazy conspiracy theory http://www.zerohedge.com/article/electric-company-saudi-arabia-warns-country-may-run-out-oil-2030

#81 BPOE on 06.10.11 at 8:49 am

Shiller is the biggest dimwit in the world when it comes to Vancouver. Dead WRONG in everyway, Stated many times, that fool said Vancouver was the bubbliest City in the World a half decade ago. Owners went on to make fortunes. While renters kicked to the curb. I know of some owners who have decided to take their profits (nothing wrong with that) and have invested and now living rent free for life. The person who listened to Shiller back 5 years ago and rented in Vancouver does not have this option.
One other note if you think the world is cratering you DO NOT want a balanced portfolio. A portfolio of slowly eroding losers is not the way to go. Gold producing Companies, Vancouver homes and SHORT the banks.

#82 BPOE on 06.10.11 at 8:52 am

Eventually LOL. That’s some Government you got there. NEVER GOING TO HAPPEN. Anyone who tries to tell you differently is telling a bald faced lie. News coming down the pipe from the Government to make home ownership even more attractive for offshore investment. Stay Tuned. Folks the Conservative Government plan is to sell Canada and so many just have their heads buried in the sand. I’m not saying it’s morally right but we’ve been making fortunes now from the Governments laws for quite sometime now and I’m lovin it
Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney have said they are relying on business spending to drive the economy as government stimulus winds down after the recession. The Bank of Canada says growth is likely to slow to a 2 percent annual pace in the April-June period after a 3.9 percent first-quarter rate, and policy makers said May 31 they will raise the benchmark interest rate from 1 percent “eventually” with the economy reaching full output next year.

#83 fancy_pants on 06.10.11 at 9:09 am

Dec 26th, 2004, 8:42am, Phi Phi Island, Thailand.
Little Katie to her Father:
“Why can’t we go down to the beach now? Lots of people are enjoying it.”

You see, little Katie didn’t see the bigger picture. She never saw the risk.

May 19th, 2007, 8:21pm Las Vegas, Nevada, USA.
Little Suzie to her Father:
“Why do you say playing the slots is risky and held high probability of losing $? Both my friends made money playing the slots.”

You see, little Suzie didn’t see the bigger picture. She never saw the risk.

June 9th, 2011, 8:30pm Bunkerville, TurnerNation, Canada.
Little Sarah to her Father:
“Why do you say buying Real Estate is a bad idea now? I have friends who bought apartments about five years ago with nothing or near nothing down, and managed to make at least $100k”

You see, little Sarah doesn’t see the bigger picture. She doesn’t see the risk.

#84 joining the dark side on 06.10.11 at 9:19 am

It’s time to say farewell. I’ve been reading this blog for 3 years. I have to admit the waiting game is much harder than working 2 jobs. It’s so easy to commit. A pat on the back for not over bidding…I actually got 2.5% off the asking price…which was riddicules anyway…I’ll wait for the next greater fool. Adios.

#85 disciple on 06.10.11 at 9:23 am

#73 Smoking Man…

Which of these people directly answers to the female in the red dress on the golden throne in the centre of the room? Be careful…if you dare to answer this…it will tell me a lot about who you really are…

#86 TS on 06.10.11 at 9:24 am

To: #66 Utopia on 06.10.11 at 2:35 am

That article and video on the Chinese bubble confirms that the people who speculated and are causing problems in China are at work in Canada. The Vancouver and Toronto similarities are evident.
I sure hope CMHC is not participating. I suspect we will not find out real soon if ever…..

#87 Ronaldo on 06.10.11 at 9:29 am

Here Sarah, try this out with your girlfriends. It will give you an idea what is about to happen in the housing market.


#88 jas on 06.10.11 at 9:33 am

yet again an excellent post!
Garth, the herd doesn’t have a mind of its own, or does it?
I would agree with those here who have argued in favour of some kind of restriction/control over non residents buying residential real estate just for the sake of ‘investment’. Because I fail to understand how does such ‘investment’ contribute to the economy in a postive way, sure it makes some realtors rich at the expense of creating misery for hundered of thousands.

Come of Canada, let’s take action…now.
Garth, can you do something about organizing us?

#89 TS on 06.10.11 at 9:37 am

Talk about spinning a bad news story into a good one.
I presume they take us for fools.

Jobless rate falls to 2-year low


While most of the jobs gains were full-time, they came in the less desirable self-employment category, which could indicate that many Canadians turned to creating their own employment because they were unable to find more traditional work.

The hard-hit manufacturing sector shed 23,000 jobs. Despite the decline, employment in the key industry has risen by 25,000 or 1.4 per cent since a low point in May 2010.

The number of employees in Canada actually dropped by 7,500 in May, and the goods-producing sector of the economy saw a pull-back in employment, with manufacturing taking the biggest hit with 22,500 fewer jobs. The month also showed the public sector is starting to tighten, shedding 44,300 jobs as governments begin dealing with large deficits.

It is very disappointing to realize that the facts are now being distorted.

The Stats Can disclaimer
This data product is provided ‘as-is,’ and Statistics Canada makes no warranty, either express or implied, including but not limited to, warranties of merchantability and fitness for a particular purpose. In no event will Statistics Canada be liable for any direct, special, indirect, consequential or other damages, however caused.

#90 disciple on 06.10.11 at 9:38 am

BrianT…don’t worry, dude…

We just have to stop burning gas and diesel in our transportation – that is the biggest problem. We need crude for most of our modern technology from artificial rubber to liquid containers (very important), and basically everything else that you can imagine.

Peak Oil is a political mind-game, it’s a dirty capitalist’s greatest wet dream. The oil-soaked monopoly press are having so much fun with scaring people…don’t be fooled, I guess you haven’t yet taken my advice and looked up the real story on crude’s abundance. The US hasn’t even opened up the Alaskan North Shore or the Rocky Mountain Reserves. Vietnam Shale is still in its infancy. BP just purposefully dumped so much into the Gulf of Mexico, while holding the rights to all solar panel technology…hmmm…sometimes you have to use some brain cells of your own…

Using crude for energy purposes will soon be on the decline as better technologies are waiting in the wings and being held back long enough for the energy cartel to play their last hand at gouging us one last time. Oil will go to at least $200/barrel before there is change to solar and then eventually to hydrogen.

I love being able to see the big picture…it instills hope for the future…

#91 panopticon singularity on 06.10.11 at 9:42 am

“Gold producing Companies, Vancouver homes and SHORT the banks.”

BPOE you’re the best, i especially like how you always say “folks” in every post, it really makes me feel like you’re talking at me, not to me lol keep making those millions champ!

#92 JohnnyBGood on 06.10.11 at 9:46 am

@ 63 gmc et al

I took a good hard look at the ROI on a microFIT installation. (For anyone not familiar with this program: the province will pay you 80 cents per KWh for electricity that you feed into the grid via solar panels you install on your roof.)

There are many people in the microFIT business today claiming incredible ROIs like 10, 12, 15%!! Sounds great!

Well, I did some research and number crunching to see if those claims were even close to true. This was a detailed analysis done with the help of several actual system installers and a variety of online tools and resources.

My numbers are based on a 10KW installation (the max allowed under microFIT). Due to system inefficiencies and actual sun exposure a 10KW system on my roof would have an actual system power of 8.4 KW. My roof is not ideal for a solar install, but it is not too far from it.

The projected annual output would be 9,828 KWh. That’s how much energy I would be selling to the OPA. Over twenty years the total revenue would be $157,641.

I then factored in the following reductions to total revenue over the twenty year contract:
• 10% due to panel efficiency degradation;
• 10% due to income taxes (payable after break-even)
• 20% due to inflation (assumed @ 2.5%––remember, the 80 cents you get today will still be 80 nominal cents in 2030).

These costs brought the total projected revenues down to $94,585. The cost of the solar panel installation would be about $70,000 (in today’s dollars). The after-tax, inflation-adjusted profit over the twenty-year contract would be about $24,585, or about $1,229.25 per year.

Now, that does not include maintenance costs (up to $300/year), power inverter replacement costs, and possible repairs. You should get additional home insurance to cover solar panel damage for a nominal cost, but read the exclusions carefully. Oh, and unless your roof is pretty new, you may want to replace it before installing the solar panels.

But leaving all that out, the payback would be about 10 years. And the average, after-tax, inflation-adjusted annual return would be 1.75%. Assuming nothing goes wrong; you have no maintenance costs; no hardware replacement costs; and you don’t need a new roof just to accommodate the solar system, that’s not bad. But certainly not as good as many claim.

You could plan on using the solar panels to feed your home’s own energy needs after the 20 year contract expires, but the conversion is so expensive as to not be worth it from a financial perspective, at least under current conditions. In twenty years? Who knows?

Note: Large scale installations, such as those on large tracts of empty land, would have different ROIs.

Oh, and BTW, does anyone else think it’s nuts for we-the-people to be paying micro generators 80 cents per KWH when wholesale electricity prices in Ontario have been coming down for years and are now averaging well below 4 cents per KWh? I guess OPA figures it’s worth it if they can offload the cost of extra capacity to private investors. But still, does this all make any sense?

#93 Victor on 06.10.11 at 9:52 am

BPOE- you’re delusional. Government policy has fueled the price appreciation in real estate. The policy can’t do anymore to inflate the Van or Tor bubbles. Fundamentals always have and will prick the bubbles.

#94 Ronaldo on 06.10.11 at 9:53 am

#23 Charles – good video. This may be a preview of what is to happen here in Canada. There were others as well that called the dot.com bubble such as Peter Grandich. He also called the top on silver recently just hours before it went on to drop 35% a few days later. He called the 87 Crash, the dot.com bubble, the 2008 crash.

#95 disciple on 06.10.11 at 9:57 am

Thanks for the awesome links! Remember that Henry Ford didn’t make those comments because he wanted the American people to know about banking…but because he DIDN’T want them to know.

Most leaders in industry, whether it is manufacturing, or finance itself, do indeed know but keep it a closely guarded secret. It is the private banking families (parasite class) that allow them to conduct their business, making our modern understanding of capitalism a FARCE. There is no such thing as equal opportunity. The only places where real capitalism exists in its rare and budding form are those nations that have been attacked or are under attack either militarily or politically by the parasite class:

North Korea
even China!
and any other country where the banking cabal have tried and sometimes succeeded at installing a puppet dictator or “communist” regime.

And don’t make the mistake of confusing capitalism with freedom. These two puppies are not the same breed or even the same animal. Wisdom lies in making proper distinctions among popular inappropriate associations.

#96 Fuzzy on 06.10.11 at 10:09 am

With the demographic crunch that’s coming, all home owners who want to turn their paper gains of the past 10 years into real gain, all of them without exception, have to sell or get out in time before the market corrects.

This is logically and mathematically impossible, some, if not most, will lose.

And about those $100K profit on virtually no downpayment, color me sceptical, believe it when I see it. Even if they did make that profit, I’m certain they’ve foolishly rolled it into some illiquid real-estate asset.

#97 GTA Girl on 06.10.11 at 10:14 am

Smoking man , Bilderberg list is on the net. And if I took your advice, I’d go buy 3condos at Toronto’s CityPlace on minimum down, rent them out and expect to fund my portfolio with oodles of cash in what? 5 years?

You crazy, but I hear ciggies make you thin… wanna buy a 400sq ft condo in the sky? You’d fit

#98 Kim on 06.10.11 at 10:18 am

I have a question…my dad built about 60 houses in the town I grew up in. Later, he sold them, assumed the mortgage (1 to 2 percent less than the bank). Sometimes after the people came over to make a payment he would show me a chart. He would say this is what the house is selling for and this (a much higher number) is how much they will pay me in the end.

My question: Why is it when I ask my new home owner friends ‘how much will it cost you after you paid off the mortgage”. Not one person, Garth, not one, can answer that question … why is that?

#99 Tim on 06.10.11 at 10:19 am

Something to take to the Canucks Game:

#100 Rob on 06.10.11 at 10:21 am

It really is different here! Supply and demand basics don’t even apply in Edmonton.
I find it hard to believe we really have such high rents compared to other cities according to today’s Edmonton Journal.
Could it be that the wealthy rental conglomerates have such deep pockets that they would rather keep rents high than have greater occupancy rates?
BTW from the front lines of the 40 ish year old decent Job but not rich crowd the overall consensus is that the next boom is near or already here. Lots of guys at work in their 20’s “building” stainless and granite little mansions.
I have to admit we are starting to see jobs posted outside the big businesses on those portable signs and even adds on the radio for good paying blue collar work.
Remember though there was a time when our little semi bungalow was “worth” about $500 000. Now $400 000 would be optimistic. The melt started here 4 years ago and there has not yet been any price recovery. I still think the debt chicken will come home to roost for many people keeping prices reasonable. I think we are only at about 4 times income for a ratio. Still though tons of flippers and spec homes for sale. Sales are meh.
If you are in another part of Canada looking for work this frozen half the year city really should be considered. Never had any sympathy for those unwilling to move for work…I sure have done it.
Sorry for the ramble, here is the link to the article and I would love to hear what you think Garth or anyone else.


#101 bee foot on 06.10.11 at 10:28 am

It is tough seeing friends making 100K from practically no investment and you know you could do the same thing.

Trust me, when your “friends” made 100K off the first real estate transaction, he/she will dive right in to buy a bigger house and hoping to make 200K. However, the second time around, they will probably get bitten. Best case scenario is they may lose the 100K they “earned”, we know what the worst case scenario, don’t we?

#102 Kim on 06.10.11 at 10:39 am

#57 Sarah
I know what you could do … take a comprehension course. It will do wonders for you (:

#103 Siddelly on 06.10.11 at 10:44 am

Shortly after Robert Shiller reports from Yale, Hitler was informed that Peter Schiff was right after all.


#104 disciple on 06.10.11 at 10:48 am

Those who can see the big picture are the sorriest souls around, because to some of you, they look insane. Anyone who learns the truth is bound to try to tell someone – this is what modern psychology is really all about. The more one sees the truth the more alarmist he looks consequently appearing proportionally madder to the people that just aren’t ready to see it themselves yet.

#105 Grim Weeper on 06.10.11 at 10:48 am


#106 Grim Weeper on 06.10.11 at 10:53 am


#107 Junius on 06.10.11 at 11:02 am

#43 Smoking Man,

I see you have upgraded your pot supply and are higher than usual. Now “bubbleheads” are 2 L “lossers”. Intelligent stuff.

You said, “Bubble Heads look at wishfull thinking.”

No. “Bubbleheads look at economic fundamentals, history and precedents. They are all around you to see.

The wishful thinking we leave for you, BPOE and the rest of the HAMsters and hooker realty crowd.

#108 disciple on 06.10.11 at 11:03 am

If you will suffer me one more post before noon:

I view true capitalism as a natural order of things, but what we have today is the polar opposite. Here is a golden nugget from the horse’s mouth himself:

“The understandings of the greater part of men are necessarily formed by their ordinary employments. The man whose life is spent in performing a few simple operations . . . has no occasion to exert his understanding . . . He generally becomes as stupid and ignorant as it is possible for a human creature to become.” Adam Smith

Capitalism is not forced 8-hour workdays, and profiting at the expense of another. It is something much better. As always, corruption is born when lies are mixed with truth…

#109 Junius on 06.10.11 at 11:07 am

#82 BPOE,

You said, “Folks the Conservative Government plan is to sell Canada and so many just have their heads buried in the sand.”

Probably the most honest opinion you have given yet. Shows your perspective and how we would be lunatics as a society to follow your leadership and ideas.

Thanks for pointing out so clearly why you and your type need to be resisted.

#110 J:LG on 06.10.11 at 11:16 am

@#20 The Hockey card Bubble. I actually remember that quite well. I invested a few hundred dollars, which for a fourteen yr old, was a lot of coin. My dad got himself sucked right into it as well, I believe the oldest cards he got his hands on, that are still worth something, are his Wayne Gretzky rookie cards, everything else bottomed out. I think he may have invested in BreX as well….

#111 somejerk on 06.10.11 at 11:19 am

Garth, I wonder how is the government taxing all the flippers? I continue to watch the real estate market in T.O. and plenty are definite flips with a significant increase on the original purchase price into the stratus of the unaffordable… these flips sell because of the ss, granite, molding and shiny new hardwood. The flippers who are turning paper into real returns are making out like bandits… it offends me that these guys will have the money in the bank and then we, who are prudent, will be taxed to bail out the greater fools… is there someone to write to make sure that the flippers are paying? Becasue if i can buy a house for 1buck and put 300k in and sell it for 2bucks and make 700k without paying tax isn’t the risk of being in at the top of the bubble worth the return?

#112 maxx on 06.10.11 at 11:27 am

Two waterfront properties in my Inbox today- both price reduced.
Visited a pricey one on Wednesday (scouting to vulch later) and were told that we could get it for a much lower price….almost every day, a price reduced waterfront listing comes in…and every time we visit a property we are encouraged to “make an offer”.
Recently offered 20% lower than list on one waterfront and backed out due to an unexpected last-minute clause- we believe it will drop down at least another 10% or more soon.
Concerned that current pricing is too arbitrary and spongy- we can’t yet feel the value and are convinced that prices will continue to slide for a looong time to come.
Greedy sellers waiting to “get their price” will lose a mountain of cash. Never have we seen so many RE agents fawn over us and treat us like royalty-very strange….and the listings keep piling in! Pricing power is a thing of the past. Buy now and lose money forever.

#113 Industrial Guy on 06.10.11 at 11:28 am

The latest unemployment report in Canada is not good news for the economy.


Canada continues to shed industrial wage jobs (22,000). Just look at the areas of job growth. It’s minimum wage service sector jobs ….. 195,000 of them. It’s no wonder there wasn’t a Spring Market in SW Ontario. Who can afford a house on $24,000 a year? Even a two income family would find it tough with our new mortgage rules.

29,000 new self employed …. Phooey! I wish Stats Canada would stop claiming that these Instant Entrepreneurs are anything but desperate people who can’t find a job so they try to create their own.

Most successful small businesses take more that two years to break even. Yes, some people are prepared, organized or just plain lucky and do it in less time. Most are not. For the average Instant Entrepreneur, self employment means long hours, lower income, a minefield of Government taxes, fees and reports and of course my favourite … dealing with Canada’s chartered banks. A more ignorant bunch you have never encountered ………. They always have lots of money available when you don’t need it and not a cent when you do. It’s not an easy transition from E.I. (Employment Insurance) to I.E. (Instant Entrepreneur).

#114 Rae Reedyk on 06.10.11 at 11:31 am

Here’s my City Of Vancouver Property Tax Increase’s and percentage since 2003
2005 09.%
2006 06.%
2007 30.% yah right!
2008 27.%
2009 00% pre olympic everything is fine tax year
2010 37.% post olympic rate increase
2011 22.%

from 1980 to 2003 the average increase was less than .5%. building in1980 $280,000.00, building 23 years latter 2003 $315,000.00

from 2003 my assessed property value has gone from $315,000.00 to $754,000.00 in 2011 a 239% increase in my property tax rate.
BC Assessment refuses to provide the legal documentation behind their assessment showing how they arrived at this value. I have gone from $5,000.00 a year in tax’s to $12,000.00 a year with no explanation of an average 28% a year increase in my tax’s. that’s some rate of inflation…
municipal suicide anyone…
time to shut down my business and move elsewhere i think….

#115 disciple on 06.10.11 at 11:39 am

#111 somejerk…lol

Of course it’s worth the return. Warped capitalism is always based on the GREATER FOOL. How can you criticize a house flipper when corporations do the same thing with natural resources?

I will help you to identify the REAL problem: Leverage. The Money Masters. The issuers of credit. The Magicians who create money out of thin air…when will you finally see it…?

#116 TS on 06.10.11 at 11:40 am

Looks like C is going to the centre of the debt problem. Should be an interesting talk. He should invite Cam Good and company….

On Wednesday, 15 June 2011, Mark Carney, the Governor of the Bank of Canada, will deliver a speech to the Vancouver Board of Trade.

Topic: Housing in Canada


#117 Trailer Park Boys on 06.10.11 at 11:47 am

#114 Rae Reedyk

Geez…you’d think COV would throw in a pair of steel shorts for that kinda coin….( made out of recycled materials of course ).

#118 Hoof - Hearted on 06.10.11 at 11:54 am

#114 Rae Reedyk

Actually beat the rush out. Get a place before they are gone.

Can’t beleieve BC Assessment cannot defend their position.

In Richmond…things are getting tight for affordable space.

By affordable, I mean older established buildings.
I see new commercial / light industrial sitting vacant.

It almost looks like Local Gov’ts have a side agenda to kill (small) businesses as they rezone land to hi -density residential.

#119 Outtahere on 06.10.11 at 12:15 pm

I have a problem here…my mortgage term is up for renewal at the end of the month. I can’t decide whether or not to lock in for 5 years at 3.79% or go variable at 2.35%. I am torturing myself with the thought that interest rates will either creep up oh so slowly (in which case the variable is better) or will rates leap into the stratosphere? Last time I locked in at 4.28% because interest rates “haven’t been this low in 50 years!” and missed out when interest rates DID go lower. Now i am paralyzed about what to do?. What to do???

#120 Jay on 06.10.11 at 12:16 pm

A personal point of view on the job stats issued today.
My University aged son and his friends have had a difficult time finding employment that pays a reasonable wage. Few have found full time employment and are forced to work 2 -3 jobs in order to gain the hours. Last year my son worked for $16 per hour this year he has the same job (landscaping) offering the same work, but lesser hours for just $12 per hour. The company states there is a much lower work load and many students willing to work at this wage right now. He also works at Tim Ho’s part time and Telephone Soliciting part time. Both pay minimum wage ($9 per hour) .
All his friends are in the same position and this is within the Lower Mainland…

#121 Cellar Dwellar on 06.10.11 at 12:16 pm

@#22 Elmer
“…..Its all the Boomers fault!…..”

Grow some nads and stop blaming everything on everyone else.Here’s some real simple advice.
Hard work + No Debt = Profits

” Get yer money fer nuthin and your chicks for free…” is a pathetic, mysoginistic verse from the 80’s that most kids today seem to embrace. Good luck.

Generation W
Waaa! Waaa! Wuh Waaa!

#122 Cellar Dwellar on 06.10.11 at 12:25 pm

@#82 BPOE
Wow! An actual statement from you that isnt rife with mocking insults about how stupid we all are….
I’m impressed.
Did the Doctor switch your meds?
Or did Mrs. BPOE allow you certain “liberties” last night?
Either way.
You still a Schmooo( Thats Latin for obnoxious irrelevant boorish toadie)

#123 Snowboid on 06.10.11 at 12:36 pm

Re: #71 Happy Place54

“#22 Elmer – You are full of crap. I am of Garth’s generation and we did not buy houses after graduation”

What? I’m of Garth’s generation as well, and I bought after graduation (as did most of my friends). Worked our way through post-secondary so no student loans.

Bought first home with no money down (1974 MICC 95% mortgage and 5% personal loan from credit union)

All our investments were in real estate, but as many posters have noted, timing is what it is all about. Every sale we made doubled our original investment.

Retired at 55 with >$ 70K in investment/pension income and no debt.

Recently took Garth’s wisdom to heart, and are now renting in BC (although we have a home in Phoenix purchased last year for 1/3 2006 value) – have $ 400K in liquid assets(from recent BC home sale) plus investments.

No guilt about what we did, in the early days we lived well below our means, paid off our mortgage in 13 years, worked second jobs during 82-82 when our interest rates were 18%.

So we are reaping the benefits of the long-term financial planning done while we were in our twenties.

We may buy again when we feel the market has bottomed out – maybe late 2012 or early 2013.

#124 Utopia on 06.10.11 at 12:37 pm

Well, judging by todays action on the markets it does look like things will get ugly and stay ugly for awhile.

Seventy five percent of issues are declining on the Dow this morning and the 12,000 level has been breached. Not a big surprise really. You should all anticipate further weakening over the coming weeks.

How far it falls is anyones guess but it is my belief the Dow will take a trip below 10,000 before there is any real talk of new interventionist monetary or fiscal policy changes coming out of the US before then.

Like I am apt to say….first the pain, then the medicine. We might just be begging for fresh stimulus too before summer is out.

Meanwhile Oil is off 2.5% and Silver dropped 2% today. Both being harbingers of market sensitivity to worries over the ongoing strength of China (it is slowing) and weakening of the US economy. Germany I hear is rattling the Euro by resisting more bailouts for the Greeks and the dollar is up sharply. Look out, this could be a long hot summer.

In my earlier post (of last night) I warned it is time to take cover. I stand by that, particularly after todays action. Each day of the past weeks has been confirming and reconfirming a broad bearish trend that you would be foolish to ignore.

There is a lot of talk in the blogosphere that Bernanke will come forward with QE3 imminently. Those analysts are wrong. The Fed will not make the mistake of introducing any new program prematurely again.

Only after there has been clear signs of damage will fresh money arrive. We will all want it then. Same goes for US Government stimulus. It is less clear how Canada may respond as our own direction is clearly more austere at this point.

One last point, and this one is directed to retirees. Mutual fund cash levels are very low right now. The lowest ever according to one report I read. Many of the funds are fully invested at exactly the moment that markets have signaled a longer term bearish trend.

My question to those of you who hold Mutuals is this…Do you know the exact makeup of your fund? Who’s bonds it holds? What stocks?

This is perhaps a good time to look at the fine print as every cat and his dog has been chasing yield for the past two years and some of these portfolios are not that pretty anymore as a market correction ensues.

Just my opinion.

#125 jess on 06.10.11 at 12:38 pm

“The free market is suppose to efficiently guide the economy.”
…ya, but you have to give up rules and regulations to allow these financial conduits to flow freely staying “arms length” , eliminate this so called , “double taxation ” etc and keep your brain turned off .

what did mr. bush say ..”they don’t like our FREEDOMS”

The United States SELLS financial secrecy.

…” Delaware is the biggest state provider of offshore corporate secrecy, Nevada and Wyoming are the most opaque they allow BEARER SHARES, a vehicle of choice for mobster ,drugs smugglers, tax evaders etc…and they are particularly lax on allowing company directors and other offices to be nominees hiding the identies of the real owners. Nevada does not share tax or incorporation information with the federal government, and does not require a corporation to report where it does business. the IRS has no way of knowing whether a Nevada corporation has filed a federal tax return.

In 1990 the US government provided millions in aid to help the former soviet union countries improve security at their nuclear power plants. much of it went missing. Department of justice traced it down to anonymous shell companies in Pennsylvania and Delaware.”

What Does Bearer Share Mean?
An equity security that is wholly owned by whoever holds the physical stock certificate. The issuing firm neither registers the owner of the stock, nor does it track transfers of ownership. The company disperses dividends to bearer shares when a physical coupon is presented to the firm. Investopedia explains Bearer Share
Because the share is not registered to any authority, transferring the ownership of the stock involves only delivering the physical document. Bearer shares lack the regulation and control of common shares because ownership is never recorded. Similar to bearer bonds, these shares are often international securities.

#126 smw on 06.10.11 at 12:47 pm

#117 Trailer Park Boys

Yeah, and a free “reach-around”.

The salaries the city must have to pay to keep a roof over the heads of municipal civil servants must be outstanding.

#127 Robins on 06.10.11 at 12:48 pm

Friends recently bought their 2nd & 4th properties, and they were comparing the best mortgage rates, P-1 & P-0.8, variable term closed. One is lucky to get CIBC’s rate of P-1 on top of 3% cash-back, but that offer ended in May 30th. Both are nurses btw.

I’ve been hearing from mortgage brokers and bank loan officers, there is no need to choose fixed rates yet but to stick with variable rates for the moment.

It seems like the market knows more that what we read from Carney.

#128 Hoof - Hearted on 06.10.11 at 12:53 pm

Not sure if anyone has seen this

The Obama Deception HQ Full length version


Watch video at 57:35 minutes and listen to Ron Pauls brother Wayne Paul…

#129 Live Under Your Means on 06.10.11 at 1:10 pm

#71 HappyPlace54 on 06.10.11 at 5:54 am
#22 Elmer – You are full of crap. I am of Garth’s generation and we did not buy houses after graduation. We rented for years (rental apartments, not condos in those days) and saved up a down payment before we bought. I’ve never had a company pension and will have to rely on my savings to fund my retirement.

Totally agree #71. I’m older than your & Garth but all of my friends rented for years before buying and had saved up for a down payment. The previous generations blame their parents for the current economic situation. IMHO, their feelings are misplaced. They forget how hard their parents’ generation worked to try and provide a better and more equitable life for their children. After WW2 there was mass immigration from war torn Europe to Canada and the USA. Most of my friends were immigrants. My father was an immigrant, but arrived after WW1. Every generation faces challenges. It’s just that world is so fast paced now and the fraudsters seem to be winning. Blame the banksters and govts, etc. The avg. boomers are just trying to survive within the current system. I think it’s actually harder for we boomers who remember what it was like when the world seemed saner.

Pardon my rant.

#130 Utopia on 06.10.11 at 1:12 pm

#96 Fuzzy wrote…..

“…..all home owners who want to turn their paper gains of the past 10 years into real gain, all of them without exception, have to sell or get out in time before the market corrects. This is logically and mathematically impossible, some, if not most, will lose”

Absolutely correct Fuzzy. Only the rare few who come to blogs like this and get enlightened (and then actually take action to protect themselves) will escape the inevitable carnage.

It takes actual work to understand the market trends and what forces underlie the the future of price declines in homes.

Too few see it, fewer still will modify their behavior in time to avoid the consequences. It is just not good enough to rely on the simple minded dollops of thin gruel and porridge thinking that says “real estate always rises” or “location, location” or even “it’s different here” logic.

We are in the midst of a correction now despite what the “average and mean” numbers tell us. There is a terribly long lag time between getting the first bits of good information and then actually escaping the denial that inevitably sets in after you heard it.

We don’t even need to repeat that gross housing sales figures have now fallen for eleven consecutive months nationally or that prices in most cities excluding the major urban areas are in decline already. But I will say it anyway.

Only Gods favored few who actually pay attention and work at understanding the mechanics of our own housing market and its inevitable correction will escape the heavy gravity of the reality coming our way.

The rest will fail.

#131 El Magnifico on 06.10.11 at 1:16 pm

Deperate realtors in Calgary!


#132 Chaos on 06.10.11 at 1:17 pm

This just in from the frontlines….

Hot Asian Money is going sideways.

To be renamed…

Scared Asian Money.

Mainland Chinese are becoming so afraid of what their dictatorial government will decide to do next, that they want their money out of China while they can get it out.

Look for the Communist Chinese Govt. to come down hard on all of this money that is escaping from China.

The bubble will deflate as soon as all of the Mandarins have their money out of China. The west side of Vancouver will be a ghost town. (ok, a slight exageration)

#133 Randy on 06.10.11 at 1:19 pm



#134 Live Under Your Means on 06.10.11 at 1:21 pm

Rec’d a cute email from a friend but not sure how it’ll show up on here.

The making of a millionaire!

O.M.G., I’m rich!

Silver in the Hair

Gold in the Teeth

Crystals in the Kidneys

Sugar in the Blood

Lead in the Ass

Iron in the Arteries

an inexhaustible supply of Natural Gas.

I never thought I’d accumulate such wealth.

#135 City Slicker on 06.10.11 at 1:25 pm

Nice write up as usual Garth. Thanks for you’re work in keeping us entertained and enlightend daily!

#136 Timing is Everything on 06.10.11 at 1:28 pm

‘Sooke [Van. Isl.] accused of double standard as $280M project goes ahead without all permits’

“It is being built by Mike Barrie, younger brother of Bear Mountain developer Len Barrie.”


Make that a triple Sno-cone. The local yokels can’t get enough of these guys.

#137 Utopia on 06.10.11 at 1:29 pm

#119 Outtahere on 06.10.11 at 12:15 pm

“I have a problem here…my mortgage term is up for renewal at the end of the month. I can’t decide whether or not to lock in for 5 years at 3.79% or go variable at 2.35%”

I don’t know if this will help, but I have a sneaking suspicion a rate hike will come with the next Bank of Canada announcement if (and only if) the Canadian dollar falls below par as I expect it will do shortly.

The pickle the Bank faces is that any rates exceeding those in the US set us up as a carry trade opportunity and that will have the effect of strengthening our dollar.

Not good for an economy where 15% of our business is manufacturing and three quarters of those exports head South to the US.

We are really very constrained by what the Americans do next. Hamstrung may be a better term. In some respects, we really do operate based on an outgrowth of actions down there and this somewhat limits both the BoC and the Government in determining domestic economic policy.

So what should you do? Hell, I have no idea.

Ask Garth.

#138 BPOE on 06.10.11 at 1:31 pm

Looks like Shiller desperate getting his pals at Wall Street Journal posting negative articles on BPOE. How pathetic. America has no business commenting on an area they couldn’t pinpoint on a map

#139 realpaul on 06.10.11 at 1:35 pm

In todays Japan people continue live with huge mortgages that will never be paid off for houses that have lost 80% of their value over almost twenty years. Why don’t they just walk away you ask? Its because the government is allowing the banks to ‘adjust’ the debt anytime a loan go’s into default…..so it appears not to….very spooky accounting.

Bank debt has been heavily subsidized by the taxpayer…which is why Japan is now 200%/GDP in the fiscal toilet. The Japanese government has never had the balls to call it a day and bury the dead banks…instead they keep propping them up…with more subsidies. Zero rates are the legacy of the real estate madness of the 1980’s Japan. The fact is that they will never recover…the loans will never be paid off….and your house is so far underwater in Tokyo you can’t give real estate away in Tokyo because the title is so mired in legacy debt.

There are many cases of children keeping their dead parents at home…well past mummification in a back closet so that they can continue to reside in the debt trap that their parents left behind and the banks will never ‘nudge nudge wink wink’ never foreclose.

#140 Utopia on 06.10.11 at 1:49 pm

#84 joining the dark side
OK, see you later pal. Do you realize that you just caved in at the worst possible moment though…at the very moment of truth?

Tough break for you.

#141 Kitchener1 on 06.10.11 at 2:00 pm

Over the last few days, i’ve seen a lot of very bearish articles out there in various financial and mainstream media outlets.

From a (read-my) critical viewpoint, it almost seems that the media is priming the public for another downturn in the economy. Almost like its a done deal.

If that happens, it means that all of the economuc stimulus spending has been for nothing.

the loss of manufacturing/industrial sector jobs is HUGE, those are the well paying jobs that the economy runs on. Absent of that, it runs of debt. Seems to me that there is no wage growth, we have reached peak credit. We have no where to go but down.

#142 Cookie Monster on 06.10.11 at 2:06 pm

#113 Industrial Guy on 06.10.11 at 11:28 am
Yup! Take it from someone who’s been self employed since 1995, it sucks. Self employed, unemployed, what’s the difference? Benefit are the unemployed are at least in the market to find a job and are not burning their savings on dead end dreams. 1 in 5 will fail, for the ones that make it, it’s a brutal ride. If making money a something was easy everyone would be doing it. Real estate was/is easy still because the buyers are all nicely financed by low interest/Banks/CMHC. Once the financing craters, LOOK OUT BELOW. Tough business again.

#108 disciple on 06.10.11 at 11:03 am
You sound confused and trying hard to understand who or what you’re mad at. Something stinks, that’s for sure but what? Clue, it’s not successful, hardworking honest business people. It’s not owners of property plant and equipment. It’s not job creators. Think opposite of this clue. That’s where you need to direct your vile.

Read Ayn Rand’s “Capitalism – The unknown ideal” I think you’ll like it.


#143 Westernman on 06.10.11 at 2:08 pm

Origional Dave

The Quote ” How the heck do you protect these people from themselves? ”

The obvious answer – Why the hell would you want to? Let them sleep in the bed they made for themselves. What are you? Their nanny?

#144 BrianT on 06.10.11 at 2:11 pm

#90Disciple-I don’t think you understand the basics-crude oil is not a “technology” and neither is coal. Neither product is a “technology” any more than a tree is a “technology”. Together crude oil and coal make up the bulk of the raw material used for global energy-for about 35 yrs there has been talk of the seamless transition you are referring to-I don’t you think the human mind will conquer the universe and we can colonize the milky way with using all the crude oil on Mars but increasingly it doesn’t look like that is the way it will play out, contrary to the 1960s Jetsons wet dream you are describing.

#145 betamax on 06.10.11 at 2:12 pm

#81 BPOE: “Shiller is the biggest dimwit in the world when it comes to Vancouver. Dead WRONG in everyway, Stated many times, that fool said Vancouver was the bubbliest City in the World a half decade ago.”

LOL. And what has happened since? Prices have rapidly increased while becoming increasingly disconnected from fundamentals, which is precisely what happens in a bubble. And Vancouver pricing is particularly disconnected, just as Shiller suggested.

You see the evidence but you come to the wrong conclusion. Further extreme price increases don’t prove Shiller wrong but rather make his point. Nor is his assertion denied by longevity: a lengthy bubble is a bubble still.

#146 maxx on 06.10.11 at 2:20 pm

#37 Industrial Guy-

Astounding- future tax revenue lost to finance industry theft of household wealth might have averted austerity.

#147 Cato on 06.10.11 at 2:37 pm

#90 disciple – Answer the question of why north americans rely on crude oil which is supplied half a world away by dirty regimes, dirty politics & dirty money while just beneath their feet lies a near infinite supply of clean fuel to replace it and you’ll answer the larger question of what is behind our political & economic failures.

#114 Rae Reedyk – Good example of just how pervasive the true effect of housing bubble really was. The country is now littered with municipal & city govt’s who helped pump the bubble for personal & ideological gain. Pretty easy to pass unsustainable tax increases on an unwitting population if you create the illusion of paper wealth. Our cities have been so mismanaged that the entire system will need to be gutted, the good & the bad. Didn’t have to be this way, too bad culprits who helped cause the mess will just get to slink away with full benefits & pensions for their years of public “service”.

#124 Utopia – We are witnessing one small chapter of the larger Keynesian bible play itself out. There is money to be made by those who know how to read it. The central planners can’t hide their moves like they could in the past, so they are relying on the financial powers to move the markets for them. Look for fed actions to be timed around the election cycle, Obama is wall streets’ favourite son. They will pull out all the stops for one last series of debt orgies before austerity is forced on the country and someone closer to Ron Paul is put in the white house. Of course the story ends badly, as austrian economists correctly forecasted it would nearly a century ago. If we have to be the generation that lives through the failure of the Keynesian experiment we might as well learn to profit from it and prepare for what comes next.

#148 TS on 06.10.11 at 2:43 pm

This shows what happens when you work at CMHC. Send the lemmings over the cliff….


#149 Daisy Mae on 06.10.11 at 2:49 pm

I’ll try again….

Was informed of an acqaintance who resides in a ‘leaky condo’ at the coast. She has a second mortgage on that condo, as a result.

Now she’s taking out a CHIP reverse mortgage.

I sent on your warning, Garth, but it’s falling on deaf ears….

#150 Daystar on 06.10.11 at 3:20 pm

#107 Junius on 06.10.11 at 11:02 am

lol, ease ’em up on our resident smoker, will ya? (he’s playin’ ketchup, spending too much time in casinos and not enough time on sites like this, he’ll catch up, we’ve all been there) P’s and Q’s ;)

Someone should remind him however, that life is not a game and as such there is no “winning” to brag about, just blessings to accept and give away if one has actually learned from their fortunes/mistakes. Perhaps he does not yet understand that a bloated ego makes mere pin cushions for others.

For example, Ron Paul has no real shot, nor can “the rich” be fully generalized. They are human too… (some of them, perhaps, better trained)
He needs to know that if the Chinese economy tanks, those so called worthless greenbacks will be worth far more than he gives them credit for (sad, yet common to see someone blinded by their own illusions of grandure, that they cannot see the error of their ways) and should it happen, all bets with interest rates staying low are off. Greece is most likely to default, but not the default nation to fear and as such, he follows the wrong mob.

Our resident smoker is right concerning Garth’s writing abilities (which gives him hope). His other half would be nearly right (no one’s perfect) if he considered far more carefully what Garth’s abilities had to say, to wit, our resident smoker will need more time. It will take time for him to realize why bloated egos make the best pin cushions and what those reasons are (good and bad) but regardless of motive, braggarts often make the biggest losers of all which is why we should try being more… sensitive? Just a thought.

#124 Utopia on 06.10.11 at 12:37 pm

Quite right, its not a good time to be in the markets til’ at least Sept/Oct, is my best guess. You know why ;)

#151 disciple on 06.10.11 at 3:31 pm

#119 Outtahere…

S E L L. This is no time to be in debt to the bank. Find a suitable rental, it’s easier than you think. Tsunami is on it’s way, doesn’t matter how big your boat is, head for shore NOW! Better to be two years early than one day too late…

#152 Kent on 06.10.11 at 3:40 pm

Even in Kingsville Ontario houses are selling like hotcakes. In the morning there’s a listing, by evening its sold. Just crazy.

Population, 20,000, and some of the cheapest housing in Ontario. — Garth

#153 disciple on 06.10.11 at 4:06 pm

In order to achieve a totally predictable economy, the low-class elements of society must be brought under total control, i.e., must be housebroken, trained, and assigned a yoke and long-term social duties from a very early age, before they have an opportunity to question the propriety of the matter. In order to achieve such conformity, the lower-class family unit must be disintegrated by a process of increasing preoccupation of the parents and the establishment of government-operated day-care centers for the occupationally orphaned children.

The quality of education given to the lower class must be of the poorest sort, so that the moat of ignorance isolating the inferior class from the superior class is and remains incomprehensible to the inferior class. With such an initial handicap, even bright lower class individuals have little if any hope of extricating themselves from their assigned lot in life. This form of slavery is essential to maintain some measure of social order, peace, and tranquillity for the ruling upper class.

#154 Jack Ross on 06.10.11 at 4:21 pm

It’s coming;


Nice comment by someone called “AJ”, looks like a Garth follower or financial planner?

“It’s not so much foreign investment (aka. Asian gambling), rather it is abnormally low interest rates allowing people with no money to buy a home. People do not realize they aren’t actually buying a home but a pile of unsustainable debt. Once rates increase, and they will, all the 0/40, 5/35 (aka people with no money or business owning a home) suckers will be wiped out. Bottom line, if you can’t put down 20% and sustain a 7% mortgage while not having more than a 1:4 income to mortgate ratio and no more than 35-40% of you net worth in residential real estate, you cannot afford a home. To do so is irresponsible and foolish, there is no asset class that rises forever. The CMHC racket absolves banks of risk, Ottawa keeps rates artifically low, they will lend to anyone with a pulse.

Think we are much different than the Americans, think again. Be careful everyone, home ownership is not a right nor should it be looked upon as an investment. It’s a shelter and can evaporate net worth like nothing else.

And for the record, I own two homes outright with them representing 22% of net worth.

Storms coming.

Canucks in 6, 3-1 win tonight and they win it in Boston.”

#155 Jessica James on 06.10.11 at 5:08 pm

Keep up the good work Garth! Agree the market is crazy but this is nuts. The attached 2 BR condo was removed from MLS on June 8 at a listing price of $529K. Relisted today (Jun 10) for $589,900. Emailed the realtor asking what is it he’s smoking, no response yet. http://www.realtor.ca/PropertyDetails.aspx?&PropertyId=10786234&PidKey=-916533856

#156 Calgary_renter on 06.10.11 at 5:27 pm

#72 C

Raise rates ASAP Carney. You’re going to get roasted in the future when this thing turns.
C, you must be kidding, even though he is head of BOC, but he has to listen to someone else on interest rate, he is only a doll.

#157 Victor on 06.10.11 at 5:37 pm

Are rising consumer debt loads the Achilles’ heel of the Canadian economy?

Before we tackle that question, let’s back up a few months and revisit the lecture Bank of Canada Governor Mark Carney gave the country on rising personal debt levels, and the fact that while money is cheap today, it could get expensive again — and quickly.

“Low interest rates today do not necessarily mean low rates tomorrow,” warned Carney. “Risk reversals, when they happen, can be fierce; the greater the complacency, the more brutal the reckoning.



Interesting choice of words from Carney.

#158 realpaul on 06.10.11 at 5:57 pm

An interesting parellel is the ‘self employed’ stat layered over the personal debt numbers. It seems that the truth is that ‘self employed’ is just another government euphemism for ‘unemployed………just without the EI benefits and the notoriety.

The drain on peoples finances have been propped up with massive debt…..in order to continue with an unaffordable lifestyle……fueled by ponzi cash from F and the goons in Ottawa. The fact that Canadians are the most debt burdened in the G8 has not made the mainstream media’s radar screen as of yet….I have to wonder why?

If truth be told there is a lot of misery out there…..not just with UNI grads who are finding nothing but McJobs await them.

#159 realpaul on 06.10.11 at 6:02 pm

#156 JJ…Wow…check out the strata fee’s on that dog. $650 p/m? It boggles the mind how much the ‘tenants/owners’ are paying the window washers and parking lot sweepers? After the Mortgage and the prop tax this puppy is one ugly albatross.

#160 Mr Buyer on 06.10.11 at 6:17 pm

There was one case (that I know of) of an actual dead body that was found in a home in Japan. They news here reported it as one of hundreds of missing people over 100 years of age. The deceased were not reported dead so as to allow continued collection of the pension not to keep a foreclosed property. I myself may have been misinformed regarding traces of radioactive iodine in sea weed along the coast of the Sea of Japan. It looks like this is not the case. I will have more on this later.

#161 Nostradamus Le Mad Vlad on 06.10.11 at 6:18 pm

Some excellent posts 2day, not the least of which are:

#147 TheBigLebowski — If Stevie will let me hitch a ride on his private jet, put me up in a first class basement suite and fund my meals, I’ll go! 7:06 clip There I am, in the pic! Tea and Crumpets served under this giant shower curtain!

By baffling ’em with BS, an hour-to-hour report will be sent here, so y’all can take cover (then, as good taxpayers, foot the bill for my travels!) . . . . and

#134 Live Under Your Means — Great description of us boomers — that’s why I’m going to be eventually melted down, then cash in by selling myself to the highest bidder!

#155 Jack Ross — “It’s coming; Canucks in 6, 3-1 win tonight and they win it in Boston.”

Agreed. Be nice to see a ‘Nuck team win it.
Default times Greece looks a likely candidate, the first in a series of cascading dominoes; Kitco Charged in tax fraud; GS investigated and others; Merrill Lynch A cancer gooses the firm.

Radioactive Sludge falling on Tokyo, followed by Radioactive Cement. Nuke hypothesis on US infant mortality rate.

CC1, CC2 and CC3. Is the climate still changing?, and CC4 — Namibia snow.

0:38 clip As autism increases, so do profits for big pharma.

Syria Russia and China are standing up for the little guy against the big bullies. Guess when the time is right, China will cash in on its US debt holdings, then WW3 can take place.

#162 SMOKING MAN on 06.10.11 at 7:03 pm

#85 disciple on 06.10.11 at 9:23 am
#73 Smoking Man…

Which of these people directly answers to the female in the red dress on the golden throne in the centre of the room? Be careful…if you dare to answer this…it will tell me a lot about who you really are…

That’s a good question Sorry for the delay in answering got a little side job for a hedge fund building a high frequency trading system. CHA CHINGGGGGGGG

Lets see, you are asking who answers to the Justice Tarot Card. But that’s not the answer you are looking for. If you are asking who is the lady in the red dress sitting on the throne I would say it’s initials only H.R who sits on the Bilderberg steering committee.

#163 Nostradamus Le Mad Vlad on 06.10.11 at 7:19 pm

#163 SMOKING MAN — Would it be Queen Beatrix of Holland?
10:48 clip Fukushima could be the end of Japan — there is plenty of space in the four western provinces. Toxic Shellfish Now they’re infected.

9:32 clip Red, white and broke. Total US debt exceeds its economy; US defaulting At least China says so. GS — Reprint from January. Seems everything is falling into the same place at the same time, which is right now. BPOE — this one is 4 U! Post Collapse I could always try my hand as a gigolo! Skating “Even as another potential Great Depression looms, the U.S. political/media system seems incapable of addressing the crisis and devising coherent answers. Instead, the old partisan and lobbying games dominate the political world and obsession with trivia commands the news media’s focus.” wrh.com. No inflation, no problem! Home Equity “All your wealth are belong to us!” — The Federal Reserve”. wrh.com.

he elite and WW3 It’s here and now. Nixon “This is a chillingly accurate indictment of the current state of the Federal government in this country.” wrh.com. Kannaduhh too.

3:13 clip I wanna Be A Pirate. C&W — good stuff! War On he ‘Net See Bilderberg — they’re the control freaks.

Solar Flare “For Friday, the institute expects moderate auroral activity that would be visible overhead from Inuvik, Yellowknife, Rankin, and Igaluit to as far south as Whitehorse, Ft. McMurray, James Bay. The visibility might be low on the horizon as far south as Prince Rupert, Calgary, Minot, Bemidji, Stevens Point, Traverse City and Quebec City, Canada.” Does it include Lord Stanley’s mug for the ‘Nucks?

#164 jess on 06.10.11 at 7:23 pm

they don’t like our “freedoms”
city within a city

“City of London Corporation ” or the square mile the one with “Lord Mayor.” Who is the person that sits behind the speaker in the British Parliament?
On January 25, 2001, the International Accounting Standards Foundation (IASF) was incorporated as a tax-exempt organization in the US state of Delaware.[1] On February 6, 2001, the International Financial Reporting Standards Foundation was also incorporated as a tax-exempt organization in Delaware.[2] The IFRS Foundation is the parent entity of the International Accounting Standards Board (IASB), an independent accounting standard-setter based in London, England.[3]

I wonder if our Auditor General was referring to these the tax avoidance schemes in the uk.

Using their offshore positions priviledge to create,fund, and sell tax avoidance schemes. For example,dividend stripping schemes that Dave Hartnett,HMRC, said would have wiped out the whole corporate tax base in the UK for the financial sector.

For Example, in 2003, a wall street newspaper reported a company co- owned by Wachovia and Barcleys , had no employees,products, nor customers. Although, it had a mailing address in Delaware. Tax arbitrage, regulatory capture which plays off one nation’s tax system against another to reduce the banks’ tax bills. And their were plenty of these so called complex transactions.

#165 Derek on 06.10.11 at 7:28 pm

#164 Nostradamus Le Mad Vlad on 06.10.11 at 7:19 pm asked:
#163 SMOKING MAN — Would it be Queen Beatrix of Holland?

Nah. He’s talking about our Heather.

#166 Daisy Mae on 06.10.11 at 7:30 pm

Utopia: “One last point, and this one is directed to retirees. Mutual fund cash levels are very low right now. The lowest ever according to one report I read. Many of the funds are fully invested at exactly the moment that markets have signaled a longer term bearish trend.”

I KNEW it was time to get out….

#167 Jessica6 on 06.10.11 at 7:33 pm

Sarah, one thing not yet mentioned in the comments here is that sometimes, especially when it comes to money, people lie. Or at least exaggerate.

So that 100K ‘profit’ might first off be the sum-total of the price increase between the asking price they paid, and what a similar place would fetch now on MLS or what they sold it for, IF they did sell it and went on to just rent somewhere.
That figure is also likely rounded up – say the price really went up around 85-90K but 100K sounds better. Then there are the transaction costs involved in both buying and selling – at least 4% each time, plus the carrying costs while they held the condo – mortgage payments (likely mostly interest), property tax, condo fees and possibly even a mortgage penalty depending on what sort of mortgage they held to begin with if they sold prematurely.

So they may very well have made some decent money still (for not a lot of effort) but take any round six-figure number you hear with a grain of salt. Profit is really only what is left after all the expenses have been tallied up.

And realize that pure luck was involved and you probably missed the boat. Either keep an eye out for the next bubble to ride up or earn wealth the old-fashioned way – the way most of us do – hard work, thrift and patience.

#168 FranSix on 06.10.11 at 7:49 pm

320 sq ft. microhome


#169 Mr Buyer on 06.10.11 at 7:51 pm

As I suspected, the currents do not readily allow flow of contaminants from the eastern coast (Pacific Oceans) to the western coast (sea of Japan). That would leave the airborne route for contamination from Fukushima but our radiation levels remain unchanged from before the catastrophe (I am confident the readings are accurate because an acquaintance has been keeping independent readings that are in line with published levels). It is starting to look like I have been misinformed. It is possible that my acquaintance was reporting a previous story about contamination discovered on the eastern coast proximal to Fukushima. I will verify this in the coming weeks.

#170 BrianT on 06.10.11 at 8:12 pm

#164Nost-Good link about Ellsberg-yeah that America appears to be gone forever. The latest news (blacked out in Canadian MSM) is that an Italian MP was beaten up trying to crash the Bilderberg meeting. I guess Alex Jones is becoming pretty influential.

#171 Hoof - Hearted on 06.10.11 at 8:43 pm

Hey Garth:

How come you weren’t invited


#172 ucatzoduro on 06.10.11 at 9:01 pm

Sarah should keep investing her money in the market especially secure divivdend paying stocks and bank preferred shares. Pay off her loans and contnue being hot so that a rich guy can sweep her off her feet.

#173 Utopia on 06.10.11 at 9:19 pm

#167 Daisy Mae wrote to Utopia…

“I KNEW it was time to get out.”

Indeed it is Daisy. There are reasons we follow mutual fund cash levels. There are historical precedents that typically see major market sell-offs or losses as those cash levels fall to the lowest ranges. At the moment, cash levels are at unprecedented lows, never even seen before.

Since not many are familiar with the theory I have a chart and some other info to post up. You really need to pay attention to these views if you want to keep your shirt during the correction that is coming. Here is a quick chart overview. Read the bits at the bottom of the page too.


Here is an article from Barron’s

And here is Elliot Wave International weighing in with an explanation of why low cash levels coincide with market tops. This is one of many indicators that I follow that tell me trouble is brewing. Pensioners are about to get creamed and almost none of them can see it coming.


And that is why it pays good dividends to get honest professional investing advice from a disinterested third party instead of listening to the talking heads who keep pushing Mutuals at a time like this.

Look, the trained ones know what is coming. You need to know too.

#174 Siddelly on 06.10.11 at 9:22 pm

#139 realpaul

In every Japanese city or town there are records kept about everyone from birth to death, two kinds of registration. One kind is birth, marriage, divorce and death (Koseki). The other is residential (Jyumihyou), and makes a record of when you supposedly moved ailing grandma to the sandy beaches of Okinawa. When you turn 100 years old the Koseki officials will send you a silver cup and a note signed by the prime minister, but the case you are referring to involved Tokyos oldest living man Sogen Kato at 111 years old who was found to be mummified and surrounded by 30 year old newspapers. It was later discovered that his son had cashed $110,000 dollars worth of his old age pension checks for his own use over the years. The real issue is that if you are 111 years old and still have a mortgage with the bank, your financial planning hasn’t been the best.

#175 45north on 06.10.11 at 9:28 pm

BPOE: as far as I know this is the first time you have ever posted a link.

The end is nigh.

#176 JohnnyBGood on 06.10.11 at 9:51 pm

#168 Jessica6

We need more people like you.

#177 jess on 06.10.11 at 9:58 pm

Cato said, “the failure of the Keynesian experiment????

what do you think he was saying in 1933

keynes quote:

“The divorce between ownership and the real responsibility of management is serious within a country when, as a result of joint-stock enterprise, ownership is broken up between innumerable individuals who buy their interest today and sell it tomorrow and lack altogether both knowledge and responsibility towards what they momentarily own. But when the same principle is applied internationally, it is, in times of stress, intolerable – I am irresponsible towards what I own and those who operate what I own are irresponsible towards me. There may be some financial calculation which shows it to be advantageous that my savings should be invested in whatever quarter of the habitable globe shows the greatest marginal efficiency of capital or the highest rate of interest. But experience is accumulating that remoteness between ownership and operation is an evil in the relations between men, likely or certain in the long run to set up strains and enmities which will bring to nought the financial calculation.”

#178 jess on 06.10.11 at 10:12 pm

IOS that scammer called it, the people’s capitalism…

Bernie Cornfeld

Shuttling around the world from his ancient French castle with a coterie of celebrity jet-setters, Mr. Cornfeld built his company, Investors Overseas Services, into a $2.5 billion financial empire that fascinated the news media, attracted small investors and plagued market regulators around the world.

… mutual funds should take their fees from the profits they made for their investors, not just a percentage of the money That is the way the IOS Investment Program was structured. Unfortunately no other provision was made for operating funds and international stock markets suffered a bear market in late 1969. The value of the IOS mutual funds took a serious fall, eliminating income for IOS. By March 1969, IOS was running out of operating money.

At this point, a little-known American financier named Robert Vesco, head of International Controls Corporation, offered his help with $5MM. Vesco managed to take control of IOS and eventually evicted Cornfeld from the management. Having placed his men in key positions in IOS, Vesco succeeded in transferring over $ 200 million of cash belonging to the IOS funds into his own ventures, mostly in Costa Rica and other parts of Latin America. When the SEC issued a public complaint, Vesco fled to exile in a number of Caribbean hideaways, and was finally reported as having died in Cuba in 2008.

Bernie Cornfeld decided that mutual funds should take their fees from the profits they made for their investors, not just a percentage of the money invested. That is the way the IOS Investment Program was structured. Unfortunately no other provision was made for operating funds and international stock markets suffered a bear market in late 1969. The value of the IOS mutual funds took a serious fall, eliminating income for IOS. By March 1969, IOS was running out of operating money.

At this point, a little-known American financier named Robert Vesco, head of International Controls Corporation, offered his help with $5MM. Vesco managed to take control of IOS and eventually evicted Cornfeld from the management. Having placed his men in key positions in IOS, Vesco succeeded in transferring over $ 200 million of cash belonging to the IOS funds into his own ventures, mostly in Costa Rica and other parts of Latin America. When the SEC issued a public complaint, Vesco fled to exile in a number of Caribbean hideaways, and was finally reported as having died in Cuba in 2008.

Following the SEC complaint, the Canadian authorities arranged for the IOS entities to be placed in liquidation.

#179 disciple on 06.10.11 at 10:44 pm

#163 Smoking Man,
Thanks for your response. I have then narrowed you down to either a type of Hamlet or Hannibal, either one is intriguing. Feel free to drop me some more clues, I will be watching…

#180 disciple on 06.10.11 at 11:09 pm

I hope I have somewhat succeeded in helping G-man’s blog dogs get a glimpse into tangential subjects they may not have otherwise considered…I mean, I’ve talked about banking, archaeology, fossil fuels, philosophy, psychopathy, Mars, conspiracies, science, astronomy, biology and because of my advanced inquiry into each of these, I have been both derided, ignored, praised, encouraged and dismissed as a “kook”.

Well, I say “GREAT”. Job done here, but I thought I may indulge myself tonight on one more subject; that is, our arcane understanding of electricity. I’m almost certain most of you here do not share my views on this either. Here goes:

Electric current is not electrons or moving charges IN a conductor (wire, for example). It is actually charges that are moving along the length of the conductor in the 4TH DIMENSIONAL space AROUND the wire.

#181 disciple on 06.10.11 at 11:16 pm

I can easily prove it to you. The next time you look at an electrical pole on the street, please take note of the multitude of ceramic rings between the suspended wires and the armature holding the wire away from the pole. The pole may be concrete or it may be wood from a tall tree, but the connector between it and the conducting wire is made of an insulator of some type.

What then is the purpose of the ceramic rings when the connector itself is not conducting electricity from the wire to the pole?

You guessed it. The electrical engineers know that the current in the wire CAN “jump” through the air from the wire to the pole and down onto the street. The ceramic rings STOP the current from “jumping” from the wire to the pole. This also means that they are aware that the current is not flowing in the wire but AROUND the space above it. This is a hyperdimensional space.

Just look at the sheer multitude of the ceramic rings in use and you will finally see what I mean…

#182 disciple on 06.10.11 at 11:23 pm

Why is this important? It means that Tesla was correct again…electrical transmission is possible WITHOUT the use of wires. This would lead to FREE energy sharing eventually and was something that General Electric and Thomas Edison of Westinghouse corporation could not allow.

I wish to inspire you to the realization that much more is possible than you have been taught and the future looks very promising. So, don’t ever despair at the current conditions, because the grip of the scientific dictatorship is slowly loosening.

#183 maid on 06.11.11 at 6:49 am

There’s only one rule : Buy low sell high. Go figure.