Tragic

The subject line of the email three weeks ago was typed in caps and had four exclamation marks. “Desperate,” the note said. “Garth, you’ve got to help my family.” And I tried, of course. But this was a Greek tragedy.

Turns out father has a restaurant in Hamilton, where he’s made a ton over the past twenty years. Most of it he sent back to the old country, because of the great interest he could earn in an Athens bank account (guess why?). So now the family’s life savings (about 900,000 euros) sit behind some Corinthian pillars on a street where cops and protesters are bashing heads.

You gotta bail, I told them. Get a wire transfer going now because you face two giant threats – the euro tanking, and that bank going pink-side-up. Then I explained how. But it didn’t happen. Turns out papa has not declared any of 20 years’ worth of interest on his Canadian taxes, and now fears losing a quarter of his wealth to the CRA.

Then, I said helpfully, you’re screwed.

Human emotion never fails to beguile and ensnare us. Here a family opts for greed over fear, and in the coming weeks (or days) all that money will likely be lost. But this is not about Greece. Even though a sovereign looks increasingly likely, causing financial panic, a run on the banks (hard to do from Hamilton) and institutional insolvency.

It doesn’t stop there. European banks have $2 trillion in exposure (also known as bum loans) to Portugal, Ireland, Spain and Italy (as well as $136 billion in Greek debt). So, if Greece decides to stiff its bondholders, dump the euro and print its own money, then borrowing costs in all of Europe would surge – pretty much kneecapping the four losers in the last sentence. More debt crises would follow. The euro would tank, the US dollar soar, equity markets roil, credit seize up, commodity prices tank, with house prices in Edmonton and Saskatoon feeling the punch.

But it could be better. Or worse.

Some people surmise we are going for Lehman Part Deux. Others blow that off as extreme, saying a new banking and credit scare will only bring buying opportunities. In other words, nobody knows, but everyone has an opinion.

This brings me to our weekend experiment, as I asked for thoughts on where Canadian housing values might be by the end of the year. To liquor up initiative, I threw in five copies of my current book for the most thrilling responses. It worked. There are more than 300 as my personal assistant and masseuse is typing this (Jack recommended her), too many of them brilliant. I will render a verdict soon.

Clearly nobody has this figured out, although I’m sticking with my view that residential real estate will be a spectacularly bad asset to have your net worth sitting in. The risks are swelling like a gland on a July night. Japan’s exports have tanked, China’s housing market is cooling, America’s debt is ticking, Canada’s jobs are leaving and everybody you know owns too much stuff and pigged out on debt. Why should real estate – bought with extreme leverage after your spouse falls in love the kitchen faucets – be immune from it all?

In any case, I thank all of you who toiled to express your wisdom. And you thought this pathetic blog was only about breasts and motorcycles. You wish.

Let me conclude with a few email snippets from non-Greeks.

Kelowna (from a blog dog’s realtor):

No offer at this time – the market is still stagnant in the condo market – we are seeing activity in some areas and pricing – it seems to be taking longer to sell properties – we are now into 12 – 18 months for condos and 12 – 14 months for single family – the days on market are often skewed as the days on market revert back to zero when a new MLS number is allotted.

Toronto:

We bought our beautiful dream home in Toronto for 1.05 million dollars.  Anyways, 4 years later, husband gets transferred to the USA.  We sell for 1.2 million dollars.  So we only made about $150 000 profit after 4 years of living there.  We came back to Toronto last month expecting the housing market to have softened or moderated since we sold our home.  Instead, it has gone crazy.  In fact, the home we sold for 1.2 million would sell today on the market for 1.7 million.  And apparently in our neck of the woods, the HAM is buying up these 1-2 million dollar monster homes like they can’t purchase it fast enough.  Little tear down homes are going for 1 million now.  Sickening. Knowing we undersold our home makes me sick to my stomach and it becomes quite the bitter pill to swallow.

Vancouver:

Being a west coaster myself and having grown up in Vancouver in the 70’s, 80’s, I’ve witnessed a transition from a modest Vancouver to a city that has a serious image problem. God help anyone who should go out of their way to shatter the pride of Vancouver like the Boston Bruins did in game 7! We saw the results of that during the riots downtown Vancouver after the hockey game.

The riot was not unexpected by me in the least.  With the extreme road rage I experience here on occasion on the west coast it was just another case of too much pride. How are we better or different from than the US? Are we worse is my question. The only reason the crowd didn’t get out of hand during the gold medal Olympic game in 2010 was because we won.

Calgary

Yikes, despite sending your blog site and sample advice to them, my niece and her beau are preparing to take the house plunge in Calgary.   Good jobs, some savings, but entirely likely to bite for over the failsafe line of twice their family income.  They have already been pre-approved, by the “slimers” running the banks for a $400,000 mortgage.

I’m trying to convince them that they will lose their downpayment if their respective companies want to transfer them, promote them, out of Calgary to another locale. In that case, they will not be able to ride-out- the- crash  saddling the saddle in Calgary and will end up owing the bank tons of money because they’ll be underwater if they sell at that time. Help!

Vancouver:

Please see the attached spreadsheet for the visuals (below), but my latest numbers forecast a 39% decline in Vancouver real estate based on a technical retracement back to the swing lows and a 42% decline based on a fundamental outlook to bring prices back to a historical multiple of rents.  The situation becomes much more bearish from a fundamental perspective if we assume an overshoot to the downside of the price/rent ratio.

This is a response to your post “Unhealthy” from June 17. I did not respond in the comment section as I did not know how to post the raw data and accompanying graphs without an online link. I realize the data is only for Vancouver and it does not predict an exact timeline, but I hope that even if it does not win the contest at least you will find it informative. Certainly today Vancouver RE is the suckers trade of the decade, akin to buying condos in Miami in 2005 or dot com stocks in 2000.  You do good work. Let no one tell you otherwise.

156 comments ↓

#1 1st is ruined on 06.19.11 at 9:23 pm

1st is ruined!

#2 bigrider on 06.19.11 at 9:32 pm

Great chart. A visual like that is worth a thousand words. Pardon the cliche.

#3 Hartley on 06.19.11 at 9:38 pm

Numero uno dude.

#4 Crashing Debt Tide on 06.19.11 at 9:57 pm

Historical Price Reversion To Mean
(From Optimistic Values to Depressed Values) :

1) Raw land from peak bubble top to post-collapse bottom loses on average 99% of value.
2) Low market and distressed properties lose on average 90%
3) Mid market-in good neighbourhoods lose 50% to 65%
4) Upper income (wealthy) properties in well stablished neighbourhoods near large urban centres lose 35% to 40% of value.

Typically it requires one entire generational cycle before post bubble prices regain their prior value often with an inflationary kicker that distorts the pricing power by a whole new class of investors that were not singed in the last bubble.

Ref. Economic Cycles & Investing/and After The Crash

#5 Mikey the Realtor on 06.19.11 at 10:01 pm

Nowhere to invest but RE, the big scare in the equity markets is back, its deja vu once again. In the spring/summer 08 the markets slowly drew down until the fall. Then BANG, 700+ point pullbacks. World economies are in worse shape today then 08. Its going to be ugly folks, take out you dusty squirrel recipe books because this time you will need them.

Real estate went into a tailspin in 2008. — Garth

#6 nonplused on 06.19.11 at 10:08 pm

Apparently the Greek-Canadian restaurateur you started today’s post with mistakes Canada for Greece. He might well be able to lose all 900,000 Euros in a Greek bank, but that will gain him no recourse with CRA. They will want, and take, every penny he owes according to their twisted schemes. The restaurant and everything else he owns in Canada is forfeit despite is attempt to move the money to a “do not pay” jurisdiction.

Folks, the tax system we have built is onerous, and unfair. The burden is crushing and unfair. Democracy has failed. Not because it was a bad system, but because we let the propagandists take the reigns. And so onerous taxes. Any Greek who thinks they’ve outsmarted the trolls running CRA by shifting their profits offshore are in for a big surprise. It just doesn’t work that way here. In Canada, if you make any serious money, you pay at least 38% in tax. And Garth thinks that they will be successful in taxing even more (although I think his is wrong about that).

Off shoring your money without paying the tax just means you will get to compare our jails to those you are familiar with from your home country.

#7 CDawg on 06.19.11 at 10:09 pm

I am in general agreement with the principles articulated on this blog. A prolonged period of exceptionally low interest rates has produced valuations for real property that has deviated from economic fundamentals. Easy credit, minimal down payment requirements, and hyperbolised cocktail party stories add additional logs to this irrational fire.

As a resident of “godless” Toronto, I strongly believe that the first domino to fall will be condominiums. With 45%-60% of new builds pure speculation (Q1 2011 Toronto CMA Condominium Apartment Overview) and 20,000+ condos to be registered in upcoming year, I can’t see this inventory clearing at present valuations. This hypothesis assumes that most speculators would want to sell rather then rent a cash-flow negative property (maybe a poor assumption).

Realtor.ca offers a number of interesting real-time case studies to validate this hypothesis, which I would appreciate this board’s feedback on. Below are 5 newly registered condominium complexes in south Toronto:
– NXT (457 units) – 51 units for sale on MLS
– Neptune (474 units) – 75 units for sale on MLS
– Park Lake (279 units) – 32 units for sale on MLS
– Bliss (276 units) – 42 units for sale on MLS
– Panorama (330 units) – 42 units for sale on MLS

In a normal market, is it standard for 10-17% of the total units in a complex to be listed? If one in six homes in the suburbs were for sale, I think it would raise questions. One wonders how many “investors” who would like to sell are not listing because of the inventory glut (how do you differentiate your condo among 75 other listings in the same building?).

#8 The InvestorsFriend (Shawn Allen) on 06.19.11 at 10:19 pm

GREECE AND THE END OF THE WORLD?

As of 11pm the Dow futures are only down by 35 poiunts.

Market apparently did not get memo that defaults by Greek banks are nigh.

Well, I suppose the Dow missed many memos over the last few years.

We shall see what happens. Promises to be entertaining.

#9 race against time on 06.19.11 at 10:19 pm

Can I get a source for that graph?

#10 T.O. Bubble Boy on 06.19.11 at 10:24 pm

Sickening. Knowing we undersold our home makes me sick to my stomach and it becomes quite the bitter pill to swallow.

Seriously? That is what makes you sick? Being able to afford a $1M home, making $150k tax-free just for living in it, and (boo hoo) having to buy another house?

Is this or this not good enough for the $1.2M they took with them???

This housing addiction needs to end, and soon… Torontonians are apparently as self-unaware as Vancouverites when it comes to utterly ridiculous way that everyone feels entitled to having $1M houses (or, apparently $1.7M in this case).

Shouldn’t you need to be RICH to live in a million-dollar house?

#11 Mike Rotch on 06.19.11 at 10:28 pm

That chart should be required reading for anyone about to sign mortgage papers. Curious about what Toronto’s and other large GTA locales’ look like.

As an aside, I’m feeling tense lately – may I please have a referral to Jack’s favourite masseuse?

#12 fiendish Thingy on 06.19.11 at 10:33 pm

Garth, that graph is unreadable in its current sizing; could you please post a link to a full-size version?

Thanks!

#13 Cognizant on 06.19.11 at 10:40 pm

Great chart on Vancouver prices. I told a friend recently that I expect a 30-40% decline and he looked at me like I was from Mars. I’m going to send him this chart.

#14 45north on 06.19.11 at 10:40 pm

Then, I said helpfully, you’re screwed.

pretty funny

Please see the attached spreadsheet for the visuals (below), but my latest numbers forecast a 39% decline in Vancouver real estate

the 39% decline in Vancouver real estate is based on price versus rent. Totally solid.

Do you suppose that the banks know that Vancouver real estate is 7 times rent versus the historical average of 3.8 ?

how could they not?

Do you suppose that CMHC knows?

how could it not?

#15 hooplehead on 06.19.11 at 10:46 pm

Not first!!!

#16 Burnt Norton on 06.19.11 at 11:03 pm

Thank you for the graph – very interesting, although out of sympathy I won’t be forwarding it onto friends who have just bought in the past 2-3 years.

Re: first snippet from Vancouver – Enough melodrama about the riots please. There were simply not enough cops down there to babysit all the 17 going on 12 year-olds. The riot related to the planning ineptitude of city hall, the underdevelopment of teenaged frontal lobes, and a handful of professional sh*t disturbers. Yeesh.

#17 saanichtonian on 06.19.11 at 11:06 pm

“It doesn’t stop there. European banks have $2 trillion in exposure (also known as bum loans) to Portugal, Ireland, Spain and Italy (as well as $136 billion in Greek debt). So, if Greece decides to stiff its bondholders, dump the euro and print its own money, then borrowing costs in all of Europe would surge – pretty much kneecapping the four losers in the last sentence.”

And then there is the ‘insurance’ that is on those loans, aka ‘credit default swaps’, aka derivatives’.
Now who is holding those? There are somewhere over US$1,000,000,000,000,000.00 of these bets floating around. Could be the makings of a very funky domino effect.

“More debt crises would follow. The euro would tank, the US dollar soar, equity markets roil, credit seize up, commodity prices tank, with house prices in Edmonton and Saskatoon feeling the punch.”

If by “US dollar soar”, you mean the USDX going up sharply, well yesss…

The USDX is comprised of:

Euro 57.6%;
Japanese yen 13.6%;
British pound 11.9%;
Canadian dollar 9.1%;
Swedish Korona 4.2%
Swiss franc 3.6%

So if the euro is getting slaughtered, then the USDX would go up, just what is it measuring however?

If the suggestion is that the USD will be considered a ‘safe haven’, that is likely to be short lived as people watch:
-states going broke
-pension funds being raided for US federal government operations
-end of QE2
-decision to increase ‘impossible to repay’ debt
-US housing market continuing to melt into a gooey mess
and of course those darned derivatives. Who DOES hold them…perhaps the greek banks themselves, perhaps AIG?

” London investment bankers name AIG as a further CDS-seller. That company had to be nationalized during the financial crisis due to its having written insolvency insurance on American mortgages. This debt-load would have led to the collapse of the world’s biggest insurer. Prior to the financial crisis AIG is said to have widely held State credit-risk. If yet-larger insurance positions on Greece exist, then the American government would have a strong interest in preventing that country’s insolvency.

Even if these are mere rumors about the Greek banks and AIG, this example makes clear the weakness of CDS markets. This protection is sold by banks or insurers who themselves have access only to limited capital resources. They have as a rule clearly lesser credit-worthiness than the states for which they are selling insolvency protection. Insurance by CDS could turn out to be just a bubble.”

more at http://www.eurosavant.com/2010/02/21/cds-just-another-evanescent-bubble/

#18 Utopia on 06.19.11 at 11:07 pm

#347 KIM on 06.19.11 at 9:02 pm to Utopia at #340

“Utopia you have no understanding of economics”
————————————————————————————

You don’t say. What else have you got?

#19 carol on 06.19.11 at 11:12 pm

Well, I live in the little backwater called Thunder Bay.
The most expensive little town this side of the mason-dixen line. Even the weather network skips us , going from southern ont right
over to manitoba.
The mcmansions are rising with breathtaking speed
and the developers are by and large making a bundle.
But I don,t understand where the money is coming from.
There is little forestry going on and some mining.
Lots of govn,t workers . A 1800 sq ft plastic box going for 500,000 here , sells for 189,000 in Wisconsin BEFORE the crash, and the wis home will be 2800 sq ft.And they where using our lumber.
So what am trying to say besides being pissed that it costs 150.00 to fill my halfton because a jerked off little town has no close competion to lower prices to what is norm.Bet it don,t cost 150 to fill your bummer in To.

#20 DML on 06.19.11 at 11:21 pm

Wall Street Journal:

A large part of China’s economic miracle was built on ill-considered lending and accounting sleight-of-hand.

Where have we heard that before…..

http://online.wsj.com/article/SB10001424052702303936704576394910531229004.html

#21 Debtisforever on 06.19.11 at 11:22 pm

Today I walked by MLS 894771, price $939,000. Despite the open house I saw no lineup of Chinese people with suitcases of cash. I saw a few casual lookers, and when I walked back an hour later, a lonely realtor looking out the window.
For those too lazy to look it up, this is a 1947 bungalow in a modest East Vancouver neighborhood. It has 3 beds and 2 baths (no suite). Meanwhile, I could rent a 5 bedroom, 2 bath place in the same hood for $2200/month.
Gee…what a choice…pay $4000/month with a variable mortgage where payments will go up (and less space), or $2200 a month where the rent can’t increase more than 4% a year.
Nah, no bubble here. Makes total sense!

#22 inglishmagor on 06.19.11 at 11:31 pm

I’ve been thinking about fundamentals today. It seems money has been flowing very differently over the last 10 years than in decades before. Everyone I know has a story that involves a windfall of free money.

I went back to some basics tied to earning a wage. For $100 that an employer pays out to an employee as it moves through a government cycle: $4.95 employee cpp, $4.95 employer cpp, $1.75 EI, $2.45 employer EI, $1.55 WCB, $32.12 income tax on a modest income of 40k, and $12 to GST and HST. That adds up to $59.79.

When the free money comes to an end and the rise we are seeing in food, gas, and eventually interest rates the $40.21 that we use to live on gets eaten up pretty quickly.

#23 yukon don on 06.19.11 at 11:32 pm

Good jobs aren’t in the plan – thestar.com
http://www.thestar.com The buyers coming up are being asked to pay alot more and are being paid less , how is this going to work?

#24 Pr on 06.19.11 at 11:36 pm

Pop-Corn…!!! Pop-Corn…!!!!

Get your Pop-Corn…..!!!!

#25 Hoof - Hearted on 06.19.11 at 11:47 pm

While I appreciate the many contributions, and the intellectual discussions…I personally have come to the following conclusions.

Based on the IMF , Goldman Sachs, etc…… the entire world has been engaged in a massive Ponzi scheme for decades, if not centuries, via the Bankster cartels.

They have blessed the plundered various faux empires…. They played the system to the maximum in 2000’s with all their exotic faux schemes ie default swaps, derivatives…etc.

If one researches enough…one realizes these parties are soul-less psychotics that lack any basic empathy that define the majority of humanity.Just because they don’t kill people in directly…one degree of separation…. does not vindicate them at all.

Such psychos, not much different than Hitler, Stalin or Mao, have no logic or long term view….which effectively dooms them..the game ends ..they have hit the wall head on.

They have indebted nations, (US since 1913 and creation of Federal Reserve ), and many experts say the “debt” can NEVER be repaid via the fractional reserve / fiat cuurency. It’s a carney scam.

The Banksters create money out of nothing, yet expect the ponzi scheme to continue.

They have played a shell game via changing the targets, but have now run out of targets.

Now the sheeple wake up….and the judgement day has arrived. The pigs at the trough will be history…..greed is a limited variable when it meets the catalyst of basic democracy Version II.

Personally?
…..remember what they did to Caucescu?

I think the world is gearing up to a economic Nuremberg trial …Blankfein et all are toast.

#26 Utopia on 06.19.11 at 11:50 pm

With each passing day, the signs of trouble in the global credit markets are becoming more acute. We cannot underestimate the damage that even a single sovereign European debt default might wreak on our own economy.

But as they say, if it has not yet happened, it is not yet a story in the news biz.

Speculation of the threat only has value to those who truly understand that todays muttered warnings can easily become tomorrows realities. But that is a franchise reserved only for the crazy amongst us and those with an uncanny ability to see clearly through the shroud of babble that clutters our media infested world.

Will the Greeks come bearing gifts (Trojan style) that will ruin the party for all or is this just more blather concocted by worry warts and those who see fear in every small corner of the world?

For myself, I do not think it is any small irony that the country (Greece) that is known as the birthplace of democracy is the same country now facing a loss of sovereignty due to a default.

Default it will. That is assured. It is extremely unlikely the people there will permit a corporate takeover of their nation and a complete loss of independence. That is not the Greek way. But look out below. Do I really need to remind everyone that this is a good time to get out of debt?

Apparently UK banks have seen the writing on the wall and are now working hard to limit exposure to Europe. A fresh credit crisis is brewing again. Here is the article with the details:

http://www.telegraph.co.uk/finance/financialcrisis/8584442/UK-banks-abandon-eurozone-over-Greek-default-fears.html

#27 Bill Gable on 06.19.11 at 11:55 pm

Man, we have some smart dawgs around here – 500,000 plus a month visit here, and with good reason. I only took economics for 4 years and a crummy BA with an Economics minor – and all the classes were Keynsian based; I think I have learned more from Mr. Turner, and you crew, than all those years at Uvic (Sorry, Doctor Efrat).
Let’s not go there.

We have an Austrian strain finally taking over this lake.

Now let’s throw in some “Black Swans”. Japan, the Chinese disaster is unfolding, EEU, food prices are galloping, and don’t get me started on insane debt levels like we have in Canada, and we have a lot of really anxious, angry people here in Vancouver.

Bottom line?
Cue up the string quartet on the Titanic.

I take no joy in any of this – but – get greedy – you get what you deserve.

#28 Nostradamus Le Mad Vlad on 06.19.11 at 11:56 pm


“Tragic, and now fears losing a quarter of his wealth to the CRA.” — Easy come, easy go. He may lose it all if Greece switches back to drachmas and forgets its Euro debt.

“In other words, nobody knows . . .” — Ain’t that the truth about life? No one knows whether Pompeii or Yellowstone will have erupted overnight, whether the US or China will default or if PIIGS get roasted.

Who cares? Nothing anyone can do about it anyway.
*
#329 Hoof – Hearted on 06.19.11 at 6:19 pm — I stand corrected. Thanks for pointing that out.
*
Chaos — New stuff, volcanoes have come alive and further to Cayce’s prediction about Japan; Post-tsunami. Mass Media Meltdown or m$m? They are one and the same.

No-fly zones and HAARP. Is this the reason?

Rothschild and BP CEO: Energy Markets. Guess energy prices are going up; How banks are creating and destroying money; Obama Now that he has screwed the cities, he is about to decimate the heartland; China Corruption and Greek Corruption. China bailed out the Greeks recently. Connection?

Saudi Arabia and Af’stan. After Syria and Yemen comes Saudi Arabia, then Iran by which time Russia and China will be involved. Toss a few PIIGS onto the b-b-q, add a few currencies and Libyan hot sauce in the mix then a volcano of a different sort erupts.

Links in. UK may be changing the NHS (big pharma); Link in. Is China dropping e-bombs on America’s grid? Link in. 2005 speech by Chinese minister talking about depop. and taking over the US.

One Volcano “Of course you know about this evil carbon dioxide that we are trying to suppress – it’s that vital chemical compound that every plant requires to live and grow and to synthesize into oxygen for us humans and all animal life.”

#29 LH on 06.20.11 at 12:03 am

It’s summer time, and central Toronto is hawt. As long as the US spurns educated, moneyed immigrants in favor of poor hombres with family ties, central Toronto will continue to be THE destination in North America (sorry Vancouver).

Sure things are overpriced, but by the time the next crash comes (a crash will certainly come, the only question is timing), I may have paid off all my mortgages (thank you tenants!), and be left with a few nice SFH’s outright, which I may then sell off at my leisure at prevailing prices (possibly lower, true, but over the long term good real estate tends to keep up with inflation), or keep for the income (beats bonds any day!)

In fact, I am already 60% of the way there.

#30 Utopia on 06.20.11 at 12:13 am

So, what leads to an economic depression? Well,according to those at Elliot Wave it is major stock market crashes and not falling real estate values or high unemployment.

http://www.elliottwave.com/freeupdates/archives/2011/06/14/What-Leads-Directly-to-an-Economic-Depression.aspx

#31 vreaa on 06.20.11 at 12:26 am

Aftermath – Vancouver Riots 2011

‘Theories of Causation’, quotes, and links to related subjects of potential interest:

http://wp.me/pcq1o-2ys

#32 reality guy on 06.20.11 at 12:46 am

Vancouver Riot cartoon

http://www.cbc.ca/news/offbeat/story/2011/06/19/offbeat-vancouver-riots-cartoon-parody.html

I think the people cleaning up the streets the next day were the real estate agents trying to keep the city presentable so they can continue pumping the slogan

“Vancouver Best Place to live”, freakin cold today just got back from Port Land just to face another day of cold and cloud and rain. Can’t wait for the two weeks of sunshine we get every year

#33 Jimmyz on 06.20.11 at 12:47 am

Great post Garth – thanks for keeping it real !

#34 bbcoq on 06.20.11 at 1:07 am

Can anybody point me towards some historical references and charts showing Vancouver pricing using data like multiples of rents, incomes etc. I am out of the market but would like to buy but at some point for family shelter reasons. We are soon to close and have rental lined up want some stability as well. Nothing against renting but I plan to stay for 15-20 years. I appreciate we here in Vancouver like to think hings are different here but we have seen asian immigrants come in waves before such as the early 90s only to see them stop buying leaving the domestic market to function more traditionally such as late 90s. I understand we are now 11 (eleven!) times average income and would like to compare the historical norms and of course, the lows.
Any help?

#35 Edmontonian on 06.20.11 at 1:09 am

Living here in Edmonton it’s crzy seeing the price of oil plunge in a couple of days!
We never had an uptick in prices back to the bubblicious prices of 2007 we’ve declined to 2006 prices still. Now oil is going lower and we already have one of the highest vacancies in the entire country!
Our RE market is going in the toilet!

#36 Axehead on 06.20.11 at 1:50 am

Nearby Sylvan Lake (to Red Deer, Alberta) is going through an identity crisis. Seems like vacation homes that used to fetch a cool 1.2M 2 years ago are now struggling to snatch 800k from very few buyers now. People are realizing that – it’s just a plain house on a very small lake with about 4 weeks of nice weather per year…when you can buy a nicer house for 250k in Arizona and golf practically all year round. The correction is welcome, hope is spreads.

P.S. the Vancouver snippet is excellent….it’s a city of pride, of heroin addicts, and swollen egos…I hate it.

#37 Zoronqueen on 06.20.11 at 2:08 am

Hi Bloggers,

We are considering moving out from Edmonton and going to Vancouver. Due to family better wether ect.

Using this calculator http://www.forbes.com/fdc/rentorsell.shtml

I have decided that it’s better to sell then rent in Vancouver providing we can find jobs there.

From my understanding, jobs are 1/3 less, yet insurance, gas, housing etc. is more expensive.

Also by moving we lose our employer’s portion of LAPP, RRSP’s ect.

Our house is assessed at 499K. Similar to http://www.realtor.ca/propertyDetails.aspx?propertyId=10547999&PidKey=-215086987

Any one care to comment?

#38 604genX on 06.20.11 at 2:10 am

Great graphic for Vancouver.

Can you break out data by type of housing – condo and single family? Might be tough for rental data….

Can you post the source data somewhere accessible?

#39 disciple on 06.20.11 at 3:48 am

It’s 4am right now…I was awakened by sounds in my backyard…thought someone was attempting robbery of my lawnmower that I intentionally left sitting on the lawn because I just don’t care anymore…no, it was probably the raccoons…can’t sleep…tiptoed downstairs, got a tea, and logged on to greaterfool.ca…

Spent a half hour already going through the comments from yesterday’s blog…Jody had a good one…

It’s easy to see who are the homeowners…”a crash won’t affect me because I bought low” etc…, – yeah, right….80% correction eventually will eat your equity and your polite sensibility, I don’t care if you paid for your house already…

Tea was good…this blog is even better…good night, er…good morning…

#40 CanuckMe on 06.20.11 at 4:56 am

It’s started:
http://www.theprovince.com/business/Stop+worrying+start+planning+your+budget/4973766/story.html

#41 HappyPlace54 on 06.20.11 at 5:38 am

No sympathy for the tax-evading restaurant owner in Hamilton. I’m sure he’s enjoying his life in Canada while the rest of us honest taxpayers pick up the slack for him.

#42 Tom on 06.20.11 at 5:43 am

Re: Flip This. Since the comments are closed for that entry and your answer was “Actually, I don’t remember telling anyone what would happen this summer. Good luck growing up.” Actually, you did. In your entry Suicide Call, you told Kim “The bubble starts deflating this summer, Kim. The buying comes later. Keep your jeans on.” So? How do you know it begins deflating this summer?

#43 MO on 06.20.11 at 6:28 am

Even if Canada has population growth and immigration, real estate prices are only partly driven by these trends. The bigger driver (particularly if prices grow faster than population) is credit, speculation and expansion.

Professor Keen speaks about this:
http://www.planbeconomics.com/2011/06/11/the-population-house-price-myth/

#44 Scalgary on 06.20.11 at 6:28 am

Garth,

I didnt have a chance to comment your last post.

Here is my thought:

Vancouver and Toronto will definitely have a bubble burst correcting around 30+%.

All other areas will have a smooth melt down for a decade at least.

My reasoning for this conclusion is that as follows:

– Even with the higher level of employment (claimed by StatsCan) we dont see any sales increase. Mostly properties are changing hands, not a reasonable amount of first time buyers.

– Historical interest rates had its purpose and it cant push the market further. If it is kept low, it can only help the existing losers to pay their mortage.

– I dont see any spurt in wages, even in calgary.

– More importantly, there are plenty of supply vs demand.

Cheers…

#45 David B on 06.20.11 at 6:32 am

So where are we going? Down, most of what will happen in Greece is controlled by Washington, the President still sits at the head of the table of all those G-8/20 meetings and carries that big stick “World’s Police Officer” Soon the President will get his debt ceiling increase ( approx $2 Trillion) of course only with Republican/Tea Party promises of savings/cuts of $1-4 Trillion over 10 -12 years. Greece will be bailed out in one form or another to allow countries to buy/support the USA new debt ceiling funds. Then from behind closed doors all these clowns will start to work making the kind of cuts to goods and services never dreamed of … well not really, the big boys have had plan “B” & “C” in mind for years ….. hello do really think they would not look after themselves first? Remember the working class coupled to the middle class can always do with less in their opinion … the rich and powerful can not as a matter of fact they like having more and governments tend to agree. So come the 4th August 2011 America will still be here and so will Greece … only change is there will be far more people with less in many respects.

#46 i.am.1st on 06.20.11 at 7:16 am

…not!

#47 Love this Blog on 06.20.11 at 7:37 am

“Hi Bloggers,

We are considering moving out from Edmonton and going to Vancouver. Due to family better wether ect.

Using this calculator http://www.forbes.com/fdc/rentorsell.shtml

I have decided that it’s better to sell then rent in Vancouver providing we can find jobs there.

From my understanding, jobs are 1/3 less, yet insurance, gas, housing etc. is more expensive.

Also by moving we lose our employer’s portion of LAPP, RRSP’s ect.

Our house is assessed at 499K. Similar to http://www.realtor.ca/propertyDetails.aspx?propertyId=10547999&PidKey=-215086987

Any one care to comment?”

I think it’s pretty clear it’s a mistake, unless I’m missing something. You are saying jobs pay less, housing and cost of living is more expensive (if you can find jobs, your words). Plus, by moving you lose the employer’s share of RRSP’s? How could this be a good move? Or was the post made tongue in cheek?

#48 eaglebay on 06.20.11 at 7:38 am

#8 The InvestorsFriend (Shawn Allen)

Why would the debt crisis in Greece affect the Dow 30 Industrial Index?
This index is made up of 30 global companies, isn’t it?

#49 Popeye the sailor man on 06.20.11 at 7:47 am

#5 Mikey the Realtor

Real estate went into a tailspin in 2008. — Garth

Yes I know first hand ;

We decided to sell and move to Alberta, but we listed our Island home in Sept 08 for 435,000 and sold for 390,000 in Feb 09.
I still remember the fear and emotions, it is not going to be a fun ride for many!

#50 Mackie on 06.20.11 at 7:56 am

Anyone watch Suzy Ormond’s Money Class on PBS yesterday. Excellent. That woman is not afraid to tell it like it is. She had very little good to say about real estate and went on the attack against those institutions behind student loans. Speaking of student loans, are Canada’s loans set up thesame as US?

#51 TurnerNation on 06.20.11 at 7:57 am

#40 CanuckMe on 06.20.11 at 4:56 am

Can you believe this? From your link:

“We bought our first home a few years ago when interest rates were low. Both of us had good incomes, ***so we spent as much as the bank would give us***”

Read more: http://www.theprovince.com/business/Stop+worrying+start+planning+your+budget/4973766/story.html#ixzz1PorT1TqD

***so we spent as much as the bank would give us***

A bankster/drug dealer’s dream customer!!
That’s what our glorious advanced culture is about: consume as much as possible in as short a time frame a possible. And then post the results on Facebook for friends to ooh and ahh over.
This is what we fight for?!?!! Our supreme enlightned way of life.

The old camps used to have a sign: Hard Work Brings Freedom.

Today’s debt camp should have a sign:

“We spent as much as the bank would give us”

#52 SMOKING MAN on 06.20.11 at 8:15 am

To the guy who made that nice chart. Nice job but it is as usfull as toilet paper

Do a chart the looks at monthly payments vs income. Then you will have domething the herd follows

#53 BlorgDorg on 06.20.11 at 8:15 am

I was on Granville St. during the riot in Vancouver last week and the air was decidedly not one of anarchy or random violence, but rather spoiled brats with no regard for property or community.

I was completely unsurprised when Nathan Kotylak’s story hit the news — rich kid gets caught being naughty. He is an exemplar of a generation that shuns consequences.

The ‘pride’ comment seems spot-on to me; those cities whose real estate is the most inflated (Vancouver, Victoria, Calgary, Toronto) are also by-and-large the most conceited and arrogant. (Yes, I’m generalizing and I also live in the middle of one of those cities.)

We all know what pride goes before, right?

#54 Fuzzy on 06.20.11 at 8:24 am

No one from Montreal?

Though it might be soft-core in comparison to GTA or Van, I can tell you things are getting out of hand here as well.

I keep hearing stories about fresh university grads (read salary no more than $55K/year) getting $300K-$350K mortgages with no problem. If I were to put 25% down to buy a condo down the street from my similar-sized appartment, mortgage & associated costs would be double my rent.

I’m surprised so little data or ink has been shed on the (albeir miniature to others) real estate bubble here in the 514.

#55 ottawan on 06.20.11 at 8:27 am

With Harper announcing a smaller public service, there are definitely fewer people buying resales in the parkwood hills, skyline and fisher heights area. There is an increase in listings. All new listings have been overpriced (5 new ones last week in single homes) and 7 others reduced their prices. NONE have sold in a week. I only follow SFH in a small area, but in MY area people THINK their house is worth a lot, but when they sit for a few months, they start to lower the price. It is worth noting that all this is on MLS for the buyer to be as informed as the seller. Copy the stuff you are interested in, and keep track of it. Tells you a lot. Things can shift quickly. April saw lots of sales, May and June have been dead.

#56 Raincouver on 06.20.11 at 8:27 am

@mikey
How much money do you have tied up in real estate?
or how many percent?

#57 SMOKING MAN on 06.20.11 at 8:38 am

Bubble heads. 5 year benchmark bond now edging toward historic lows. Get dreamin about a crash. Re agents know rates are going to the bascment they pass it on to the cattlel

My son wanted to sell his condo in feb. I told him no. Ilast week more than e. Rrds of the units in his build are sold. Price up 25 k since start of year

Ps typing from black berry soory for the typos. Icant spell when I can see. Typeing on here is like tytping blind

Irrelevant comments. Real estate markets thrive more on confidence than cheap financing (which we already have). If rates do not rise, it will be due to a worsening in economic and financial conditions. That is an anathema to housing. — Garth

#58 Kat on 06.20.11 at 8:41 am

#32 reality guy

“I think the people cleaning up the streets the next day were the real estate agents trying to keep the city presentable so they can continue pumping the slogan”

It would make sense but let’s face it…that would be far beneath most realtors!

#59 Macrath on 06.20.11 at 9:07 am

For every $1,000 a Canadian family earns, they have to make about $1,500 in debt payments.

http://ca.finance.yahoo.com/news/Canadians-continue-rack-debts-yahoofinanceca-3206838254.html?x=0

Debt is accumulating at an astonishing rate. When do the lenders lock the free money vault?

#60 Bottoms_Up on 06.20.11 at 9:19 am

#55 ottawan on 06.20.11 at 8:27 am
—————————————
What I don’t understand are the prices for SFHs in Orleans/Barrhaven/Kanata/Stittsville/North Gower. Sure, for $500,000 one can pick up a large, newer build SFH in any one of those burbs, but for that price one can also get a decent home in Ottawa inside the green belt (i.e. walking distance to mooney’s bay beach for example).

#61 Mr. Reality on 06.20.11 at 9:30 am

Everyone see how emotion plays a role in horrible and self destructive financial decision making?

The tie to the mother land (pure emotion) will make this guy lose everything.

He should of put his money in the Caymans………

Mr. R.

Short the markets!

#62 somecatchphrase on 06.20.11 at 9:31 am

#50 Mackie on 06.20.11 at 7:56 am

“Speaking of student loans, are Canada’s loans set up thesame as US?”
_________________

For all practical intents and purposes, the answer is yes, we have the same student loan scam going on here in Canada.

Canada’s student loan system is more or less the same as what you have in the US. What’s important is that there’s a government guarantee for the lender.

Government guaranteed student loans are one of the main culprits behind rising tuitions, just like CMHC is one of the main culprits behind the real estate bubble.

It’s ironic that government programs intended to make housing and education affordable have had the opposite effect.

“How government programs drive up college tuitions”

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

#63 Jim on 06.20.11 at 9:32 am

The problem with the mean reversion graph is the mean has risen a bit due to extra ordinarily high home costs for the last decade. A proper redrawing of the mean line would still show a decline coming however.

#64 Ben on 06.20.11 at 9:32 am

Oil Drops to Four-Month Low, Trades Below 200-Day Average on Europe Crisis

http://finance.yahoo.com/news/Oil-Drops-to-FourMonth-Low-bloomberg-1432637654.html?x=0&sec=topStories&pos=3&asset=&ccode=

#65 Kimi on 06.20.11 at 9:34 am

#34 bbocq … I am out of the market but would like to buy but at some point for family shelter reasons. …Nothing against renting but I plan to stay for 15-20 years. I appreciate we here in Vancouver like to think hings are different here but we have seen asian immigrants come in waves…Any help
———————————————-
Hey #24 Pr….I’ll take a box of that popcorn please… cause the show #34 is going to put on sounds like a re-run.

#66 disciple on 06.20.11 at 9:35 am

#25 HH…
The criminal leaders you see are actually far-removed from your real rulers who remain largely unseen…Blankein et. al. are simply puppet decoys, conveniently provided targets for your shots at deciphering the madness that is the debt-fiat credit system masquerading as true scientific capitalism. Like I continue to point out: one cannot use money itself as a commodity to make more money – these profits are illusory and eventually someone has to pay for this financial skulduggery. That would be YOU and not your tax wage slave farmers who OWN you. Don’t play with fire and you won’t get burnt.

#26 Utopia…
I heard on AM radio today that Greece’s creditors are still waiting for Greece to pass some type of austerity program…are you certain that Greece will default? I wonder why it is taking so long to make a decision…hmmm…who benefits from the delay?

#67 Kimi on 06.20.11 at 9:40 am

ps… I use to use ‘Kim’ but it looks like someone is already using ‘Kim’ and is pissing off Utopia… so ‘Let it rip girls’.

#68 vreaa on 06.20.11 at 9:53 am

Globe and Mail Video: 25% Basic Vanilla Pullback For Canada If Interest Rates Flat; For ‘Unstoppable’ Vancouver Pick Your Own Number [Ours is 50%-66%]

Carrick-Mandani Discussion
Still and partial transcript

http://wp.me/pcq1o-2zJ

#69 Jessica6 on 06.20.11 at 10:04 am

How ironic.

Our resident Greek tax evader might lose his savings due to the financial crisis in Greece…. caused in part by rampant tax evasion there.

As for the Toronto couple who find it ‘sickening’ what gains they ‘lost out on’… A lot of people in the world would love to have your problems. I find it sickening that there seem to be an endless supply of stupid greedy people in this world.

#70 disciple on 06.20.11 at 10:06 am

You see, for many, many years I did not understand that a bank will create your mortgage money out of thin air and use your signature as proof that they gave it to you.

I had already understood that banks create money out of thin air when governments need to borrow it for public works or social programs; in fact, I remember acing many an essay in History and Humanities courses in University simply by the fact that I understood this banking fraud, while my peers were busy worrying about their future careers in this rigged casino economy.

But I thought (like most of you on this blog and millions more out there) that banks have reserves in at least the 10% range to back up the loan they give you for your mortgage. The truth is that they don’t use diddly of their own funds, especially in Canada where most deathpledges are “backed” by CMHC.

But recently I came to understand that a mortgage is not a loan at all. It is a death-pledge exactly as it translates into French, and a different term is used in Quebec to obfuscate this reality: hypotheque.

It is a scam, and is precisely how new money enters the system. Without mortgages, credit will dry up and the fake economy will die. Yet, ironically, Mortgages are the backbone of your slavery, literally and figuratively, and that is why I will never get another one as long as I have air to breathe. Live and let die, as one doppleganger once crooned.

Thank you. (No bankers were harmed in the writing of this post).

#71 poco on 06.20.11 at 10:12 am

#57 Smoking Man
My son wanted to sell his condo in feb. I told him no. Ilast week more than e. Rrds of the units in his build are sold. Price up 25 k since start of year
______________________________________________
I guess we live in two different worlds–my son also made the decision to sell his condo (i posted how he finally got out using the “realtors’ bonus” or typically called–how your own realtor screws you without you knowing)—anyways he sold in 2days with this method after sitting for approx. 5 months with no takers–point is the condos in his complex (2 now listed–all same sq. ft) are listed at 15k and 18k less than his selling price

we discussed the pros and cons of hanging on or selling and he made the decision to get out–sold for what he paid 3 years ago–so he lost part of his original downpayment as a result–just add one more name to the long list of sellers who will not be buying in the near future
expensive lesson for a first time buyer, as many first time buyers are going to find out

#72 Utopia on 06.20.11 at 10:15 am

#67 Kimi wrote……..

“PS… I use to use ‘Kim’ but it looks like someone is already using ‘Kim’ and is pissing off Utopia… so ‘Let it rip girls’.
—————————————————————————————————

Don’t worry about a thing Kimi. I am not pissed at all. Just bemused. Actually I loved reading the many insightful posts over the weekend. Kims post to me made me burst out laughing. I will have to advise my ex I don’t know anything at all about economics. She will get a good laugh too.

PS: Not sure I would enjoy the prospect of the girls “letting it rip”. Good grief, we already have CrowdedElevatorFarts to contend with daily. Is there no end to arse humour?

#73 Mackie on 06.20.11 at 10:19 am

Thanks catchphrase. My daughter recently graduated and. My wife and i are covering any student loans so she can begin debt free. She does not owe much about 10G. But what many students are graduating with theses days, they are screwed from the get go. $40,000+ when you are graduating making minimum wage or close to it is a recipe for long term debt. I guess the banks want to get them early and keep them there for the rest of their lives.

#74 JohnnyBGood on 06.20.11 at 10:22 am

Garth said, “Real estate markets thrive more on confidence than cheap financing…”

While the economy seems to be doing OK, from what I see around me confidence is not very high. Statistically speaking, the Canadian CCI was last measured at around 86 and falling. When the economy is strong, that figure easily rises above 100. In the depths of deep recessions it can hit as low as around 50. So the CCI right now looks fairly lukewarm.

So, confidence is not bad, but it does not seem to explain the huge run-up in home prices. Yes, low supply is a factor, but only if there is sufficient demand. Cheap credit explains a lot of it; and relatively cheap credit is a huge driver when confidence is high. But I think there is more to it right now than just confidence and cheap credit.

For people looking for a place to live, perhaps it is fear of getting priced out of the market that keeps demand high. Low rates give them the wherewithal to act on their fear. And for people with money to invest, greed is fuelling rampant speculation (e.g. condos).

So, is it possible that right now we have both greed and fear acting on the market simultaneously, rather than in a binary fashion as we are used to? Just asking.

#75 poco on 06.20.11 at 10:27 am

#21-Debtisforever
found it—-i think the realtor better put on his glasses—built in 1947 but “shows like new”

http://www.realtor.ca/propertyDetails.aspx?propertyId=10815942&PidKey=381754437

way out of my price range

#76 enlightened on 06.20.11 at 10:53 am

#59 Macrath
“Debt is accumulating at an astonishing rate. When do the lenders lock the free money vault?”

Great question – apparently not this week – I receive an offer from Mastercard to increase the limit on my CC from $7800 to $11,500……..! And I’m a student – who works p/t retail…….
Mind you – I have maintained a stellar credit rating over the years….but I can’t guess as to when it ends either – sometimes I wish I was wired such that I could max everything out. out-Jones the neighbours, travel etc and then declare bankrupcty – alas – that dang personal responsibility thing gets me every time.

#77 Contrarian on 06.20.11 at 11:02 am

>>Turns out papa has not declared any of 20 years’ worth of interest on his Canadian taxes, and now fears losing a quarter of his wealth to the CRA.

Wow… so much sympathy from me lost in that one sentence.

#78 pulse on 06.20.11 at 11:10 am

Tragic, indeed.

Today, I wear a hat that commemorates Canadians’ sacrifice at Juno Beach.

Today, the psychopaths’ tools drop bombs on Libyan women and children, in my country’s name (under cover of NATO) far beyond the mandate of the pertinent United Nations resolution.

Today, I see greed, double dealing and corruption rewarded at every turn.

It is time to stop measuring our wealth in dishonest weights and measures. It is time to scatter the illusions we are presented with. This ilk of Wizards will do ANYTHING to keep the Ponzi system of debt alive.

I trust Her Majesty’s loyal representatives will find room for the subjects’ shelter and nutrition in the midst of the obfuscations.

28. (1) The Minister may, by notice in writing, at any time allocate any portion of the amount applicable under section 27 ($300,000,000) to any approved mortgage insurer in order to support the efficient functioning of the housing finance market and the stability of the financial system in Canada and to mitigate the risks to Her Majesty that arise from the provision of mortgage or hypothecary insurance protection under this Act.

( http://www.parl.gc.ca/HousePublications/Publication.aspx?Language=E&Mode=1&DocId=5088345&File=143#38 )

Today, I weep.

#79 Utopia on 06.20.11 at 11:15 am

#66 disciple on 06.20.11 at 9:35 am

You are right. The media is awaiting a decision on the Greek Government passing into law new austerity measures. So is the European Central Bank, the Germans, the IMF and most of the rest of the planet.

It will be a long wait. Even if the laws are passed they will fail.

That is a very weak government there now though. The populace is clearly fed up and are unwilling to grant foreign banks ownership over national assets and treasures.

What Greeks demand is the resignation of the leadership, not cooperation with demands imposed from New York or Berlin, from the IMF or ECB. They are incensed at the very crude idea of turning over Sovereign Islands to foreign banks as they know this will still not eliminate their debts. Only forestall the inevitable.

I am certain beyond doubt that the public will demand (and prefer) default over a further loss of sovereignty. And lets be clear, default is a Greek tradition. They have done it many times in the past already.

Once more is no skin off anyones ass because the country has always come back from the brink and lived to fight another battle. This time is no different.

Noted economist and Harvard University professor Niall Ferguson agrees. He states that the odds of a Greek default are literally 100% and he also points to the long history of that nation walking away from it’s obligations and it’s creditors.

http://www.goldalert.com/2011/06/100-chance-of-greek-default-says-niall-ferguson/

And here is a quote from Professor Kenneth Rogoth of Harvard University, one of the worlds best known Economic Historians. In this New York Times article of December 18th 2009, He states…….

“There’s a serious chance Greece will default. Most people don’t realize that this is a tradition in that country. Greece has been in default for a substantial amount of its modern history as an independent country. Even if the IMF steps in, they won’t do so until the crisis actually blows up.”

Please see the full article below. It may be almost 16 months out of date but it reads like it was written yesterday. I encourage everyone to read his related predictions as well regarding future taxation in the US, commodities and investments. All written before events actually occurred.

You may recall that the issue of a China real estate bubble has really only met the ink and paper of the media in the last few weeks. In a big way.

Yet here is Professor Rogoff warning us of a China bubble long before the idea was even a mote in the minds of most people. Once you begin to read his work and that of co-author Carmen Reinhart you will become a convert to the school of Economics history. Guaranteed.

http://online.wsj.com/article/SB10001424052748703323704574602030789251824.html

#80 Stevermt on 06.20.11 at 11:15 am

Someone in a recent post mentioned the ”
black swans” and proceeded to give a list of “knowns” ie Greece, Japan,etc, etc.
the true “Black Swan” that might trigger the next leg down will likely be an “unknown unknown”…something that nobody saw coming, but will exclaim afterwards that we knew that that “unknown” had the possibility of taking place. Many of these events might normally be just inert, but in this case might have profound consequences. That is what defines them as Black Swans.

#81 pulse on 06.20.11 at 11:15 am

oops!

Above should be $300,000,000,000.00

(soon to be trillion anyway)

#82 Hoof - Hearted on 06.20.11 at 11:18 am

#28 Nostradamus Le Mad Vlad

A few years ago I fello on anothe rblog takd about the depopulation of the rural areas as part of a “plan”.

I watched a documentary which explained the insidious way this is happening.

Texas (aka Don’t mess with Texas ) appesr to be being raped by foreign interests. They built this toll super highway owned by Spanish interests and hav enot included off ramps to small towns

Extrapolating this, it appears they want to concentrate people into cites like a concentration camp. This is whats going on,in a so called democracy and free market.

Concentrate people, make them debt slaves, isn’t that what is going on.

They have allied themselves with environmental groups, who, it appears are quite Malthusian and consider people as cancers to the planet and have their own ideas of how many people should be on earth.(ie we less than 1 Billion)

Via this alliance, all sorts of green agendas pop up, restore nature back to land…..all these seemingly divergent views converge to herd us sheep into little pens called 500 sq ft. condos. One sees maps that show before and after how much of the uS will be returned back to nature…..then I suppose Monsanto will be one of few farmers left.

IMHO, this is exactly what we see in BC, Campbell did a bilderberg by selling us out and imposing massive infrastructure owned by these shadow gov’ts. Translink is the biggest of the scams imposed.

#83 vyw on 06.20.11 at 11:35 am

The graph shows prices of around $770K in 2011. If this is 7X rental, then rental is $110K or $9000 a month? Sounds kind of high.
One other thing, the trend line should be influenced by interest rates. From 2000 – 2008, the interest rates were low; from 2008 – ?? they are ultra-low. Therefore the trend line should be steeper.

Correction of 23% to reach the long-time trend of 600K in 2014? Sounds a bit low. SFHs in Vancouver will be fewer in numbers because of land prices. I’m still going with another leg up (due to under-supply) – 30% for SFH, a peak in 9 months (Mar 2012) and then 30% correction over the next 2 years to Mar 2014. The condos are already starting to show weakness and a decline could start at any time due to over-supply.

#84 Sean on 06.20.11 at 11:35 am

Can you please help explain this report? How do sales numbers keep going up at such huge percentages?

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/daily-mix/toronto-condo-sales-set-may-record/article2067668/

#85 BPOE on 06.20.11 at 11:39 am

PARTY LIKE ITS 08
Oh baby! Things are looking great folks with the world crumbling and the last bastion of safety gold and Vancouver. You see folks this is why Vancouver returned 25%! That’s right 25% in one year. On a 2 million dollar house that’s 500 GRAND and that’s a FACT. Some good news for the naysayers. Last time Vancouver lost the cup real estate plummted 25% before soaring to new highs. Different world now but Vancouver is all about long term. You have up months and down months but long term a million for a tear down looks dirt cheap. Canadians have 1.5 trillion in debt and will be mopped up. Big boys taking over folks. Canadians get out of the way. The renters had their fun rioting but Vancouver powers onward. I look forward to Canadians bailing so the PROJECT can be completed. Going much much higher. Stay tuned for future news from the Government outlying the PLAN. One final note those July interest rates going up – Ain’t happening

#86 Devore on 06.20.11 at 11:52 am

Most of it he sent back to the old country, because of the great interest he could earn in an Athens bank account (guess why?). So now the family’s life savings (about 900,000 euros) sit behind some Corinthian pillars on a street where cops and protesters are bashing heads.

Spoken like a true Greek. Thought he was getting something for nothing. Thought he was smarter than everyone else. Now he’s about to find out where all the money for the party came from, like the rest of the Greeks.

#87 Devore on 06.20.11 at 11:56 am

#47 Love this Blog

I think it’s pretty clear it’s a mistake, unless I’m missing something. You are saying jobs pay less, housing and cost of living is more expensive (if you can find jobs, your words). Plus, by moving you lose the employer’s share of RRSP’s? How could this be a good move? Or was the post made tongue in cheek?

Yeah, but you don’t have to shovel snow, clearly makes decreased income, decreased benefits and decreased standard of living totally worth it.

#88 eaglebay on 06.20.11 at 12:04 pm

China and commodities, growth potential.

http://business.financialpost.com/2011/06/20/resource-companies-bet-on-china-boom-not-roubini-gloom/

India and commodities, growth potential.

http://www.financialpost.com/entrepreneur/Indian+market+matures/4973179/story.html

#89 Stevermt on 06.20.11 at 12:10 pm

Utopia…great post about Elliot wave theory #30..cool stuff..your earlier post was good too #26…

also I think Kimi wasn’t referring to passing of the wind..just sayin. :)

#90 Chaos on 06.20.11 at 12:11 pm

I think that the CRA would decide that Zorba owes them a schwack of money whether or not the Greek bank goes pita up.

I strongly believe that if the CRA ever comes into evidence of tax evasion that they will hound Zorba into the grave.

Talk about being caught between a rock and a sharp knife.

Greed immediately follows Greece in the dictionary.

The irony cuts like a knife.

#91 Genghis on 06.20.11 at 12:26 pm

Mark Carney’s tales of woe

In today’s Ottawa Citizen

http://www.ottawacitizen.com/business/Mark+Carney+tales/4967539/story.html

#92 kenken on 06.20.11 at 12:27 pm

Seems Toronto and GTA are trying to catch up with the madness of Vancouver!

http://www.torontorealestateboard.com/consumer_info/market_news/news2011/pdf/nr_mid_month_0611.pdf

#93 Alan on 06.20.11 at 12:33 pm

Garth,

Any good advisor would have suggested that one of the options would have been to wire-transfer money out of the Greek bank in Euros to another country. -Not repatriate the money to Canada. Silly Fool

With regards to real estate tumbling, I say if the Greek debt crisis blows up then real estate may be on of the few asset classes that will fair better than any financial asset ( stocks and bonds) especially income producing and you are not underwater.

Any ethical advisor does not assist tax evasion. — Garth

#94 Victor on 06.20.11 at 12:36 pm

This just in; F says Canadian real estate is just peachy so no need to tinker again with our mortgage rules.

http://business.financialpost.com/2011/06/20/no-need-to-tighten-mortgage-rules-further-flaherty/

#95 Timing is Everything on 06.20.11 at 12:40 pm

Off topic…Gas in Victoria at 111.9 at the mo’
Nice small local war going on as of late…Same price as Calgary. Off course it will all ‘balance’ out over time.

#96 disciple on 06.20.11 at 12:48 pm

#79 Utopia…
Brilliant! Thank you. I understand now why Greece was targeted by the IMF – because of their history as an independent…IMF has some loose ends to tie before the final great and terrible war…
Unlike you perhaps, I believe that the central bankers have unlimited power due to their successful application of mass mind control, and for this reason, I believe they will likely win the Greek battle. But I hope I’m wrong…

#349 Lost the taste for RE…last post yesterday!
I finally got through all the comments (It’s 1:29pm) and got to your reply. I have never seen literally abandoned houses within a subdivision of cookie-cutter SFH’s before. I’m actually moving into a house that is beside one such house. Your moniker describes my feeling exactly: I too have lost the taste for RE, what happens when more people do as well?

#97 zombiedelight on 06.20.11 at 1:04 pm

BPOE
The renters had their fun rioting but Vancouver powers onward.

Realtors and renters riotin, ahah
Did you riot good Bpoe? Set a car on fire then?

#98 jess on 06.20.11 at 1:13 pm

accounting team will make your profits “dutch”
see Video
Accounting Tricks
Four strategies that American companies use to reduce their taxes.
==========
Double down
But Nobody Pays That
Companies Push for Tax Break on Foreign Cash
new york times
==

insider trading laws don’t apply to members of Congress…???
========================
Although the law forbade the use of repatriated funds directly for executive compensation or stock buybacks, companies found plenty of ways around it. “Fungibility is one of my favorite words,” Mr. Schwartz said.

Chapter 4: “Single Sales Factor” – The Great American Jobs Scam …File Format: PDF/Adobe Acrobat
“Single Sales Factor” and the Corporate Assault on the Income Tax … The theory behind SSF says that if your state adopts a tax formula based on the single …
http://www.greatamericanjobsscam.com/Chapters/Chapter4.pdf – Similar

#99 doctore on 06.20.11 at 1:28 pm

I have wondered something. Why do people go onto sites like this or others, looking for some sort of divine help in their situations? This is simply a blog to educate and share ideas not for some prophet to help all those out of their dilemmas. They got themselves in, they will have to get themselves out. If a person were to try and fix all the financial problems out there I think it would get a tad overwhelming.

#100 Rob now in Nova Scotia on 06.20.11 at 1:34 pm

I know how the Greek father can resolve his issue: he needs to wire the money to a Swiss bank. Not UBS or any of the big banks but a small Kantonalbank. Opening an account is just as easy as it is here but you have to go there to open it.

#101 betamax on 06.20.11 at 1:53 pm

#53 BlorgDorg: “I was on Granville St. during the riot in Vancouver last week and the air was decidedly not one of anarchy or random violence, but rather spoiled brats with no regard for property or community.”

Exactly. Spoiled brats in $200 hockey jerseys engaging in vandalism for the simple reason that they thought they could get away with it. I hope many are identified, charged and end up with a criminal record that haunts them for the rest of their days.

#102 betamax on 06.20.11 at 1:56 pm

#8 The InvestorsFriend: “Market apparently did not get memo that defaults by Greek banks are nigh.”

The market has been tanking for the last 6 weeks in anticipation…recent news is just further confirmation.

#103 Canuck Abroad on 06.20.11 at 2:03 pm

Garth, are you absolutely sure real estate in Toronto will correct? Like, really, really sure? I know logically it should, and I know I predicted yesterday a retracement to 2002-2003 prices, which was fun and all, but I have just got off the mls website and am utterly gutted at what a house will cost me if I chose to buy. Crappy little 3 bedrooms with one of the bedrooms the size of a large closet for $800k+. There is a house for sale in Leaside, to be completed Nov 2011, and they are asking over a million, and two of the three bedrooms are only 7 feet wide. Huh?

#104 Herb on 06.20.11 at 2:05 pm

“… I said helpfully, you’re screwed.” – Garth

Hope you also advised him to get a tax lawyer to negotiate voluntary disclosure and a settlement with the revenooers on behalf of an anonymous client. If he acts before CRA catches on to him, he won’t have any legal problems and might get away with paying cents on the dollar.

Brian Mulroney showed us how it’s done in solving his tax problem with Schreiber’s money.

#105 Canuck Abroad on 06.20.11 at 2:07 pm

Further to my previous message, I have attached the link. Seriously, 7 foot wide bedrooms!!!

http://www.realtor.ca/propertyDetails.aspx?propertyId=10656726&PidKey=-826360866

#106 Timing is Everything on 06.20.11 at 2:13 pm

‘Reversion to the Mean’ and ‘Fear and Greed’ and the Future….and some math.

“My point is that, when financial experts use RTM, they should say that it’s an attempt to model investor behaviour.”

Remember…a house has turned into an ‘investment’ (investor behaviour perhaps)…and so it goes.

http://www.financialwebring.org/gummy-stuff/RTM.htm

http://tinyurl.com/3usased
————————————————————-
Double sno-cone tonight…

#107 Brad in Cowtown on 06.20.11 at 2:21 pm

You should give free books to those who say no correction this year (if they are proven correct). Most of your readers are doomers anyway, so you won’t be giving away too many freebies that way…

A few thoughts:
1) I’m tired of people saying rates need to rise for a correction to happen in Canadian housing. Rates don’t need to be a cataylst (as they weren’t in the U.S. prior to their collapse).

2) Perception can, and likely will, take many more years to shift enough for average prices to fall in a material way. And during that time, people will have plenty of time to get their debt back to manageable levels.

3) Debt is 150% of income now. So what? There is no evidence to suggest people are failing to service that debt in a material way. Sure, mortgage defaults are rising. Of course they are. There are more mortgages out there now. The home ownership rate has risen to 70% recently, so of course the number of defaults will also rise.

4) Politicians are all about self preservation. They care nothing about “doing the right thing.” That means they will push the problems into the future as long as they possibly can. So the doomers, like me, can keep predicting hard times until we’re blue in the face… fact is our predictions will be early, and likely early by many years.

5) Debt to income ratio is the highest it’s ever been. True. Debt to rent ratio is the highest it’s ever been. True. Home ownership rate is the highest it’s ever been. True. BUT, why is it so ridiculous to say those ratios are ridiculously high, without first considering if maybe those ratios were simply ridiculously low for so many years?

Is a significant possible in most major markets, especially Vancouver and Toronto? Yes.
Probable? Sure.
Imminent?! Definitely NOT.

#108 Midas on 06.20.11 at 2:26 pm

CMHC: The Canadian Moral Hazard Corporation:

http://www.mises.ca/posts/articles/the-canadian-moral-hazard-corporation/

“In comparison to Fannie Mae though, the prognosis of the CMHC is notably worse. “

#109 VanLarry on 06.20.11 at 2:33 pm

That chart is useful.

Now just to remind people of bubbles, here’s the typical bubble chart done by Dr. Jean-Paul Rodrigue of Hofstra University.

http://3.bp.blogspot.com/_9ZzZquaXrR8/TGVCk8Aca-I/AAAAAAAAGJc/ksuuLN2zafA/s640/BubblePsychology.png

We’re almost there.

#110 Canuck Abroad on 06.20.11 at 2:35 pm

Mish has some charts that show the rise and fall of US housing prices and discusses when the US market might end its decline. Useful to apply to the Canadian situation.

http://globaleconomicanalysis.blogspot.com/2011/06/when-was-housing-peak-and-how-far-to.html

#111 AG Sage on 06.20.11 at 2:38 pm

>#5 Mikey the Realtor on 06.19.11 at 10:01 pm
>Nowhere to invest but RE

Natural gas is historically low.

>#100 Rob now in Nova Scotia on 06.20.11 at 1:34 pm

The Swiss are getting careful, it’s not as easy as it used to be. (yes, we have a Swiss bank account.)

#112 BrianT on 06.20.11 at 2:38 pm

#79Utopia-The Greek population knows the score at this point (they probably wouldn’t if the internet wasn’t around). Giving away all their assets to grifters is absolutely the worst thing the country could do-if they go along with this “austerity plan” the country of Greece is toast. Hard to say what will happen but the only way out for the country is a total default as soon as possible IMO. After the dust settles, that might be the time to consider selling valuable assets if absolutely necessary, but no action can clean up their balance sheet as effectively as an immediate default-the other possible option is borrow more funds with no strings attached. Unfortunately all their leaders are purchased at this point so it should be interesting to say the least.

#113 Azza4 on 06.20.11 at 2:46 pm

Mortgage Giants Wells Fargo and Bank of America Opt Out of Reverse Mortgage Business. Where did I hear that our home is not a retirement plan?

Read more:
http://moneyland.time.com/2011/06/20/mortgage-giants-wells-fargo-and-bank-of-america-opt-out-of-reverse-mortgage-business/

#114 Hoof - Hearted on 06.20.11 at 2:55 pm

Greece?

Gov’ts are rapacious re taxes..,

Via Late David ingram….US has apparently implimented a policy that if you(non US citizen) stay for over 200 days TOTAL over a few years, your GLOBAL income is taxed by US as if you were a US citizen….

Greece was targetted because it was small, and a head on a platter ‘message” for the rest of Europe like Count Vlad in Romania used to do.

However, Bilderbergs never counted on the Golem of democracy, rooted in Greece, biting back and sending POSITIVE shock waves of F8ck off to Banksters….the revolution is starting…much like how much abuse can a dog take till it BITES back .

I say Economic war crimes are no different than murder…their is a connection re crimes against humanity….2 degrees of separation.

A few bankers tired as such..even if simply given life sentences…….will send a message long overdue for past 300 + years since Rothschilds indentured the world…

Absolute power corrupts absolutely……and within that is arrogance and blinkered tunnel vision…their downfall in not seeing the obvious .

#115 JohnnyBGood on 06.20.11 at 3:13 pm

#30 Utopia

Stock market crashes do not cause depressions, they merely presage them. Even Prechter says so, if you read his books and reports carefully–as I have.

Stock markets are the most sensitive barometers of sentiment and liquidity. Changes in both are manifested in the stock markets before the economy. This is why we have the conventional wisdom that the markets lead the economy.

Don’t put too much faith in Elliot Waves. I’ve studied EW for a few years now, and I find their predictive ability lacklustre to say the least. Even Prechter, the all-time EW champion and guru relies far more on various other technical and sentiment readings than he does on Elliot Waves. Lately, he’s even been focusing more on cycles analysis as his EW-based forecasts have all but discredited him. And his overall forecasting record sucks. Believe me, I’ve followed him closely. Over the last three years he’s made bad call after bad call.

[Note: I think Prechter is a very smart and courageous guy. And I trust his intentions (if not his forecasts) more than most because his business is not based on whether markets go up or down, but simply on being right on which direction they take, and when, and by how much.]

EW is a sort of sub-set of Socionomics, which, formulated under various names by many pioneers, combines psychology with market mechanics. They either incorporate or completely eschew efficient market theory and other exogenous-cause-based theories.

Prechter says markets are endogenously regulated rather than exogenously regulated. Sentiment leads the economy, rather than the other way around. I find there is some merit to this thesis, but if you ask the EW people what does cause changes in sentiment, they have no answer. A theory lacking such a fundamental foundation has little value.

Also, the E Wave model includes so many patterns and contingencies that their actual predictive power trends toward no better than 50/50, in my opinion. Also, while E Wave patterns are supposed to predict market action, in reality EW technicians continuously massage or change their E Wave counts to suit what’a already happened, instead of what will happen. You don’t need E Waves to be right about whether the market will go up or down half the time.

From my own research, what Prechter calls sentiment is usually just liquidity. Jens O. Parsons wrote a great little book on monetary inflation called “The Death of Money” in which he shows the best predictor of stock market action is monetary inflation/deflation. It’s not the only factor, of course, but a major one, if not the biggest one.

The reason the stock markets are the most sensitive barometer is because stocks are so liquid. When new money is created, one of the first places it typically goes is the stock markets because it is so easy to buy and sell stocks. The money then filters into the economy where it can be used for expansion (not so much right now, but historically this has been typical). Therefore, you can understand why liquidity can sometimes be confused with sentiment. And why it can appear as though stock market crashes cause depressions.

#116 disciple on 06.20.11 at 3:22 pm

#114 Hoof-Hearted…
Your passion for true freedom is genuinely touching and I agree with what you are selling, but in the ascension to a higher consciousness one cannot continue to blame the Red-shields or the banksters. These are only front-men for your real rulers, convenient targets as I like to say…
Humanity has been struggling with the 5% of its psychopathic nature since the beginning of the reign of the ancient sea-kings many thousands of years ago after the last global natural disaster. (Take a look at the circular shape of Hudson’s Bay when you have a minute)

The problem is with the human mind which allows the evil mechanizations to continue. Control your greed and conquer your fear and collectively WE will win…the problem at the present is just that basic economic truth hasn’t gotten to all of us…yet.

#117 BrianT on 06.20.11 at 3:25 pm

#108Big-Yes-right now we have a very impressive list of eventual defaults:

1.Greece
2.Portugal
3.Ireland
4.Italy
5.Spain
6.USA (maybe not)

The plan is to impose “austerity” on every one of these countries listed (i.e. gut them)-should be interesting.

#118 JohnnyBGood on 06.20.11 at 3:29 pm

Correction: The book I mentioned in my previous comment is called “Dying of Money” by Jens O. Parsson. An oldie, but goody.

#119 bigrider on 06.20.11 at 3:36 pm

Honestly Garth maybe I should take your advice you gave me a while back and get some new friends.

I am well connected with builders, many RE agents have several contacts on the mortgage side of the business, I know alot of small infill builders and have witnessed many infill builds in my neighborhood.

No one yet in the above agree that housing prices, sales or action is showing any signs of capitulation much to my frustration. Massive homes going up on larger infill lots in my older neighborhood in the suburban part of GTA are sold before they are finished.

I won’t a correction (crash even better) so bad I would pay for it. I am thinking of buying a condo and a townhome simply to cause such correction..you know Murphy’s Law.

Yes I know, no ‘ paucity ‘ but neither did Jesus when he entered the temple of money changers..LOL

I feel like I’m in the “twilight” zone.

#120 Nostradamus Le Mad Vlad on 06.20.11 at 4:14 pm

#23 yukon don — “Good jobs aren’t in the plan” — Correct. They have gone overseas while NAmerica becomes a service / drug based economy. We can’t all be drug dealers, pushers etc., so we can’t afford McMansions (unless being in debt for life is what one chooses).

#59 Macrath — “When do the lenders lock the free money vault?”

As long as politicos / banxters continue to make excuses to keep QE going, they are open for business 24/7/365, and suckers sink quickly to the bottom.

#80 Stevermt — “. . . the true “Black Swan” that might trigger the next leg down will likely be an “unknown unknown” — See next response to #82 Hoof – Hearted.

#82 Hoof – Hearted — “. . . it appears they want to concentrate people into cites like a concentration camp.”

Aha! You have caught on! Combined with the link I posted to Chaos (#28), this is one of the three things that can (or maybe will) happen with enormous speed, to leave humanity shaking their heads as to what’s happening, and why is it happening so quickly.

Using China’s and the US’s HAARP machines, one can destabilize the three ‘quake fault lines which meet underneath Tokyo and help kick start the volcanoes thruout Japan, and the country sinks. Successful depop.

The other HAARP triggers the SAF and NMF within days of each other. By now, most people are basket cases, not knowing what will happen next, nor where it will happen.

You are correct. Depop. is well underway, as are the natural changes in cycles and 2016 may be the end of the American Empire, as all empires finish. Good post.

#108 TheBigLebowski — “. . . a Corporatist/Fascist government system does.” — Precisely what has been put in place by TPTB in NAmerica now, with Obama and Harper, which is why this will end, whether the elite like it or not.

#114 Hoof – Hearted — Another exc. post. Iceland and Greece were the first two. Iceland fought back and won, and it looks as if the Greeks are up for a fight as well.

#121 Incubus on 06.20.11 at 4:24 pm

In vancouver these houses would sell for $1 000 000

http://www.businessinsider.com/cheap-detroit-homes-2011-6

#122 Burnt Norton on 06.20.11 at 4:29 pm

Ya you guys are right. Riot in Van must mean that it’s an awful city. Better stay away. We’ll cope somehow.

#123 From Mississauga with Love on 06.20.11 at 4:36 pm

Can anyone explain to me the rationale behind the rise in the mid-month stats (both volume and ASP, but mainly volume) for June? Who’s buying? In W19, and surrounding areas, that I track in Mississauga, sales are really slow. Granted, prices of some homes are ridiculous, but I have been saying prices are ridiculous for two years now yet they keep going up.
But seriously, the volume is really anemic. Which areas in the GTA are seeing the sales? The TREB report shows the 905 hot as hell as well. But where exactly?

Does anyone know where I can find Mississauga-only stats?

#124 SMOKING MAN on 06.20.11 at 4:41 pm

Garth Said:
Irrelevant comments. Real estate markets thrive more on confidence than cheap financing (which we already have). If rates do not rise, it will be due to a worsening in economic and financial conditions. That is an anathema to housing. — Garth
…………………………………………………………..

Ya Garth Just like it was in the gloom and doom days of early 2009. No confidence rates fell, hello boom times.

When the world goes into the toilet, our rates will drop and they have been droping, and the price of real estate in Canada will have another massive spike. When the US dollar tanks Commodity stocks will skyrocket.

Garth I am not a pimple faced kid that worships you, I a drunking phyco that is never wrong when it comes to the markets, go back a month ago on the blog I told everyone I was shorting. It’s been a good month.

#125 SMOKING MAN on 06.20.11 at 4:48 pm

#124 From Mississauga with Love on 06.20.11 at 4:36 pm

Tip
In toronto between 1st and 43 st south of lake shore, You can’t lose way under valued vs the city, Buy a bugalow on a fifty foot lot knok it down and build two and make 100% return after you pay everyone off. Better that 10% return with a balanced protfolio don’t ya think.

And remember if you use leverage your return will be closer to 500%

That’s how the guys with the big boats do it dude.

#126 Cap'n Tibbs on 06.20.11 at 4:50 pm

[T]he family’s life savings (about 900,000 euros) sit (in Greece).

Get a wire transfer going now [but] papa has not declared any of 20 years’ worth of interest on his Canadian taxes, and now fears losing a quarter of his wealth to the CRA.

SO? 75% of 900K sure beats 0% of 900K

The Eruo will face greater downward pressure the more Greece is supported by the EU. If the EU finally smarts up and kicks the Grecians out then there’s less pressure – no more throwing money into the rescue black-hole. However in this case papa’s funds on deposit will be revalued in Drachmas. WAG on the value at that point is way less than 900K * . 75 Euros of purchasing power.

Papa’s got to get to Greece, withdraw enough or all of those funds in Euros and 1) bury them in a coffee can under some ruins and bring back $9999 in Canadian cash over the course of many, many trips. Praying all the while the Euro doesn’t drop like a stone due to any future rescue of the PIIGS 2) Buy a 900k Euro yacht and sail to the Atlantic’s East Coast and sell. Praying all the while not to sink, drown, be taken hostage by pirates, etc. 3) sit on his hands while his savings are converted to worthless Drachmas. Praying all the while that the funds will ever be allowed to leave the country 4) bite the bullet and pay the tax NOW.

Every single story of high finance in the post 2008 world should have “YOU CAN’T CHEAT AN HONEST MAN” as the byline.

#127 Cato on 06.20.11 at 4:59 pm

CRA is not to be trifled with, our taxman has powers not seen in many other countries. Only viable way out for Greek family is hire tax lawyer, file a voluntary disclosure and deal with it. Provided there isn’t a history of evasion they will find alot more leniency than waiting for a knock on the door. Or screw the country and transfer money to a swiss bank and plan an overseas retirement.

End of the day someone has to pay for the excesses of the past decade. Greece is the stomping grounds for the EU & IMF in preparation for a much larger economic event. In a democracy austerity will never work, so they either need to strip democracy of its freedoms or go debt monetization route and stealth default on the debt. I’d be betting on the latter and EU has to collapse as a result, its the only way each country can once again have central authority over its currency and turn on the printing presses.

Europe’s troubles should be positive for the USD in the short term but even the US will hit the wall in a spectacular fashion at some point.

Simple fact is the world economy is just fine, its the west that is out of balance. We all feel entitled to our middle class lifestyles , but economists forget we’d need another 12 planets to give everyone a shot at a life most Canadians take for granted. Turns out many other people on the planet think our way of life is pretty good and they now want a shot at it. Something has to give, there aren’t enough resources to go around so the tug of war now begins. The property bubble bursting is just the start to a larger financial nightmare for many Canadians, but for others times will never have been better. It might not be fair, but its reality.

#128 SMOKING MAN on 06.20.11 at 5:00 pm

I don’t know why Canadians can’t come to grips with the fact that Vancouver will become Hong Kong west.

Do any of you have any idea of what a parking spot costs in Hong Kong.

Either buy or get out dodge, it is what it is.

#129 Bobby on 06.20.11 at 5:02 pm

Downsizing of Ottawa bureaucracy has started with a lot more to come.
Will start looking at Ottawa condos now. Will be some good buys out there shortly. Some of the units I have looked at online have been for sale for months.
No need to rush into anything.

#130 BrianT on 06.20.11 at 5:14 pm

#123Incubus-Yes the average list price for a motown house is $13000 but when factor in the ridiculous property tax load and energy costs the average Detroit house is worthless at this point.

#131 Hoof - Hearted on 06.20.11 at 5:17 pm

#117 disciple

I used to be one of the 1st to laugh at conspiracy theories….

However, as per the scientific model, one keeps an open mind and does a continual review of the facts/evidence…and in light of this creates one’s own personal postulations.

I had no idea of what FEDERAL RESERVE…Fractional Reserve etc. was, until other “messengers” exposed the Emperors who had no clothes, (including Warren Buffet…)not even on the lay away plan.

Life is not that complex if one’s terms of reference are basic humanity and decency..why wouldn’t we want a level of equality regardless of race, religion , creed, etc ?

I could never have imagined the depth of depravity that lurks in and amongst the elite…till I tuned in and saw it all unfold….its like a master plan.

However, such types fit the extrapolated model on what is really going on.

IMHO…economic war terrorist by inbred elites…F*ck em…lets rock and roll….end of discussion.(and no I consideer myself small “c” conservative..

The ” liberals” are simply double -dipping taxpayer $$$ whores/false prophets who would sell out anyone to foster their retarded beliefs.)

I am marching forward to kick their ass…how about you?

#132 BrianT on 06.20.11 at 5:19 pm

#121Big-They are distributing t-shirts in Greece with Papandreou’s (Greek prime minister) face on them-the logo is Goldman Sachs Employee of the Year.

#133 Hoof - Hearted on 06.20.11 at 5:26 pm

#122 Nostradamus Le Mad Vlad

Anything left ” rural ” can effectively be a major threat.

It’d like VietNam…..the indigenous patriots kicked the US invaders ass.

Rural parties of any nationality are not raised as pussies…they are very tough and focussed….very resourceful..like the Vietnamese and by de – facto inference can SHOOT.

Yeah, I know thse sounds Orwellian…but it is a sloooowwwww process to depopulate.

They would be factions no different than Al Qaida…ie the USSR lost a war on Afghani’s own turf ..USSR was fish out of water and got its ass kicked .

Gov’ts have gone Wall Steet…is your locale in their best interest in a Cost versus Benefit analysis?

You have lost it. — Garth

#134 jess on 06.20.11 at 5:34 pm

speed meters

The K Computer is packed with computing muscle. It stitches together 68,544 processors, each equipped with eight cores for a total 548,352 electronic brains. At full capacity, it aims to have 640,000 electronic brains. Fujitsu said this would provide the machine with enough horsepower to slash the time required to run a simulation of a beating human heart reacting to new medicine to two days from two years
The system is housed in 672 refrigerator-sized computer racks at Riken’s Advanced Institute for Computational Science in Kobe in western Japan. The machine uses 9.89 megawatts of power, roughly enough electricity to power more than 9,000 homes per year.

===
Formula 1 economics
brought to you by transfer pricing /tax havens:

“The money is often funneled through companies headquartered on the Channel island of Jersey, a place of great discretion and low taxes. According to the study, a number of companies in the Formula One empire that are based in England have taken out large loans at 15 percent interest from the subsidiaries in Jersey. As a result, the companies in Jersey post high earnings, which are only subject to the Channel island’s low tax rates. In return, profits are reduced for the companies registered in Great Britain, which pay higher taxes.”

http://taxjustice.blogspot.com/
===========================
In this column, Johnston addresses several tax
myths, including the economic effects of the Bush tax
cuts, the number of jobs created by targeted tax
benefits, and how Formula One racing will help the
Texas economy.
Close Encounters of the
Tax Myth Kind
By David Cay Johnston
http://taxprof.typepad.com/files/131tn1299.pdf

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

Shenzhen, in Guangdong province.

Now it is making another pioneering move – banning electric bicycles, often referred to as e-bikes, from most of its streets. city has 500,000 e-bike owners.

The ban is for a six-month trial basis, and it could be extended…Last year, The bikes accounted for 15.7 percent of all road accidents in the city in 2010.

“The bicycles are capable of high speeds and there is no registration requirement,” Sun Wei, a traffic management assistant in Luohu district, said.”

…Other cities may follow suit and eventually include fines of 200 yuan per violation.” (china daily)

#135 Steven Rowlandson on 06.20.11 at 5:43 pm

It looks like alot of people need a cast iron stomach to face the unavoidable decline and fall of the real estate market and the grossly inflated prices. But what the hell. If I can suffer through a 49 grand loss on the stock market which was a 100% loss, then real estate investors of all sorts can take a 90% or better hair cut like a man. Losses happen!
The best thing to do is get liquid especially in things that can’t be worth zero and wait. The chance to vultch is sure to come for those who have prepared ahead of time.

#136 randman on 06.20.11 at 5:45 pm

A couple of charts of interest…

http://4.bp.blogspot.com/-6asuBf7HMnk/Tf8lrRDJ4yI/AAAAAAAALoI/hz8wMQtPAww/s1600/history%2Bof%2Bhome%2Bprices.png

http://2.bp.blogspot.com/_nSTO-vZpSgc/S8bRgj7_YBI/AAAAAAAAIOs/AvONuEatjm8/s1600/japan-land-prices-s.png

#137 robert james on 06.20.11 at 6:18 pm

I did you usual dog walk with my dog walking buddies this morning and all three are from South Africa and in the last few days all three of them got e mails from their friends in SA regarding riot in Vancouver.. Lets face it ,,South Africans are a pretty hardened lot when it comes to crime..The old joke is,,if you have a break in in your house you can tell where the bad guy is by just listening for the gun fire from different households in the neighborhood.. Anyway,, these people all asked what the H*ll was going on in Vancouver as they thought Canada was a safe country to live..

#138 Seeker on 06.20.11 at 6:22 pm

Anyways, 4 years later, husband gets transferred to the USA. We sell for 1.2 million dollars. So we only made about $150 000 profit after 4 years of living there….. Sickening. Knowing we undersold our home makes me sick to my stomach and it becomes quite the bitter pill to swallow.

Such a bitter $150,000 pill to swallow, pitiful really, how one can not see the greed in themselves, even after profiting that much in 4 years.

#139 Hoof - Hearted on 06.20.11 at 6:22 pm

You have lost it. — Garth

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

No not really…

Have YOU …..Sir Garth…. have any rural holdings?

We do…since 1974.

Effectively, we get literally ZERO for services, yet the property taxation rate , as per assessment/Mill Rate is TWICE that of urban.

Police? 30 minute drive minimum

Hosptital 30 minute drive minimum

Schools??? most of the closest one have not only been closed but demolished. )

BTW : CARIBOO BC area

Parties that live in such rural areas, often urban expatriates …… are selling due to need for proximity to Health care.

I appreciate your dry wit…but if you ain’t in the same ballpark…what ARE you pitching Garth….?

The olde days are over…..get with the program.

#140 randman on 06.20.11 at 6:35 pm

This is what we get for our tax dollars…..incompotentcy
(damn it, I can’t spell)

City manager did not read 1994 riot report
Vancouver/CKNW(AM980)
Janet Brown | Email news tips to Janet
6/20/2011

Some rather surprising news from Vancouver City Hall in the wake of last week’s riot.
The city manager Penny Ballem says she did not read the report written following the 1994 riot.

“Had you yourself read that Whitelaw Report prior to last week’s riot? No I had not myself.”

Why not?

“If I had to read every single report that was behind a lot of business we do I would never see the light of day.’

Ballem also says a review of what unfolded Wednesday night will be announced shortly.

#141 Timing is Everything on 06.20.11 at 6:41 pm

#95 Timing is Everything – said “Off topic…Gas in Victoria at 111.9 at the mo’….Off course it will all ‘balance’ out over time.”

Well, that didn’t last long…131.9 now…Ha!

#142 TurnerNation on 06.20.11 at 7:03 pm

#82 Hoof – Hearted on 06.20.11 at 11:18 am

Oh hoof hearted…this little map that’s flying around…
:(

Just search Google images for: USA depopulation map

http://tinyurl.com/6dhvn8v

#143 Mikey the Realtor on 06.20.11 at 7:15 pm

Real estate went into a tailspin in 2008. — Garth

Sage – sure, NG is cheap relative to what it was, but fundamental investing has left the building long time ago, now we invest in LNKD and ZIP and look at charts while the world around us is crumbling.

Commodities are the only thing I can say I believe in, more specific to Ag and oil/ng, 7 billion people and growing. We need to eat, we don’t need LNKD or iphones.

#144 Bottoms_Up on 06.20.11 at 7:26 pm

#125 From Mississauga with Love on 06.20.11 at 4:36 pm
————————————————
CMHC statistics:

(you’ll have to look for mississauga in the GTA reports)

http://www.cmhc-schl.gc.ca/en/hoficlincl/homain/stda/index.cfm

#145 trinotuta on 06.20.11 at 7:31 pm

Everything’s fine folks. Housing markets are stable. Nothing to worry about… F said so ;-)

“The reality is that their housing crisis continues, that there’s a danger of a prolonged housing crisis in the United States. That’s not in Canada, and that’s because we regulate, we supervise, we monitor; we have fiscal responsibility in terms of the housing sector in Canada, a very different place,” he said

http://ca.reuters.com/article/domesticNews/idCATRE75J3NI20110620

#146 Nostradamus Le Mad Vlad on 06.20.11 at 7:32 pm


#135 Hoof – Hearted — “It’d [be] like VietNam…..the indigenous patriots kicked the US invaders ass. You have lost it. — Garth”

HH is somewhat correct. The Vietcong knew they were not able to defeat the US forces on the ground or from the air, so they went underground. Because they knew their territory well, they were able to pick the US soldiers off.

No, I have never been to Vietnam, just read stuff thruout the years which shows the US, USSR and now NATO are repeating the same mistake. That is their choice.

#136 jess — “The money is often funneled through companies headquartered on the Channel island of Jersey, . . .”

My brother and I grew up in Jersey (born here). The last tax rate I am aware of was 20% for locals, probably lower for businesses.

A lot of Hollywood, rock ‘n’ roll stars and athletes keep the bulk of their money there. A nice place for a holiday (45 sq. miles), but I don’t want to live there now.
*
Controlled m%m Top 10 things they are not reporting presently; Fukushima “Called “light-water reactors”, this design was not chosen for safety reasons.”; Fukushima Radiation in northern California; Germany Saying adios to nuke power and replacing it with . . .

3:51 clip and 2:04 clip Cyber war between China and the US.

Empty Show of Force “… sending a message to those uppity American serfs what will happen to them if they refuse to send their money to the bankers like Iceland, Egypt, Greece, and [watch this space] are doing!” wrh.com; Quick! Have C-F-H send void, signed cheques to Obama so he can continue the murderous rampage he is on; Defense Secretary Gates warns Congress that they must allow an illegal war to continue; Eisenhower was right “We invent enemies to buy the bombs.”

Debtocracy A 75-min. Greek film; full film here. Made for US$15K; World Debt Is Unpayable The only solution is to collapse the house of cards; 5:16 clip End the Fed! Dr. J. Galbraith (and natural life cycles) will probably do that anyway. Good riddance; Russia “Will Bernanke simply print up a bunch of spendable cash for the Russians the way he did with the Chinese, and will that trigger a Russian frenzy to buy up land and hard assets in the US?” wrh.com; Here’s China; Gold and Silver “Looks like the naked shorts got to be a major embarrassment. So Congress gave them an escape hatch.” wrh.com; BitCoins FF? “Breaking News! A man leaves wallet unattended, it gets stolen. Senate to ban wallets to protect citizens from theft.” 3:03 clip Making a killing from the war; US$18 billion How can anyone lose that kinda money?

Nukes in US “How wonderfully lucky for the nuclear power plant that the levees upriver failed and saved their investment! Anyone living near those failed levees hear any loud bangs?” wrh.com. Recall the convoy headed for Joplin yesterday? Monsanto “Then they are not “wildlife” refuges any more, are they? It’s just another taxpayer-subsidized experimental farm. The goal appears to wipe out all natural food crops to force us into dependence on the owners of the modified gene foods.” wrh.com; Chromebook Apparently, don’t buy one. It’s not all it’s cracked up to be.

#147 Increasing that 1% on 06.20.11 at 7:32 pm

at #120, bigrider “I [want] a correction (crash even better) so bad I would pay for it. I am thinking of buying a condo and a townhome simply to cause such correction..you know Murphy’s Law.”
——————–
Yeeeeah, c’mon bigrider, go for it!!
(Wuh? Don’t people cheer on the big gamblers, on those shows, and stuff, like that Howie Mandel gig and Regis’ thing?)
You’ll be fiiine, no really, seri-ous-el-ly, do-it do-it

#148 Ret on 06.20.11 at 7:33 pm

Re: CRA and offshore holdings.

Why would CRA even find out about the undeclared interest in Greece? Who would inform CRA?

My Greek neighbours own a small, 3-4 unit apartment building there and they have zero problems. They refuse to pay property taxes there as well. “Only an idiot pays property taxes,” they tell me. My other neighbours have one or two condos in China for their parents. No problem doing those deals. Since when did China officials report to Ottawa about Chinese business deals or holdings? What Chinese official would tell a CRA investigator anything? What reliable evidence would the CRA bring to the court case?

Has CRA really got the resources to chase every Canadian tax cheat around the globe? What’s the story?

Bilateral tax treaties. — Garth

#149 Bill Gable on 06.20.11 at 8:04 pm

How is this for total insanity (*how would you feel if you had been paying your mortgage and taxes in this State of the rapidly becoming the USSRA ?)

“A long-delayed federal program aimed at helping hundreds of unemployed Massachusetts homeowners pay their mortgages is finally being launched today, with $61 million earmarked for the state.

The US Department of Housing and Urban Development and the nonprofit NeighborWorks America said the program will provide hundreds of local borrowers with interest-free loans of up to $50,000 over a two-year period. In some cases, the money will not have to be paid back.

The $1 billion national program is expected to benefit 30,000 unemployed homeowners in 27 states and Puerto Rico with financial assistance.”

http://tinyurl.com/3ttkmsr

#150 Timing is Everything on 06.20.11 at 8:16 pm

You have lost it. — Garth

“The limits of conspiracy theories”

Oh ya, Garth, Hillary Clinton is a “shape shifting-reptile.” Just thought I mention it. ;)

http://tinyurl.com/3m6k7rc

————————————————
WRT the Vancouver riot…

Just a thought. What if booze was illegal and pot was legal? Hmmmm…

#151 jess on 06.20.11 at 8:18 pm

http://www.waterloochronicle.ca/news/ghetto
rental ghettos / student housing that is destroying what used to be attractive neighbourhoods.
=================================
“Statistics show that between 2005 and 2008, police were called to Albert a staggering 2, 486 times. Many of those police responses paid for by regional taxpayers — were to control student parties and babysit slobbering drunks. The complaints included 107 calls to report sick or injured people and 266 noise complaints.”(frank etherington -http://universitiesneighbourhood.blogspot.com/2010/05/opinion-on-northdale-frank-etherington.html)
====================================
Block of properties up for sale as residents, landlords oppose bylaw

http://www.therecord.com/news/local/article/550653–block-of-properties-up-for-sale-as-residents-landlords-oppose-bylaw

#152 Mr Buyer on 06.20.11 at 8:49 pm

#129 Cato…I hear this huge rate of consumption of the Canadian middle class thing all of the time. We can sustain our middle class at any level we wish in truth and not many other countries can. We opened our markets to the world and the world with its lower standards of living produced things cheaper than we could. There is no surprise there. We CAN, even now, close our markets, produce our own products to a much higher extent than we do presently and everyone, EVERYONE gets back to work and voila our middle class thrives. We are a very very resource rich country. We could do business with the world on our own terms. It would involve a much stronger military admittedly but that is not all bad, especially if we mandate outfitting that military with CANADIAN made products. A select few have profited wildly from globalization, it is just our bad luck that it is the few with power to implement a vision presently. Yes Canadians consume a great deal of energy but there are few of us with greater distances to commute and a much colder climate to contend with than most. We as a people have sheepishly allowed the degradation of our economy, lifestyle and medical system. Nothing is for free, or at least free turns out to be very expensive. Life is a full contact sport requiring continual effort and attention. People want to be relieved of that burden but find that artificial relief a huge expense. We need to be manufacturing our own goods. We will not be missed as a consumer in the world economy and our resources are required on an ongoing basis. Canadian cars, computers, biotech, high speed rail, fiber optic networks and anything else you can think of. On top of all that we need to get out in front of new technologies and become world leaders. Can we do it? Certainly not buying and selling houses to each other.

#153 Utopia on 06.20.11 at 9:05 pm

#116 JohnnyBGood to #30 Utopia

“Stock market crashes do not cause depressions”
—————————————–
I appreciate your analysis John. That was a good post you left and I agree with much of it. Prechters work fascinates me though. I am a bit like a moth to a flame where his theory comes into play and I think he has many valid points. Using his theory to time markets though is hit and miss and many people who have followed him closely lost out on much of the market run-up over the past two years. He may be correct that a major multi century top is approaching that will bring on one of the biggest credit busts in history but I am not holding my breath. I keep reading his work though for perspective. It is like a holiday for my mind from the bullish happy camp that is equally deluded and cannot fathom that markets do sometimes breakdown altogether. We are deeply immersed in systemic risks now that are so profound I find I cannot rationally ignore Elliot Wave theory without feeling like I am missing an essential piece of the puzzle.

#89 Stevermt. Thanks Steve.
(Yes, I know what Kim really meant. Could not help myself though!)

#113 BrianT wrote…….”Unfortunately all their leaders are purchased at this point so it should be interesting to say the least.”

Sadly you are right Brian. It seems the Greeks have been sold out at the top (by the top and by those entrusted with the interests of the Nation). It is a startling legacy that the Greeks will live with well into the future knowing that their own leadership bet against the country and made profit as the country fell apart. Shocking really. As you mentioned though, the people there are well aware of the betrayal and it is the reason they are demanding the government step down. But the frauds are all so transparent. It is almost as though the crisis in Greece is being manufactured and set up to fail.

#96 disciple responding to Utopia wrote….”Brilliant”
———————————–

Many thanks Disciple. I have come to enjoy your posts too.

#154 HouseBuster on 06.20.11 at 9:22 pm

“Toronto:

We bought our beautiful dream home in Toronto for 1.05 million dollars….Knowing we undersold our home makes me sick to my stomach and it becomes quite the bitter pill to swallow.”
———————————–
Wow! You sound like a whiny [email protected]#$%! WTF!!! You know some people in the world don’t have enough to put food on the table and here you are bitching about not selling your home higher.

Something is definitely wrong with this country!

#155 Hoof - Hearted on 06.20.11 at 9:26 pm

148 Nostradamus Le Mad Vlad..

Thanks for the Back- up….lol

Garth is correct …….say,……90 % of the time.

(aka take it as kudos Sir Garth)

IMHO, reviewing Sir Garth’s blog etc….the vested interests do want a concentrated URBAN enviro.

Then they have sheeple.

Lured by a 0/40 …etc…..oooooo …..Urban living = U-R Mensa candidate……….oooooo save planet oooooooo.

(OMG !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!)

Seriously..think about it.

Condo Hell…stratas internal politics…keeps the strata peasants………….too busy,,,,,,,, so no time about external politics.

At minimum, the de-facto argument holds…

The outlying (rural) areas are remnants of ye olde independence.

I , as an urban dweller, yet with rural holding….. was amazed at how “MacGyver”ish these rural types were….so self – sufficient.

After the non – urban periphery (rural) areas have been exploited, the political whores will find the rural -low vote areas are best attacked via the “sharp pencil”.

aka ooooohhh well, we need to close this school….that
health care facility..etc. etc……I’ve seen this since 1974.

Unless it is a close election , whereby every vote counts..RURAL areas are prime for major fiscal cuts….

#156 geogar on 06.21.11 at 8:37 am

Ambi·dextrous the masseuse. Amphibious the investor. Artemis the first timer. A real epic in the making. Thank you for the postmodern insight. You go dude.!!