The expert

Angela Calla and Greece are connected, of course. It works like this. The Greeks revolt and tell lenders where to put their debt. Sideways. Stock markets sag. Investors freak, sell off, and run to safe bonds. Bond prices soar, forcing yields to crumble. Long mortgage rates dip, and Angela gets hot flashes. It’s positively Darwinian.

Calla’s one of an army of mortgage brokers who specialize in virginal finance. Along with her rapacious colleagues, they target first-time buyers lacking the experience to know when to walk away, or when they’re being lied to. But this lender babe is more audacious than most. Her business card reads, simply, “Mortgage Expert.” And she must be, after all, since she’s got her very own radio program, “The Mortgage Show” on Vancouver’s CKNW, where editorial integrity is sacred, unless you brought your chequebook.

Of course, I don’t mean to pick on one poor beguiling brokeress trying to flip a living. But she makes it so easy, especially since she’s coaching young couples to leap blindly into one of the most bubblicious markets on earth. “If you’re a first-time homebuyer,” she says in a testosterone-laden ad, “get out there and BUY YOUR FIRST HOME.”

But, Angie, what happens when I buy with nothing down and my mortgage renews in five years at twice the monthly payment?

And she says. “Even though rates have nowhere to go but up, upon renewal you will have paid off enough of your mortgage that you should not have payment shock… If you continue to rent, your landlord has every right to raise your rent in accordance with inflation, and you receive no equity.”

Well, so much for the ‘mortgage expert’ stuff.

Horny kids buying a cheap $400,000 condo in Burnaby with 5% down would end up with a mortgage of at least $390,000 after paying off CMHC. At 4% for five years with a 30-year am, they’d have a monthly payment of $1,900. Hey, cries Angie, just like rent! So let’s buy!! Of course, with strata fees and insurance, it comes to about $2,400, but don’t sweat the details. Dammit, we’re building equity here.

Five years later, 2016, mortgage rates have normalized to 7%. The kids have now made $113,133 in mortgage payments, and $144,000 in total payments. And the mortgage amount to be renewed stands at $353,350. WTH? Turns out they coughed up payments totalling $107,350 for interest, fees and taxes – which is $1,789 a month. Just like rent! And they still owe a bundle.

So they renew for another five years at the prevailing rate of 7%, and the monthly payment jumps to $2,300 (plus fees and taxes). And five years later, they still owe $332,000. In other words, to build equity and reduce their debt by less than $60,000 over an entire decade, they spend $306,000, or $2,550 a month. Of course, they could have rented the same place for $1,600 a month, or $192,000, saving $114,000. Even with all that gorgeous equity stripped out, they’d still be $74,000 ahead of the lucky owners who fell for Angela’s considerable charms.

Of course, I can hear the siren song now. ‘Real estate always goes up,’ she whispers into a newly-moist microphone. And the climax: “Despite what you may have heard, real estate is affordable in BC.”

Panting, you cannot stop listening. Simply. Too. Seductive. “The reality is, if you make $30,000 per year, you can own a condo in over a dozen hot municipalities for a payment that will likely be less than your current rent! The property ladder does not start at the top with a million dollar home – the sooner you start, the faster you can move up the ladder.”

Or down. No amount of lipstick and personal lubricant can mask the horror of even a modest crunch in prices when you are an equityless, over-indebted, deflowered property virgin. That hugely expensive amount of real estate net worth you were building up can be wiped away in a matter of weeks, leaving you with all debt, an illiquid property, and endless payments.

And in the Lower Mainland, as in Winnipeg, Saskatoon, Calgary and Toronto, this will happen. It need not be 40%, either. Just a few points down, then a flatlined market (the best case scenario) and the virgins are toast.

In which case Angela moves on. Like to refinancing credit card debt.

“If you have debts (including credit cards, lines of credit, loans)… it’s almost like it never happened! Restructure your mortgage with today’s low rates to include your debts. For the average Canadian who carries $600 a month, if that debt was restructured into a mortgage today, you would save $500 a month.”

You read it here first. Refi a debt load costing you six bills a month by borrowing more money and save five hundred a month. Almost like it never happened!

Damn. I hope the Greeks are reading this.

 

193 comments ↓

#1 Dad on 06.28.11 at 9:12 pm

Son, I want you to know, our basement is always open.

#2 T.O. Bubble Boy on 06.28.11 at 9:15 pm

Don Cherry with Dominion Lending, Doug Gilmour with Monster Mortgage, who’s next?

Maybe Wendel Clark will be the new spokesperson for the CHIP Reverse Mortgage?

#3 LJ on 06.28.11 at 9:17 pm

If homeowners thought that it was safe to get into the water, here come the tax increases. Calgary:

http://www.calgaryherald.com/news/City+budget+could+shock+homeowners/5019735/story.html

9.8% increase for water and sewer
8.7% property tax hike

Plus, whatever H & F have in store for income taxes.

Oh yeah, the Alberta government is running a 3.4 Billion deficit next fiscal year (as a string of numbers =$3,400,000,000.00), so don’t count them out either.

#4 Adam on 06.28.11 at 9:19 pm

Wow. Unbelievable. The problem is the average young person doesn’t understand, no experience.

#5 Hovering on 06.28.11 at 9:20 pm

that does sound pretty seductive..

screw you, i’m going over to Angela’s

(bet she lives in a house owned by her parents)

#6 bcPaul on 06.28.11 at 9:26 pm

Boy, in that video of hers looks like she took a bath in teak deck stain – hope it was water based.

#7 Rocket Boy on 06.28.11 at 9:35 pm

I would first like to express my sadness for the police officer who lost his life in the line of duty today – a 2 year old and a baby only a few weeks old will forever be denied a father because of a puke ass 15 year old kid who was driving without insurance or a license – I would be the first to volunteer and fry that kid in the chair without any hesitation.

(on a lighter note) Here’s something that I found uncanny today – met a client who’s EI has run out – pretty much living on the support of family and friends. I told him to apply for assistance with Ontario Works – in my line of work, its not about losing your house – its about survival –

So, heading home, I turned on the radio and first thing I hear, a glowing report that the unemployment rate actually dropped..from 7.5% to 7.4%…… and I just thought, yeah, because of people have reached their maximum time allowed and now have been cut off – one less person to count. Sadly that must be happening hundreds of times each day to everyday folks.

So, before some in here cheer the destruction of our fellow Canadian citizens – lets remember, we’re all in this together – when all hell breaks loose – and the masses turn violent, all your stored water and food will do little when they seek you out.. the very fabric of this great country is based on the backs of those who want to build a better tomorrow…

#8 squidly77 on 06.28.11 at 9:38 pm

Owners are facing bills of between $77,000 and $189,000 each to pay for repairs to the roof, eaves, balcony and parkade in a building where a one bedroom penthouse suite is currently listed for sale at $317,000

And the screws turn slowly.

#9 Raj on 06.28.11 at 9:39 pm

To All Blog readers,

I would like to thank Garth for educating thousands of readers about
family finances and preventing people from falling into the housing traps.
We all know that sustainability and environments are key issues in 21st centuries.
I would like to see people perception on “ Free Public Transit .The idea is to use gas tax to
fund transit.Please cast your vote on this issue at

http://www.wikiopine.com

Thanks.

#10 Tim on 06.28.11 at 9:41 pm

By what percentage would a condo in Vancouver have to drop in order for it to make sense to buy, given the large outlay for condo fees, taxes, insurance and mortgage interest?

#11 M.M. on 06.28.11 at 9:45 pm

I’ve read almost all your posts. This is the boom-diggity my man. Hit the nail on the R.E. head. One question: Do you think that Real Estate Brokers will be trading in their Beemer Benz or Bentleys for 2004 Corolla’s once the dust has settled?

#12 Raincouver on 06.28.11 at 9:55 pm

I know a couple who have 450 k mortgage, and had to get a co sign on the loan, with 5 percent loan. They said I was crazy to pay rent because I’m not building equity because in 2008, we already crashed so they bought the dip or so they thought.

#13 Debtisforever on 06.28.11 at 9:56 pm

#10-I would say 50%. Why do I say this? I live in a condo where similar units sell for $500k. This is a “fancy place” where every time the people upstairs flush their toilets, it sounds like Niagara Falls in my bedroom (hint-never buy a condo).
Anyway, numbers. I rent this fancy place for $1350/month. If I were to buy the place down the hall with $50k down, 30 years, 3% interest, it would cost $2132 in mortgage. Strata? Another $200. Property tax? Probably $100-$125. So we’re up to $2400/month. Property would have to drop by 50% to be less costly than my rent. Oh, and rates would have to be guaranteed for 30 years. Special assessment when the damn pipe bursts and floods the bedroom? Who knows…I know I won’t be paying for it!

Think I’d rather rent. Maybe forever. After living in one crappy condo after another in this city, I’ve concluded that it’s just not worth it.

#14 mid-Ontario on 06.28.11 at 9:57 pm

Greece will default.
Consensus is 100%.
The population will refuse to be squeezed harder.
Just tonight, CBC reported Greece expected 8% higher revenue but got 8% less in the first half of 2011.
Do the math. Greece is toast followed by others!

The major issue is what will happen to the credit default swaps. No one knows how widespread they are.

World banking will freeze solid as a result.
When? Maybe soon, maybe later this year.

RE will freeze and crash.
Garth’s readership will climb but many will heed his call too late.
Calla will be toast along with others like her.
Whole mortgage lending businesses will be toast.
F may start up Fed lending houses to stimulate lending again but all will be for nought.

I’m going back to the basement to cuddle with my bullion.

#15 Mr Buyer on 06.28.11 at 9:57 pm

#7 Rocket Boy … well said. A little gloomier than I allow myself to write but I agree with the assertion that bunkers and water supplies are a whisper away from the end. Just look at all the fortified positions in history that fell to basic siege tactics. We should be working the problem together well before things get to that (like I said before, I am hoping for the best but maybe I should be preparing for the worst).

#16 Chaos on 06.28.11 at 9:59 pm

Fiduciary: Pertaining to a position of trust or confidence.

When “real” professionals act this recklessly they are drawn and quartered.

Perhaps it is time that the “professional” money woofs started loaning with their “own skin”…

or… perhaps the “financial services” industry should be held accountable for their recklessness.

In B.C. even car salespeople are licensed!

#17 ted on 06.28.11 at 10:00 pm

So what you are saying is Greece is bankrupt, this woman is of obvious Greek origins so don’t listen to her. I agree with the rest of the stuff you say but I would doubt you would attack any other ethnicity this way. Far too many asians to pick on. Greeks hardly any here.

Relax. I pick on everyone. — Garth

#18 SMOKING MAN on 06.28.11 at 10:02 pm

3 days with out bozze. Going to die………………
Win huge at the casino……a small exchange with security and in the drunk tank for a few days….Fn amaerican cops. losers………

Got killed on Yellow pages. thank good it was only 10 k. I knew it was dog. serves me right for going against the little crazy voice inside my head..

Whats going on with Real estate. did it crash yet……sort of want it too for my kids……. but f it.. I call it like I see it.

More milk in the re cow, kids need to wait a few more years…..

#19 pulse on 06.28.11 at 10:05 pm

(re-post from yesterday’s thread)

Dear Children;

I am sorry to inform you of the consequences of the timid and weak generations that proceeded you.

You see, they all lined up at the trough of something for nothing and paid no attention to history’s lessons. They bought in to the lies and schemes of an army of Shylocks and sold your future. They thought their own pension would benefit from downsizing, outsourcing, productivity gains and rationalizations. In fact they rewarded the 21st century’s robber barons most handsomely to sell your hopes and dreams to foreigners.

You have been sacrificed. The march of generations will continue, but you have been placed in servitude; they forgot honest weights and measures and have thrown you into the volcano.

With some delicacy from an old pro;

http://caracommunity.com/content/bill-caras-blog-jun-28-2011

… and in case you missed it on the news pablum, a little reality for you to teach your parents who thought they voted for ‘conservatives’;

27. The aggregate outstanding principal amount of the following loans must not at any time exceed $300,000,000,000 or any other amount that is authorized for the purposes of this section under an appropriation Act:

(a) all mortgage or hypothecary loans that are insured by corporations that are or were approved mortgage insurers; and

(b) all mortgage or hypothecary loans that are insured under contracts of insurance that could be deemed to be policies under section 19 and that are entered into by companies that have never been designated as approved mortgage insurers.

… and further down your list of potential masters to receive the protection of $300,000,000,000 of your future tax payments

43. In sections 44 to 48, “agreement” means

(a) the agreement entered into by Her Majesty and The Mortgage Insurance Company of Canada that was made on January 1, 1991 and subsequently assigned to GE Capital Mortgage Insurance Company (Canada);

(b) the Management Agreement entered into by Her Majesty, The Mortgage Insurance Company of Canada, Royal Bank Investment Management Inc., and Royal Trust Corporation of Canada that was made on November 1, 1991;

(c) the agreement entered into by Her Majesty and AIG United Guaranty Mortgage Insurance Company Canada that was made on November 21, 2006;

(d) the Custody and Security Agreement entered into by Her Majesty, AIG United Guaranty Mortgage Insurance Company Canada and RBC Dexia Investor Services Trust that was made on November 21, 2006;

(e) the Management Agreement entered into by Her Majesty, AIG United Guaranty Mortgage Insurance Company Canada and RBC Dominion Securities Inc. that was made on November 21, 2006;

(f) the agreement entered into by Her Maj-esty and PMI Mortgage Insurance Company Canada that was made on July 12, 2007;

(g) the Custody and Security Agreement entered into by Her Majesty, PMI Mortgage Insurance Company Canada and Citibank Canada that was made on July 12, 2007;

(h) the Management Agreement entered into by Her Majesty, PMI Mortgage Insurance Company Canada and TD Asset Management Inc. that was made on July 12, 2007;

(i) the Management Agreement entered into by Her Majesty, Canada Guaranty Mortgage Insurance Company and Phillips, Hager & North Investment Management Ltd. that was made on May 5, 2010;

(j) any reinsurance agreement to which Her Majesty and a company or a predecessor to a company are parties;

http://www.parl.gc.ca/HousePublications/Publication.aspx?Language=E&Mode=1&DocId=5088345&File=101

pulse

#20 SMOKING MAN on 06.28.11 at 10:08 pm

13 mid-Ontario on 06.28.11 at 9:57 pm

You are insane, the scared money(greece) will flow into our bond market, driving fixed rate mortgages to the basment.

Man I have so much work to do…….with the grass hoppers.

Read it and weep.. 5 Year bench mark yeilds in the toylet.

http://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/?page_moved=1

Meaning when the big banks get tired of getting their ass kicked by credit unions… They are going to drop the fixed rate mortgages huge…. No matter what Carney and F tell them to do.

#21 Mr Buyer on 06.28.11 at 10:09 pm

#9 Raj … as for public transit. I am guessing that when public transit rivals the safety and convenience of a car people will be more inclined to use public transit. Many people in Tokyo do not bother even owning a car (parking is insane and the traffic even more so, but in a polite way). It is very safe to take mass transit in Tokyo in general (I do not think the women that have been groped by pervs on the trains would agree, there are special women only cars on trains because of groping) meaning your chances of arriving home after work without being mugged are almost 100%. You can get almost anywhere in the city as fast or faster and much much cheaper than by car. A rule of thumb I estimate is that a station will have to be like 5 minutes away walking and a train 5 minutes wait maximum to compete. Another option are car like units that sit in your driveway and join transit ways in a coordinated fashion (all these things are possible now) but that system has yet to find its way off the drawing board yet to my knowledge.

#22 Jack the Lad on 06.28.11 at 10:13 pm

Ted,

Don’t worry about Garth picking on the Greeks and the Asians.

I know some WASP jokes you can probably hit Garth back with…

#23 Fleabitten Monkey on 06.28.11 at 10:15 pm

I have a number of acquaintances in the real estate business. All I ever hear them talk about is “creating the urgency”. I recall being out at the pub running into the whole gang and we were just shooting the shit in casual conversation completely unrelated to real estate. I said, imagine if people weren’t afraid of anything. One of them said “well, we’d never be able to sell anything”. They all broke out laughing. Non existent ethics. Sad.

#24 Ralph Cramdown on 06.28.11 at 10:23 pm

Just to clarify how Angela’s assumptions and Garth’s numbers pencil: You sign up for a 4% 30 year amortization with a five year term. $1,856/mo. Rates go up, so five years later, instead of signing up for a 25 year am, you go for a 30 year am again, to keep your payment sane at $2,324+CMHC. EXTEND AND PRETEND. After ten years, your mortgage is down to $331,808. Now you’ve got enough equity to pay the real estate agent with enough left over for a DP on something bigger.

#25 TaxHaven on 06.28.11 at 10:24 pm

Not only are first-time and spec buyers going to pay more and more as rates rise, but eventually many of them are going to be forced to dump, at any price.

Look for exploding listings of underwater properties, all with huge mortgage balances outstanding and huge losses, too.

Result? Price collapse.

What did she say in the video? “The biggest purchase you’ll ever make”?

More like The biggest purchase you’ll never make…

#26 Patz on 06.28.11 at 10:24 pm

19th Century American railroad entrepreneur Jay Gould once said, “I could hire half the working class to kill the other half.” (Or maybe it was Marx–Groucho). The point is not lost on the editorial board at CKNW. They love nothing better than to pit public sector workers and their “gold plated pensions” against private sector workers. And it works! Bitter puppies phone in all day long bitch–moaning about the union workers (not all are public sector) who get defined benefit pensions—that is if they’re not ripped out of their cold dead hands.

In an economic environment for the working/middle class it has been shown many times over that wages have been stagnant for 3 decades. Recently in the US the amount of return on economic activity to the wage earners has hit the lowest point *ever!* The rest goes to the bosses, rentiers and top executives.

So, the good folks at CKNW must be laughing all the way to the bankers (for their rewards). What this has to do with the price of anything is that the housing bubble distracted the middle–class from their situation, persuading them that they had in fact, found a way to get rich. They’ll find out too late it’s a better way to get poor.

#27 Bottoms_Up on 06.28.11 at 10:29 pm

#7 Rocket Boy on 06.28.11 at 9:35 pm
————————————————-
Exactly. The only security we truly have derives from the fabric of our society.

The other day my wife asked why I never chain the front door before going to bed. My response was because if someone really wanted to get into our house they could (i.e. it’s not that hard to kick in a locked door, or to throw a brick through the sliding glass door).

We are safe because those less fortunate than us have hope. Once people lose hope…..well, hello Greece (or Vancouver post-Stanley cup loss).

#28 Samson on 06.28.11 at 10:30 pm

Beautiful stuff, Garth. One of your best yet.

#29 prairie gal on 06.28.11 at 10:30 pm

wow. just… wow. her site should come with a huge disclaimer. ‘for entertainment purpose only’, perhaps.

#30 Siddelly on 06.28.11 at 10:32 pm

Just finished my pizza from Romanas here in North Burnaby and the Greek lady who has been running this joint with her husband and daughter for 37 years assures me tonight that Europe will never allow Greece to go down. The domino fear is too great. Somehow I think she is right, all for one and one for all musketeers.

#31 Lisa on 06.28.11 at 10:48 pm

The RBC website has some tantalizing web videos aimed at first time buyers…short docu-style stories of the young couple with lower income joe jobs, consumer debts, and dreams for owning their first home. The friendly, caring “mortgage specialist” from RBC takes the “time to get to know” them and shows them a way to make it all possible. Cut to the couple in their newly bought home, all decorated with newly bought HomeSense stuff. PUKE!!!
Shame on the banks.

#32 Helicopter Ben on 06.28.11 at 10:48 pm

A lot of people dont realize 40% of the greek debt is insured by american banks with CDS (Credit Default Swaps) worth about 140 billion dollars. if 6 of the weakest EU countries Default which is very likely it will cost the banks 4-6 trillion leaving them insolvent. same players in game as before. goldman sachs ,AIG, Bank of America. these tyrants were bailed out by tax payers only to continue their ways in high risk high reward bets. they have no business in dealing with CDS in Europe, time to shut all these too big too fail banks. These are Bob Chapman stats very interesting guy to listen to.

#33 nonplused on 06.28.11 at 10:55 pm

Angela is sort of almost hot and likes pinning grumpy old men to the wall and feeding them donuts, so I can see why you fell for her.

#34 Jsan on 06.28.11 at 10:56 pm

#8 squidly77 on 06.28.11 at 9:38 pm

Owners are facing bills of between $77,000 and $189,000 each to pay for repairs to the roof, eaves, balcony and parkade in a building where a one bedroom penthouse suite is currently listed for sale at $317,000

And the screws turn slowly.

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

A friend of mine here in Edmonton just got a much smaller but still hefty bill to repair leaking windows and such at their condo. The condo is less than 10 years old and already the repair bills are piling up. Ever condo owner was just recently given a 15K bill as a start with more than likely more to come as the work progresses and more repairs are needed. The developer is nowhere to be found so suing is not an option.

This is what happens when housing goes mad and developers start slapping up crap for the masses of willing suckers who cannot dig themselves up to their necks in deep mortgage debt fast enough.

#35 cool on 06.28.11 at 10:57 pm

The problem in North America is that people are encouraged beyond their limit.Couple with it the fact that everyone has to make BIG,the society ends up with characters like this mortgage broker.

#36 Cato on 06.28.11 at 10:59 pm

You see far too many mortgage brokers these days passing around real estate advice, investment advice, financial advice. Licensing is a joke, yet another industry that needs to implode and go away.

Extend and pretend. Greece is an apt pupil, max out the credit cards and keep lifestyle going at all costs. Some day the reckoning will come just as long as its not today.

Sheeple seem to be more than willing to hand over liberty and freedom to buy a little reprieve from austerity. Communism is surging in Greece. Pathetic.

#37 Peter Pan on 06.28.11 at 11:03 pm

Angela is just an enabler for the young, inexperienced and trusting.

She’s just a symptom of our sick consumerist society.

If it wasn’t her, it would be some other person feeding the newbies the real estate BS.

#38 Jsan on 06.28.11 at 11:06 pm

When you live in Alberta, there is the feeling that we are the Oil center of the universe, that nobody else has what we have. This is so wrong. The US has 1.5 Trillion barrels worth of Shale Oil, same @$&% crappy heavy oil as Tar Sands Oil and now even little Israel has 250 Billion barrels of the stuff. The big difference is Alberta cannot bulldoze the province fast enough to dig it out while the other countries with massive heavy oil reserves are considerably more cautious.

http://www.theglobeandmail.com/report-on-business/commentary/neil-reynolds/with-its-oil-treasure-israel-gets-a-shield-from-tyranny/article2078985/

#39 Jordan on 06.28.11 at 11:07 pm

Yikes, pay your credit cards off over a thirty year period? She is definitely not a person to take any financial advice from!

#40 Where's the money Guido? on 06.28.11 at 11:18 pm

I had the chance to meet the Don Cherry with Dominion Lending poster in person at the Boulevard Casino. A fellow brought it there for the Vancouver-Boston 6th game being shown on their HUGE screen (45 foot) in their concert hall (excellent HD picture). No Angela tho, drats. It would have been nice to see her fawn all over me when I told her that I had a PAID FOR house and was looking , maybe to SPEND, hahaha. Might have got a free beer from her or something.

#41 Nostradamus Le Mad Vlad on 06.28.11 at 11:20 pm


The Experts said to buy Nortel and Bre-X, as they are showing great returns. Where are they now? Don Cherry looks good!

“I can hear the siren song now.” — Aahhh yes, The Song Of The Sirens. Does this not bode well for Property Virgins? Methinx not.
*
#14 mid-Ontario — “Greece will default.” Well, Greece is now on a 48 hour nationwide strike, and the best thing ordinary citizens can do to draw attention is to withdraw labor. From then on, something has to give — Greece.
*
Signing over Assets US may be forced to sign over assets to China to pay debt; Five Biggest threats to US economy; BoE One (rase rates) and BoE Two Tsunami of foreclosed homes when rates rise (see previous); Egypt scraps IMF loan; Inside info.? Traders dumped oil holdings prior to IEA notice; SAAB Chinese co. bails them out, and Job Searches fruitless.

Flying Bikes Holy smokes! Get a flying Harley, Garth! No traffic jams, no cops — put a jet engine on it and you can speed from province! 8:33 clip What Christine Lagarde is inheriting; Ponder this: Gadaafi stays, Obama goes; High Food prices escalating?

Raging Inferno; Two min. clip Flood water mixing with radioactive waste stuff at Ft. Calhoun, and 1:10 clip 15 tons of radioactive waater leak from Fukushima into ground; Los Alamos has the world’s biggest nuke arsenal.

Vitamin D One and Vitamin D Two.

#42 Devore on 06.28.11 at 11:24 pm

And she says. “Even though rates have nowhere to go but up, upon renewal you will have paid off enough of your mortgage that you should not have payment shock…”

/boggle

#43 Where's the money Guido? on 06.28.11 at 11:25 pm

Re: #3 LJ on 06.28.11 at 9:17 pm

If homeowners thought that it was safe to get into the water, here come the tax increases. Calgary:

http://www.calgaryherald.com/news/City+budget+could+shock+homeowners/5019735/story.html
9.8% increase for water and sewer
8.7% property tax hike

Wow, you got off lucky, our water and sewer in Port Coquitlam went up 15 and property up 12%. Gotta pay for the new bridge for Coquitlam residents to get to their mansions on Burke Mountain (starting at 820k for under 2000 sq. ft). Oh yeah and also a 30% pay hike to all city politicians, in addition to 15% for city workers.
Whose the real thieves here, the rioters or the civic, provincial, and federal thieves (sorry Garth). That’s why we call BC’s ruling party the THIEVERALS.

#44 Aussie Roy on 06.28.11 at 11:38 pm

Great article today Garth, these types are very hard to argue with, not because they are right but because it’s very hard to have a battle of wits with an unarmed person. Bit like trying to explain math to BPOE.

Aussie Update

Oh China will save us – LOL

http://www.bloomberg.com/news/2011-06-27/why-china-s-heading-for-a-hard-landing-part-1-a-gary-shilling.html

Debt and its cost to families – STRESS.

http://www.news.com.au/money/money-matters/cost-of-sinking-deeper-in-debt-as-financial-stress-bites/story-e6frfmd9-1226083845024

#45 poco on 06.28.11 at 11:39 pm

#229 Squirrely yousaid
#187 Poco……spoken like a true closet cop in denial and afraid of being outed as a killer psycho and part of a rat bag of killer psychotics who think they’re above the law.. Disonance is a bitch….do you have to drink yourself to sleep at night or like a true sociopath do you not even care? Beat the wife and kids……..much?
—————————————————————
boy, that’s quite the rant there– what, just pull it from that tin foil hat of yours? —oh and the question is phrased–“Do you still beat the wife and kids?”–get it right eh!!!
____________________________________________
you said
As we have seen the thing that happens is this….a cop murders a citizen….then a massive coverup takes place and the denial public relations machine moves into high gear with all the cops telling stories about the ‘bad character ‘ of the victim. Then…when it turns out that the cops have been lying all along but they still deny responsibility and hide behind the shoddy investigations ( when evidence is lost and the perpetrators are not even interviewed) done by themselves.
As far as the stat that indicates that more Canadian citizens die at the hands of police in Canada than soldiers in Afghanistan at the hands of the Taliban…..this is all public information….something the cops have a hard time denying.
_____________________________________________
please enlighten us–provide some links to your “stories”

you said
The auditor general has chastised the police for inadequate hiring practices…unless you live under a rock this story has been reported in various forms on public broadcasts.
_____________________________________________
nope, never heard them– must have been in print–i’m sure you didn’t make it up–so provide us with a link or two would you, if they exist

you said
Compare us to the United States..where the citizen on citizen murder rate far outstrips Canada but……. cops rarely shoot first and ask questions later as the national police in Canada has proven themselves as being predisposed to do. The police in the US are accountable while in Canada …..not. The fact that cops kill more citizens per capita in Canada than in the US is also public information.
It leads to only one statistical conclusion…that police in Canada are trigger happy killers versus their US counterparts.

Now personally I think that police use murder as a weapon of intimidation….crowd control if you will….much like rape is used by African and Asian regimes. They ( our once respected police) have built a measured reputation of murdering citizens with impunity and without just cause or provocation ( some have ended up shot in the back of the head while handcuffed) and therefore they believe that killers will be more accepted as authority figures and that the citizens are cowed when confronted. Such is the depravity and moral bankruptcy of the leaders.
_____________________________________________

buddy –put that “hard-on” back in your pants and get on with reality !!!!!!!!!! –you’re really losing it

#46 BC Bring Cash on 06.28.11 at 11:41 pm

Public Transit in BC for example is heavily subsidized by the tax payer. Through municipal, provincial and federal involvement approx. 70% of transit funding is publicly funded. Only about 30% of revenue is collected through the fare box and transit pass sales. A lot of transit riders receive subsidized passes for a minimal fee due to age or disabilities. Its not a big leap just to trash the whole system of paying fares and making it free. The bureaucracy involved to handle the various programs likely cost more money than the fares collected. For example fare boxes need to be maintained. People need to count the coins and roll them for deposit. Others need to dump the fare boxes into a vault. Security is needed to transport these coins to a processing facility…. on and on. Eliminating transit fees and making them free makes sense.

#47 Sp on 06.28.11 at 11:45 pm

“Five years later, 2016, mortgage rates have normalized to 7%.”

Kind of doubt this would happen if the debt is being back stop by the taxpayers. More likely the higher cost will come in the form of devalued currency.

#48 VancouverContrarian on 06.28.11 at 11:58 pm

Angela Calla represents everything that is wrong with business today – she has no education, expertise, or knowledge, outside of emptying the wallets of suckers. Her so-called mortgage expertise is matched only by the dubious competence of “CKNW Financial Expert Michael Levy”, a man who has absolutely no financial education or training, who if he is not braying whatever way the wind blows, is promoting his third rate silver and gold strategies.

I do have to wonder who the target audience for CKNW is anymore. It seems that all you hear for ads are “consolidate your debt”, “if you have $10,000 or more in debt”, “if the banks won’t lend you money”, and those morons from Maple Ridge Chrysler…”we’re crazier, and broker than you think!”

I bet you are.

#49 Hoof - Hearted on 06.28.11 at 11:58 pm

#9 Raj

Well….don’t get caught up in the Stockholm syndrome…

Much of this Environment etc mantra is courtesy of vested interests and Gov’t bureaucracy building.

#50 TheFirstRick on 06.29.11 at 12:08 am

Decades of Don Cherry and virtually nothing he did or said pissed me off. Until he became a property pimp.

#51 VancouverContrarian on 06.29.11 at 12:09 am

And another thing, Garth, would you do a blog post on the ptich that Angela Calla spews out about making your mortgage tax deductible? I’ve always thought the thing smelled rotten.

#52 Burnt Norton on 06.29.11 at 12:10 am

Once Mr. Lahey’s sh*t storm arrives, fluff like her will be blown away like bits of lint. Not to worry tho, looks like she has other marketable assets.

#53 the Phantom on 06.29.11 at 12:15 am

Hi Garth; fellow blog dogs and lurkers everywhere…

I was laughing tonight Garth at your innuendo;

(ref:…I can hear the siren song now…she whispers into a newly-moist microphone. And the climax…Panting, you cannot stop listening. Simply. Too. Seductive.)

Perhaps it is a sign of my advancing years and the shrinking blot in the rear view mirror of my life that used to represent my youth at one time but it is a curious paradox that you superimpose these phrases, dripping with sensuality over a woman who couldn’t take a decent picture to save her life. Maybe I am growing more fickle, less tolerant and pickier as I age, I don’t know. I am not one to readily comment on peoples’ features because God knows, if I depended on looks to get by in this life, they’d have hung me a long time ago. Anyway, have a goog evening and thanks for the comic relief.

the Phantom

#54 Rob in BC on 06.29.11 at 12:31 am

Garth,

This is the first time I’ve commented on your blog. I’ve been a long time follower and forwarded Angela’s email blast to you today. I don’t know if that triggered your blog post today, but I’m happy that you addressed it. I simply could not read this offensive email and not respond. I think you’ve done a great job of describing the reality of our real estate market in Vancouver and how outrageous it is. I want no part in it.

My favorite quote is the “get out there and BUY YOUR FIRST HOME”, as if the all caps screams at me renting is stupid and if I don’t buy now, it would be a mistake.

Reluctantly, I entered the housing market a few years ago and bought a condo; Lived there for a few years and realized that owning in this environment makes absolutely no sense. I’m happy to say that I’m a renter now and have moved our investments into more liquid and promising assets. We have better cash flow and are not exposed to the risks of RE.

When I think of the term “real estate pimp”, Angela Calla comes to mind. She advocates that she works for no one but you, and not the banks, but I’m sure her income is based on how many fools she can convince to invest in RE. Her email made me sick.

Anyways, I think I’ve ranted enough. There’s not much to say on top of what has been illustrated already through your posts over the last few years. I thank you for the public service you have offered. I’m patiently waiting for the day when things have reverted to the norm, we can buy a home in Van, and raise our young family without having to worry about being financially wiped out by the coming storm.

#55 Paolo on 06.29.11 at 12:40 am

Wow!

This will not end well…

#56 debtified on 06.29.11 at 12:43 am

I’ve said it before and I’ll say it again: China will go down and it will take Australia and Canada with it.

Latest news from China – Local govts run up huge debts, risk defaulting:

http://www.webcitation.org/5znNJO7F5

A Bloomberg article predicting hard landing:

http://www.webcitation.org/5znNrz067

#57 terminalcitygirl on 06.29.11 at 12:44 am

Hubby and I have been looking for a cheaper rental in Van the last month or so. Seeing lots of stuff on Craigslist that isn’t moving. Looked at a basement suite on the weekend, it wasn’t too bad but not for us. I had initially asked about utilities which were estimated an additional $100-150 a month. Got an email from the nice owner this eve saying they were willing to negotiate utilities if we wanted the place.

Their story: nice 30 something couple, bought the house a few months ago. The house has a basement suite + a new laneway house. I hope they put a lot down on that baby but with the desperation of tonite’s email, I think perhaps not. We’re seeing a lot of “multiple dwelling” properties in Van these days. We looked at another place a few weeks back, brand new house with a basement suite and a laneway house for rent. Noticed both were re-listed on Craigslist today…

#58 JohnnyBGood on 06.29.11 at 1:26 am

As long as we are calculating the PROS and CONS of renting and buying a home, I did some of my own calculations––not to prove or disprove anything, but purely for my own edification and that of others who may be interested.

Like all good financial/economic analysis, mine is heavily reliant on gross assumptions ;)

I wanted to calculate the basic total costs of renting vs. mortgaging/owning the same home over a period of 30 years. The numbers below are taken from Garth’s post, but I changed the home from a condo to a SFH (I don’t consider condos actual real estate.)

Home type: SFH
Home price: $400,000
Rental cost: $1,600 per month
Mortgage rate: 7%
Am: 30 years
Inflation: 2.5% (All values and costs in my example rise at this rate.)

Here’s what I found:

Mortgaging the home:
• Total mortgage payments: $948,388
• Total property taxes: $131,715 (starting at $3000/year)
• Insurance: $20,000 (starting at about $400/year)
——————–
TOTAL: $1,100,103

Renting the same home:
• Total rent: $842,940
• Insurance: $6000 (starting at about @144/year)
——————-
TOTAL: $848,940

The annual mortgage expenditure is $30,528. The annual rental expenditure starts off at $19,200 but rises to $30,694 (about on a par with the mortgage) by year 20 and reaches $39,291 by year 30.

The renter has extra cash to invest in the first 19 years, but the mortgagor has extra cash to invest for the last 10 (purely based on mortgage vs. rental outlays). If we assume an annual, net return of 6% in the portfolio, the renter would have about $205,000 more than the mortgagor in his portfolio at the end of the 30 years.

Value of home after 30 years: $839,027.

Summary:
The mortgagor spent $1,100,103. The renter spent $848,940.

The mortgagor has assets worth about $884,000 (home plus investments). The renter has assets of around $251,000 (investments).

Obviously, this is a simplified analysis that does not take into account all costs (namely maintenance and repair), but the numbers used are realistic IMO, based on historical trends.

Because I take a purely objective view on this, I don’t care what the results show. If anyone can improve on the analysis, by all means. I only want the truth, whatever it may be.

One last note… A study previously cited on this blog compared the total returns associated with owning a home vs. renting it and investing the extra cash over a period of 10 years in stocks and bonds. I forget the name of the study and frankly it’s too late to care, but as I remember it, there was no clear-cut all-time winner. The study concluded that for some ten-year periods owners were better off. For other ten-year periods, renters had the edge. In other words, like most economic analyses , the conclusion could be summed up with a decisive “yes and no” or “it depends.”

Perhaps, the decision comes down to: what ultimately makes more sense for you and your family based on your preference, lifestyle, affordability, etc. Then ask Garth to help you figure out the financial stuff.

#59 BPOE on 06.29.11 at 1:53 am

If I’ve said it once I’ve said it a million times. Canadians have no business whatsoever buying real estate in Canada. Big boys moving into Vancouver mopping up all the bids. If Canadians would just pack up and leave the whole process would be so much faster. It’s going to happen anyways. Sell your house so the big boys can move in. Eventually you will have to move.

#60 wes_coast on 06.29.11 at 2:11 am

This Vancouver Sun article says it all. Pizza delivery driver and part time housing broker.
http://ht.ly/5snKu

#61 Canuck Abroad on 06.29.11 at 2:14 am

In the article, Angie said, “…If you continue to rent, your landlord has every right to raise your rent in accordance with inflation…”

Here is the reality. Rents are based on supply and demand. I have just renewed my rent for the third year in a row at 0% rent increase. I am paying exactly the same rent next year as when I moved in 3 years ago. Inflation here is on fire! How is this possible? Easy – there are several other apartments in my building and across the street that are similar size and condition. So when it is time to renew, I just check to see what is being charged on those units and start negotiating. Landlord knows if I move down the hall to save money, he is looking at possibly several weeks rental void, plus redecorating costs, plus he can then only charge market in the end to fill the unit. He is a smart guy and I am a good tenant so voila, no rent increase.

What do you think will happen to rents in Van and TO when house prices start to decline and home”owners” decide to rent out their place rather than take a loss when they need to move? Excess supply. Rents are priced at market, regardless of the inflation rate. So don’t let RE agents scare you with inflation stories.

#62 amarulaman on 06.29.11 at 2:20 am

She is smoking hot, but your really smart…im so confused.

#63 munch on 06.29.11 at 2:24 am

#11

Please to be leaving Corolla’s out of it

I drive one and I will NOT brook any association between myself and real estate agents

I will NOT tolerate it, do you understand?

My car is clean, they are not!

Many thanks in advance

Munch

#64 604genX on 06.29.11 at 2:26 am

June sales have fallen off a cliff in Vancouver. Check out the neighbourhood snapshots:
http://www.yattermatters.com/category/neighborhood-numbers/

#65 Mark on 06.29.11 at 2:28 am

Most people don’t seem to understand that after 5 years is up, you don’t get to take an additional 30 years to pay. You’re 5 years older. 5 years closer to being out of the workforce. CMHC won’t renew a loan for a 30-year amortization (ie: 35 years total) if they originally insured the note for only 30 years in total.

#19, you’re absolutely correct — by the time the smoke clears due to this housing deflation, Canada’s banks will have extracted close to a half trillion dollars from CMHC, and will basically own the show. After all, the government, through the CMHC, was stupid enough to guarantee over a half trillion in subprime mortgages. Even the US banks couldn’t rely upon Fannie Mae/Freddie Mac to be so extravagant.

#66 Jon in Cowtown on 06.29.11 at 2:57 am

How funny to listen to this bimbo extolling the virtues of home ownership although that is too kind a term for “owning” a rat hole in the sky. When it comes to this wonderful blog I’m reminded of something my dear old Dad told me: “don’t listen to me, life will teach you”! Garth you are to be commended for trying very hard to be Dad but I fear for many, life will be their only teacher. On the positive side just think of this as a culling process. The problem is, the dispossessed rarely admit culpability.

#67 CrowdedElevatorfartz on 06.29.11 at 3:05 am

Ahhh yes CKNW.
The radio station that has sold it’s jounalistic integrity to the highest bidder. In this case, Angela Calla’s hour long “info-mercial”
Seems to be the CKNW way these days.
Sad really.
CKNW used to be a news leader. Now they just read what their told to.

#68 SwampLily on 06.29.11 at 3:14 am

#9 Raj: I love your “free transit” idea. Many parents here in Victoria have to buy a youth city bus pass for their kid to travel the distance to school and back (cost of $490 per kid per school year). Many schools have closed here, and the remaining ones are few and scattered; for most school kids walking that distance is not an feasible option time-wise.

You’d think all the bus drivers would all look out for the younger students who use transit to get to school and back, especially those who have to change buses downtown, but sometimes the driver is a wacko like the one who wouldn’t let our 11-year-old daughter off at her stop. The bus was empty and she pulled the bell (more than once), but he kept driving and finally dropped her off 8 blocks past her stop, in winter, she walked home by herself 13 blocks in the dark.

#69 Beach Girl on 06.29.11 at 4:42 am

Possessions own you. Can smell the fear out there. Live below your means, exercise and have a glass or two of wine. My motto. Bought the Jack Russell. It is nasty.

#70 Jody on 06.29.11 at 4:45 am

Greece votes today (Wednesday). I fully expect them to deafault, they better, this puppy needs to come down, big time. Better sooner than later. I think once the Greek vote is done that a market crash will happen. I think this is gonna happen fast, there won’t be any dicken around here. I fully expect Canadian banks to take a week long bank holiday to coincide with the July long weekend. I’ve got my goalies mask, leather outfit and machete, Mad Max time.

#71 Ralph Cramdown on 06.29.11 at 6:38 am

JohnnyBGood:

Your rent/buy analysis is basically correct:
– Over a long enough time horizon, buyers usually win
– moving costs for renters are the cost of the truck, but for buyers, they’re 5-6% of the house they’re selling. Buyers only win if they stay put, or if price increases are above trend between their moves
– buyers with a low DP and long amort take on extra risk at the beginning: If the house value drops before their renewal, they have to come up with extra cash to get their equity back up to 5% — banks can’t/won’t renew a mortgage for more than the house’s current value
– if you assume houses are currently priced above trend (and, by price/rent or price/income, they are), the likelihood that they’ll continue to increase at inflation+delta in the near term is a lot lower

#72 TurnerNation on 06.29.11 at 7:14 am

Oh oh, blog dog Carney must raise rates.

Canadian Inflation Surges to Fastest Since 2003 in May Driven by Gasoline

By Greg Quinn – Jun 29, 2011 7:32 AM ET inShare1More
Business Exchange Buzz up! Digg Print Email Canada’s inflation rate unexpectedly accelerated in May to the fastest since March 2003, with quicker price gains seen in every major category except shelter, led by gasoline.

The consumer price index rose 3.7 percent from a year earlier, Statistics Canada said today in Ottawa, a gain that exceeded all 24 forecasts in a Bloomberg survey of economists. Inflation was 3.3 percent in March and April, a 30-month high and a rate economists said would be matched today.

http://www.bloomberg.com/news/2011-06-29/funerals-added-to-inflation-basket-as-canada-tweaks-price-index.html

#73 TurnerNation on 06.29.11 at 7:21 am

#3 LJ on 06.28.11 at 9:17 pm

I thought “Conservatives” were sober prudent fiscal managers? In AB especially, free of eastern limp wristed “liberals”, right?

#74 TurnerNation on 06.29.11 at 7:24 am

Recall the good old bad days when a stagecoach trip was a risky undertaking due to roving bandits and robbers along the way. Some things never change…our “heros'” main duty is revenue generation for the Crown.
We truly live in an open air prison camp…our jailers are quite clear. Just following orders.

Police officers and traffic cameras brought in another record cash haul last year, almost reaching the $40-million mark for the first time.

According to the Calgary police commission annual report, which is going to a city hall committee Wednesday, the force got $39.4 million in traffic fine revenue for 2010.

That’s a 15 per cent increase from the year before.

In 2007, traffic tickets generated $32.9 million in fine revenue, and that number has risen each year since.

Last year was the first full year that speed-on-green cameras were in effect in Calgary.

Read more: http://www.calgaryherald.com/Gotcha+Calgary+police+rake+record+traffic+fines+speed+green+cameras+kick/5014276/story.html#ixzz1QfME29oZ

#75 C on 06.29.11 at 7:26 am

Just out that Canadian inflation running at +3.7% and it’s the third month in a row that inflation has been over 3%.

Even excluding gasoline inflation is still over the magic 2% threshold at +2.4%.

Get some integrity and do the right thing Carney. You have let the housing market get wayyyyyyy out of control. You can think you are doing manufacturers a favour by keeping rates low but what you are doing is going to kill the middle class.

The next rate decision is in less than 3 weeks now. You must start raising rates. You are already Canada’s version of “bubbles” just like Greenspan is in the US.

1% BoC overnight rate, come on. We should be at least at 2-3%, if inflation is consistently running over 3%.

Do the right thing and stop your cheap talk Carney.

#76 Mackie on 06.29.11 at 7:41 am

U.S.’s attempt to bring down oil prices appears to be failing. Oil up, gold up, silver up, inflation up up and away. Time to buy more silver and gold.

#77 maxx on 06.29.11 at 7:43 am

#43 Devore on 06.28.11 at 11:24 pm

“” And she says. “Even though rates have nowhere to go but up, upon renewal you will have paid off enough of your mortgage that you should not have payment shock…””-

There is so much cash to be made from consumer ignorance…and it takes so little education to avoid scamsters and their “profit centers” (read: money pits). Trouble is, most of them come packaged in suits, inside impressive digs, giving them a veneer of respectability.
Recently, I walked into a private investment firm (fee for service) to glean info. I came away with a favorable impression and some free books. Just yesterday, I heard that they are embroiled in a major scandal. I have seen too many crooks in the business and had no intention of parking equity with them.
ANY money lost is money (and its product) lost forever.

#78 Raj on 06.29.11 at 7:49 am

Thank you everyone who supported the idea of “ Free Public Transit”
I would like to clarify that it’s not a pipe dream as it has already been implemented in
some US and European cities.

Unfortunately, most of the people have voted “No” at http://www.wikiopine.com

Hopefully, after reading this people will have some positive thought on this issue

1.More transit riders=les¬s congestion¬s on roads=Less pollutions + Savings due to less congestion for the entire economy + More productive workforce due to less stressful commutes = Use those savings to fund transit”

2.Free Transit = Less Assaults on drivers

3. Better environment

4. Free Transit = Better affordability for captive riders( without auto)

5. Free Transit = Saving on infrastructure to collect fares. Some TTC ticket collectors are making 120000/year .

6. Unlike “free health care “ “free transit” immediately pays back to the system

7. Governments spend billions to maintain highways, some of those can be saved

8. This will also discourage urban sprawl which has been a major issues in North America

9. This also gives sense of ownership

Of course this cannot be implemented overnight .It has to be implemented stepwise

Some of the things which need to be done before making transit free are

1.Make the system more efficient financially. Very few people know that there are few transit systems which are not only not subsidized by governments but are profitable too.Transit companies in Singapore
have been operating on profits ,are the fares too expensive ? the answer is almost ½ of TTC.

2.Make the system safe

3.Make the system more mreliable with increased frequencies

#79 Ralph Cramdown on 06.29.11 at 7:53 am

Another day, another group confusing headline inflation with core inflation.

How much would the BoC have to raise rates by to lower the price of gasoline and imported food? A: Except to the extent that our dollar would go up, hurting manufacturers and other exporters, raising rates has no impact on gas/food prices. Which is why the BoC watches CORE inflation rates, not headline. As long as core is around 2% and unemployment is high, rates won’t be increased. Suck it up.

#80 BrianT on 06.29.11 at 7:56 am

#49Vanc-How about Greenspan,Bernanke,Robert Rubin,Hank Paulson,etc.etc.etc.etc.-do these guys have enough impressive formal education to take care of you?

#81 BrianT on 06.29.11 at 8:16 am

A lot of money is being bet this morning on Cdn interest rates rising (after the 3.7% CPI report).

#82 Jody on 06.29.11 at 8:23 am

Starting at 45:30 this video explains the problems in great detail, I laughed and cried. Let’s kill small business with stupid laws, yea, that will fix the economy.

http://www.youtube.com/watch?v=VpZtX32sKVE&feature=pyv&ad=6739540474&kw=alex%20jones

#83 Ret on 06.29.11 at 8:40 am

#79 Raj
Nothing is free. Either start taking your medication or stop taking your medication. You are seriously delusional.

You are not the only one Raj. “Free,” is a Canadian disease along with, “the government should…”

#84 Devil's Advocate on 06.29.11 at 8:59 am

http://www.mwahahahahahaha.com/

#85 detalumis on 06.29.11 at 9:01 am

She is not any worse than that awful Patricia Lovett-Reid from TD Bank with her baby cheeked head full of botox and filler chatting to the perky young people on the porch of their house. She explains mortages and lines of credit as if she was talking to an 8 year old child.

#86 Jetfixer on 06.29.11 at 9:05 am

The whole core inflation tally is flawed IMO. Everything that you need in your day to day life is excluded from the calculation. People don’t say holy shit my fuel is up 20% and my grocery bill is up 15% but whatever core inflation is only 2% so were good. Is the CPI or PCE truly accurate? can it not be manipulated? Whether you see it at 2.5% or 3.7% a minimum of .5% increase is needed either way.

#87 Kent on 06.29.11 at 9:29 am

In the nearly three years we’ve lived in our current location, prices have risen, and we’ve paid $42,500 in rent on a house valued (in ’08) at $310k. The mortgage is irrelevant as we could pay cash. Taxes would have been $7500 for three years, that makes $35,300 less we could have paid had the money gone into buying than renting. Not sure how I came out ahead on this, especially given this house could well sell for $350k today.

#88 Ralph Cramdown on 06.29.11 at 9:33 am

The logic behind core inflation explained:
http://krugman.blogs.nytimes.com/2010/02/26/core-logic/

#89 Moneyville blog on 06.29.11 at 9:37 am

Did moneyville just post this, really? I had to do a double take! There advertisers might be fuming now… LOL!

http://www.moneyville.ca/article/1015893–why-i-sold-my-house-and-rent-instead?bn=1

#90 JohnnyBGood on 06.29.11 at 9:38 am

#72 Ralph Cramdown

Yeah. Basically, as with all “investments”, timing increases in importance the shorter your investment horizon is.

While everyone has to assess their own situations, I maintain a few core points:

• While a home is an asset, it should not be treated like an investment. Home owners should not bank on their homes to fund their lives (eg after retirement)–though I’m sure many will do just that, and in the process, perhaps spend or give back to the bank everything they worked for their entire lives. With hard work and a bit of good fortune, when you pass away you will have a valuable asset to bequeath to your heirs.

• A corollary to the above is: never speculate with your home or treat it like a tradable asset (unless you are psychologically, socially, and financially prepared to lose it). That’s fine to do with investment real estate if you understand the risks, but not with the place where you live, love and raise your kids.

• Assuming one can afford home ownership (and I mean really afford it, not just cover the mortgage, taxes, insurance and maintenance), preference and lifestyle should be given more weight than market conditions when making the decision to rent or buy.

• Never assume you can predict the future of asset prices. Understanding the risks associated with buying a particular asset (eg a home)–and how they apply to you– is very important; but that does not necessarily give you the ability to forecast prices.

#91 T.O. Bubble Boy on 06.29.11 at 9:59 am

The results of the CMHC home renovations survey are insane: $23 billion on renovations in 2010 — almost the same as 2009, when there was the home reno tax credit!

“The Canada Mortgage and Housing Corp. Renovation and Home Purchase Survey, released Wednesday, said an estimated 1.9 million households, surveyed in 10 major centres, indicated they completed renovations last year, a slight decrease from the 2.1 million households that completed a renovation in 2009.

This represents 42 per cent of homeowner households, down from 50 per cent in 2009. The average cost of renovations was $12,972.”

So, 42% of households did renos in 2010 after 50% did renos in 2009?!?!? Obviously I don’t know the overlap here, but I would guess that at least 60% of households have done renos in the past 2 years then?

And – what percentage of those homeowners are in fact Condo owners vs. SFH owners? (where you’d expect minimal renos) Even if Condos are say 25% of the total homeowners, that leaves only a small percentage of SFH homeowners that haven’t renoed in the past 2 years.

How HGTV-addicted is this country???

#92 joe larue on 06.29.11 at 9:59 am

took a long bike ride in Toronto from the Humber river in the west to Cherry Beach in the East……news flash for everyone that thinks there are “no more good sites” in Toronto… There’s heaps of undeveloped land right by the water, especially east of Yonge Street.
…closing on the sale of the investment condo next Monday. And it feels great.

#93 debtified on 06.29.11 at 10:06 am

#79 Raj on 06.29.11 at 7:49 am

Thank you everyone who supported the idea of “ Free Public Transit”

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

There really is no such thing as “Free” public transit, Raj. In fact, this idea will likely cost most to deliver than the “Pay Per Use” idea. Just think about it.

I am all for “Affordable (and Accessible) Public Transit”.

Now back to the economy – surging inflation is on the news. It doesn’t matter. The people on the helm don’t have a clue what to do with it. It’s too late now. We’re going to hit the iceberg. Hang on tight and know where the nearest emergency exit is.

#94 rory on 06.29.11 at 10:20 am

#79 Raj

Raj and others. If you want the benefits of fewer cars driving less miles then free transit is the only option.

When I used to live in Van, we could drive to the mall in about 10 to 15 minutes on a good day and park for free or we could walk 8 minutes, hop the sky train, ride for 10 minutes or so and have the privilege of paying $1.50 (or so) each way for a total of $6 bucks.

Duh, we drove. Go figure.

#95 maxx on 06.29.11 at 10:32 am

#45 Aussie Roy on 06.28.11 at 11:38 pm-

A very pertinent link. It begs the question when will sheeple stop “styling” their lives into bankruptcy. Central banks, MSM and marketing Goliaths of all stripes relentlessly push imagery of grandiose living in ones own little Taj Mahal.
We live real lives, not lifestyles…and sometimes real life is about deep mourning over the river of money piddled away over the past decade (or two) at the behest of these manipulators.

#96 Hoof - Hearted on 06.29.11 at 11:02 am

Corrupt officials flee with $120 billion: report

http://www.vancouversun.com/business/Corrupt+officials+flee+with+billion+report/5009904/story.html

Estimates by China’s central bank that up to 18,000 corrupt officials have fled overseas with over $120 billion in stolen money in the last few years are undoubtedly well short of the truth.

The 68-page report by the People’s Bank of China, dated 2008 and marked “confidential,” was mistakenly posted on the bank’s website a week ago and has since been removed.

But the analysis which cites specific examples of how corrupt officials and Communist party members have, since the mid 1990s channelled their illgotten gains into countries like Canada, the United States and Australia in return for resident status or citizenship, has caused uproar among Chinese netizens.

There are reports of at least eight new websites coming on line in China last week to provide forums for people wanting to express their anger at this and all other petty corruption that dogs the daily lives of Chinese people.

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

Super HOT HAM

#97 Abitibidoug on 06.29.11 at 11:17 am

@Patz, post#27 who said: In an economic environment for the working/middle class it has been shown many times over that wages have been stagnant for 3 decades.

That’s not consistent with my observations. Over the last 30 years houses have gotten bigger and contain more stuff than ever before, more people have traded their cars in for bigger fuel guzzling SUV’s, more people have pets than ever before and spend more lavishly on them, have more electronic gadgets than ever before (a 26 inch TV is not enough, we need bigger screen TV’s in every room) their kids have more expensive clothes (not like us who wore a lot of out of style hand me downs), and vacations to Florida or Europe are now considered the norm.

We’re so wealthy now we throw more usable goods in the garbage than ever before. Among usable items I have recovered from garbage include a working window air conditioner, a bicycle, 3 televisions, 2 boombox stereos, furniture, humidifier, tools, light fixtures, ceiling fan, and many other goods. It’s worth noting that our family got our first window air conditioner from a Sears scratch and dent sale in 1971 (we couldn’t afford a new one) and now central air conditioning is the norm.

In the past cars had less options on them (we couldn’t afford all those extras) and were kept longer. I’ve seen better cars in demolition derbies than the ones I drove until they fell apart, or many people still drove in the 1970’s.

So yes, in summary people are worse off now than ever before.

#98 garrulous squirrel on 06.29.11 at 11:18 am

40 years to pay on a $400,000 condo and still be left with a mortgage at retirement? In that time…where have the kids been sleeping? Today’s condo’s are so small that families are out of the question…..accorcding to demographics expert Dr David Foote…..the FTB’s are buying themselves into a ‘functionally obselete’ unit that is not suited to their needs. I have seen ‘flex space’ condo’s ( the ones with no doors on the bathrooms or bedrooms because they couldn’t swing open due to lack of space) that were so small that I fear an outbreak of ‘cabin fever’ when a long winter sets in and ‘going out is not an option.

That calculation will only get uglier as rates rise. The BOC is disregarding it’s own ‘inflation targets of 2% as they are in fact stating that core inflation is double that at 3.8%…what gives?

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/stephen-gordon/core-inflation-rate-will-drive-any-interest-rate-move/article2080017/

The BOC is counting on China continuing to flood western economies with cheap crap that can be used as ‘hedonic representation of costs’…..by now everyone who reads this blog knows that hedonics measurements are all bafflegab and bullshit. No one who go’s grocery shopping believes that inflation is 2%. In my area property taxes are up 20% alone. The utilities have all raised fee’s and rates more than 10%.

Big problem for guys like Carney is that China is not the mud hole it was when Canada and others decided to bake the cheapo price points of Chinese labor into our own CPI hedonic measurement scheme. China has inflation similar to the west at an estimated 10++% and prices are going up. We’ve imported inflation to them and its coming round trip right back to us in the form of higher prices.

This si a big problem for Carney,,,he has to keep printing money at 16% a year to keep the government largesse afloat and pay for the bonds Canada issues to itself. Even though the intrest payments are a keystroke….it still looks bad when the 1% intrest payments won’t cover the amount owing. This continues to add to debt and deficit intrest payments. It’s like he’s swirling down the toilet still screaming……”Nope…..everythings under control”

We saw Greece do exactly the same thing and over time ‘Canaduh’ debt will be more than even marginal intrest rates can pay back. They had 30% of the population on the government payroll…we have 22%. The people had less personal debt…we are the most indebted in the G8………..hhmmmmmmmm ? Where’s the money going to come from?

#99 CrowdedElevatorfartz on 06.29.11 at 11:27 am

@#60
BPOE ! How did you escape?
Come HERE you little cherub. All that talk about “Big Boys” is making me…..flatulent.
Naughty “Flipper” that you are.
Hold still. This will only take a minute and then its ….Back to your cage.
Breeeeath Deeeeeeeeeep.

#100 morry on 06.29.11 at 11:30 am

“ECONOMY LAB
A housing bubble? Even Carney won’t go there”

#101 Neu Grufti on 06.29.11 at 11:33 am

As someone who has experienced first hand the delusional frenzy that mortgage brokers and real estate agents can induce in first time buyers, let me just say that it’s going to be interesting watch these ‘Mortgage Experts’ switch careers when things go south.

It’s not as if Canada is going to experience some kind of deep, chronic, and new ‘Great Depression’, but as housing dips and these experts start having to actually work for their commission, it’s going to be a bloodbath. So many of them have become accustomed to a lifestyle they will no longer be able to afford that they are going to have to enter a crowded job market with few opportunities, and wind up in a situation they would never have dreamed of.

I don’t actually look forward to that. It’s not schadenfreude, it is passive interest on my part in seeing how they cope with the change of circumstance.

Me? I’ll stick with liquid investments that secure my future.

#102 Utopia on 06.29.11 at 11:38 am

So, you people are actually trying to tell me that Angela is a real person?!! Cripes, I thought I was watching cartoons when I saw at those videos.

#103 BoomerBoy on 06.29.11 at 11:39 am

New report from CIBC today:

Benajamin Tal believes a sudden cycle of rate hikes by the Bank of Canada is “unlikely.”

“Digging deeper and looking at the households with both low equity positions and high debt-service ratios, we found that this fragile segment of the market accounts for only 3.2 percent of total mortgages,” he writes. “Shock the system with a 300-basis-point rate hike and that number would rise to a still-tempered 4.5 percent.”

#104 jwkimba on 06.29.11 at 11:42 am

kent: you should have bought. The rent/price ratio was close to normal for that property. At 20% down they carry for the close to the same. Why did you not ‘do the math?’ and figure that out.

Here in Toronto you would pay the same rent for a house worth 700k+ with no upside, and in that case renting is smarter.

#105 Ralph Cramdown on 06.29.11 at 11:43 am

While a home is an asset, it should not be treated like an investment. […] preference and lifestyle should be given more weight than market conditions when making the decision to rent or buy […] Never assume you can predict the future of asset prices.

My views are more or less diametrically opposed. When I buy, my house will be the largest, most leveraged and least diversified component of my portfolio. I’ll buy with my own needs paramount, but with a close eye on land value, likely (relative) appreciation and resale potential. I owe it to my family.

Cycles in real estate are LONG. The current one is so extended that many people don’t even really think of real estate as cyclical. I don’t need to time the market exactly — being within a year or two of the bottom would suit me just fine. If I lived in the US I’d likely buy right now, even though prices may still be declining, because I know they’re much closer to the bottom than the top. But buy near the top and lose ten years of appreciation here? Can’t take that risk. Nobody has shown me a likelihood of rents and wages popping, and even the more optimistic of the analytical real estate economists are calling for a long period of sideways prices while wages catch up and my DP grows.

You don’t have to think of your residence as an investment when prices are low or at historically fair value, but you sure as hell do when they’re nuts. If I could offer you a $20,000 RRSP eligible investment that pays 0% (less after inflation) over ten years, would you take it? That’s the kind of bait being used to support the current market.

#106 MM on 06.29.11 at 11:44 am

Visit some world class cities and you’ll notice they have world class public transport that everybody uses. Think about that next time you’re stuck in congestion caused by …. you!

#107 Utopia on 06.29.11 at 11:56 am

#79 Raj on 06.29.11

I think your idea is a good one Raj and it should be considered by more municipalities where roadways are clogged to gridlock with too many cars and trucks. Nothing is free of course but in the case of transit a very good economic case can be made for a transit subsidy in congested urban environments. I would gladly pay into such a scheme. The benefits far outweigh the costs.

#108 disciple on 06.29.11 at 12:01 pm

Looks like I’ve got my work cut out for me today…

Labour unions: These were initially formed by the conservative Tories in Britain to mitigate the rising power of the middle working classes. Ironic, you say? No. Not if you understand it is a mind game. Divide and conquer. Play both sides, the Hegelian dialectic, a Tudor specialty.

Hope: One of the honourable functions of government should be to maintain hope in our young people for the future. Sadly, this has been lost a long time ago due to a failure of leadership, a failure of honour and moral ethics on the part of our leaders. This is no accident. When I see the parental generation talk about how different it was back when they were kids, how children were more obedient, more courteous, more ethical, I have to laugh it off. Obviously, they have forgotten many things about their own generation. Different stripes, same animal, but a damn straight smarter animal.
Do what you know is right. When you make mistakes, own up to them, and change. My 4 kids (or 5 if you count my wife) have seen me make my fair share of mistakes, and they are the better for it. Don’t be afraid to make mistakes, that is how we learn, and that is our current employment. That is why human childhood lasts longer than any other on this planet. The gods have ordained it so.

Licensing and Regulatory Bodies: From their inception they have been a scam. Implemented in the early part of the 20th century in America, they were sold as beacons of quality standards, but in actual fact are nothing of the sort. Our society is better off without any type of licensing at all, that way the crooks are easily identified. It’s the crooks who want licensing so they can hide behind their designations rather than have to answer for their fraudulent behaviours.

Free transit: Another great idea, just like yesterday’s of shortening labour hours. The standard 8-hour workday was a long-contested hard fought REPRIEVE from the 10-14 hour workday forced upon children during the Industrial Revolution. Your real rulers have succeeded in convincing you that it is prudent for you to literally work yourselves to death. Recognize it for what it is, a mind game, designed to keep you from realizing the ultimate Utopian dream. Impossible, you say? Sort of like heavier than air flight, or touchscreen tablets?

The power pyramid should be completely inverted. The financial parasite class should be paid the least, and those keeping the sewers clear should be highest paid. That would restore a sense of honour and ethics back into the system.

#109 nonplused on 06.29.11 at 12:03 pm

Garth, seriously, you need to sue the Globe for plagiarism! They can’t even write an article defending house prices without condemning them anymore!

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/stephen-gordon/a-housing-bubble-even-carney-wont-go-there/article2079775/

The important part the author misses of course is that when interest rates begin their inevitable rise and house prices thusly begin their mathematically inevitable fall, the consumer debt bubble will implode. This is what actually happened in the US, all bubble talk aside.

#110 rental monkey on 06.29.11 at 12:13 pm

I have been reading this blog for a while now, and it finally occurred to me after reading tonight’s sermon by GT: real estate today is what MLM was in the 80’s and 90’s. Everyone wants to buy inventory and sell their stuff to make amazing $, but eventuall there is not enough people to feed the bottom of the pyramid. Ponzi 2011 is definitely Amway of decades past. Anyone know people selling those products anymore?

I did make the connection before today, however, tonight it became clear. Crystal clear. Lotsa people are going to be HOOPED. Not just a $475 starter kit, it is a half a milllion dollar debt to the bank. Yikes.

#111 Industrial Guy on 06.29.11 at 12:15 pm

The Canadian Press

OTTAWA—Canada’s annual inflation rate jumped to the highest level in eight years last month, rising to 3.7 per cent as big increases in gasoline prices pushed the index to a new post-recession peak.

BOC Governor Mark Carney just had any remaining breathing room eliminated …. Since the Federal Government has no willingness to consider a made in Canada oil price policy and rising oil prices are driving this sudden increase in inflation. They are left with one card to play …. Interest rates are heading up and sharply!

The recent CAAMP report stated that 200,000 home owners “have absolutely no room for additional monthly increases in their payments.” The same report says … 700,000 homeowners could not afford another $200 per month on their mortgage payment. A $200 a month increase for anyone with roughly a $250,000 mortgage is a modest 1% increase in their mortgage rates. Almost one million Canadians are about to get caught in the low mortgage debt bear trap set by our Minister of Finance. Almost a million home owners … add partners, spouses, kids, dependants …… well you get the picture. It’s going to effect a lot of people’s lives in a negative way.

CBC Radio ran an Interesting piece on the Yale University’s professor Robert Shiller, this morning. Some markets in the USA have experienced a slight uptick in sales numbers, but shiller see’s it as just the “spring market”. he goes on to claim that further price decreases are inevitable. The reporter could not pin him down on declaring Canada’s real estate market a “Bubble”. In the past Shiller has claimed that our recover from the recession is a “a purely random success story” .. “It seems that if the country didn’t have that boost from oil, it would have done worse than the United States.”

Read more: http://www.cbc.ca/fp/story/2011/02/08/4246526.html#ixzz1QgVzTwoI

#112 Why buy? on 06.29.11 at 12:16 pm

My wife and I live on a half acre property with an ocean view on the west coast. A 3 minute walk to a private beach and we rent at $1500/month. Our landlords bought the place in 2006 for somewhere around $460,000. I imagine they think it’s worth $600 or more now but I wouldn’t pay that. I did some quick rent vs buy analysis because I wanted to know if buying the place we’re already living in would make financial sense in today’s market. Turns out it doesn’t and things just don’t look good for those that own. After running the analysis we would save approximately $289,129 (in today’s dollars) by renting, rather than buying the house we already live in, over the 30 year time frame you have entered.

Assumptions

Property tax: $2000
Mortgage rate: 5% amort. period 30yrs
Inflation rate: 3.5%
Annual appreciation rate: 3%

Here is the analysis

Rent vs. Buy Analysis Rent Buy
Rent and fees $558,000
Mortgage payments $811,674
Property insurance + $2,379
Property taxes + $104,666
Maintenance + $60,000
Opportunity cost (tied-up equity) + $944,017
Tax savings (interest/taxes) – $97,786
Appreciation – $656,541
Total cost = $558,000 $1,168,409
Present value at inflation $342,092 $631,221

Difference -$289,129

Here’s the calculator.
http://realestate.yahoo.com/calculators/rent_vs_own.html

#113 TS on 06.29.11 at 12:18 pm

Stats Canada income report based on 2009 income tax returns.
So housing goes up and incomes for the most part come down.
The squeeze is on….
http://www.statcan.gc.ca/daily-quotidien/110628/t110628b2-eng.htm

#114 Paul on 06.29.11 at 12:19 pm

http://www.cbc.ca/news/business/story/2011/06/29/housing-bubble-capital-economics.html

#115 Medic on 06.29.11 at 12:20 pm

Kent (#88), if you could have paid cash for the house in ’08, that means you have about 300K lying around. The market has returned over 50% since ’08 – that’s at least 150K profit. What did you do with the 300K you had lying around?

#116 Andrew Toronto on 06.29.11 at 12:27 pm

So guys, have prices in cottage country already begun to fall? Parry Sound, Muskoka.

Does anyone have any good resources for finding Waterfront lots?

I don’t think prices begin to fall until mortgages reset and boomers start getting nervous. 2-3 years perhaps. But Garth is right in most of his arguments, the timing hard to forecast though.

#117 Q on 06.29.11 at 12:31 pm

Of course the fiscally responsible mandarins in Oakville, now say they need $1 billion to repair all the infrastructure that they neglected for decades in order to give themselves better P&P (pay and pensions). Don’t be an idiot Nick, they say, it will only cost $160 per citizen per year…not the $4,000 that you rant about! So very true….only an average increase of 4 x $160 per household THIS YEAR. Next year when rates go to 6% or better, that figure will double per annum…and we’ll STILL owe $4,000 per person. GEE WHIZ, I wonder how we ever got into financial trouble with these wizards running our finances. Maybe they can do what the Feds, the Provinces and Regions do (and the Greeks)…just increase the debt to pay the interest. We would be better off hiring a six year old child to manage our finances…at least they understand that if you only have three apples….you can only eat three apples….! Oh, as for the Greeks….sorry Garth, they’re not reading this…Cable & Wireless just cut off their internet for delinquent payment.

#118 poco on 06.29.11 at 12:33 pm

#88 Kent
In the nearly three years we’ve lived in our current location, prices have risen, and we’ve paid $42,500 in rent on a house valued (in ’08) at $310k. The mortgage is irrelevant as we could pay cash. Taxes would have been $7500 for three years, that makes $35,300 less we could have paid had the money gone into buying than renting. Not sure how I came out ahead on this, especially given this house could well sell for $350k today
______________________________________________

I guess it’s that old saying–location–location –location

here in the tri-cities i watch as prices continually drop–5k- 10k- 20k drops not unusual anymore–it’s becoming the norm
many of the townhome complexes i watch (380k to 500k range) have had significant drops since Jan. When i see a drop of 20k i look at it as paying for my rent for the last 18 months–one in particular i’m somewhat interested in started at 439k in feb (slightly overpriced) now down to 399k–and still it sits–i figure my rent is paid til the summer of 2012

and we all know where housing is going –don’t we???

#119 disciple on 06.29.11 at 12:50 pm

A name you’ve never heard of…Edward L. Bernays, double nephew of Sigmund Freud. Bernays invented the Press Release and grandfathered Public Relations.
Bernays’ public relations efforts helped to popularize Freud’s theories in the United States.

Bernays convinced industries that the news, not advertising, was the best medium to carry their message to an unsuspecting public.

“If we understand the mechanism and motives of the group mind, is it not possible to control and regiment the masses according to our will without their knowing about it? The recent practice of propaganda has proved that it is possible, at least up to a certain point and within certain limits.”
He called this scientific technique of opinion-molding the ‘engineering of consent’.

Like I say, it’s all mind games. Take back control.

#120 pessimist on 06.29.11 at 12:56 pm

In the nearly three years we’ve lived in our current location, prices have risen, and we’ve paid $42,500 in rent on a house valued (in ’08) at $310k. The mortgage is irrelevant as we could pay cash. Taxes would have been $7500 for three years, that makes $35,300 less we could have paid had the money gone into buying than renting. Not sure how I came out ahead on this, especially given this house could well sell for $350k today.

Apples and oranges.

To realize the “value” of the house, you would be spending more than $23,000 on commission and HST, not to mention about $3,000 in legal fees for the purchase and sale. Oh yeah, there’s also the $3,100 in land transfer tax you would have paid when you bought (double that in Toronto).

Since you didn’t count the cost of mortgage interest (you had cash), you also have to count the opportunity cost of that money – $310,000 at 3% after tax per year (very conservative) would have netted you an extra almost $29,000 after tax.

Oh yes, and maintenance – a conservative $3,000 per year average – another $9,000.

Insurance would be at least another $1,000 per year more too – another $3,000.

I’ll take your word on the property taxes, but in my neck of the woods (rural), the property taxes would be at least 50% higher on a house like that. But I will concede this point as I don’t know where you live.

OK, so just off the top of my head, you can decrease your potential “profit” by $61,000 over the three years, making owning a losing proposition by $26,000. I am certain that there are other costs that I have left out or understated.

This is compared to renting being a losing proposition by $42,500. Yes, owning would have theoretically put you a head by about $5,000 per year IN THE BIGGEST FREAKING REAL ESTATE BOOM IN HISTORY. Reread that last sentence. Now imagine what would have happened in a decline.

This is not even considering the additional complications had you had a mortgage (much worse), including the interest rate differential penalty if you sold early. Not to mention the possibility of rates increasing.

Not to mention the peace of mind of renting. Pipe leaks? Landlord’s problem. Grass needs cutting or snow needs shovelling? Landlord’s problem. Property taxes goes up? Guess who. And so on.

Owning, especially in an overpriced market, for shorter terms, and if you have a mortgage is a losing game. Sure hindsight is 20/20 – I could argue that had I played the winning numbers to last night’s lottery I would be rich. Simple when you know the outcome.

#121 Soylent Green is People on 06.29.11 at 1:00 pm

snip snip: Does it not seem odd to anyone that Don Cherry, who always played the average Joe, got so wrapped up in neoconservatism, the revolt of the rich against society?

I mean he’s everywhere. Campaigning for Julian Fantino, endorsing Rob Ford. He’ll probably be lending his blubber to Kingston’s local conservative candidate.

Many are just calling him a senile old crank, trying to capture a bit of the limelight, and while that may be true, there is another reason.

Steve Harper and the boys made this man a lot of money. More money than I’ll ever see in a lifetime. And now he owes them.

How you ask? Pull up a chair. I want to tell you a story.

The Backroom Deal of the Century

http://pushedleft.blogspot.com/2011/01/did-you-ever-wonder-how-don-cherry.html

http://www.facebook.com/photo.php?fbid=181139401919426&set=a.101148906585143.2545.100000701030243

#122 Devore on 06.29.11 at 1:01 pm

#59 JohnnyBGood

Seems correct. I think it is not surprising that once the mortgage is paid off, or nearly so, the home owner would pull ahead. But, as you note, it depends. Although there is a certain historical average return on real estate, it varies WIDELY between any two given points. If you buy today, you cannot simply assume historical returns. Same applies to equity and other investments.

It is quite clear there is a bubble, or at a very hot market, in real estate in many cities, there is some confidence there will be price declines, and a long period of time before prices come back.

At some point, prices will be at a level where it makes sense to buy (vs rent) right off the bat. It will be cheaper than renting. Even if we never get there, there will be far better entry points into real estate, where you won’t have to be clairvoyant and predict economic conditions for the next 20-25 years in order to have INFORMED peace of mind (as opposed to blind faith that it always goes up and it’s the best investment).

#123 Devore on 06.29.11 at 1:06 pm

#79 Raj

9. This also gives sense of ownership

Raj, if there is anything we have learned in the last few decades, is that when something is “free”, or community owned, the opposite of sense of ownership happens. Also see “tragedy of the commons”. When no one, or everyone, owns something, funny things start to happen.

#124 disciple on 06.29.11 at 1:13 pm

“Debtocracy” a 75-minute documentary made for $15K has inflamed popular resistance in Greece by casting the debt crisis in a new light.

Seen on the Internet by over a million Greeks

http://www.youtube.com/watch?v=qKpxPo-lInk

#125 Dave on 06.29.11 at 1:26 pm

A great article in today’s Calgary Herald regarding the housing bubble that is about to burst. It’s good to see the mainstream media finally getting on board.

http://www.calgaryherald.com/business/Canadian+housing+bubble+close+bursting+Capital+Economics/5022405/story.html

#126 MikeT on 06.29.11 at 1:36 pm

bullion lickers: rejoice!
http://www.zerohedge.com/article/mint-start-selling-2011-american-eagle-silver-coins-75-premium-paper-senators-propose-elimin

#127 CrowdedElevatorfartz on 06.29.11 at 1:48 pm

@#27 Patz
Your Statement about CKNW is completely true.
That they…”pit public sector workers and their “gold plated pensions” against private sector workers. And it works! Bitter puppies phone in all day long bitch–moaning about the union workers (not all are public sector) who get defined benefit pensions—…”

I guess I’m one of the bitter puppies.

When I see the absolute lack of work that is generally “non performed” by surly, arrogant, lazy people that consider the public “customers” no better than an annoyance to be barely tolerated. ( if you doubt what I say go to the Post Office, get a Pass Port, stand in line for a drivers licence, return empty beer bottles at a BC Liquor store and see what type of “service you get…etc.etc.etc.
That fact that the majority of these “union protected” folks would be too stupid or lazy to get a job anywhere else doesnt annoy me as much as their expectation that they should have a job for LIFE.
Where? Other than the public sector does ANY other WORKER have that kind of security? No where!
So when you laugh at the “bitter puppies ” out there remember this reply.
Cause the public sector’s day of rekoning will soon be upon them.
Taxation Saturation has peaked.
Cut the public sector to the bone. And then cut some more. the private sector can do the jobs cheaper, faster and with a “pretend smile ” on their faces.
I , for one, will not weep.

#128 CrowdedElevatorfartz on 06.29.11 at 1:54 pm

Angela Calla’s sincerity is about as genuine as her hair color

#129 Bill Gable on 06.29.11 at 1:58 pm

Note to Tim : Re Vancouver Condos.

DON’T TOUCH A CONDO IN VANCOUVER with a bargepole.

Built to California codes, and slammed together by crackheads and thieves, stick with saving and investing. (*And don’t buy a crack shack either).

Green Rain screens are all over the City, as usual. NICE!!!

Condos = Leaky, then you have the old “gee we need a new roof, pipes, carpets, paint “, and of course every condo committee has at least one litigious jerk, that makes everyone miserable.

We lucked out and got our Condo sold, and a year after we moved out – the elevator quit.

One of our ex-neighbors told us the elevator is still out and they can’t raise the huge money to fix it. (* Has destroyed the life of lady in wheelchair, and it really ticks me me off).

RENT, sayeth Yoda, Rent!!!

#130 daystar on 06.29.11 at 2:00 pm

The poor property virgins. Sadly its not just them who are dumb enough to enter into a market like this:

http://news.ca.msn.com/top-stories/canadas-housing-bubble-deemed-close-to-bursting

#131 eaglebay on 06.29.11 at 2:20 pm

Hey doomers, including Utopia and Mr Reality and many more.
Have you noticed the stock exchanges this week? How are your educated predictions now?
Much money to be made. Good luck with your shorts?

#132 Dubble on 06.29.11 at 2:23 pm

Saskaboom?

I recently posted about my choice to quit my job and head back to school. I start the ordeal of upgrading a few high school classes next week.

My former employer paid ok (50k), but I saw the writing on the wall. They had recently laid off more than 500 employees Canada wide, and it was a very stressful atmosphere. I predict that this Western Canadian “cable giant” is headed for big trouble.

I have been spreading my resume all over town, but I am somewhat limited in my search. I need part time, evening and weekends…

Needless to say, I havent found work. It’s looking like a “Mc Job” might be my only option. I hear people saying that we have the hottest economy in North America.

I’m glad that I quit and that I will be trained in a field with huge demand. Saskaboom? Nah….

#133 Abitibidoug on 06.29.11 at 2:43 pm

@#96 by maxx:
You make it appear like these sheeple were forced against their will to “style” themselves into bankruptcy. As I said previously in another posting, is there anyone left in the world who believes in free will? These sheeple CHOSE to buy into the trash marketers peddled, and consequently CHOSE to get themselves into this financial mess.

#134 Bill Gable on 06.29.11 at 2:56 pm

Mr. Turner, our fearless leader and truth sayer has been trying to get you to listen – so maybe this will help cement your thoughts on WHY you best not try RE – and not for a LONNNNG time –

“Canada’s housing market is in a bubble that’s set to burst and prices could plunge by as much as 25 per cent, a major independent research firm warns.

“Housing valuations have lost all touch with fundamentals and household debt is at a record high,” economists at the economic research consultancy Capital Economics say in their most recent Canada Economic Outlook, issued Wednesday.

“Our fear is that, with the housing bubble now close to bursting and commodity prices retreating, Canada will go from leader to laggard.”

The report predicts a fall in house prices by as much as 25 per cent over the next three years.

A domestic housing boom coupled with high commodity prices worldwide have spared the economy the severe recession felt by other developed countries.”

http://tinyurl.com/3of7466

#135 VICTORIA TEA PARTY on 06.29.11 at 3:04 pm

#17 Jody

Would it be as simple and straight-forward an outcome as you wish.

But, as you can read from the following extract from the “of two minds” Web-site (I strongly recommend you read this whole piece, and its June 29th successor article about the USA ALSO being a kleptocracy) your suggestion (a lot like mine BTW) ain’t gonna happen until it does, whenever that will be!

“Greece Is a Kleptocracy (June 28, 2011)

…classic description of a kleptocracy: a financial and political Elite which skims and concentrates the wealth of the nation via corruption…while being protected by the winking complicity of their fellow plunderers who hold civil and financial authority.

…The Greek kleptocrats knew all along that the German, Dutch, French and Finnish taxpayers were easy marks, just as they knew the European Union Power Elites would fall all over themselves to “save the euro” which was the centerpiece of their “one Europe” strategy of domination.

Only the Greek kleptocrats just beat them at their own game…reckoned they could game the system…and they’ve played that hand to perfection.

…The wild card here is the oppressed Greek citizenry, who might just spoil the fun by overthrowing their corrupt Overlords…and…refusing to play any more, as a General Strike of any length would quash the fantasy of rising taxes…at the heart of the “austerity program.”

…The game is over…All that needs to happen now is for the players to reveal their miserable cards and fold. The losses will…only get more horrendous the longer the game is allowed to go on.”

The problem with Greece is the same problem investors all over the world have with their respective sovereign securities industries, and come with the same question: What is the actual value and credibility of ANY stock, bond, ETF, or any other so-called security, that I buy from the marketplace through my broker?

As time goes on the answer gets muddier because of world-wide debt-loads and the embedded conflicts of interest (kleptocracies) that result therefrom.

It’s an investment jungle out there Jody. But you already know that!

In sum, the only real investment is to pay off debts and stick close to kith and kin, providing security and care (even better than gold and silver). They will greatly appreciate your kindnesses as will the rest of us.

#136 Shane on 06.29.11 at 3:07 pm

Canada’s housing bubble deemed close to bursting

CBC – Wed, 29 Jun, 2011tweet2EmailPrintCanada’s housing market is in a bubble that’s set to burst and prices could plunge by as much as 25 per cent, a major independent research firm warns.

“Housing valuations have lost all touch with fundamentals and household debt is at a record high,” economists at the economic research consultancy Capital Economics say in their most recent Canada Economic Outlook, issued Wednesday.

“Our fear is that, with the housing bubble now close to bursting and commodity prices retreating, Canada will go from leader to laggard.”

The report predicts a fall in house prices by as much as 25 per cent over the next three years.

A domestic housing boom coupled with high commodity prices worldwide have spared the economy the severe recession felt by other developed countries.

Canada’s economic success could become the thorn in its side as the threat of a downturn in the housing sector looms, the report says.

The firm says a burst housing bubble would shrink real estate investment and hurt consumption — two things that would considerably slow economic growth.

This decline in consumption will mean a slowly rising unemployment rate as well, according to Capital.

The company says Canadian house prices are overvalued by approximately 25 per cent, close to excessive levels seen in the frothy U.S. market at its 2006 peak.

Over-building is already visible; the number of unoccupied houses and condos is at a record high. It closely resembles the 1994-95 housing slump, when the construction industry experienced a severe downturn.

The report forecasts falling house prices and smaller residential investment. Real estate currently makes up 6.8 per cent of Canada’s GDP. Lower prices would mean a hit to household net worth as property now accounts for one third of a family’s total assets, the report found.

#137 Helicopter Ben on 06.29.11 at 3:21 pm

#132 EagleBay…… your basing 1 week of stock market trading to determine whether the world economy is either in a up or down turn? there is always going to be money to be made in the stock market, but the easy money is gone. if you diversify in crap you still end up with crap. the people who are going to do well in the stock market are the professionals not the average joe going to the bank saying here invest my money, they are going to get raped like the herd always does. How did the Doomers do in 1929 , a lot better then the optimist i am sure. its not about happy or sad its about realizing whats happening around you and adjusting accordingly. the people who do the best in life arent the strongest or smartest people, its the people who are the most flexible and are able to adapt to change cause thats the only constant in this life, change.

#138 Hoof - Hearted on 06.29.11 at 3:33 pm

#79 Raj

Not sure waht City you are from, but here in BC we have this Godzilla sized tumour called TRANSLINK…

It is an unaccountable body…which is much like the giant vampire squid Matt Taibbi talks about.

They’ve done P3’s , and have obligations to their partners..such as Golden Ears Bridge, a toll bridge.

They said this P3 route was to save $$$’s, but people avoid it due to tolls…the P3 partner is guarantedd certain revenue…shortfall is made up by increased property taxes.

In other words, public transit in BC is F#cking vampire squid..no free lunch..and yet the retards still want to expand it.

#139 Hoof - Hearted on 06.29.11 at 3:37 pm

#136 VICTORIA TEA PARTY

re Greece….

Greece will teach us a lot…

I think the banksters thought raping the Greeks was gonna be easy…guessed wrong.

The only joker in the debt-deck is the old Rothschilds trick of baiting war and then covering all bets.

#140 disciple on 06.29.11 at 3:46 pm

What would happen to entire segments of our 96% service and consumer economy if the following ever happened?

“A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.”—- Time Enough For Love, by Robert Heinlein

You guessed it…(I hope)…change for the better.

#141 BrianT on 06.29.11 at 3:49 pm

#136Vic-It is pretty audacious-German and French (and even us to a certain extent) taxpayers have to pay to bail out these grifters. Then they turn around and steal Greek assets, not to turn ownership over to German and French taxpayers, etc. but to connected private interests that didn’t put a penny into this whole corrupt bailout scam.

#142 jess on 06.29.11 at 3:52 pm

what happens when a managing director of a bank is also a director of the newspapers

.. … On Monday an 81 year old lawyer confessed before a New York court to not having declared income amounting to US$26.4 million from his tax return. As a result he has been fined a stunning $9.8 million. A decision on whether he will also have to serve a prison sentence will be taken on the 27th of September.

The lawyer had placed his money on a Swiss UBS account via an offshore company. However, when UBS came under investigation by the US tax authority, he transferred his money …
==================
http://taxjustice.blogspot.com/2011/06/neue-zurcher-zeitung-swiss-dog-that.html
Peinlicher Fall für die Bank Wegelin
Von Arthur Rutishauser. Aktualisiert um 07:50 Uhr 35 Kommentare Diesen Artikel twittern. Diesen Artikel per E-Mail versenden. Drucken Artikel als E-Mail versendenEmpfänger (E-Mail)*

Schliessen

In den USA hat ein Kunde gestanden, dass er bei der Bank Wegelin unversteuertes Geld versteckt hatte. Die Information über sein Bankkonto stammte aus Unterlagen der UBS.

http://www.tagesanzeiger.ch/wirtschaft/unternehmen-und-konjunktur/Peinlicher-Fall-fuer-die-Bank-Wegelin-/story/19990053

==
two years ago
http://www.finews.ch/news/banken/1664-wegelin-hummler-erwartet-us-forderungen

#143 BrianT on 06.29.11 at 3:56 pm

The hutzpah of this guy is unbelieveable-there has never been a US president so controlled by Wall Street grifters, and now he says the problem is “the rich” (which means any non connected business owner still surviving) http://finance.yahoo.com/news/Obama-challenges-GOP-on-debt-apf-2793159575.html?x=0&sec=topStories&pos=main&asset=&ccode=

#144 Helicopter Ben on 06.29.11 at 4:00 pm

I am surprised people are piling on the greeks cause they are broke, i have a hard time believing the average greek wanted all this debt. the banks are raping them, they made a bad loan that cant be paid back, they should of never let greece into the EU. thats the banks problem not the people, the country produces less then walmart . its impossible to pay the loans back and the banks know that. what this is really about is privatizing the country. IMF is telling them give us your land, your ports your monuments your grand childrens taxes, give it all. wont happen regardless of what the paid off politicians passed. their prime minister cant walk the streets anymore cause he will be lynched. you cant make a whole country go along with this when they dont want to. they will default mine as well do it now before the banks try to take over the whole country. Spain and Italy is next only this time they are too big too fail and too big to bail out. I am not sure if anyone is seeing the bigger picture on all of this. all these crashes were planned to buy up everything for pennies on the dollar, might look amusing to you when its over seas but its coming to america very soon and our economy wont look so good when the states goes bankrupt. Which they already are just nobody has noticed the emperor isnt wearing any clothes.

#145 Derek on 06.29.11 at 4:07 pm

#128 CrowdedElevatorfartz on 06.29.11 at 1:48 pm wrote:
When I see the absolute lack of work that is generally “non performed” by surly, arrogant, lazy people that consider the public “customers” no better than an annoyance to be barely tolerated. ( if you doubt what I say go to the Post Office, get a Pass Port, stand in line for a drivers licence, return empty beer bottles at a BC Liquor store and see what type of “service you get…etc.etc.etc.

Well so you say. On the other hand I have just returned from a visit to the Post Office where a trio of friendly ladies quickly, courteously and efficiently handled a group of lunch hour customers. I left feeling very happy about the experience. So there may be bad public service employees but there are also good ones.

(And if you want to know a secret, it’s not that different in the private sector. Some parts the service is great, others not so much).

#146 maxx on 06.29.11 at 4:18 pm

#62 Canuck Abroad on 06.29.11 at 2:14 am
“….he is looking at possibly several weeks rental void, plus redecorating costs…”

AND, having to find another great tenant who always pays on time and takes good care of the premises. Never underestimate this enormous value to a landlord.

#147 CrowdedElevatorfartz on 06.29.11 at 4:20 pm

@#143 Derek
Touche’
I stand corrected. One wonders if they were happy to be back at work after the strike/lockout.
It’ll pass.

#148 the_apocalyptic_one on 06.29.11 at 4:22 pm

HAM becoming bacon?

http://finance.fortune.cnn.com/2011/06/28/chinas-debt-bomb/

#149 Nostradamus Le Mad Vlad on 06.29.11 at 4:23 pm

#245 TurnerNation on 06.28.11 at 10:51 pm — “This year marked the 200th anniversary of the 1811 New Madrid Seismic Zone earthquakes, which were recorded as some of the largest earthquakes to strike the continental United States.”

Thanks for the link. Interesting with all the flooding covering most of the NMF, the forest fires close to the nukes in Los Alamos and the SAF burping occasionally.

Wonder what role HAARP plays in all this?
*
#33 Helicopter Ben — “if 6 of the weakest EU countries Default which is very likely it will cost the banks 4-6 trillion leaving them insolvent.”

In a word then, we’re screwed as there are PIIGS, the UK, Latvia, etc. Going out in a blaze of glory is a nice way to complete this current cycle!

#57 debtified — Add the US and most western countries into the mix, and you’re probably onto something, esp. if China ditches the Yuan / Renmibi (or both) and goes with the Rouble.

#71 Jody — “I fully expect Canadian banks to take a week long bank holiday to coincide with the July long weekend.”

Nicely pointed out, esp. with all the other garbage being tossed around in this classroom of a planet. Now TurnerNation’s link at top becomes a little clearer when it’s all packaged together.

#83 Jody — Good link. As NAmerica is quickly headed to a service-based economy (see McJobs or Timmies servers), it really doesn’t matter anymore.

#134 Abitibidoug — That’s right. Freedom of choice (which everyone has) entitles each person the freedom to make their own choices in life, and they live with the consequences of those choices.

#137 Shane — “Over-building is already visible; the number of unoccupied houses and condos is at a record high.” — Just like 1989, 1982 and so on. Parents sometimes teach their children well, but whether those children listen is another matter altogether.

#150 Helicopter Ben on 06.29.11 at 4:58 pm

#150 Nostradamus….. just to make it clear the 4-6 trillion is held by all the banks involved mostly European but american too. the Fed reserve pumps massive amount of money to these EU banks and to the stock market too, essentially giving trillions of american tax payer dollars to keep this system afloat, the stock market and banks would of crashed even harder a long time ago if not for them doing this, doesnt solve the problem though just makes it worse. very few families in Europe own all these centralized banks and bigger banks like Golman sachs and JP Morgan. so when they bail these banks out they are bailing out then selves with tax payer money. and when they print the money to bail them selves out the tax payer has to pay interest on this money created out of thin air. The Rothschild family owns half the worlds wealth and they want more money and more power thats all this is about, indebt the world and bring in a one world currency and you will be their slave

#151 maxx on 06.29.11 at 5:10 pm

#134 Abitibidoug on 06.29.11 at 2:43 pm

@#96 by maxx:

Read my second sentence again.

Arguing that people have the capacity to exercise free will 100% of the time, that they should be immune to advertizing volume and complexity as well as peer pressure is beyond disingenuous. I routinely hear retorts like yours when business attempts to wash it’s hands of a situation it doesn’t like.

You are correct in that people can exercise free will, however it is sheer fallacy that they be immune to the volume of BS they are exposed to. Whatever the source.

#152 Hoof - Hearted on 06.29.11 at 5:13 pm

#145 Helicopter Ben

Didn’t Goldman Sachs get in bed with Greek politicians and had them buy all that toxic debt ?…the Greek citizens had no say ?

#153 Helicopter Ben on 06.29.11 at 5:13 pm

Oh and can you guess which countries dont have a centralized bank. . Iran, Libya, sudan, cuba and north korea. Afghanistan and Iraq just got theirs thats what these goldman sachs sponsored wars are about, stealing nations wealth. they are setting up libyas as we speak, they will steal kadafis 100 tons of gold and the crude oil, kicking china out of the country. This is why they say these countries are evil, they will go after Iran soon enough. i traveled through Iran when i was 21. My bank card didnt work with the ATM’s i had to carry all the money i had on me during that month, i didnt realize then but i do now. when george bush called them the axis of evil i laughed, all media is bullshit, learn to think for yourself.

#154 garrulous squirrel on 06.29.11 at 5:22 pm

#46 Pocop…….get out from under that rock……stop trying to live with yourself through denial…or stop drinking so much at the precinct. The public recognizes the police force as a wreckless lieing murder machine that lies and hides their guilt behind process. heres just one example…….I’m not your mommy…..do your own surfing…… as I said….the public meida is fillled with examples of murderous incompentance by those neanderthals who ‘made their mark; on the admission application for police work.

http://www.straight.com/article-329990/vancouver/rcmp-officers-not-justified-tasering-robert-dziekanski-inquiry-finds

Just think about just the number of unfortunates who have been gunned down or otherwise have met their untimely death before you try and defend the watercooler bravado down st the ‘goon store’. How about the Ian Bush case……..????

Just these two examples that have made it through the police denial machine have shown that the police kill, steal, lie, drunk drive and the police mobe to hide the facts from the public. Is that not above the law? before you decide to become a spkesman for the police you should at least read a few newspapers…….promise….it isn’t that hard.

You wanted examples….there you go.

#155 West Coast on 06.29.11 at 5:29 pm

Is it a conspiracy when it is plain as day?

Every western nation is following the same pattern of being thrust into debt and then regardless of the will of the majority being forced to selling off / liquidate their public infrastructure (parks, social programs, water,…)

It is not a conspiracy it is as ordinary and as banal as any other corporate raid.

http://www.guardian.co.uk/business/2007/apr/12/businessglossary108

#156 robert james on 06.29.11 at 5:36 pm

#149 Ham becomes bacon.. Some how I would not be surprised if this happens at some point… Personally speaking,I often wondered if China was just a lot of smoke and mirrors.. Even the “over night millionaires” (criminals) are getting out and coming to Vancouver and other places where they are welcomed..

#157 Imstupid on 06.29.11 at 5:40 pm

#24 Fleabitten Monkey

Just to add to your post, I wish people thought individually, we would live in a better world. I can only speak for myself, I have not bought anything from a store in almost 4 years. I am an economic parasite. I save about 60-70% of my income and play the globalization game too. I buy everything from China directly. Why shop at Walmart? Just go directly to the source and get a better deal. I have someone in China that I pay 2k to get me what I need for the year. I arrange a shipping container that costs 6k and get everything for a third of what I would pay retail. If you people were smart you would do the same. It’s ok because globalization is good.

Did they send you over a job, too? — Garth

#158 brainsail on 06.29.11 at 6:06 pm

Some good news about North American companies who have their goods manufactured in China.

“Fed up with the poor quality of having their products made in China, American businesses like Sleek Audio are moving production back home.”

http://finance.fortune.cnn.com/2011/06/29/why-we-left-our-factories-in-china/

#159 zombiedelight on 06.29.11 at 6:07 pm

Hey Raj,
I want a free house, that way there will be less crime

Oh and if you disagree, i’ll give you a free punch in the face!!!

#160 Kitchener1 on 06.29.11 at 6:08 pm

Greece is suffering from the NIMBY mindset as a whole country. NIMBY means not in my backyard. the same applies to there line of thinking.

The demographics have been against them for a while, population getting old quick, huge unemployment for the under 30 crowd, small population, early retirment-55-57 etc.. The older crowd has the most votes, hence their situation, it could have been addressed but no politican would get elected on a cut and tax increase budget.

everyone is ok with cuts so long as its not their cut of the pie. Now there all screwed.

regarding the inflation CPI report of 3.8%

Banks getting there money at .25, mortgages at 3.3% five year or 2.2 variable = free money- crazy

#161 Imstupid on 06.29.11 at 6:08 pm

#150 Nostradamus

The trillions the banks are out from piigs going broke is just a drop in the bucket compared to the derivative fall out it would have. Greece alone can cause a trillion dollars of gains to disappear. That’s why the USA is concerned their banks don’t hold that much Greek debt but the have large derivative bets that could cause the system to be rocked again.

#162 daystar on 06.29.11 at 6:10 pm

145 Helicopter Ben on 06.29.11 at 4:00 pm

I’m inclined to concur with your optics on Greece, HB. Greece was the last of the first nations to join the Euro, citing risks to their own currency then due to high public debt loads. I don’t think some commentors understand what each nation joining the euro gives up in terms of their own ability to handle or control a public debt crisis.

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

Greece wasn’t a good fit given their economic circumstances back in the day and they were the last to join the Euro in 2000. 50/50 odds were given then concerning Greece’s ability to stay afloat back then with economists citing that Greece was just one bad government away from insolvency so why is the world so shocked at whats playing out in Greece today?

What surprises me is how people are reacting to the reactions of Greeks on the street. Greece is being forced to liquidate everything they once publically owned. Government buildings, railways, ports, every crown corp, its all being sold now and why? Try a corrupt/mis-managed government in power for 5 years that needed to do all the right things economically but did nothing but the wrong ones. Heck… shucks… who would ever think a corrupt government would ever grace western nations elsewhere, right? (what did Canada rack up with foreign bond debt in ’09-’10, $100 billion worth, approximately 90 Billion coming from the U.S.? Its not hard to picture us being there within 5 years at that rate)

http://en.wikipedia.org/wiki/Politics_of_Greece
http://en.wikipedia.org/wiki/New_Democracy_(Greece)

Corrupt/ideologically bankrupt hallmarks of the rightwing “New Democracy” party was bloated, unsustainable military spending notably in 2004, 2005 with Greece coming in 2nd of all big defence spenders in Europe. Did they really need 30 F-16’s and 333 leopard tanks? U.S. defence contractors thought so. Its not hard to extrapolate that one or many politicians as they say, proverbially got “greesed”. The true tell of their corruption rested with “creative accounting” of public finances, declaring 3% annual deficits when the number was more like 13%. Commentors who rail away against the Greeks and their present choices towards left wing governments simply do not know the political history of Greece. Simply put, their right wing choices failed them miserably so where does the voter go next?

I guess… if one was to look at our own human nature in retrospect, we as onlookers have one of three choices when our relations (humans elsewhere) go through hard times: 1) Sympathy, 2) pity or 3) indifference.

Sympathy is reflected by one’s grasp or belief that we are all interconnected, all “in the soup together” so to speak and as such, sympathize with whats happening towards the hardships of others because, through connection, we can actually relate. Pity is reflected by one’s belief or view that the hard times experienced by an individual or group are localized because the onlooker is nothing like those suffering, “I am nothing like them” (or perhaps moreso, “I am above them”) thinking and as such, pity is the most that can be mustered. Indifference is, well, to simply not care at all and I would suggest, having been around enough revolutions around the sun and seeing this impermanent world woven with patterned causal effects for what it is that we all have much, much more in common with each other than we realize. Karma is not always instant, will be around to remind us why that is… soon enough.

#163 pulse on 06.29.11 at 6:21 pm

The REAL B.P.O.E.

“On April 9, the fiercely independent people of island-nation defeated a referendum that would have bailed out the UK and the Netherlands who had covered the deposits of British and Dutch investors who had lost funds in Icesave bank in 2008.”

” “Taxpayers should not be responsible for paying the debts of a private institution,” said Sigriur Andersen, a spokeswoman for the Advice group that opposed the bailout.”

http://netrightdaily.com/2011/04/iceland-declares-independence-from-international-banks/

ALL HAIL ICELAND!!!
(then examine the actions ‘our’ Bank, PMO and Cabinet)

pulse

#164 Hoof - Hearted on 06.29.11 at 6:46 pm

From last year

Bernanke: Wall Street’s Greek Debt Contracts To Be Investigated By Federal Reserve

http://www.huffingtonpost.com/2010/02/25/bernanke-wall-streets-gre_n_476687.html

WASHINGTON — Federal Reserve Chairman Ben Bernanke told lawmakers Thursday that the central bank is looking into the use by Goldman Sachs and other Wall Street firms of high-risk financial instruments to make bets that Greece would default on its debt.

Bernanke said the Fed is examining companies’ use of credit default swaps, a form of insurance against bond defaults. He made the comments at the start of a Senate Banking Committee hearing. It marked the second day that the Fed chief has testified on Capitol Hill about the economy.

Also check items on YOUTUBE…Max Keiser explained a lot.

#165 JRL on 06.29.11 at 6:49 pm

Ok fine, so nearly every country in the world is burdened with MASSIVE piles of “National Debt” and soon every child will be born owing a portion of their future earnings to some invisible bankster cabal. I have a question – How is that possible? How can EVERY country be massively in debt? To whom? For what, exactly? Workers and countries produce real, tangible stuff – banksters produce nothing, they feed off usury. I think all countries should just claim bankruptcy and tell the banksters to sod off before we stick them all in a gulag where they belong. Had a meeting t’other day with a RE shyster, cute as a button like Angie. She launched into her routine and I shut her up with a look, held up my hand and told her to save the sales pitch. I’m not some 20 something just fell off the turnip truck yesterday. Everybody today is a “professional” something or other, too bad none of them know the square root of jack squat.

#166 Cindy on 06.29.11 at 6:52 pm

Read more: http://www.calgaryherald.com/business/Canadian+housing+bubble+close+bursting+Capital+Economics/5025054/story.html#ixzz1Qi9fHCnH

#167 pulse on 06.29.11 at 6:58 pm

#161 Kitchener1

Your tone and perceptions indicate a damaged ability to discern (that’s ok – it can be cured!)

Here is some human reality for you to consider in your deliberations of truth;

WARNING: disturbing FACTS and actual human emotion are presented.

http://sturdyblog.wordpress.com/2011/06/18/democracy-vs-mythology-the-battle-in-syntagma-square/

If you can choke that down, you may choose to move on to some other tasty FACTS displayed at the top of this blog entry;

http://caracommunity.com/content/bill-caras-blog-jun-28-2011

Then, if you are still with me, you must try and discover where Canada’s gold reserves have gone??? (Maybe Garth could tell us something about the disposition of those worthless bricks under Mr. Mulroney’s and Ms. Campbell’s watch.)

pulse

#168 pulse on 06.29.11 at 7:19 pm

#9 Raj

Have you ever considered that ALL privileged government organization exists at the expense of real producers?

More of the great “Something for Nothing” intoxication that will destroy the free will and ambition of any decent working population. It is quite simple for any group to continue to vote themselves ‘benefits’ at the expense of others. The tyranny of the majority knows not what they do?

In a dumbocracy, two foxes will always vote to remove the fence from the henhouse.

pulse

Will t

#169 BrianT on 06.29.11 at 7:30 pm

As Charlton Heston would say-Soylent Green is Sh-t! http://old.news.yahoo.com/s/digitaltrends/20110615/tc_digitaltrends/japanesescientistscreatesmeatoutoffeces

#170 Dan in Victoria on 06.29.11 at 7:39 pm

@158
Are you one of the forty thieves?

#171 Nostradamus Le Mad Vlad on 06.29.11 at 8:05 pm


#151 Helicopter Ben and #162 Imstupid — Good summations and thanks for the updates. It will be curious to see how this all plays out once a few years has gone by, who holds the seat of power and who the bit-part players are.

If BC allows the HST to come into play, this is the start of our own austerity plan, and we will have done it ourselves, so your two posts when added together, lead to #156 West Coast — “Every western nation is following the same pattern of being thrust into debt and then regardless of the will of the majority being forced to selling off / liquidate their public infrastructure (parks, social programs, water,…)”

We sure do live in interesting times, ‘tho I say (for myself) that if the HST takes effect, I will cut about 98% of my shopping out altogether — do without, unless it’s absolutely necessary.
*
1:22 clip The UK version of Halliburton – Black Water, etc.? Layoffs in the military mean new business opportunities, raping, pillaging and looting other countries; One world govt. “And we’ve seen what a wonderful job the UN and EU have done along those very lines!” wrh.com; 1:42 clip Breaking (wind): Iran tests nuke capable missile, but no one says whether the missile is loaded with nuke stuff or not. “THIS IS A “JEDI MIND-FUCK” ATTEMPT TO JUSTIFY ATTACKING IRAN!” wrh.com; 1:14 clip Iran shows Russia all the proof it needs; NATO dropping uranium bombs on Libya, so all is well; Egypt “History shows us the pattern. The French Revolution was not a single revolt, but several in a row.” wrh.com.

Banxters laugh as Athens burns; 2:40 clip Greek vs. US debt; Athens Just as Sarkozy had the Irish take a second vote on EU – IMF membership (?) and succeeded, so the same for Greece; Inflation Yes, Little Suzy Creamcheese there is an economy left, but it’s in complete agony; New Rules for Banks; Greece treasures (like the Toronto Maple Sausages) on sale to pay off the debts; Austerity What it will look like to many Greeks (and others) — fire the banxters! Let then pay their own way on minimum wage! UK Austerity “The same people who tell us that the country “can’t afford” to pay pensions or provide public services have now entered into their third major war in ten years — with no end in sight.” The west is broke, so they all bail out each other! BB (Big Banks) “The bigger the bank, the greater the tendency towards fascism.” wrh.com, and that is what exists in NAmerica now; Buy Silver? Not sure; 23:23 clip “Eight states quietly move to drop out of the Federal Reserve System.” wrh.com; Casino Royale “I am telling them that the whole 20 story casino is going to collapse on top of them and to cash in their chips and get out.”; Iceland Independence is sweet!

Dams Right on the South Dakota / Nebraska line — “The face of Gavins Point Dam is cracking under the preasure of the floodwater buildup and could burst soon.” Los Alamos Fire within fifty feet; TSA “Cancer, schmancer; just look at my Chertoff Group stock soar!! Maybe I should plow some of that profit into cancer treatment centers! I’ll be RICH!” wrh.com; Other stuff to keep you distracted; Monsanto’s very healthy profit.

#172 JohnnyBGood on 06.29.11 at 8:09 pm

123 Devore

“Although there is a certain historical average return on real estate, it varies WIDELY between any two given points.”

Absolutely. Over the 30 year time span used in my calculations, I think it is safe to assign an historical average. Barring a massive generational revulsion of real estate and a sustained credit crunch.

“…there is some confidence there will be price declines, and a long period of time before prices come back.”

Yes, it could happen this way, as it did in the ’90’s. However, aside from a crash, I see the real potential for another scenario: high(er) rates, high debts, and high housing supply, but an inflationary economy with high immigration and decent job growth shift spending away from the real estate sector and into goods and services. Housing prices could basically stagnant for years (but not decline in nominal terms) until inflationary growth allows the economy to catch up.

“… there will be far better entry points into real estate, where you won’t have to be clairvoyant and predict economic conditions…”

The very act of trying is, I think, a mistake. One of the points I repeatedly make is that the decision to buy a house is not only a financial one, and trying to time the market is, in my opinion, fool-hearty for the average person.

That’s not to say I advocate jumping in with both feet and allowing the bank to stuff as much money in your pockets as you can take. I always stress people need to carefully assess if they can afford home ownership and what would their chances be of riding out any potential tough times without realizing a potentially devastating loss of wealth. However, under my version of affordability, the Canadian housing landscape would look much different than it does today. Think 1950’s perhaps.

#173 Imstupid on 06.29.11 at 8:10 pm

No, that’s the point. Why should I play nice with my spending, when in the end, retailers don’t play fair with their buying? I would love to by things made locally but all you find is made in China junk. Since it’s made in China I may as well by it there. Cut everyone out and save a bundle. Im not saying I agree with it but things are the way they are. Let’s all work the mule til it dies then we can play the blame game. What I find the most amusing is that the same “name brand” products sold here are so much cheaper. Talk about price discrimination. I bought my car from the USA saved 16k. The only thing is that you can’t finance anything. Cash only. I wish I didn’t have to do this but I flat out refuse to be ripped off period. So my advise is get 3 -4 households together fill up a 40 foot container an buck the whole system.

#174 Imstupid on 06.29.11 at 8:12 pm

Buy, sorry for spelling error

#175 Imstupid on 06.29.11 at 8:17 pm

I’m not a thief, I declare all purchases and pay duty plus taxes. I go to Canada customs clear my shipments the only diffrence is that I do it for personal consumption not retail.

#176 ittybitty on 06.29.11 at 8:21 pm

#7

We should not be working at the problem together,not when you have idiots living off loans and swimming in debt. Let the savers and renters have the last laugh.

#177 Devore on 06.29.11 at 8:24 pm

#165 JRL

How is that possible? How can EVERY country be massively in debt? To whom? For what, exactly? Workers and countries produce real, tangible stuff – banksters produce nothing, they feed off usury. I think all countries should just claim bankruptcy and tell the banksters to sod off before we stick them all in a gulag where they belong.

You and what army?

As long as bank created credit is fungible with government created currency, through magic of the Bank Act, nothing can change. Credit is denominated in the unit of exchange.

Since all money (currency and credit) is brought into existence via interest-bearing debt, at all times more money is owed than actually exists. On average, we are all in debt. The central pillar of debt-based money system is that debt can never be repaid, in fact it is vitally important that such a thing never happens. This is why countries are de-facto not allowed to default, only to restructure debt by taking on more debt.

#178 Devore on 06.29.11 at 8:38 pm

#172 JohnnyBGood

However, under my version of affordability, the Canadian housing landscape would look much different than it does today. Think 1950′s perhaps.

Good luck. For example, look at the US long term house price chart (such as this one from a quick Google search)… the post-depression and war period was characterized by very depressed house prices. In the early 50s prices returned to the mean, where they stayed roughly until the 2000s. If you bought a house when WWII ended, you made the right decision.

This is in contrast to the last decade. Surely, if you bought in 2000, you would consider yourself an investment genius. There was no reason NOT to buy a house then. It was a logical decision, assuming you had the financial means to do so. But the rise in prices of the last decade does not correspond to rising incomes (which are flat) or to falling interest rates (which do not justify a 100% price increase). This is affordable, only as long as interest rates remain low.

To buy today, even for the long term, you have to assume this is the new normal. This is the new plateau. (“Stock prices have reached what looks like a permanently high plateau.” Irving Fisher, 1929, 3 days before stock market crashed, another bubble also driven by extreme leverage and credit created by the newly formed FED.)

Is buying real estate today like buying in 1950, or like buying in 1910?

#179 Dan in Victoria on 06.29.11 at 8:56 pm

I had a good laugh this afternoon.
Enquired about a piece of property that has had several price reductions.
Realtor e mailed me back, Oh we have some one else interested we will accept offers next Monday at 5 pm.
LMAO for a good hour.
I think i’ll go fishing instead.

#180 Helicopter Ben on 06.29.11 at 8:59 pm

# 153 Hoof Hearted…….. I think the greeks had as much as a say as we do hear or any american. we get lip service from our governments but at the end of the day they no longer work for us they work for banks and corporations. what happens if the north american union goes through which is very likely, would they reverse it cause we dont like it? no. even though it would end our sovereignty as it did to europe , cause when it went through there was a new constitution that overrode the individual countries constitutions, with open borders and new currency. Cause greece is tied to the Euro it cant function anymore, their country is too small to have a strong currency in their situation. when the European Union was being assembled the majority of people in many nations didnt want it but it went through anyways. The American revolution was mostly about fighting the bank of england, same families owned them then as they do today, nothing has changed. I never vote anymore, the world is not as it seems.

#181 Helicopter Ben on 06.29.11 at 9:01 pm

and if you are wondering Garth, yes i am wearing my tin foil hat

#182 garrulous squirrel on 06.29.11 at 9:02 pm

BC Civil Liberties publishes police force ‘wall of shame’. Its fairly extensive……and shameful……this rabble in uniform isn’t worth the price in blood that citizens pay. We may as well hand out guns and tazers to the criminally insane and send them out with a ‘hall pass’.

http://www.bccla.org/policeissue/policeissuesub.html

#183 Dan in Victoria on 06.29.11 at 9:03 pm

Vlad @171
I had an online discussion with a bunch of people about the HST.
OMG there are some dumb people out here. Tragic.
Garth example today would probably confuse them.
Or as i was told go take a course in economics.
Interesting times indeed, oh well the smart ones will do okay as per normal.

#184 BigAl (Original) on 06.29.11 at 9:09 pm

Iceland and Argentina both show that there is life (even prosperity) after default and giving the finger the international bankers and the IMF.
The third world shows that bending to IMF austerity measures destroys economies, people, cultures, and nations.
So I say to Greece, go ahead and default. You will be better off.

#185 Utopia on 06.29.11 at 9:10 pm

#132 eaglebay on 06.29.11 at 2:20 pm

“Hey doomer’s, including Utopia and Mr Reality…”
————————————————————————-

I am not a Doomer Eaglebay. Not a conspiracy theorist either. I consider myself a realist and I try to remain objective. My short term call on the market was related to ideas based on some assumptions that did not come to be. I can assure you, had the Greek vote failed (as one example), the market would look quite different today than it does. In any event, don’t get too cocky. The general trend is still down and the froth is still being blown off commodity markets in particular. Right now, my expectation is that trend will hold through to fall. I am actually bullish on stocks in general, just not yet. That moment will come in due time.

#186 Abitibidoug on 06.29.11 at 9:44 pm

@maxx #152:
I hear and see a lot of advertising every day, as most of us do. I CHOOSE to ignore most of it, and usually assume it’s BS unless experience teaches me otherwise. That’s why the belevolent government gave me an education, paid for by the taxpayer of course, to teach me how to think. Nostradamus Le Mad Vlad (post #150) understands this idea, what’s so disingenious about this simple concept that you don’t get it?

#187 Dan in Victoria on 06.29.11 at 10:23 pm

Yawn…….Type alibaba on google search.

#188 waterloo Resident on 06.29.11 at 11:48 pm

I don’t know what everyone is so afraid of; just buy that house and when the time comes that you cannot afford the mortgage anymore then just walk away from it the same way Americans walk away from their homes. If this means that you need to declare bankruptcy then go ahead and declare bankruptcy, then start off with a fresh slate. SIMPLE.

#189 maxx on 06.30.11 at 8:47 am

#186 Abitibidoug on 06.29.11 at 9:44 pm

If you CHOOSE to believe that you are able to opt for an independant course of action 100% of the time, you are very much mistaken. No one is always immune to influence (whether overt or covert) and no one is “above it all”. The concept of freedom of choice is in very large part an illusion that some CHOOSE to buy into wholesale. See, simple.

#190 Abitibidoug on 06.30.11 at 11:18 am

@189 maxx:
Some things, like the weather or how the economy is performing are beyond my control. however, I can exercise choice in many other matters in my life. Are you familiar with the story of Adam and Eve in Genesis, the first chapter of the Bible? Even if you aren’t religious (and by the way I am not) this story brings out an important point. The actions taken by Eve, and subsequently Adam, were the results of their free will and having a brain God gave them to make independent, autonomous choice. Fast forward to the present, I live in a country of freedom of speech, and the freedom to make choices on many matters. For your information, many soldiers, young men in their prime, died in 2 world wars to preserve this great freedom that I appreciate. Not only that, but many more men (and women) put their lives on the line, ready to fight in the Cold War period, and at much cost to taxpayers, again to preserve that all important concept of freedom. We commemorate this sacrifice every year on Rememberance Day, November 11. In summary, I GREATLY appreciate my freedom of choice and do not take it lightly.

It’s also worth noting that my freedom of choice has led me to choose some bad investments. I CHOSE to buy those bad investments, knowing fully well the risk I was taking, and have no one to blame but those 3 people named Me, Myself, and I for the way it all played out. I would rather have the freedom of choice (as I should emphasize again that I have) and make the odd bad choice rather than not have freedom of choice at all. See, it’s that simple.

#191 Jonnycanuck on 06.30.11 at 1:28 pm

I guess those that have seen their values double and sometimes triple in last 8 years were all idiots to have bought. It is neither Garths or Angellas advice to be a determining factor in if people should buy or not. The clients need to look at their circumstance and decide if they want to and are qualified to purchase a place. If they qualify and want to have the pride of ownership who is Garth to say that buying would be a bad option. Angela is providing a service to clients who would like to buy….she is not forcing people to buy.

#192 maxx on 06.30.11 at 5:02 pm

#190 Abitibidoug on 06.30.11 at 11:18 am

You’ve missed my point again. My posts have nothing to do with the legislation of freedom of choice, which, like you I also greatly appreciate. My posts have everything to do with the way business is often conducted. The methods of influence it is free to choose to employ, are a force to be reckoned with and quite often result in unfair advantage to its benefit. We must all accept the consequences of our choices, however the data available for choice is not something we have enough control over.
There is a lack of balance between business interests and the individual, now more than ever.

#193 Abitibidoug on 06.30.11 at 9:00 pm

@maxx #192:
You do make some valid points, about the lack of balance between business and individual interests. Sadly, this imbalance got worse in the early 1980’s with the more right wing conservative pro business bias in governments. The end result is you have to be a more vigilant, more informed, critical thinking, look out for number one consumer. Whether that is better for society is debatable to say the least.