XXX

.
Quiet back there, damn it. Let’s try to settle down on this blog, and show some respect. We need a full minute of silence for one thousand brave realtors who are making the ultimate sacrifice in a major Canadian city which shall remain nameless. Yes, poor Victoria, capital of BC, the canary in Vancouver’s coal mine and a harbinger for Toronto where (I am told) about 100% of new condo sales last month went to speckers.

So what happened in Victoria? Cue the crickets. In the last full week there was a grand total of 18 residential sales, only seven of them single family homes. Yes, I know this is August and BBQ weenie time, but this is a market where there are more than 5,000 listings (and 1,000 real estate agents). At this rate, a total of 100 or so houses could sell in August – which would be an 80% decline from July.

That’s hardly likely, but it’s quite possible sales could be halved. And after that, prices. Of course, average asking prices already tumbled about $50,000 last month, so the canary’s squawking. And, I can report to you, the inevitable is spreading.

In Vancouver the latest secret realtor numbers show sales in trendy Van west are off 38% and in HAM central (Richmond) down 35%. Deals are running a full 25% below the 10-year average and bidding wars have fizzled. The worst July on record was in 2008, the second-worst was 2009, and this one was just as bad.

Yesterday, as you know, I told you about godless Toronto. Prices have dropped back to March levels and month-over-month numbers are lousy. Sales fell by over 20%, and if it weren’t for all those myopic new condo speculators and horny 5% virgins lining up for plastic-clad boxes in the burbs, even the Toronto Star might notice what’s going on.

But let’s get to the news.

Yes, America was downgraded Friday night by the guys at S&P. Ironically, they stripped the wealthiest nation on earth of its AAA rating, while the same harlots handed triple-As out like flavoured condoms to every toxic batch of securitized subprime mortgages that came along. Pathetic. And right now, meaningless.

“The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics,” S&P said, trying not to smirk.

But that’s not the news that matters. At least not to house prices in BC and Ontario (that middle bit – the prairies – is there to keep the metrosexuals apart). The salient factor is jobs. We don’t have enough of them, and those who do have jobs aren’t getting raises. This means rising houses values are supported only by rising debt – which is 100% unsustainable, whatever happens to interest rates.

Friday’s employment numbers in both Canada and the US sucked. Yes, positions were created, but in tepid numbers. In this country 95,000 new jobs came from the private sector, while government shed 70,000. Yup, that’s right – seventy thousand families who no longer have a defined benefit pension plan to fall back on. Across this whole massive country, just 7,100 net new jobs materialized. The jobless rate fell a bit, but only because a ton of folks gave up looking.

In the States, a similar story – where 20 million people are out of work. It is the longest, deepest employment slump since the 1930s.

It’s widely and wisely believed the US housing market will not recover until more people are working. Interest rates could go to zero with the government giving everybody a free down payment, and not much would change. Yanks have learned their debt lesson. You don’t take on a fat mortgage unless your income is secure and your future ascending.

This week was a shock for most Canadians. It conjured up wisps of panic not felt since 2008. Financial markets tumbling. Confusion and panic. Wall-to-wall media wallowing. Instant investment fear. And the realization almost everybody you know – in your family, at work, in your own house – just pissed away three years in which they could have prepared.

Instead, we’re far more indebted, less diversified, more exposed and vastly more at risk than we were the last time you turned on CNN.

This is why real estate sales and prices will fall. It may take time to seep east from vexatious Victoria, but seep it will. Enjoy the house porn while it lasts. We’re about to be downgraded.

 

232 comments ↓

#1 TurnerNation on 08.05.11 at 10:00 pm

Ah, the new Freedom 85 retirement plan for most :(

DJ Investors May Have To Get Used To Zero T-bill Yields

By Min Zeng and Anusha Shrivastava
Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)–Zero or even slightly negative yields may be here for a while in the market for short-dated U.S. government debt, barring any significant improvement in either the global economic outlook or the euro-zone’s debt troubles.
Demand has surged this week on Treasurys maturing in a year or less, known as T-bills. Yields on many T-bills have tumbled back to around zero again after a spike last week. Once it became clear that the U.S. won’t default on its debt, money investors flocked back to T-bills in droves at a time when risky assets had suffered a broad selloff amid fears about global economic growth and euro-zone’s debt crisis.

“As long as uncertainty persists, I won’t be surprised to see bill yields stay at these low levels,” said Sean Simko, who oversees $7 billion fixed-income assets at SEI Investments Co. in Oaks, Pennsylvania. “Safety is the driver for now.”
Jerry Curley, a senior T-bill trader at in New York at BNP Paribas, sees a very tight range for T-bill yields and that they could even dip slightly below zero. T-bill yields are anchored by the fact that the Federal Reserve has kept its target policy rate between zero and 0.25% since December 2008 and some T-bills have fallen below zero for several occasions since the 2008 financial crisis.

Friday, the 1-month T-bill yielded 0.001% while the three-month T-bill yielded 0.008%. That means that the Treasury can for now borrow money virtual for free, albeit for short periods, a boon in its efforts to manage its fiscal shortfall.
Thomas Urano, portfolio manager in Austin, Texas, at Sage Advisory Services Ltd, which oversees $9.5 billion in assets, says he understands the appeal of T-bills but is looking for alternative assets from which to squeeze higher returns. He is buying commercial paper sold by non-financial U.S. companies, for example, but stays away from euro-zone bank commercial paper.

“Investors are still staying very liquid, very short, the majority is in overnight paper,” said a trader at a primary bank. “They are not looking for yield just yet, they are more concerned about staying liquid.”

#2 waterloo Resident on 08.05.11 at 10:03 pm

(” America was downgraded Friday night by the guys at S&P “)

Oh Crap, Monday is going to be BRUTAL on the stock market !

#3 Hashnugs Inthebong on 08.05.11 at 10:04 pm

United States of America Long-Term
Rating Lowered To ‘AA+’ On
Political Risks And Rising Debt
Burden; Outlook Negative

#4 T.O. Bubble Boy on 08.05.11 at 10:07 pm

Wikipedia is already updated:

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

So, the final AAA survivors are:
Australia
Austria
Canada
Denmark
Finland
France
Germany
Guernsey
Hong Kong
Isle of Man
Liechtenstein
Luxembourg
Netherlands
Norway
Singapore
Sweden
Switzerland
United Kindom

who’s next???

#5 T.O. Bubble Boy on 08.05.11 at 10:08 pm

(I bet on Australia, the UK, or Hong Kong)

#6 Devore on 08.05.11 at 10:09 pm

Is that a Luger in your bra, or are you just happy to see me?

#7 Smoking Man on 08.05.11 at 10:15 pm

about to be downgraded huh…………………………

Time for a bubble head bon fire , choom-bi-a my lord…..thing

Not so fast…Grass hoppers…

So funny…

Garth the tax farm slaves in Canada will do what the power of suggestion of what Peter Mansbridge says…….Hum 3 media companies, 5 big banks and one Carney…easy to control

Hell ya, house price to income in are insane we all know it but the slaves don’t care, they look at monthly payments vs income.

And now after perching it for months it should be quite clear to all of you out in blog land that rates are going to go in one direction and that’s down baby……And the tax farm slaves will eat it up in godless Toronto with bidding wars….

Garth I know I am an ass, a goof, immature idiot. But you got to be wondering to yourself right now how the f do I predict the markets with such accuracy…..

Bozze, hoos and once in a while the green stuff I say…… It works for me…

#8 BPOE on 08.05.11 at 10:22 pm

Very vague. “may take time” A month, a year, 5 years? Downgraded? I don’t think so. We’re looking at a major upgrade, at least out here in BPOE. We all now what happened during the last financial crisis. Vancouver took off like a rocket ship and that’s a fact. Everyone who has money wants to make money. Investors know that the place to park your money is in Vancouver. By the beginning of 2012 we will have a clear indication of where housing is going. In BPOE prices will be up as investors from around the world who have no debt and have no need or interest to borrow pour into Vancouver. Dirty money will continue to flow as well with multiple houses being bought and put up for sale the next day. This should be illegal but the Canadian government will never put a stop to this practice so this will continue to fuel the market. Boomers without pensions will never sell as their house is an atm machine with many 100’s of thousands of dollars to be taken out over the years. Interest rates will be lowered within the next 60 days to ensure first time buyers can continue borrowing to the max. Stocks will continue to stumble as gold approches $1800 by the end of the year. These are my predictions, you may not agree with them but they will be proven all correct in a 150 day time frame.

This is why real estate sales and prices will fall. It may take time to seep east from vexatious Victoria, but seep it will. Enjoy the house porn while it lasts. We’re about to be downgraded

#9 kimi on 08.05.11 at 10:23 pm

I wonder what House Porn withdrawl looks like?
I cannot wait to say ” I told ya so!! I told ya two years ago!!!” … but I won’t … I will say NUTHIN. I’ll just watch, see and listen. A interesting ride ahead.

#10 waterloo Resident on 08.05.11 at 10:23 pm

( “95,000 new jobs came from the private sector, while government shed 70,000.” )

Yeah, those 95,000 private sector jobs are in places like DOLLARAMA (min-wage), while the government jobs were high paying jobs, at least double of minimum wage, so that is really going to hurt.

#11 Steve on 08.05.11 at 10:23 pm

Within 3 months Gold should Sky
Rocket (way past $2300. an ounce).
Then at what point will the Central
Banks begin to sell Gold.
Uniteligable debt = artificially low
interest rates
Too much capital tied up in Gold
Eventually = Central Bank Selling.

This blog is starting to worry me again. — Garth

#12 Mike B on 08.05.11 at 10:26 pm

One could argue that the sudden “unexplained” drop in the stock market a couple days ago was the result of a number of inside investors who knew that this US downgrade was coming and thus wanted to get out while the getting was gooooood.
So they did. I think alot of investors are shorting the crap out of the markets for a least a few more days.
The drop in credit rating could in fact work in favour of the oft impossible to predict and fickle stock market.
Just when you logically think it should drop… the market heads higher. How many times have we all noted that the banks in England are still nationalized and the debt in Greece still exists as it does in the rest of Europe. Wall street is not reformed whatsoever…. so what has prompted such a huge run up in the stock market since Lehman bit the dust.. Most say it is trust and hope.. I say it is cleverly rigged by the hedge funds and asses like Goldman Sachs . It is the inside club where few are given a membership.
The market is an evil place run by evil people to serve their own purposes at the expense of the entire world. Can it be fixed???
It should be mighty clear to most of us by now that politicians these days have proven just how useless they really are at solving problem. Creating the problem they are savantes … fixing the prob .. Fobs… well that could take generations and why should they care… it has little effect on their own lives as in most countries they are entitled to pensions with the tiniest amount of service. Look at the old codgers in our two countries senate. Good luck getting anything positive done. But hey the canadian government did get out of GM just before the implosion.. dumb luck I say.

#13 vatoDETH on 08.05.11 at 10:29 pm

Calgary has sold a meager 1157 houses and 453 condos in the last 30 days! Wow! Can’t wait for those interest rates to get hiked up!

Calgary July SFH sales -17% from June, condos -22%. — Garth

#14 Gold Member on 08.05.11 at 10:31 pm

So basically Canada is the only N.A country to have the coveted AAA rating, thus our bonds will be bought up by foreigners looking for safety, thus driving down bond yields leading to lower fixed mortgage rates. Phew…
Good time for my mortgage to be up for renewal! Great time for a housing market correction….cheaper homes + low mortgage rates = happy Gold Member, works even better than viagara!

#15 Boombust on 08.05.11 at 10:35 pm

Right on…S&P. What a joke. They’d give anyone a mortgage who could fog a mirror just a few years ago.

Say why doesn’t Michael Campbell (LOL) report on this?
With his furrowed brow, yet?

#16 WI Boomer on 08.05.11 at 10:41 pm

AA+ mostly meaningless noise. The S&P index has taken a nasty kck in the nu— over the last 9 days or so. More worried about where that might go over the next year. Since I won’t be tapping it for an extended time frame, why get too excited.
Real Estate continues to lose value, and interested buyers in most markets. Ho-Hum….what Did you expect? Gold up again…what did you expect?

The beatings will continue until morale improves.

#17 Joe Robertson on 08.05.11 at 10:44 pm

Its all about being able to service one’s debt Garth and here in Canada Ontario and BC’s bond auctions will have new buyers…global debt buyers who are backing away from bonds in Europe and now the US with the downgrade this eve.

Our rates will not be rising anytime soon as Canada’s debt will be bought keeping rates low.

The over the counter derivatives Wall St bundle up and was able to get the AAA stamp allowed them to sell these toxic packages all around the world, the biggest Ponzi scheme in financial history.

Looks like the crazy Tinfoil hats were right again as the market is often a leading indicator and the index’s did their own downgrading as the Dow lost 1307pts S&P 148pts and the TSX 1354pts in the last 11 days.

ECB agreed to more bond buying today of Italian-Greek debt their own form of QEasing and the US Feds will have no choice but to print more funny money to buy their own crap!

Your right Garth the US won’t default on their debt obligations they’ll just devalue their currency.

Who knows how this will effect Canada in general…time will tell…but being in debt up to your eyeballs thanks to 107% financing..yes we too had insane mortgage lending..is not a good position to be in, yikes!

45 million Americans now using food stamps to survive…sad, very sad.

Monday is going to be wild, let the games begin!

#18 kimi on 08.05.11 at 10:47 pm

Hey … how come ya all are getting off topic with your “gold fantasies”???? Maybe Garth should start a new piece titled “GOLD PORN” … come on already are you guys ‘not getting it’… your becoming WORSE than the House Porn Blog Dogs.

#19 Smoking Man on 08.05.11 at 10:48 pm

I have a question for all off you out there…….

If you where an international gazilionair today what would you do with your money, you know that Europe is up the creek, and you know that the good old US of A, is spending way more than what it brings in, what would you do?

Would you keep your gazilions in the bank, they only cover you for 100k. or 1mil in a trading account.

In my case if I was scared I would buy a bit of Canadian Bonds, like wearing 10 condoms for one session in Amsterdam……Safe as it gets.

Now there are a tones of gazzilionairs out their thinking the same way…….

It should be obvious to anyone with an open mind that money is coming to our shores and coming in a big way.

Rates will go no where but down…..despite the fact the media is trying to cool it, and for good reason might I add.

Now grass hoppers, when you look around to your fellow tax farm over schooled slave nabours what will they do when they eventually figure out what is really going to happen to rates.

Will they invest in stat arm trading models my specialty, will the buy futures contacts, will they self direct a balanced portfolio, our bight the bullet and pay some schlep 2% a year for a mutual fund, remembering they got stung in 2008.

Nope. they are going to buy property, they understand it and they have the satisfaction of not paying a land lord slime bag……..

The above statement is called critical objective thinking and if you have a BA or higher, the education industrial complex beat it out of you…..

#20 KIM on 08.05.11 at 10:50 pm

Gold member # 2
If you think rates are going lower in Canada think again. The downgrade of the US will lead to thousands of downgrades of companies , municipalities and others who are tied to the US government. The double dip will be worse then the first. The housing ponzi in Canada will fall hard. Remember prices fell 15% in a few months in 2008. This time realtards the government can’t and won’t stop it. Many will lose their homes as maxed out and out of work or underemployed people will not be able to service their debts.

#21 Nemesis on 08.05.11 at 10:50 pm

Let me guess… Her boyfriend’s name is “Thor”, or Gunther… or something of that ilk. Sweet riding in the ‘Nagan today, GT – should’a been there. Regardless, thank you for the ‘words’… I really must get out the Underwood (I’ve been slacking since the ‘hyper-sport’ tune-up).

PS – a little birdie told me that one of YVR’s larger ‘private equity’ players in the SkyBox frenzy has called it quits and is advising confidants to ‘bail’. Semi-Hearsay, but a good source.

#22 CREA Circle Jerk on 08.05.11 at 10:52 pm

#4 T.O. Bubble Boy on 08.05.11 at 10:07 pm

The UK, France for sure in due course; probably Austria too. Those are the ones that should be downgraded in relatively short order.

#23 a prairie dawg on 08.05.11 at 10:53 pm

Attention Walmart shoppers…

#24 Harvard Grad on 08.05.11 at 10:54 pm

How goes the blog – I am back from a successful business trip in the States. I took a quick look at the blog when I last wrote, the hate was intense. I guess my superior mind really freaked out the basement dwellers.

If you want a dose of reality on the real impact that this recession is having on the States, I can tell you first hand – not pretty.

This once prosperous and rich nation really has lost it’s way. I checked into a hotel outside Boston and I was told not to leave my hotel after dark. A rash of muggings on tourist and businessmen was becoming rampant. For Sale signs littered so many streets, you believe we are entering some dark times.

So, how is GTA girl doing? Guess you were dreaming of me since I last wrote. Well, I am putting a number of businesses together to capitalize of this economic downturn. For those who bashed my comments last, tell me, what have you done besides moaning on this blog on making money other then stuffing it into some soon to be culled stock. I will let on to a little secret, there is a business model, averaging returns of 200% that only the brightest are building as we speak – when this melt down moves in high gear, I will let you know what many have missed out on.

Many of my Harvard buddies are piling in the cash, and spend little time in blog rooms farting about other people’s comments…

#25 timo on 08.05.11 at 10:59 pm

http://www.bloomberg.com/video/73606936/

worth a watch
what a mess

#26 Snowboid on 08.05.11 at 11:08 pm

#8 BPOE…

***** (Okay I deleted my own first paragraph – it wasn’t nice and way too personal).

Only part I felt was reasonable to submit:

I believe you are wrong.

Sincerely,

Snowboid.

P.S. GT, when did you start shopping at Walmart?

#27 Kurt on 08.05.11 at 11:10 pm

Canaries don’t squawk when the air goes bad – they just simply stop singing. Say, seems a bit quiet in here, don’t you think?

#28 Jasonturbo on 08.05.11 at 11:20 pm

Lol Garth, as of late, the “wackjob” factor of this blog is … Disturbing.

#29 disciple on 08.05.11 at 11:25 pm

Yesterday, I watched a pigeon walk right into my garage as I was underneath my vehicle. After completing the repairs, I thought for sure he had left but it seems he took shelter under my other vehicle overnight. My daughter was the first to notice it this morning and fed it some rice. It passed away in the afternoon, not sure where my wife put the body. It came to die in my garage. It knew it’s time had come and I guess wanted a quiet place indoors to pass on. Amazing.

Who honours those we love with the very life we live?
Who sends monsters to kill us and at the same time sings that we’ll never die?
Who teaches us what’s real and how to laugh at lies?
Who decides why we live and what we’ll die to defend?
Who chains us and who holds the key that can set us free?
It’s you. You have all the weapons you need. Now fight. – from Sucker Punch.

#30 Helicopter Ben on 08.05.11 at 11:27 pm

Garth do you believe there will be a massive sell off monday morning? will people still deem U.S. Treasuries as a safe haven? i dont know how this will effect my silver investment, i took raping this last week, oh well in it for the long term.

#31 randman on 08.05.11 at 11:28 pm

Fantastic article from Bloomberg on how Nixon got us here and the evolution of monetary policy from the 60’s

“The Nixon Shock was a central cause of the Great Inflation. It also spelled the end of the fixed relationships that had governed the financial universe. Previously, people took out mortgages for set periods and at fixed rates. They had virtually no options for saving money other than in banks, and the interest rates that banks could pay were capped. Floating currencies unleashed a new world of risk and instability. For the first time, investors could bet on the direction of interest rates or the Swiss franc. New financial instruments, new speculative tools, proliferated. The world gravitated from the certainties of Bretton Woods to the dizzying market cycles we’ve lived with since.”

http://www.businessweek.com/magazine/the-nixon-shock-08042011_page_5.html

#32 Raj on 08.05.11 at 11:31 pm

Will Stock market tank big time , come Monday?

vote at

http://www.wikiopine.com

#33 45north on 08.05.11 at 11:36 pm

Kimi: I wonder what House Porn withdrawl looks like?

this is what it looks like in California:

http://www.youtube.com/watch?v=su7DrfGEVUI&NR=1

#34 squidly77 on 08.05.11 at 11:39 pm

Even Canaries have back up plans.
http://www.rubyreddesign.co.uk/canary_mask.jpg

#35 bullion.bunny on 08.05.11 at 11:41 pm

#24 Harvard Grad on 08.05.11 at 10:54 pm

Many of my Harvard buddies are piling in the cash, and spend little time in blog rooms farting about other people’s comments…

So what are you doing here?

#36 ALE on 08.05.11 at 11:48 pm

Meaningless? What about impacts to the bond and equity market? Bond selloffs and rising interest rates? Impitus for more Fed market intervention? QE3?

Noone can say for sure what the impact of the US downgrade will be, however one thing that can be said is it won’t be meaningless.

#37 Westopia on 08.05.11 at 11:53 pm

DELETED

#38 nonplused on 08.05.11 at 11:53 pm

Eric Jansen (spelling?) over at http://www.itulip.com has just released another missive where he declares the bond market at 0% is actually symptomatic of early deflation. Everyone would rather have cash than assets. But there isn’t a way to hold all that money in the electronic world, as cash, because it doesn’t exist. So you hold T-bills at zero percent.

But, true to his ongoing 12 year thesis, the Ka-bust will be followed quickly by an inflationary Poom. All of it artificial.

Why am I still here? Oh ya, do not buy any type of truck, new or used, with a Navistar (popularly called “PowerStroke”) engine (diesel). Mine is a Ford F 350, 2004 vintage, 158,000 km. The dealer wanted $5000+ bucks to do a 6 hour job on the injectors, and 3 days into it they are all cranky because they can’t get it to run and had to tow it back from the road test, after they thought it was fixed.

Buy a Dodge with the Cummings engine. My dad has one of those and although it’s a little slower, it’s never given him any troubles. It’s despicable that all 3 domestic car manufactures were bailed out buy the government to protect the unions. And it’s despicable that they are allowed to sell trucks that don’t run, won’t run, and that they know their products won’t run. Don’t give me that (as I got) “that’s what you pay for the performance” bullshit. I paid for that when I bucked up to buy it. And besides, the “performance” has been terrible. A week into my vacation I have no truck, and all the way along it’s been using fuel like it’s a 1982 460. Right about now, I’d take a 1982 gas 360 f 350 over my current pile of gunk. Same mileage, and I can fix it myself.

Why do I go on about this? Well, the whole economic system suffers from the same malaise. We have made everything too complicated in search of efficiencies that aren’t there, once we pay for maintenance.

#39 Joe Robertson on 08.05.11 at 11:59 pm

#20 your right this isn’t a gold blog its a blog about the #1 sector millions of Canadians have ALL their money tied up in, in otherwords a huge liquidity trap, tied up in real estate.

How many boomers out there have all their wealth in their home and can’t sell the 2 bedrooms they never use to raise some cash.

Sorry that the #1 investment sector these last 10 years has been precious metals, would the opinions make it easier to read if it was the oil sector or the banking sector?

Wake up people the central banks of the world have created a full out currency war everyone is looking to devalue their currency from either cutting interest rates (Swiss) tossing huges amount of $yen through intervention (Japan, waist of time) or cranking the printing presses to buy their own bonds, US, ECB

Far too many Canadians are long multiple properties and are going to be in for the shock of their life as the markets become a “buyers market”….

Good luck!

#40 Tim on 08.06.11 at 12:09 am

Metro Vancouver Building Permits Leap 42 Percent

http://www.vancouversun.com/business/Metro+Vancouver+building+permits+leap+more+than+cent/5211408/story.html

The value of building permits , mostly residential jumped 42 percent over the last three months.

Stocks tank, yields on bonds suck, and housing is off only a few percent after doubling over the last ten years, and interest rates remain significantly lower than average, thereby benefitting those who own real estate

#41 Many worried realtors on here on 08.06.11 at 12:10 am

The housing crash is getting worse and you can see it with the increased posts from out of work realtors who have nothing else to do since the housing market is finished. The US is now AA+ and watch for countless companies to take a hit to their credit rating as many are tied to the US government. The Markets are crashing now for a reason. They are a warning for more drops in the stockmarkets. Very similar to 2008 only this time governments are maxed out on debt themselves. The talking heads on tv are tell people to hold? Ya… ok I will hold while the fund guys sell. This is what is happening right now and a total flash back to 2008. They are using the same exact lines/lies they did in 2008. Any rally and you sell your stocks and re-short. Don’t be fooled or you will see 7000 DOW and then they will say wow we didn’t see it coming….SELL! then they buy. Get it? The PM of Italy telling his people not to sell italian bonds? That would make me hit the sell buton in one second. DON’T BELIEVE THE LIES.

#42 Tim on 08.06.11 at 12:16 am

Yes, and can you guess which agencies are taking the hit? Why of course, scientists who work at Environment Canada.

700 Jobs on the Chopping Block at Environment Canad
http://www.canadaforvisa.net/700-environment-canada-jobs-on-the-chopping-block/

Why are we not surprised with this asshole PM in power? Why would we need people to help understand climate change?

#43 Snowman on 08.06.11 at 12:28 am

“We’re about to be downgraded.”

We? Who is we? You and the dogs? I would say you guys are as downgraded as it gets already.

#44 Mr. Reality on 08.06.11 at 12:36 am

Garth

Nice to see some numbers real estate wise. Thanks for the no BS assessment of the current climate.

I hope BPOE understands that when our neighbors to the South get downgraded, the beauty of Canada becomes faded. We are way too interconnected to get out of this mess unscathed.

Mr. R.

#45 Bobby on 08.06.11 at 12:39 am

This is just the start. A municipality on Rhode Island just declared bankruptcy, $80 million in pension liabilities with an annual budget of only $16 million. This is just one of many.
Here in Canada it is no different. Federal superannuation is underfunded by $ billions. Air Canada has deferred their pension discussions to an arbitrator. And guess what, they lessened their loss this last quarter while Westjet had millions profit. Oh yes, they don’t have a pension plan.
It is not sustainable here in Canada either. Here in Victoria lots of houses just sitting, just as Garth has said, no one is buying. Now is a certainly a good time to start
looking.

#46 Nostradamus Le Mad Vlad on 08.06.11 at 12:41 am


#184 disciple on 08.05.11 at 10:13 pm — “. . . it was the intention all along.”

Seems Dad (Nostradamus Jr.) may have been right all along — bankrupt TROTW (incl. themselves), then everybody is on a level playing field.

However, one thing not taken into account is the change in cycles. The west is almost done, the yellow / red races are taking centre stage, so Enter The Dragon.

Everything is working in perfect symmetry, and there is nothing that anyone can do about it. As above, so below, a.k.a. Organized Chaos. This has already happened in the rest of the lower psychic regions — we’re just the last to experience this.
*
“. . . about 100% of new condo sales last month went to speckers.” — These are the greatest fools. Are they ever gonna get whacked across the head by a 2×12, and it will hurt big time. They are here to learn lessons about greed, ‘tho.

“It is the longest, deepest employment slump since the 1930s.” — See link re: 1931. Indeed, Canada, France and a few other countries will be downgraded, so increased taxation and austerity measures.
*
1931 all over again; Is the ECB trying to cause a crash? It would be in the IMF’s – NWO’s interests, as they could impose a one-world govt. under martial law. TPTB are then in charge; China unlikely to save anyone now (just buy them all up on the cheap); Robots = mass layoffs; Q&A time Simple question, easy answer; Seven min. clip History shows every eighty years society collapses. Where are we in the present eighty year cycle?

Russia is right here. NATO is using Syria, then Saudi Arabia as a front for hitting on the big boogeyman, Iran; Hackers will target water and power plants; 2:18 clip Dogs and Polar bears playing. Funnier than humans! Slavery to Smart Meters. Brief description; Harper Prisons for profit? Obama’s Super Congress = Hitler’s enabling law (roughly the same thing).

Scotland and Turkey have one thing in common — tunnels, and lots of them; Obama endorsed by Communist Party for another four years; Link in. Filesharing, according to a musician, is a good thing. as 99% of artists never make it to the big time anyway; Accidents Happen Some scientists are accidents waiting to happen.
*
Chaos — Kinda moot article. Keep in mind — We come, we go. Such is the short, fleeting temporary nature of life here.

#47 Rich Renter on 08.06.11 at 12:43 am

I laught when i read Canada is the only country in North America with a AAA rating. There are only 3 countries in NA and 1 of them is Mexico. Which country will get the WTF rating?

#48 Patz on 08.06.11 at 12:43 am

Oh Harvard Grad, so good to have you back. It sure has been dumb here without you, I mean really there’s just no smart people around. You did say you are smart right? Oh yeah, you went to Harvard, you mentioned that a couple of times. Well I hope you stay around for awhile and tell us how well you’re doing. It’s so dreary without those great success stories. I’m a guy and I’m not gay but boy I’ll bet those girls on the blog are just, well, as you said it “dreaming” about you. Lucky guy!

#49 Jake T. on 08.06.11 at 12:52 am

Japan’s real estate collapse in some places was as deep as 75% and ultra low interest rates did not help but made things worse. The Nikkei 225 at 38,000 is not coming back anytime soon it is about 9,300 today.If you keep interest low and keep dropping them it’s like giving alcoholics more alcohol. Eventually you are going to slowly kill the alcoholic and in this case it’s 2%-4% interest rates when it should be 6%-8% interest rates at least to keep speculation down or away as much as possible. A dollar borrowed is a dead consumer 148% debt to income. Keep on borrowing suckers!

#50 phinny on 08.06.11 at 12:57 am

The Canadian economy created 95 000 private sector employees.

Yay.

The Canadian government cut 88 000 (or so) lazy, union-sounding, porn-downloading, tax siphoning parasitic government workers.

Triple-A Yay.

#51 LH on 08.06.11 at 12:58 am

@19 Smoking Man:

You are my hero.

Signed,

LH

#52 timo on 08.06.11 at 1:01 am

http://thehousingbubbleblog.com/?p=6655

I can just imagine the stories here next year.

#53 LH on 08.06.11 at 1:10 am

@24 Harvard Grad

How was 02138? Last time I was there I took a piss on the yard (Austin Hall, to be specific). Decided HLS wasn’t for me after all. Had some good buddies from my time in Cambridge, MA but education is overrated these days.

I take it you lost interest in your 150k/job? (or perhaps the poor economy claimed yet another victim?)I would quit too if I had a 200% investment opportunity available (is it drugs?).

As for me, my gross last couple years > vancouver SFH and I’m ready to retire any day now but I still work on just for fun. Money isn’t everything after all.

#54 Peter Green on 08.06.11 at 1:15 am

Talking to a new hire at work, originally from GTA. Expressed amazement (disgust? shock?) with RE prices here. Still owns condo in GTA, ~ $360k. Comparable in VCR is $700k.

“If I had known, I would have never moved.”

#55 Pat on 08.06.11 at 1:23 am

“there is a business model, averaging returns of 200% ”

Wow, turning $1 into a trillion in 25 years, eh? I hate to think what you’d do if you had a thousand bucks.

(looks like trolling requires some basic intelligence too)

#56 Cookie Monster on 08.06.11 at 1:33 am

This is something I wrote awhile back that I think is worth repeating again since nothing has changed except maybe the fact that reality is becoming apparent. It’s been a hell of a day and I expect more bad days to come.

Dear Capitalist Antagonist

The positive results of capitalism that surround us are evidenced in everything we own and use daily through the products brought into existence by successful business entrepreneurs. Modern life’s items including all the benefits bestowed upon us by the public sector including the highly touted roads that we depend on so much, the modern conveniences of modern life, are brought to us in one way or another by a base of people called capitalists. The money raisers and wealth creators, the builders of enterprise and industry, the successful business operators who bring people and resources together in the process of delivering products and services for society to consume.

We all know most business start-ups fail and in doing so many starry eyed entrepreneurs lose their life’s savings and years of their time trying to commercialize some idea or invention into a business success. Just watch Dragons Den to see a sample of the turds that get flushed away everyday and the odd few that have a small chance to succeed. Many more obscure businesses languish on the margins of viability indefinitely without failing. These enterprises are a lot of work. So considering this, one must appreciate the rarity of those highly successful and mighty business operations that do succeed, the ones that amass great wealth are truly exceptional to the rule and tremendously beneficial to society and greatly responsible for raising our standard of living. Think Microsoft, Potash, Exxon, RIM, 3M, Intel, Apple etc.

So I’m a defender of capitalism because I’m a capitalist, I’m a small business owner and I’m an entrepreneur and I’m often disgusted watching government constantly squander wealth day after day on the public sector and other incoherent statist pursuits.

Lately many people are blaming capitalism for the corruption and distress in our economy and I constantly argue that people’s anger is misplaced. The villain in our failing economy is not capitalism, its not entrepreneurship, its not rich business people, it’s our government, it’s our banks, and it’s our bloated public sector. These institutions are responsible for our crumbling economy, these institutions are not capitalist they are socialist parasites feeding on the host of an underlying real economy that is capitalism. We have a mixed capitalist/socialist economy with a growing portion of free loaders living off the real economy, hordes of looters feeding on the private sector successes, too many legalized thieves supporting their standard of living on the back of a slowly shrinking impoverished private sector working class poor who are struggling to support an ever expanding expanse of non-productive public sector upper-class socialites. The working private sector businesses and their employees are supporting an ever growing elitist public sector, narcissistic government and an ever growing unsound fraudulent banking system. These are the reasons why so many people have so much debt, these are the reasons why the poor are getting poorer, and this is why it takes two full time incomes to support the average household, soon to be three. Government spending and inflation are robbing us and our future generations blind.

Governments are complicit in contributing to our economic demise. Bailouts for banks and large financial institutions and numerous manufacturing corporations are used to keep the conduits and creators of wealth alive, keeping workers on life support so as not to lose any slaves, government must not allow their cronies to fail and disturb their system of theft that took so long to construct. Government will continue to guarantee bank deposits and loan books; they will continue to buy billions in bad mortgages and bad debts brought about by their own orchestrated credit expansions puffed up in the news as a strong economy and rising GDP during the boom phase, such popular fun and political exuberance until the bust lays waste but that’s always postponed until the next guy gets elected.

Everyday in the news it’s one waste fest after another, it’s this scandal here and that intervention there, botchery by bureaucrats. These jokers have turned politics into a reality TV soap opera for the ignorant masses to debate about how they best want to be oppressed. Proof of our taxpayer funded public education/daycare system’s curriculum of ignorance.

Our modern banks create money out of thin air in a fractional reserve banking system condoned and fostered by government for the benefit of government, a system of misallocation of funds and fraudulent activity. Historic jurisprudence clearly holds that only term deposits are legal tender for lending at a 100% reserve ratio with some agreed to rate of interest to be paid to the depositor for use of his funds, anything else is misallocation of funds and fraud. Long standing principles developed over centuries for sound banking have been discarded for the benefit of modern banks and governments around the world at the demise of society’s wealth through inflation and rescue packages to crooks. See the bank of Amsterdam as an example of the most successful and honest bank in world history when gold was money. Gold still is money and always will be. These are facts of reality and fundamental pillars of economics where erosion will lead to economic demise and social chaos.

And of course the public sector, what a tremendous waste of money and good people’s talents who unfortunately do not contribute nearly as much to society as they receive. If public sector workers had to put cash registers in their public sector offices they would soon realize that no one is actually willing to pay them the high prices needed to support the delivery of their crappy services. They are so frightened to death of this idea you’ll notice how indignant a public sector worker will get at the mere suggestion of converting them to the private sector, they know full well they could never honestly earn their standard of living by continuing doing what they are doing. They know full well how demanding a free market would be and the impossible task it would be for them to separate people from their money without the force of government extortion feeding their bloated budgets and lavish compensation.

All the fine people in government, banking and the public sector need to realize that they are in fact the source of much of the looming economic catastrophe we are facing. They are the beneficiaries of immorality, they are the beneficiaries of looting and government largess, they are the beneficiaries of wealth stripped from the real economy, the true tangible and underlying economy that actually exists built on savings, brains, brawn and risk called capitalism.
Our public sector lottery winners should feel ashamed of themselves and a tremendous sense of guilt and responsibility for the downfall of our economy and the suffering of the poor and working class serfs beneath them, but like a stampede of cows they unknowingly trample over their heads while protesting any cuts and demanding the party must go on.

Socialism destroys capital. This is why capital and jobs flee unfriendly jurisdictions. This is what helped keep the USA competitive domestically, it was competition amongst the states; it’s flee or die; survival of the fittest, efficiency does matter. As it gets worse with time more businesses in the socialist republic of Canada will leave. There will be less arguing from guys like me and fewer votes in the ballot box as more people vote with their feet and leave while bidding farewell to the blood sucking leeches until eventually the only people left in the country will be a bunch of useless twerps and lying politicians. The wealth will be gone and the cannibals will be left to dine upon one another like they did in Soviet Russia.

Socialism’s great until you run out of other people’s money.

#57 Fist Full of Dollar$ on 08.06.11 at 1:53 am

Where did we lose 70,000 public sector jobs? This number seems huge considering that the Feds haven’t even begun to cut any substantial positions to balance the budget. I guess maybe that 5-10 positions in every public sector workplace, over every level of govt., across the whole country can add up. Still is hard to imagine.

#58 Evangeline on 08.06.11 at 2:12 am

((It’s widely and wisely believed the US housing market will not recover until more people are working.))

The question is, which will come back first, U.S. housing or employment? I watched a Warren Buffet interview recently where he said that U.S. employment will come back when housing (and all its associated industries) comes back.

#59 Davinci on 08.06.11 at 2:15 am

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#60 Rob now in Nova Scotia on 08.06.11 at 2:30 am

Garth, thank you for this blog and giving some of us the opportunity to post. I’d love to retire in Victoria so a nice price drop would be great. I should be ready to retire in 4-5 years when silver is in triple digit territory. Would that coincide with the real estate bottom?

#61 Mike on 08.06.11 at 2:57 am

Not sure what our man Garth is talking about regarding Toronto madness. According to guava.ca the insanity is going strong indeed. GTA inventory is almost a record low.. GTA average price is almost 10 percent higher year over year based on July numbers.. same with median price. up 10 percentish/ Days on the market.. well that is a record low of 26 days. Inventory is close to its lowest level. Now in our hood the sold signs just keep popping up and most indicate a “above asking” sold banner. Only one has not sold.. it is listed under a 1% total commission real estate brokerage so I guess the real estate mafia are keeping their buyers away … these guys are just clowns.

#62 Jon in Cowtown on 08.06.11 at 3:05 am

Any bets as to whether QE3 is coming, I’d say it’s a done deal. Problem is the prop-up effect will be even shorter than QE2 and then the double dip will come. You could make some serious dough, just don’t hang on too long.

#63 Future Expatriate on 08.06.11 at 3:11 am

Once the word leaks out and sinks in about the radiation levels on Vancouver Island, and yes, way over in the “protected” Saanich peninsula, current values will drop, not just by a half which they would have anyway, but by two-thirds if not more.

Increased dangerous radiation levels for the next DECADE is not anything Las Vegas or Miami or Stockton CA had to deal with.

We are seeing a test case nuclear time bomb in BC. Victoria may well become a wasteland. The capital could well eventually be moved inland.

#64 timo on 08.06.11 at 4:41 am

http://archive.kpfk.org/parchive/mp3/kpfk_110804_170004bbriefing.MP3

interesting views

#65 GTA Girl on 08.06.11 at 5:16 am

Anyone offering a return of 30%+ is selling something you don’t want to buy. Turn and walk away.

200%? please. The Nigerians holding your long lost uncles treasure chest are not a sound investment, Harvard Grad… You are adorable

Garth, I’d love you to explain why speculators are still buying into Toronto’s new build condos. Been touring the city and I cannot quite believe there are enough high paying jobs to support the amount of towers going up. One corner of a 20+ condo had all empty units. Realized these must be the 1bed/bachelor units that investors buy.

What’s really going on? Seems to really stink now. Ponzi~esque

#66 GTA Girl on 08.06.11 at 5:30 am

The new condo ads are becoming hilarious. Using Sex&City styled models, female body parts?

The ads for an Italian lifestyle condo at Dufferin/Lawrence are hilarious. A busomy boob job model trying to emote Sophia Loren chic, w/her basket of veggies and stilettos

Then go drive by the condo site and fully understand that the area is poor, immigrant, over congested. No one there could afford $399k for a bachelor. The area has been depressed since dawn of time.

Don’t even begin to mention the water themed new condo monolith that’s being planned in north Oakville. In a field, near the highway, all glass boxes starting from $350k. Their slight of hand adverts declare, “moments away from transit”….? Yes an hour drive away from Go Transit, thru congested suburbia. Their selling point is that this area of Oakville has been poor and neglected, but now they have 1Canadian Tire store, so ‘Buy Now!”

Insane.

#67 Imstupid on 08.06.11 at 6:37 am

I know a business model that is returning 300%. I will let you know what it is when this melt down moves into gear.

#68 SquareNinja on 08.06.11 at 7:04 am

Smoking Man… gazillionaires aren’t retards! Why invest in Canada, which will suffer the same fate as its boyfriend, when you can invest in Asia? Japan has nowhere to go but up, Vietnam is the new China, Singapore survived Asia’s 1997 Financial Crises unscathed… Korea came back stronger than ever, and Taiwan didn’t feel a thing. I think you need to stop being so Western-centric.

#69 mid-Ontario on 08.06.11 at 7:20 am

#24 Harvard Grad
Your experience in Boston reminds me of the only time I was in Washington. The year was 1974 and I was told, quite accurately, the same thing. Stay in doors at night. Some things never change in some big Cities. The question remains – how passive will the poor remain?

#19 Smoking man
Many big banks now charge to have deposits over $50 million -CNN. They get you every which way.

S&P have set themselves a trap. They did right but they will get blasted from all quarters now. There is no way for them to upgrade the US probably in the next 20 years. Others will follow and the debt load of all nations will be scrutinized as it should.
The scam is up boys.
RE is toast.

#70 X-cess on 08.06.11 at 7:39 am

Re: S+P

Does S+P have any credibility left?
U.S. congress is a new version of the “3 Stooges”.
Who’s driving the bus?

In the U.S. is there anyone looking after the people..the country?

Appears this Democratic system has been falling apart for many many years..just take the money and run.

Perfect setup for a new political system to enter the race as happened in Germany in the 1930’s

#71 timo on 08.06.11 at 7:48 am

http://www.washingtonpost.com/world/asia-pacific/china-bluntly-tells-us-to-end-its-addiction-to-debts/2011/08/06/gIQABGJ9xI_story.html

holy chop sticks batman. I hope this is just sabre rattling. r/e bubbles are going to deflate now.

When China can make a BBQ that lasts three seasons, we’ll listen up. — Garth

#72 daystar on 08.06.11 at 8:18 am

#4 T.O. Bubble Boy

Excellent question. Let me marinate on that one for a while…

A couple others raised an interesting point to your ever provacative, controversial, trendy oversexed blog to wit, I must on rare occasion disagree. S & P’s U.S. downgrade (coming after the market close) won’t be meaningless. Oh, its not to say that in the past, their grades haven’t been meaningless as you point out. This time, S & P is saying what everyone else is thinking. However it was played out, either by script or bumbling mis-steps, the U.S. government has failed to come up with a plan to address their runaway deficit spending and the world is watching. It should go without saying that the U.S. dollar really is too big to fail. if it crumbles, entire systems as we know it, will crash and the age of protectionism will begin. (ah, lets not be too expectant of it happening overnight, shall we? This stuff takes years if not decades to happen, we could see Spain and Italy coming 18 months ago, old news)

I would have to think Garth, that the markets will sell off on monday from S & P’s downgrade with the fears of higher rates around the corner. Higher taxes, government cuts, both are now inevidable, even for the rich. The markets will react to this, of that I have no doubt. Once again, September/October is the month to load up on cheap stocks. Not before then… as predicted.

The downgrade was widely expected and markets factored the potential in. However, predicting anything (other than house prices in Vancouver) is currently a mug’s game. — Garth

#73 hobbygirl on 08.06.11 at 8:27 am

Capitalism is great until you run out of other people’s money – ie: QE 1, 2.

No more QE so markets are tanking, just delaying the inevitable.

#74 steve on 08.06.11 at 8:57 am

This may have been asked already, but is there a rule that some pension funds can only invest in triple a rated debt?
Will this cause some unloading of T Bills in the near term or do all 3 of the agencies need to downgrade?

#75 Evangeline on 08.06.11 at 9:01 am

((My daughter was the first to notice it this morning and fed it some rice.))

I haven’t researched this to know if it’s true, but I’ve heard rice is lethal to birds because it expands in their digestive systems. Along with that went the advice not to throw rice at weddings, stick to confetti.

I believe that’s a myth (many birds eat rice in the wild). In any case, lots of wedding parties now throw bird seed. — Garth

#76 BrianT on 08.06.11 at 9:13 am

The USA needs higher rates on Treasuries. A gigantic amount of cash has been lent from the taxpayer to the connected banks at basically 0%-the plan is for these banks to lend the money back to the taxpayer (by buying Treasuries) at far higher rates-rinse and repeat. This is the sign of a very productive and efficient economy.

#77 Utopia on 08.06.11 at 9:20 am

So the US has been downgraded by S&P. You might immediately therefore question if the rumours that were milling about in the days preceding the announcement were indeed the primary factor behind the stock market sell-off and flight to cash.

If that is the case then it was indeed insiders who took advantage of this tidbit of info to unload shares in advance of the announcement. We cannot know at this point however a close look at who precipitated the extremes in selling pressures might be a good starting point.

So is the carnage over?

Incredibly I think it may be close to an end. Despite the downgrade we need to consider that there will be a substantial amount of capital that will now be pulled from Treasuries. And where will it go?

That is the question to be answered next week. To me it is obvious though that equities will begin to advance again and we may see some very bullish action through to the fall.

In any event, one thing else is clear. Interest rates will now begin rising in the US on this news and the first rate increases could well come this summer.

I am not concerned about a negative market reaction come Monday though. The S&P downgrade is more smoke than fire at this stage. It is symbolic really and was inevitable. It’s impact has already been discounted by the 10% market declines we have seen over the past two weeks (on the assumption it was known in advance by key insiders).

#78 Peter on 08.06.11 at 9:26 am

Future Expat…Victoria actually got less radiation than Regina and Toronto according to Health Canada monitor stations.
This is a function of weather patterns ,the Jet stream flows parallel to the coast because of the mountain range , then it starts to break up over the middle of the continent,dumping any radioactive particles there!
Ain’t science wonderful! (10 microrem in Sannich today)normal background.

#79 Ex-Cowtown on 08.06.11 at 10:12 am

#8 – BPOE

When your entire premise for economic salvation rests on benefiting from the continued influx of the proceeds of crime….

Maybe, just maybe, you should rethink your business model?

#80 TurnerNation on 08.06.11 at 10:13 am

RECENT: Vancouver’s real estate prices drop—will Toronto’s be next? (39 minutes ago)

http://www.torontolife.com/daily/informer/to-market-to-market/2011/08/05/vancouver-real-estate-prices-drop/

#81 David on 08.06.11 at 10:23 am

Looking forward to my Prime – 0.75% VRM being lowered with the next interest rate cut.
Once prices start to collapse in the inflated cities, there won’t be any choice, and I’ll enjoy my 2007 built 2 Story House for $1450 a month including property taxes, about $1000 a month less than I could rent.
(I will say, in Victoria, its nuts. I know people renting places on the oceanfront for $3K a month that are “worth” $1.4 Million with $6000 a year property taxes…it would cost about $7K a month to buy that home at these prices)

#82 Habbit on 08.06.11 at 10:33 am

The rating agencies lost a lot of credibility when they rated CDO’s with subprime mortgages and other higher risk debt obligations triple A. Combined with many other fiascos (Enron,Worlcom.BreX,Hunt brothers and silver,Bear Strearns,Lehman Bros. ect…) many beleive the markets can be manipulated by the big boys for the benefit of the even bigger boys. Deregulation became the cure all allowing the most predatory type of business dealings and what amounted to loansharking. In short the wall street predator types were allowed to run free in the name of profit. AAA rating should mean something and there should be repurcussions on the agencies that rate junk AAA. Many including large institutional buyers took a beating buying the junk the agencies rated AAA. Heck if the lowest tranches of these CDO’s were rated too low they were simply repackadged and re rated AAA! Gotta keep the $ flow going eh! So what if pension funds were to take a beating? Many had to be in the know as to what was really going on but too much today money was being made. Mortgage salespeople were making into the hundreds of thousands yearly. Subprime companies were growing incredibly. Many of the loans they put out were refinances. Gotta use the false equity to get more stuff eh! It worked like a charm until the whole rotten structure collapsed. But heh no problem. We can still give ourselves unwarranted gross bonuses cause the fed’s are gonna bail out the mess via the taxpayer. And besides they do what we want them to cause it works for us! Sweet deal if you can get it. So may have lost confidence in the system as it is and that IS the problem. Hell even the terminated CEO of Fannie Mae received 126 million when he left. Incredible. Until average people feel that the finacncial services industry, governments, and other high rollers are looking out for their best interests we can expect more of the same. And yes that means responsible lending practices. It is always simpler and less messy to take a penny from everyone than to take a buck from those that would not notice it having been taken. THERE IS NO CONFIDENCE AT THE GRASS ROOTS. = TROUBLE

#83 Anonymous on 08.06.11 at 10:39 am

#24 Harvard Grad:

Quick question — in the Harvard bookstore, how do you get from the cafe to the clothing section?

Any Harvard student knows the answer. If you can’t answer, you’re a troll.

#84 TheBigLebowski on 08.06.11 at 10:42 am

74 steve
DELETED

#85 Markets set to crash on 08.06.11 at 10:44 am

Good read by Martin D. Weiss Ph.D . This guy has been proven correct over and over again. This was printed a day before the debt ceiling.

http://www.moneyandmarkets.com/day-of-reckoning-tomorrow-46267

#86 Wicked downturn is a coming. on 08.06.11 at 10:47 am

Utopia #77

Think again the downgrade of the [email protected] means nothing.

“Deception #2. When S&P, Moody’s, and Fitch downgrade the U.S. government’s debt, Washington and Wall Street will try to convince you that it’s not going to have much impact.

False!

Standard & Poor’s has already said that the downgrade will directly impact government-owned and government-sponsored agencies: Ginnie Mae, Sallie Mae, Fannie Mae, Freddie Mac, and many more.

S&P has also promised that a U.S. debt downgrade could precipitate downgrades of up to 7,000 municipalities.

What they have not told you is that many corporate bonds could also be subject to downgrades.

Why? Because the companies that issue these bonds rely on U.S. government subsidies, contracts, financial guarantees, bailouts, and more. Or they do business with other companies that rely on the U.S. government.

And in a broader sense, they operate in a country — the United States — where the government’s credit rating is a key factor in virtually every financial transaction.

So a downgrade for the U.S. government is inconceivable without a chain reaction of downgrades in virtually every business sector.

Plus, there’s one more explosive fact that S&P has chosen not to highlight in public:”

http://www.moneyandmarkets.com/day-of-reckoning-tomorrow-46267

#87 Gold Member on 08.06.11 at 10:48 am

Kim #20

If foreign $ comes piling into Canadian bonds then bond prices will increase and bond yields will decrease, that’s a fact. Long term fixed mortgage rates are tied to bond yields, again fact. Thus fixed mortgage rates will go down. Realize that I’m not talking about variable rates which are tied to prime and determined by th BoC.
Again, this scenario will play out if investors increase their purchase of CDN bonds, which seems likely.

#88 ballingsford on 08.06.11 at 10:52 am

Interesting weeks and months ahead for sure. Buckle in!

#89 Alister on 08.06.11 at 10:56 am

The loss of AAA status will create a lot of movement in markets. Some insurance contracts, endowment funds, bank conevenants, mutual funds etc, require that only AAA securities can be held. If there is mass selling of US debt, interest rates could spike from that selling. Such things happened in the PIIGS after a downgrade.

We live in intersting times. I’ve never experienced this in my lifetime (58 years), so it will be a learning experience for me.

#90 Stop being brainwashed puppets on 08.06.11 at 10:59 am

Cookie Monster # 56

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#91 Killer Chicken or Imploding Boomer? on 08.06.11 at 11:02 am

“seventy thousand families who no longer have a
defined benefit pension plan to fall back on.” – Garth

I verified the number on another site Garth, but why do
you conclude these people are losing their pension?

Existing pensions will be capped, commuted or converted to a LIRA. But growth will cease. — Garth

#92 TheBigLebowski on 08.06.11 at 11:17 am

DELETED

#93 Alister on 08.06.11 at 12:05 pm

#31 – I was around when Nixon did that. I suppose the article thoroughly explained how a number of Presidents run huge deficits prior to Nixon presidency, because of the little skirmish called Vietnam, which went on for 12 years.

Start with Kennedy.

#94 BrianT on 08.06.11 at 12:07 pm

China tells the US the party is over-time to clean up the mess http://www.reuters.com/article/2011/08/06/crisis-idUSLDE77504R20110806

#95 thinktank on 08.06.11 at 12:13 pm

Ontario (therefore Canada) has its own problems (no secret there) But did you know for all the talk of how bad it is in California (the state is officially broke and has been for years now) its NOTHING compared to Ontario on a per capita basis – so how we have a housing bubble, specifically right here in Toronto (my home town) is beyond me. Garth is 1000% right … it’s DEBT – it certainly isnt because incomes have risen to keep pace with these insane home prices. I have a small mortgage remaining on my own home – very manageable and my home has appreciated about 45%-50% in the past 6-8 years so Im not complaining – but it doesnt change the fact that valuations are complete madness. Heres the link from the Globe and Mail regarding how in debt Ontario is relative to California-

http://www.theglobeandmail.com/report-on-business/commentary/neil-reynolds/ontario-like-california-going-for-broke/article1684035/

its about a year old this month but somehow I dont think things have improved since this piece was written – in fact I would make a pretty educated guess and say things are worse for both California AND Ontario (not referring to Arnie’s personal issues either!)

In my humble opinion EVERYONE SHOULD READ THIS if they havent already – a well researched and documented piece of journalism

Kinda like the Coyote opening a flimsy umbrella as a 2 ton boulder comes screaming down on him – final thoughts… “aw crap” ..LOL

#96 Neo on 08.06.11 at 12:14 pm

#4 T.O. Bubbleboy

I believe the correct answer is UK.

#97 Jsan on 08.06.11 at 12:23 pm

China says ‘good old days’ of borrowing are over.

“China — the United States’ biggest creditor — said Washington only had itself to blame for its plight and called for a new stable global reserve currency.”

“The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone,” China’s official Xinhua news agency”

http://www.theglobeandmail.com/news/world/asia-pacific/as-allies-rally-behind-us-china-says-good-old-days-of-borrowing-are-over/article2121922/

.

#98 Snowboid on 08.06.11 at 12:27 pm

#56 Cookie Monster…

Sadly, Oscar, I cannot give your thesis a passing grade.

#99 BPOE on 08.06.11 at 12:36 pm

Wow. The US just got its bottom paddled big time. Flight to safety folks. China has spoken we all know what this means. Renters in Vancouver beware. Your rental home to be bought up soon, bulldozed and you have to find a new place to live. The fuse has been lit. The Vancouver rocket sled is about to launch again and again. WOW!

NEW YORK/SHANGHAI, Aug 6 (Reuters) – China bluntly criticized the United States on Saturday one day after the superpower’s credit rating was downgraded, saying the “good old days” of borrowing were over.
Standard & Poor’s cut the U.S. long-term credit rating from top-tier AAA by a notch to AA-plus on Friday over concerns about the nation’s budget deficits and climbing debt burden.
China — the United States’ biggest creditor — said Washington only had itself to blame for its plight and called for a new stable global reserve currency.

#100 Tony on 08.06.11 at 12:40 pm

I doubt the US created any jobs last month as the revision will put it into the lost jobs category. The knee-jerk reaction after the initial rise in the market indexes Friday show the people in the *know* (know what the real job figures are) are selling and will continue to sell heavily this month up until probably the 25th. The solution to Americas woes i believe is to raise taxes heavily on all the people who caused this mess. The low class and the recent people who emigrated there in the last 5 years. This would eradicate the people responsible for the whole sub prime mess. They don’t like it leave America and presto the vermin who caused the whole thing are gone. It makes a lot more sense than making someone who buys a certain amount of real estate an instant citizen of the United States.

#101 BPOE on 08.06.11 at 12:40 pm

The interest rate cut should be in place within 60 days. Look for early October for the cut. Congratulations for being apart of the winners circle.
_________________________________________
David on 08.06.11 at 10:23 am
Looking forward to my Prime – 0.75% VRM being lowered with the next interest rate cut.
Once prices start to collapse in the inflated cities, there won’t be any choice, and I’ll enjoy my 2007 built 2 Story House for $1450 a month including property taxes, about $1000 a month less than I could rent.

#102 Joe Robertson on 08.06.11 at 12:46 pm

DELETED

#103 reality guy on 08.06.11 at 12:55 pm

1 Steve on 08.05.11 at 10:23 pm

Within 3 months Gold should Sky
Rocket (way past $2300. an ounce).
Then at what point will the Central
Banks begin to sell Gold.
Uniteligable debt = artificially low
interest rates
Too much capital tied up in Gold
Eventually = Central Bank Selling.

This blog is starting to worry me again. — Garth
===================

Yeah garth, but you put you neck on the line when you said gold was going crash.

It may in the future, but with the US downgrade, its looks like a shining star for now.

Actually I said smart PM investors should be consistently taking profits. That is still my belief, even though it runs counter to human nature — Garth

#104 Junius on 08.06.11 at 12:57 pm

Barry Ritholtz from “The Big Picture” did a great job of summarizing the causes of the Financial crash in the Washington Post. Here is last weeks Washington Post column:

The debt ceiling is hanging heavy over our heads. But that’s not the only reason it looks dark down here. We’ve got some major and prolonged challenges: ongoing debt issues, structural unemployment, a housing overhang and continued economic frailty.

How did we get here? Well, by way of a financial crisis, stock market collapse, bank bailouts and, of course, the Great Recession — and a good many moments of poor judgment.

Given the drama of the debt-ceiling debate, this is a good moment for investors and policymakers alike to look back over the past decade at the mistakes made by our institutions, private sector and government.

If this were a college final exam, it would be in essay form. But because it’s summer, and most of you are out of school, consider this the answer key to that exam.

1 Rates: After the dot-com implosion and 2000 market crash, the Federal Reserve lowered rates to 2 percent for three years, including a 1 percent rate for more than a year. That monetary policy was unprecedented. It had an enormous impact on various asset classes, including dollars, real estate, bonds, oil and gold. A more “traditional” interest rate between 4 and 6 percent would likely not have started the inflationary spiral we saw in commodities during the 2000s. Had rates been “normal,” it is doubtful we would have seen a 41 percent drop in the dollar from 2001 to 2008.

2 The rating agencies: Moody’s Investors Service, Standard & Poor’s and Fitch Ratings — all originally served bond investors, who paid for their research. But that model changed in the 1990s to one that was funded by the syndicators and underwriter of structured financial products such as mortgage-backed securities. Essentially, bankers “purchased” the rating they desired. As a result, the performance of the rating agencies decayed, as they were no longer judged on the quality of their analytical reviews. Second, the underwriting quality of syndicators fell, as they —not a neutral third party — were, in effect, picking their own credit ratings. The real question for the financial markets is why we even require rating agencies to evaluate complex financial products any more.

3 The radical deregulation of derivatives: The Commodity Futures Modernization Act of 2000 was a highly unusual piece of deregulatory legislation. It created a new world of uniquely self-regulated financial instruments — the credit derivative. Unlike traditional financial instruments — bonds, stocks, futures, options, mutual funds — it did not require anything from underwriters or traders. No reserve requirements against future obligations, no counter-party disclosure, no exchange trading needed, no capital minimums. This had an enormous impact on risk management, leverage and mortgage underwriting. AIG, for example, wrote $3 trillion of credit derivatives with a grand total loss reserves against any payout of zero dollars. Bear Stearns and Lehman Brothers were able to expand dramatically into the mortgage-backed security space using very little capital and lots and lots of leverage. You remember how that worked out.

4 Subprime loans: More than 50 percent of subprime loans were made by nonbank mortgage underwriters not subject to comprehensive federal supervision; another 30 percent were made by thrifts also not subject to routine supervision. With this, traditional lending standards disappeared. Millions of unqualified borrowers poured into the residential housing market as overleveraged buyers.

The irony is that dropping credit standards is a key factor in just about every bubble and financial crisis in history. Call it a lesson never learned.

5 Leverage rules: In 2004, the Securities and Exchange Commission issued the “Bear Stearns exemption,” replacing the existing Net Capitalization Rule — that is a 12 to 1 leverage limit — with essentially unlimited leverage for the five largest investment houses. Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns were given carte blanche to pile as much obligation onto their capital base as they saw fit. Following the rule exemption, they leveraged up 25, 35 even 45 to 1.

Less than five years after the exemption was granted, none of these companies existed in the same structure as before the rule change.

6 Mortgage underwriting standards: Beyond the subprime mortgages, lending standards dropped for home purchases in the 2000s. Many lenders stopped verifying income, payment history and credit scores. The 20 percent down standard disappeared. No money down loans rose up. “Piggyback mortgages” piled on a second mortgage. Not to mention “innovations” such as adjustable-rate mortgages. What followed? Rising home prices, housing overstock and booming defaults and foreclosures.

7 Automated underwriting: Loan demand became so great that bankers developed an automated underwriting system that emphasized speed and volume over accuracy and risk management. And the players all learned how to game the system. Real estate agents and mortgage brokers used corrupt appraisers to facilitate loan approval. Mortgage brokers learned how to tweak even the worst loan application to get it approved. Even bank loan officers circulated “unofficial” cheat memos on how to get lousy applications through the automated system.

8 Collateralized debt obligation (CDO): Here is an issue for those of you who believe markets are so efficient: CDO managers created trillions of dollars in mortgage-backed securities without really understanding what was going into these giant mortgage pools. The institutional investors — pensions, insurance firms, banks — who bought these appear to have failed to engage in effective due diligence. This teaches us just about everything we need to know about self-regulation of the financial industry. Indeed, given the outsize bonuses of bankers and the profit motive of banks themselves, financial self-regulation does not appear to be remotely possible.

9a. Glass Steagall: The Depression-era Glass Steagall legislation was effective in keeping Wall Street crises separate from Main Street. Think back to the 1987 crash — it had little impact on the broader banking industry. But the repeal of Glass Steagall in 1998 allowed FDIC-backed depository banks and Wall Street investment firms to become intertwined. It took less than 10 years for the entanglements to become extremely dangerous. By the time the 2008 credit crisis hit, the troubles on Wall Street were inseparable from Main Street. So banks and investment firms collapsed together.

9b State banking regulations: Many states had anti-predatory lending laws on their books. These prevented the making of loans or mortgages to borrowers who could not afford them. In 2005, these state laws were “federally preempted” by order of John Dugan, head of the Office of the Comptroller of the Currency. States with anti-predatory lending laws saw lower default and foreclosure levels than states that did not have them. Not surprisingly, after the preemption, default and foreclosure levels in those states rose.

10 Fannie and Freddie: In 2006, more than 84 percent of subprime mortgages were issued by private lending institutions not covered by government regulations, according to data from McClatchy. Indeed, before 2005, the government-backed private firms Fannie Mae and Freddie Mac were not allowed to buy nonconforming loans. But they were losing massive market share to Wall Street and, in response, petitioned their regulator for permission to buy alt A and subprime loans. Fannie and Freddie plunged headlong into the junk bond market just as the housing market peaked. But it was the profit motive and competition — not government policies — that led to this.

Where does this leave us? We have created an intensely concentrated financial industry, where a handful of banks control the majority of assets. Competition is less than it was before the crisis, and bank fees are creeping upwards.

While risk-taking remains rather subdued, history informs us it is likely to return as the crisis fades in the collective memory. The bailouts left us with a legacy of poor balance sheets and moral hazard. None of 10 factors discussed above have been, in any meaningful way, resolved.

The debt ceiling is the least of our worries.

#105 Westernman on 08.06.11 at 1:05 pm

Tim #42 – Thats great news about Eviornment Canada! Now they should take the financial hedge trimmers to that useless bunch of overpaid, self-entitled,whining buffoons known as Canada Post – and they should be merciless about it.
Cookie Monster #56 – Dead on the money Sir! I couldn’t have said it better myself … as someone once said ” Goverment is not the answer, government is the problem. ” Government appeals to the useless, lazy, incompetent people and when that type get in charge you can be sure your country is doomed.

#106 reality guy on 08.06.11 at 1:10 pm

Today we live in such an uncertain world,

The people locked in to huge debt will find out the hard way, or with too much fixed assets will find out the hard way why they need a balance portfolio or a portfolio top loaded with cash.

Most of buddy’s client’s are top load in gold or interest baring assets. They are all licking their chops on what ahead for the us and the world.

This may be a chance of a lifetime to get some solid companies for a cheap price in the days/ week/ or months ahead.

It may be hard times for the US, but the always seem to rebound back. Happy stock hunting in the days to come.

#107 Mr. Reality on 08.06.11 at 1:15 pm

BPOE – question for you

When all these baby boomers realize that their investments and retire savings are going to get pounded, and decide to sell their homes in order to attempt to maintain the dream of retiring, what do you think will happen to the Vancouver real estate market?

Buddy, watch the real estate liquidation in Canada begin.

These over leveraged boomers are done, along with their inflated housing prices.

Mr. R.

#108 Jsan on 08.06.11 at 1:21 pm

This definitely can’t help the situation.

“It Just Went From Bad To Far, Far Worse As Germany Says Italy Is Too Big For EFSF To Save, Refuses To Carry Euro Bailout Burden.”

http://www.zerohedge.com/news/it-just-went-bad-far-far-worse-germany-says-italy-too-big-efsf-save-refuses-carry-euro-bailout-

#109 Junius on 08.06.11 at 1:28 pm

#24 Harvard Grad,

Your mindless ramblings clearly show that a Harvard Education is not what it used to be.

#110 Young Old Fart on 08.06.11 at 1:32 pm

Three years to get ready? It has been longer than that. I just happen to be visiting my bank in Europe at this time to make some transfers and get ready to pull the trigger.

The rich get richer and the poor get poorer.? Very true. Why? Because the poor are stupid and are about to get schooled.

Sound harsh? If you think so, you have no idea as to what is to come….

Those that know I believe are ready, as am I. Now, I am off to catch my business class seat home, relax and watch the Asian markets Sunday.

Then Monday the fun begins…….

#111 Junius on 08.06.11 at 1:35 pm

#89 Alister,

You said, “The loss of AAA status will create a lot of movement in markets.”

Don’t be so sure. It is only one rating agency, S & P, that has made the move. Neither Moody’s or Fitch have made the move and most funds only need 2 rating agencies approval for AAA rating.

There is another element to the downgrade that is deeply troubling. S & P had been lobbying for months in Washington for more aggressive cuts to gov’t spending. They wanted to see $4 Trillion in cuts and made it very clear that they would downgrade in the event they didn’t get it.

We all know that S & P were a leading contributor to the subprime crisis. They were bought and paid for by the Wall Street firms and provided no protection for investors.

The gist is that S & P have no credibility. Everyone knows it. They are using their ratings as a way to force the US gov’t to take actions. They have now entered the political process which is just outrageous.

#112 Junius on 08.06.11 at 1:37 pm

#82 Habbit,

Very good post. Thanks.

#113 Brian on 08.06.11 at 1:38 pm

yep – long long way down. Won’t come for a while yet, maybe 4 or 5 years, THEN when everyone will be sick of even hearing the words, ‘mortgage,’ ‘real estate,’ ‘cottage,’ ‘mutual funds,’ (etc. etc.) and all the secretaries and janitors and part-time REs, who are (now) saying ‘buy now or be priced out forever’ will have long since shut up and just kinda disappeared.

THEN things will get very very ummm ‘interesting’ and the bargains will be astonishing and anyone with cash and income will just swoop in like a shark!

Gonna take a few years yet – but it will come and its gonna be amazing.

#114 TurnerNation on 08.06.11 at 1:41 pm

Open houses this weekend should be interesting…who is willing to bid 5-10% over asking, when their stock portfolio dropped by the same amount this week!!!!

#115 Not Doomed. on 08.06.11 at 1:52 pm

The downgrade was widely expected and markets factored the potential in. However, predicting anything (other than house prices in Vancouver) is currently a mug’s game. — Garth

You mean like predicting that the US would never get downgraded.

LOL.

I can’t recall anyone making that prediction in recent weeks. It seemed obvious after the S&P warning. — Garth

#116 Joe Robertson on 08.06.11 at 2:00 pm

#102 deleted ???

DELETED. Say anything you want, but an ad hominem post gets the hook. — Garth

#117 The InvestorsFriend (Shawn Allen) on 08.06.11 at 2:07 pm

Utopia at 77 said:

“there will be a substantial amount of capital that will now be pulled from Treasuries. And where will it go?”

Well, yes some institutions will sell treasuries and invest elsewhere.

But to whom will they sell? And where will the buyers get the money?

If the Fed buys these bonds then that constitutes the printing of money and your point holds.

If other institutions buy the treasuries then the same money is just moving around.

This what I have tried to explain, the buying and selling of stocks and bonds in the market does not result in ANY net money flowing INTO or OUT of markets. The same money flows THROUGH the market.

The article below explains this:

http://www.investorsfriend.com/how_the_market_works.htm

And see the following about how markets can create and destroy wealth out of thin air.

http://www.investorsfriend.com/nov_24_2001.htm

#118 Not Doomed. on 08.06.11 at 2:29 pm

Time to upgrade this blog To charlatan AAA.

#119 Snowman on 08.06.11 at 2:31 pm

The markets have already counted in the downgrade before it became official, from this point there is going to be at most a 10% slide in the equity markets.

Canada also got downgraded back in 1993, Garth can tell you more about that as he was the Minister of Revenue at the time? Garth, back @ ya ….

Actually, I oversaw implementation of the GST, which (as you know) reversed the $40 billion deficit and restored Canada’s credit rating. We were in surplus until Mr. Harper became PM, cut the sales tax and increased spending. Bad moves. — Garth

#120 BrianT on 08.06.11 at 2:33 pm

#95Think-McGuinty and the MSM have done a wonderful job of keeping the Ontario fiscal disaster a secret. Heads are gonna roll big time if Hudak takes over.

#121 BPOE on 08.06.11 at 3:02 pm

Markets don’t go straight up and they don’t go straight down. Many boomers have been preached about balanced rrsp’s over the decades and have followed that advice. Boomers have their homes paid off compared to the next generation (of Canadians) who have taken on massive debt. Many boomers have huge credit lines attached to their houses which aren’t being used. As well many boomers do have a retirement plan. The boomer will also use his house as an ATM to the bitter end. Finally Garth says don’t bet against America. I say Don’t bet against the baby boomer No politician will ever do anything to hurt the boomer. Boomers always get what they want. Just wait folks tons of money will be funneled to the next generation of Seniors from the boomer gen. Boomers aren’t moving out of their homes and they won’t stand for the lifestyle and current benefits in place for Seniors. They want it all and they never lose
++++++++++++++++++++++++++++++++

Mr. Reality on 08.06.11 at 1:15 pm
BPOE – question for you

When all these baby boomers realize that their investments and retire savings are going to get pounded, and decide to sell their homes in order to attempt to maintain the dream of retiring, what do you think will happen to the Vancouver real estate market?

Buddy, watch the real estate liquidation in Canada begin.

These over leveraged boomers are done, along with their inflated housing prices.

Mr. R.
.

#122 Moneta on 08.06.11 at 3:02 pm

The gist is that S & P have no credibility. Everyone knows it. They are using their ratings as a way to force the US gov’t to take actions. They have now entered the political process which is just outrageous.
————-
It does not matter whether they have credibility at this point or not. The cons want austerity and they will stop at nothing to get it as:

1. many think that a country’s balance sheet should be managed exactly like that of a household’s,

2. the US does need a makeover to shrink the excessive entitlements and gross inefficencies.

They will probably get their way, but since current leaders will make all the wrong cuts, the economy will go in a free fall and then we’ll get QE3.

#123 Andrew on 08.06.11 at 3:07 pm

Where will markets turn on Monday? Investors absolutely can’t be bullish about US stocks after the news Friday night. But if they sell their positions on the Dow, does it make any sense to flood into US treasuries, driving down the interest rates of the very debt that has just been downgraded? The market is irrational, to be sure, but I’m not sure they’re THAT irrational.

I wouldn’t be surprised to see gold jump more than $100 on Monday and surpass $2000 by the end of the week.

#124 Snowboid on 08.06.11 at 3:12 pm

# 101 BPOE…

You said it: “Congratulations for being apart of the winners circle.”

The emphasis on ‘apart’.

#125 T.O. Bubble Boy on 08.06.11 at 3:16 pm

@ #96 Neo:

#4 T.O. Bubbleboy
I believe the correct answer is UK.

I agree, even with the UK Government cheering their “responsible” austerity measures in the press today:

http://www.google.com/hostednews/afp/article/ALeqM5gRArkAuP1DeCCz4bizNuKN-vhAwg?docId=CNG.e7483a16e5bc523893331788ea5e6527.fe1

#126 timo on 08.06.11 at 3:23 pm

http://dailybail.com/home/fannie-mae-asks-for-another-bailout-china-blasts-us-debt-add.html

take care all and keep your head when others are loosing theirs. Where the hell is my tulips?

;)

#127 Two-thirds on 08.06.11 at 3:42 pm

It pains me to admit it, but it looks more of a certainty at the moment that interest rates in Canada will fall, or at best, stay frozen at current levels until the US recovers.

Time to borrow to invest, perhaps?

#128 OkanaganInvestor on 08.06.11 at 3:58 pm

I agree with Garth that we should talk about real estate and below is an excerpt from an article that should keep the goldbugs, doomers, and renters all one happy family on this blog:

“There are two reasons why real estate will always represent the first/worst bubbles to afflict such markets. First of all real estate is the most obvious asset-class to turn to in such circumstances. Secondly, many/most Western economies provide some level of subsidization for home-ownership – further “juicing” these real estate bubbles. The fact that the U.S. subsidizes home-buying more than any other economy is one of the reasons the U.S. housing market continues to represent the world’s worst real estate bubble (with massive, systemic fraud being the other main driver).

In such circumstances, there is no such thing as “investing” in real estate – only in gambling on it. The exponential money-printing and near-zero interest rates have resulted in more capital sloshing around asset markets than at any other time in history – by a factor of ten. In such circumstances no one can attach a rational/objective assessment to home prices. With absolutely no way of determining how overvalued is any particular real estate market, then obviously any/every purchase is a gamble.

This means that any sane individual contemplating buying a home today would do only one thing: run! With no real estate market on the planet being a desirable place to invest our capital, the only sane strategy for future buyers is to delay buying a home – and instead to prepare to make that purchase under more optimal conditions.”

http://www.gold-eagle.com/editorials_08/nielson080411.html

#129 MochaJava on 08.06.11 at 3:58 pm

@Harvard Grad
Many of my Harvard buddies are piling in the cash, and spend little time in blog rooms farting about other people’s comments…

Except you eh?

#130 betamax on 08.06.11 at 4:01 pm

#99 BPOE: “China has spoken we all know what this means.”

Yes, it means empty political posturing that affects nothing. Thanks for playing.

#131 Cato on 08.06.11 at 4:05 pm

The ratings agencies are now largely irrelevant, the bond markets themselves are now the mechanism for risk discovery. I think ratings announcement is more about furthering a political agenda, stage is being set for intervention but certain interests on wall street want to guide the process.

I think there is now only one way out. Well actually two but only one is realistic. First choice would be large scale, outright debt forgiveness. Not likely as it would cause civil strife. The state giving your tool of a neighbour or in-law a 6 figure check for behaving like an idiot would not go over well.

Second scenario and the most likely would be wage inflation. Not for everyone, just some and just enough to shift debt balance enough to start healing the system. In a centrally planned economy the winners and losers are decided by gov’t. so its probably time to place bets on where stimulus will likely go. Will it be green energy, infrastructure spending, healthcare? or some other vehicle to reflate the credit cycle. Maybe another war?

At this point the burden of world recovery is going to be placed on the US. Europe is an absolute basket case, socialism has run so far amock the EU is unrecoverable. Russia is a police state ruled by oligarchs. Japan is at the start of a demographic tailspin. China & India still have decades of maturing to do. That leaves the US standing alone.

China will whine about the US deliberately devaluing the dollar through debt monetization but remember the buggers were manipulating the yuan for last 30 years. Hopefully US action goes one step further to defeating communism for good. I’m not a fan of US imperialism but I’d rather see a strong US than a strong China. In this struggle Canada needs the US to come out on top.

We need several more rounds of stimulus and they need to be epic in scale. The US has to lead the charge. I like Ron Paul, but he’s a crusader and like the tea party isn’t looking at the bigger picture. The truth is we’ve gone to far over the edge for spending cuts and a balanced budget to make any difference. Only growth will save us now, and we need to kick start it with a bang at a scale the private sector can never muster on its own. Thats not to say gov’t doesn’t need to be cut to the bone. At this stage any spending that isn’t resulting in near term economic growth needs to be done away with regardless of the social cost. Resources need to be diverted to more productive measures, no different than being at war.

End result is a depreciated dollar so savers will pay the price. But they have a choice, instead of hiding under the mattress they can protect themselves through investment portfolio. Personally I’d be laying bets in the energy space – we are sitting on a lifetimes supply of gas so why are we transferring vast amounts of wealth to OPEC nations who produce nothing in return. We need to transition our transportation infrastructure to nat. gas and give the finger to OPEC for good. From there we can move to stimulate clean energy & knowledge based economies.

If we make it through this (and I think we will) only then we can kill off Keynesianism once and for all. Until then we have to stay the course or risk killing patient.

#132 betamax on 08.06.11 at 4:13 pm

Garth, I don’t what what’s more disturbing: the gun tattoo or the bod it’s tattooed on. Couldn’t you find any nice tramp stamps on the internet?

#133 Timing is Everything on 08.06.11 at 4:18 pm

Garth, Here’s a question I’ve wonder about…
How much does the so-called ‘private’ sector rely on the so-called ‘public’ sector? I mean really, most of the private sector derives contracts (wealth) from the public ‘good’. i.e. government contracts (directly or indirectly, it matters not). Can such a thing even be quantified?

——————————————————-
The government we have is the government we deserve. There seems to be a lot of whining about ‘how the world ‘works’ or conversely ‘doesn’t work’. From my vantage point, the world is working just fine. Changing. Moving forward. Same as it ever was. Quite the ego people must have to think they can ‘fix’ the world. God is ROTFL at that one!

——————————————————-

#32 Raj asked “Will Stock market tank big time , come Monday?”

Don’t know. I do know, as sure as day follows night, Tuesday will still follow Monday. Same as it ever was.
Does that help?

—————————————————–

WARNING: Songs I like. You know, in light of the current situation and all.

“I don’t know what you expect staring into the TV set” – Talking Heads

http://www.youtube.com/watch?v=I1wg1DNHbNU

http://www.youtube.com/watch?v=AWtCittJyr0&feature=related

http://www.youtube.com/watch?v=xNnAvTTaJjM&feature=related

#134 Linda Pearson on 08.06.11 at 4:31 pm

#48Patz on 08.06.11 at 12:43 am
Oh Harvard Grad, so good to have you back. It sure has been dumb here without you, I mean really there’s just no smart people around.

Just keepin’ it real…George W Bush attended Harvard too.

#135 TheBigLebowski on 08.06.11 at 4:43 pm

DELETED

#136 Burnt Norton on 08.06.11 at 4:51 pm

Junius – thanks for the WP article above.

#137 Patiently Waiting on 08.06.11 at 6:07 pm

This may have been asked already, but is there a rule that some pension funds can only invest in triple a rated debt?
Will this cause some unloading of T Bills in the near term or do all 3 of the agencies need to downgrade?
____________________________________________

I think some SWHTF over this, but ultimately I would not be surprised if the pension funds re-write their criteria for investment to include AA+ so they can continue investing in US TBills . . .

#138 simkev on 08.06.11 at 6:07 pm

#24 Harvard Grad
They definitely offer a very good ESL program in Harvard … I can tell!

#139 City Slicker on 08.06.11 at 6:31 pm

US’s downgrade isn’t so much about their bonds as the degrading of the world reserve currency the USD:
Peter Schiff:
http://www.youtube.com/watch?v=nR8up1Ks0h8

This is very bullish for gold, soon there will be nowhere else to run. Sorry Garth.

#140 Victoria Tea Party on 08.06.11 at 6:40 pm

#131 Cato

I largely agree with your comments. However, I have these few following thoughts.

The stores in the Hamptons must be near out of diapers this weekend.

The usual gaggle of doomers, having already shopped early Friday afternoon to brace for whatever happens on the following Monday markets, may have resulted in empty shelves for some of the apoplectic Wizards of Wall Street (those not working for the ratings folks!) and DC.

According to Garth this downgrade of the US debt situation is no big deal for now.

True, but some guy on BBC, Saturday, said it’ll take from 9 to 18 YEARS for the US to get that Triple-A back!

So, between now and then a lot of stuff can happen.

But why wait for then, when right now will do?

–China has called for a new reserve currency, but did not specify what or how;

–Europe, especially Italy and Spain, seem to be driving the Euro experiment down the tubes quickly. Monday could be an interesting market day;

–China is having problems maintaining its export customer base because that base, mostly Europe and America, are faltering. See the above points.

The question for the diapered Wall Street know-it-alls, and their DC counterparts is this: How can they manipulate the Dow futures index on Sunday afternoon, West Coast time, to put some more lipstick on their marketplace pig and hope things turn out positive on the Monday opening.

Something that could help would be a late Sunday announcemnet that an emergency meeting of The Fed has resulted in the launching of QE 3!

It’ll be dressed up with an urgent-sounding name, but further borrowing would be the result; more debt in order to return prosperity to the Empire! All stimulus since 2008 has failed and further borrowings will only fail again.

What the Friday S&P announcement really showed was the extremely close alignment between the MSM and the Obama crowd. They all occupy the same suit!

The knashing of teeth, the huffing and puffing, the “how COULD they EVER do that to US!” was spectacular and oh so damaging to their already tattered reputations.

Lenders all over the world must have looked at that spoiled brat reaction and at some point will decide that enough is enough.

What lies ahead could be strategic withdrawals from “secure” American paper of all maturities and a bond market that may look like financial Hell on Earth come Monday.

Or maybe not.

We, therefore wait.

These historic financial times in which we live broke new ground with the debt downgrade. More broken ground to come.

So much worry, so few diapers.

#141 robert james on 08.06.11 at 6:49 pm

On Monday morning I think there will be a lot of stop losses taken out as per usual after “scary” news like the downgrade… Personally speaking it is nothing but a big phony show.. JMHO of course.. Oh,, the goof in the picture with the gun tattoo reinforces my other humble opinion that there will be a huge business opportunity for a Tattoo Removal franchise in the years to come.. “You can`t fix stupid but You can erase it” will be the full page ad on the back of the Globe and Mail in the future..

#142 Nostradamus Le Mad Vlad on 08.06.11 at 7:07 pm


Two items of major significance — First, the Wise Words in today’s KDC:

“If stock market experts were so expert, they would be buying stocks, not selling advice.” — Norman R. Augustine.

Second — This.
*
#56 Cookie Monster — “Socialism’s great until you run out of other people’s money.”
and
#73 hobbygirl — “No more QE so markets are tanking, just delaying the inevitable.” | with | “However, predicting anything (other than house prices in Vancouver) is currently a mug’s game. — Garth”

What if QE3 is foisted upon unsuspecting North American taxpayers, Canada loses it’s AAA Canada Grade A Beef rating and instead becomes Mexican Refried Beans with Guacamole Ketchup placed on top of the Chinese-built American bbq, with burnt burgers as the main course? Is there any hope for mankind, or is the present system scrapped and we start all over again? See last financial link for a clue.
*
US Navy Seals “Obama is cleaning house! Were those Seals about to blow the whistle that it wasn’t really bin Laden they murdered last May?” wrh.com. Everything Obama has done to get re-elected may have just backfired — Fake bin Ladens; Tail Wagging The Dog? “Historically, the US has moved out of economic depressions through war. However, this time, those in the bowels of power in DC had better be damned careful in their considerations.” wrh.com; Nagasaki “Bombing Nagasaki was completely unnecessary.”

Global Faceoff “Lucifer, step aside – a more diabolical plan has never been conceived.”; 2:40 clip Hiroshima vs. Detroit 50 years on. This would be one of the reasons for all the wars in the ME; 2:06 clip Credit agencies down to junk food; Super Congress A fiscal death sentence (depression); The link I posted earlier said every eighty years, a global reset happens. Now is the time for that reset.

#143 steve on 08.06.11 at 7:12 pm

Thanks TheBigLebowski, helpful as usual.
Wanna play X’s and O’s?
Best 2/3?

Best, Steve

#144 TurnerNation on 08.06.11 at 7:22 pm

Blog dogs: the best method for searching on MLS.ca, I find, is to locate your area and then bookmark your search and include the # of listings in the bookmark’s name. This way you can keep track of active listing #s in the search, when they change.

Repeat for other searches.

#145 Daisy Mae on 08.06.11 at 7:29 pm

To: Future Expatriate.

VICTORIA – Dr. Perry Kendall, British Columbia’s provincial health officer, issued a statement today reiterating that there are no health risks to British Columbians due to radiation from the Japanese nuclear power plants.

“British Columbians do not need to worry about any health risks from radiation here at home as a result of the nuclear reactor releases in Japan.

“We have been monitoring the situation very closely, and I have been in close, regular contact with our partners at the BC Centre for Disease Control, Health Canada and in the United States since the tragic earthquake and tsunami in Japan.”

“As expected, we have seen extremely small levels of radiation from Japan that have made their way over to the west coast of North America, but the levels are so minute that they pose no risk of health effects.”

#146 Daisy Mae on 08.06.11 at 7:58 pm

BPOE: “Boomers aren’t moving out of their homes and they won’t stand for the lifestyle and current benefits in place for Seniors. They want it all and they never lose.”

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

What ARE you talking about?

#147 Ben on 08.06.11 at 8:07 pm

The S&P Downgrade has been known about for two weeks, what people didn’t know was they were off by 2 Trillion.

http://www.businessinsider.com/downgrade-treasury-spells-out-sps-2-trillion-mistake-2011-8

#148 Junius on 08.06.11 at 8:26 pm

#56 Cookie Monster,

You said, “The villain in our failing economy is not capitalism, its not entrepreneurship, its not rich business people, it’s our government, it’s our banks, and it’s our bloated public sector.”

Wrong. Dead wrong. It was caused by the virulent form of “free market” or “unfettered” capitalism that dominates our current politics and our financial system.

First of all, the argument that we must choose between capitalism and socialism is dated and false. You need to move your thinking beyond this simplistic paradigm. The current battle is between so called “free” or “unfettered” capitalism and competitive capitalism. Understanding the difference between the two is key to understand both how we got into this mess and what we need to do to get ourselves out of this.

The main culprits are the banksters. It was our fault for allowing their deregulation over the past few decades. They bought off our politicians and created a financial system that has put isn’t into a world wide crisis.

We have returned to the world of the robber barons of the 1880s and 1890s but instead of steel and railway magnates we have banksters, media barons like Rupert Murdoch and others. These so called “free market” capitalists have no interest in competing in a free economy. Their only interest is in control, monopoly and exploitation.

We have once again learned the hard lessons of human nature and capitalism. As we unleash human talent and innovation we also must contain its excesses. Power corrupts, absolute power corrupts absolutely.

The US needs a President like Teddy Roosevelt who knew enough to take on the robber barons. Someone who understands that we need to make our economy competitive again and that only comes when we have proper laws that protect small business and entrepreneurship.

I am a capitalist as well. However I understand that in order to function the system needs a fair legal system, a properly regulated banking system and rules that protect us against monopolies and anti-consumer behaviour. Human nature has not changed in thousands of years. Neither has our collective arrogance that things this time are somehow “different”.

#149 Roland on 08.06.11 at 8:36 pm

@131

Historically, Canada has done best when there is a genuine world balance-of-power.

Canada gained its independence when a rising USA offset a powerful British Empire.

Canada flourished as a “middle power” during the Cold War between the USA and USSR.

Since the fall of the USSR, Canada has found itself sucked into a subordinate relationship with the USA, and ever more dependent on raw commodity exports.

A rising China is good news for Canada and will improve our negotiating position with everybody. A weak and frightened USA will need friends, and Canada can make them pay the correct price for our friendship, rather than have them take us for granted.

#150 Utopia on 08.06.11 at 8:38 pm

#29 disciple on 08.05.11 at 11:25 pm

“Yesterday, I watched a pigeon walk right into my garage as I was underneath my vehicle….My daughter was the first to notice it this morning and fed it some rice. It passed away in the afternoon.”
———————————–
Sorry to hear about your bird. Hopefully your daughter was not too upset. I have a love for pigeons and kept them for many years. My hobby was feral pigeon rescues.

If you do come across another sick bird here are a few things to try. Usually the first thing a sick bird needs is to get rehydrated and get warmed up.

It is pretty easy to nurse them back to health. All you need is one of those small heating pads (set on low) and some International Rehydration formula. The normal word for IR is “water”.

Basically it is a mix of a teaspoon of sugar, a few shakes of salt to a cup of fresh water. You can feed a few eyedroppers worth to the bird directly down the throat (the airway is located under the tongue so this is not as dangerous as it sounds) Just don’t squirt water into their mouth or you can aspirate them….gotta be directly into the throat.

This gets the electrolytes back to normal. It is basically Gatorade for birds. This stuff has literally saved millions of human lives too since it was discovered in the 60’s and it is being used extensively in refugee camps to treat those suffering diarrhea and dehydration.

It’s discovery was considered a near miracle. Up until that time nobody could understand why refugees kept dying despite being given as much plain water to drink as they wanted. The sugar and salt made all the difference.

Anyway. For food, just scatter some simple seeds nearby. Pigeons love split dried peas. Popcorn works well in a pinch. Nothing salted though and no rice or sunflower seeds in the shells. Scatter some sand in the dish for grit which they need for digestion and in a day or two your sickly pigeon will likely perk up a bit.

Hope that helps.

Just the basics for keeping a bird alive until you can get more help. Keep giving liquids every hour or two in small amounts and keep the bird warm then try this “pigeon site” below for help on bird rescues. Your daughter may really enjoy learning about saving sick birds.

It will be very rewarding for you too and it will sure take your mind off this crazy economy for awhile!

http://www.pigeons.biz/pigeons/index.html

#151 Onemorething on 08.06.11 at 8:47 pm

Weather in the Okanogan Awesome…RE prices falling!

#152 Utopia on 08.06.11 at 8:57 pm

#44 Mr. Reality on 08.06.11

“Nice to see some numbers real estate wise. Thanks for the no BS assessment of the current climate”
——————————————-
I agree. It’s good to be talking real estate again and how it impacts the economy. I really felt that if I read one more inane comment about fractional reserve banking my head was going to explode.

Victoria may just be our countries ground zero as it turns out. The numbers that are being posted there are near shocking.

Sadly, for sellers, there is always a long lag time between the realization that sales have melted away and the reality that they need to cut prices if they really want out. If they truly want a sale.

Some will still be able to pull that rabbit out of the hat but for thousands of others the top has already come and gone. Those are the victims of greed and the misplaced beliefs in the golden calf of ever rising prices. They will be sacrificed at the alters of arrogance and ignorance.

So they dithered. They waited. And now they are trapped.

#153 disciple on 08.06.11 at 9:25 pm

Wow, thanks Utopia. Actually, I was not home at the time so all of what happened was reported to me, but definitely I will pass on the info to my daughter as she grows up. I honestly thought it had gone away before I retired for the night and closed the garage door, didn’t expect it to stay overnight. We didn’t have any bird seed but we have plenty of uncooked rice (we get it imported from Thailand once annually from a specific region).

Garth-I’m still laughing about the bird seeds at weddings LOL…

Nostradumus – I am not that Nosty Jr. that everyone keeps referring to…must have been a cool guy though.?

I had to confer with some clients today, yes on a Saturday, but there was a lot of money involved…you know what I mean, and I learned that one of them had just sold their $6000 sofa from one of their condos that they have been trying to sell for over two years. Of course, they got much less for the sofa and the tags were still on them. Turns out they purchased the sofa to stage the condo for open houses. This client has at least two condos in the same building. She also reported to me that there were about 12 or so open houses in the same condo building today. I don’t know if that’s normal or not, I’m just reporting it. She looked worried to me, but maybe I was just hallucinating.
Thanks and good night – disciple.

#154 Utopia on 08.06.11 at 9:44 pm

#58 Evangeline on 08.06.11 at 2:12 am

“It’s widely and wisely believed the US housing market will not recover until more people are working. The question is, which will come back first, U.S. housing or employment?”
———————————————–
There are two major shifts of land wealth that have taken place in the last hundred years Evangeline.

The first occurred as industrialization drew farmers off the land and into urban settings, thus freeing up farmland for acquisition by our modern land barons.

The second shift is in progress now.

This is a time when private property held in urban areas is transferred from private owners into the hands of a new and growing land-lording class. It will be no less dramatic than the change from a farming society to one of mass urbanization.

Housing will recover. What will be different is that our society will likely mirror that of much of Europe where renters can outnumber owners and leasing property is seen as the new normal.

This does represent a massive shift of wealth from the former middle class to an new elite of landholders. Even if employment numbers return to historical averages it is unlikely that home ownership rates will ever see the 70% penetration numbers again.

In that world, both housing and employment can recover but life will never be quite the same again for millions of disenfranchised owners.

Sorry.

#155 daystar on 08.06.11 at 9:58 pm

The downgrade was widely expected and markets factored the potential in. However, predicting anything (other than house prices in Vancouver) is currently a mug’s game. — Garth

#131 Cato on 08.06.11 at 4:05 pm

But Garth, predict is what an investor does. Predict, privately, if not publically, speculate… mainly on equity potential and the environments they swim in, thats what I do and if that makes me a mug, er… ah… ahem… guilty. ;) You know how it goes. Postulate. Educate yourself and guess. Hypothesize… and then predict, with one’s own wallet is where the fun truly begins. If the wallet grows fat, one can move beyond hypothesis and plausably infer an actual theory!

Good god, I’m not alone, the only difference between me and most other investors is that I verbalize my opinions on this site as you well know. I’m not going to get into picking the winners from the losers mathematically in terms of share offerings, balance sheets, dilution, discovery/resource potential, managment, geopolitical risk etc. (to bad too, I have plenty to say about these as well) but the environment in which one invests, whether its in equities, bonds, real estate, ventures, anything really, y’know, the economy as an integrated systemic holistic whole, well, I don’t see any harm in predictions as long as they are supported by solid facts.

As for S & P or Moody downgrades, I think it matters what they say as long as they actually tell it like it is. Its when ratings agencies don’t get it right that makes them irrelevant and they’ve had that past, sure, as rubber stampers of toxic subprime bonds not to mention other examples, but when they get it right gradually they become relevant again. What, we think ratings agencies will never establish their credibility again? If one is paying attention, its what they are trying to do now. Ratings agencies have to, I think, because their very future existence is at stake if they don’t get it right from here on in.

Basically what I’m saying is that our pessimistic views can become dated if we don’t keep an open mind. Things can and do change as change itself, is inevidable. Ratings agencies know for themselves just how much damage their reputations took with U.S. housing. They are responding the way they have to in my opinion because if they don’t, they become irrelevant to the financial systems themselves and if they become irrelevant to banks, its the end for them. Lies aren’t working for them so much anymore. Banks, rating agencies, they’ve had to make major changes or… well… there won’t be a tomarrow for them, thats just how it is.

Ask yourselves why S & P warned and then downgraded U.S. bonds to begin with when they could have just… rubberstamped, business as usual right? The U.S. government raised its debt ceiling, why make waves now, right? Well, business as usual made them irrelevant or for a lack of a better term, useless and who wants to pay for that? And sure, potential exists for CEO’s in financials to send a message through agencies themselves, thats not hard to fathom and likely also the case, but what I’m saying here about credibility is not hard to fathom either. Ratings agencies have to restore their reputations or they truly become irrelevant and their silence becomes their swan song… so they chirp a different tune.

As for August giving market rally potential, I simply cannot see anything other than bear traps and steady selloffs ahead for at least a month. Look at where the media is driving the herd and ask yourselves what will happen when Japan reports an actual full GDP quarterly reflecting their stunted growth since March 11th. Will this set the markets on fire? Torch them maybe. The evidence of a world wide slowdown is there and no, its not “already priced in”, but it will be. Lets not give the herd too much credit for actually being smart, shall we? The mob ain’t all that bright, truth be told.

Commodity supply is hardly tight, flatlining in the peak of summer, perhaps building straight across the board as we speak (there I go, speculating again). India is slumping from inflation. China… big question mark now but if the rest of the world stops buying stuff, China will hurt regardless of what their government numbers cook up. The rest of Asia is hurting and a good chunk of it is coming from Japan.

Europe truly is a mess. Italy’s PM has very little credibility left, Spain is in a deep real estate led recession with a household credit bubble killing their economy and the same goes for Portugal. The U.K. is in hard times publically and privately and RE values there are hanging by a thread. France and Germany will soon have debt hangovers of their own to account for and they may have to adjust to the fact that the Euro may not survive. What will it hold for them? I’ve said it before, Italy could be bankrupt within 2 years, there is very real risk there and if it happens, what happens to the Euro? Think about that one long and hard. How will it effect other currencies?

Governments across the globe are out of bullets, as they say. Should things recess globally, politicians will have to allow things to self correct. Think for a moment what that means especially to currencies and in the same breath, don’t expect drama overnight, but allow it to play out over years, if not decades and thats how we will see the light.

And to Cato, as for “this governmental system is better than that one”, i.e. imperialism or capitalizm or democracy is better than communism or socialism etc., I still adhere to the belief that leaders can take the best systems out there publically or privately and run them into the ground, while taking the worst of systems and making them work regardless.

Its called “management”. How well managed was Lehman Bros. or Worldcom or Nortel or Enron or Freddy/Fannie? How well managed was the Whitehouse these last 10 years and for that matter, congress? Offering another example… how well managed is socialist Norway?

Or Iceland… Ireland… Greece… Italy… Israel… and on… and on. Perhaps if we had leaders who weren’t priders, greeders, sociopaths or dummies in general regardless of the systems they run, we’d have a better world, don’t cha think? The best of systems won’t survive if dummies run them long enough. Yeah… its not hard to guess why S & P is making some noise. When one really thinks about it, it isn’t hard to guess at all but this is way too much opinion even for me, its a Saturday, have a good one y’all.

#156 eaglebay - Red Deer on 08.06.11 at 10:29 pm

#140 Victoria Tea Party

That’s one rating agency. The other ones are still rating the US as AAA.
Don’t be a doomer.
The markets will do well next week and comes September away we go.
Be positive and believe in Canada. The US will do fine also.
Doomers are loosers. If you think that the market had it, why don’t you short it?
Oh, I can’t, I’m not so sure anymore. Yeah, right.

#157 jess on 08.06.11 at 10:31 pm

5 T.O. Bubble Boy
I pick Austria
===
Health secretary Andrew Lansley is understood to be drawing up plans for a dedicated central unit to house billions of pounds of toxic IT-contract exposures – a legacy of the disastrous £11bn NHS computer system upgrade that began eight years ago.(guardian)
so much for efficiency….

#158 bullion.bunny on 08.06.11 at 10:37 pm

#38 nonplused on 08.05.11 at 11:53 pm

We have made everything too complicated in search of efficiencies that aren’t there

Well more complicated for sure, but do you really want to go back to a 1975-1980 vehicle? No thanks, they run much better now and require far less maintenance! Only problem is when they break….look out the bills are large. You can purchase your own OBDII scan tool and do most of it yourself, that’s what I do. AutoEnginuity sells a good one.

http://www.autoenginuity.com/

Also as far as the Diesel goes, ask them where they are getting the pumps and injectors rebuilt. These devices operate a very high pressures up to 28,000 PSI , service can only be performed in clean rooms using special tools. Harper Diesel here in Toronto performs repairs for most of the diesel vehicles regardless of model or make. Volkswagen & Audi use them for all of their rebuild and warranty work . Plenty of idiots (sounds like the garage you are using) attempt to rebuild injectors and/or pump in the laundry room with no more than a screw driver. Results are always predictable…..a big mess.

P.S. Ford has it’s injectors made by Bosch & Cat, depending on the make and model. These are designed to provide about 500,000 miles of service without repair or rebuild.

#159 eaglebay - Red Deer on 08.06.11 at 10:53 pm

#148 Junius

That’s with government interference. That’s no capitalism.
You don’t know what capitalism is and do not realize the effect of government.
Governments functions and duties should be to protect individuals and their properties.
That includes police, armed forces and laws and regulations that are designed to protect people.
Any interference with freedom, liberties and meddling with people’s lives should be a non issue.
Our big government is our enemy.
The banksters and the large corporations are protected by our governments which is wrong. No monopolies should be allowed and no franchises should be given to anyone.
Capitalism is competition, freedom, no interference, no confiscation of capital and rules to protect the people.

#160 45north on 08.06.11 at 11:31 pm

Utopia: This is a time when private property held in urban areas is transferred from private owners into the hands of a new and growing land-lording class.

you mean like my sister-in-law and her husband who bought houses in Pickering? After 30 years, tired and exhausted they sold, happy to get out.

#161 Snowboid on 08.06.11 at 11:42 pm

Anatomy of a crash:

As I still keep an eye on Phoenix real estate, this listing caught my eye – it is a great example of what happened during the RE fiasco in Arizona. Note the current listing price at the bottom. Okay, it’s not a prime area, but still is a smoking bargain by our current BC standards. Is this the fate of RE in Canada?

Built in 2003, 1 acre lot, 5 bedrooms, 5 baths, 3501 sq feet. Backyard oasis borders park reserve, upgrades galore, 2-way fireplace in master and family room, master sitting room with interior balcony, pebbletec pool and spa.

Previous Sales:
Sold on 2003-10-07 for $397,541 (New)
Sold on 2006-03-14 for $750,000

Listing History:
$749,900 On 2007-07-28
$729,000 On 2008-05-17
$499,900 On 2009-04-04
$489,900 On 2009-06-06
$449,900 On 2009-08-29
$439,900 On 2010-04-17
$419,900 On 2010-05-01
$399,900 On 2010-07-24
$369,900 On 2010-08-21
$349,900 On 2010-09-18
$329,900 On 2010-10-30
$319,900 On 2010-12-25

Days on market: 1470
# of Times Listed: 6

Current Asking Price: $270,000

#162 Nostradamus Le Mad Vlad on 08.07.11 at 12:06 am


I just want to say this is not me, but an imposter. If I were you, I wouldn’t have anything to do with me!
*
CME’s To keep everything in perspective, the sun has blown a gasket, but this will play a role as well; m$m Nobody likes liars; Four min. clip Facebook not all it’s cracked up to be; Link in ‘Net interference has begun; London unrest, just in time for the soccer season.

China says “. . . it may pursue the option of creating a global currency to replace the dollar altogether.”; 13:09 clip Fundamentally, this is economics beyond my comprehension; Blahs Para. by pic, a little way down is interesting; No more money from China; Crisis If it’s Sunday, it must be the start of a new crisis, and Chinapocalypse; Having A Rotten Tooth Pulled It’s sudden and it hurts.
*
Chaos — This is beyond ludicrous! “1) What are the odds of guy named Leonid Elenin growing up to be an amateur astronomer who just happens to discover a comet that is coming between the Earth and the sun in September of 2011 (9/11…his name “Elenin” is 9/11 backwards).”

#163 Utopia on 08.07.11 at 12:24 am

To Disciple….

A short while ago I wrote to you about feeding pigeons. I mentioned popcorn. I hope you understood I meant popcorn BEFORE it is popped. I meant kernel corn from the bag. NOT microwave popcorn or the stuff you pop and eat at a movie…….just old fashioned seeds.

They come in bags or jars and don’t have salt or additives. Sorry about any confusion. The pigeons will love you better if you give them the food they like.

Just plain seeds.

#164 Calgary Illusion on 08.07.11 at 12:52 am

#156 eaglebay – Red Deer

When the market is finally purged of toxic assets (which should of happened in 2008) – I will be estatic about equity markets once again. Don’t be too bubbly on Canada either – we the taxpayers are about to be throttled by CHMC losses in the not so distant future. Be prepared to help shoulder those mistakes with higher taxes. Don’t mistake doomers for capitalists.

#165 Canayjun on 08.07.11 at 12:54 am

daystar

Really well written. Thanks for sharing your opinion.

#166 timo on 08.07.11 at 1:18 am

http://translate.googleusercontent.com/translate_c?act=url&hl=en&ie=UTF8&prev=_t&rurl=translate.google.com&sl=de&tl=en&twu=1&u=http://www.spiegel.de/wirtschaft/soziales/0,1518,778764,00.html&usg=ALkJrhhxjNBKFaKheVyGw7JIuTNvmXmksQ

Merkel’s rescue experts reject Italy

soap opera continues

#167 LB on 08.07.11 at 1:45 am

Now that the global corporate and financial sectors are in full recovery mode and generating huge profits as a result of the recent taxpayer bailouts, isn’t it time for them to now be required do THEIR part to address the resulting current financial crises by, having first repaid these funds, legislate them to redirect some of these profits back to the taxpayer through increased taxes and job creation?

#168 Jody on 08.07.11 at 2:37 am

Who cares about the downgrade, it’s the amount of toilet paper money being printed that matters. We’re talking $55 trillion plus in the hole, they are monetizing the debt to try and fix things but it is mathmatically impossible for the US to pay their debt back, it’s impossible. I think we really need to ask if they will crash their own dollar on purpose to avoid having to pay their debt.

Right now police and fireman across the US are being asked by city and municipal governments to take a 50% cut in their pensions, and that’s just the beginning. There is a reality out there that people are not willing to accept.

I see this as an opportunity to get rid of all the government parasites, I wonder how long they’ll hang round once their ill gotten pay cheques go up in smoke. I think they’ll be a massive sell off in equities, bonds and western curriencies. It just takes a little panic to go a long way. There will be a massive bond auction, it won’t destroy the farmer who farms or the fisherman who fishes, it will destroy the bankers, but then the bankers will keep screwing us over, whats new. The markets will freeze and the aholes will bring in a global currency. Now if you’ll excuse me I have to go back to hiding in the basement with my guns and canned bacon.

#169 Jody on 08.07.11 at 2:54 am

Oh yea, some links to the pension cuts people are being asked to take around the US, also some cutback stories.

http://www.pensiontsunami.com/

http://articles.cnn.com/2011-07-21/us/rhode.island.pensioners_1_retirees-pensions-social-security-benefits?_s=PM:US

http://abcnews.go.com/Business/Retirement/public-pension-reform-states-cut-benefits-massive-funding/story?id=10448854

http://www.dailymail.co.uk/news/article-1301941/Millions-face-25-pensions-cut-inflation-rules-final-salary-schemes-change.html

http://www.nytimes.com/2011/01/13/us/13illinois.html?_r=1
“raise the individual income tax rate by about 66 percent” Good lord.

Meanwhile the scum bag bankers and CEO’s keep taking, our tax dollars bailed them out instead of going to schools, hospitals, fire, police, roads etc. How nice.

http://www.cbsnews.com/stories/2009/11/19/eveningnews/main5714036.shtml

http://fedxmx.com/fedex-cuts-workers-retirement-compensation-while-ceo-rakes-multi-million-dollar-pension

#170 reality guy on 08.07.11 at 3:46 am

Tomorrow will be interesting when china opens

right now they are giving the Obama administration a tongue lashing…They want US to cut social security and the MILLITARY.

http://www.theglobeandmail.com/news/world/asia-pacific/as-allies-rally-behind-us-china-says-good-old-days-of-borrowing-are-over/article2121922/page2/

Just want to know from the people who has these huge mortgages and leverage themselves to the hilt. Are you beginning to feel the heat.

If I were in your situation, I’ll be peeing my pants just about (MONDAY)

#171 Mr Buyer on 08.07.11 at 5:26 am

#56 Cookie Monster… It is time for a new hybrid with scientists at the helm. Corruption and and gouging of profits are elements of capitalism you forgot to mention. Capital does not build it right the first time for an extended period of time. After all, where are next years profits going to come from if everybody bought our truly durable products. Capitalism does not foster efficiency by any real estimation, only how to most efficiently harvest profit in the form of monetary gain. The making of money with money is a futile cycle producing little for mankind. Imagine all these capitalists being tasked with the job of working out the fine grain aspects of present and foreseeable technical challenges. Not to mention that capital moves in often after the public purse has put the infrastructure in place. I believe it is not unreasonable to assert that there is not a true capitalist on the entire planet, all rely on public infrastructure. I am all for lining my pockets with cash and getting away from it all but there are huge challenges not far ahead. My limited understanding estimates my children will face the brunt of it when they are my age. As for capital leaving Canada, it can feel free to do so, but it will be back. Lets see, the 2nd largest country on the planet with the same population that lives in and around Tokyo. Resource rich is a tired term that does not really describe our situation by any stretch of the imagination. An important question is how are Canadians going to hang on to this magnificent country and its real wealth? It is all well and fine for capitalists to speak of culling and survival of the fittest, but the fittest what exactly and what has been selected for? Capitalism has brought us here hand in hand with any other ism you can dream up. BTW, I happen to lump banks and bankers into the capitalism you are speaking of so passionately.

#172 timo on 08.07.11 at 6:06 am

http://www.ynetnews.com/articles/0,7340,L-4105365,00.html

man the world is worried.

“the Tel Aviv Stock Exchange delayed the start of the week’s first session Sunday after pre-opening trade showed the benchmark index dropping more than 6 percent following the downgrading of the United States’ debt rating”

quick,call my Realtor!

#173 Beach Girl on 08.07.11 at 6:48 am

#19 Smoking Man. I admire your lifestyle, enjoy yourself for as long as it lasts. No one looks good after 70 anyway.

Nope. they are going to buy property, they understand it and they have the satisfaction of not paying a land lord slime bag……..

Not all landlords are slime bags. I provide a valuable service.

Also I think Harvard Grad. was the janitor there. What did he actually graduate with?

#174 Utopia on 08.07.11 at 7:54 am

#104 Junius

Thanks. That Washington Post article is a pretty good summary of what went wrong in the US.

What Barry is telling us in short was that the system went awry over a combination of greed, the profit motive, competition and squabbles over lost market share.

Regulatory agencies failed in their responsibilities as they were pressured and lobbied into relaxing standards. Throw in some dirt cheap interest rates and the mix was ready to blow up the financial system.

No conspiracy really. The system just became so damn complex that few could properly understand it anymore. Fewer still made the effort at due diligence as they launched their leaky boats on faith alone.

Too bad that we have mirrored so many of the same mistakes here in this country. When credit does finally tighten (as it will) there is going to be one hell of a shock in store for a lot of unprepared Canadians.

Who are they going to blame then?

#175 Utopia on 08.07.11 at 8:04 am

#111 Junius

“Don’t be so sure. It is only one rating agency, S & P, that has made the move. Neither Moody’s or Fitch have made the move and most funds only need 2 rating agencies approval for AAA rating.”
———————————————-

Thanks again Junius. Another great point. The Doomer’s are already predicting financial armageddon for Monday but I don’t see that coming anymore.

After digesting the information over the weekend I am less concerned than I was initially. The sell-off may continue for awhile until markets settle down but in the larger picture some good buying opportunities should emerge.

We have all got to stop hitting the panic button every ten seconds and take a few deep breaths. Money may indeed be shifting around the system and repositioning on the ratings moves and related political worry but there is usually some a winner for every losing trade.

The trick is figuring out what those trades will be.

#176 BrianT on 08.07.11 at 8:15 am

Great overview of the last 10 yrs in the USA-in 2001 CBO make some absurd forecasts which were parrotted by all respectable MSM “experts”-have a look-pretty wild http://www.zerohedge.com/news/speaking-credibility-here-cbos-2001-forecast-which-predicted-negative-25-trillion-net-debt-2011

#177 detalumis on 08.07.11 at 8:38 am

Sorry boomer thumper BPOE you have this 18 year demographic pictured completely wrong. I don’t know a single over leveraged one living in a mini mansion. Most I know are quite like me with paid up houses, mine is 1,200 square feet sitting on a great big lot that the next generation seems intent to build a castle on. I do know some living in houses in Toronto walking distance to the subway and shopping that can easily be converted into a duplex to augment their income. I also live on dividends after losing my job at age 50. I realized I have the same net income as when I commuted 60 hours a week so I decided to become part of the low-income-demographic (thank you progressive tax system).

My neighbour just turned 91 which means with all the health care demands I will make of you guys I will very likely sit around and do nothing for 41 more years. Oh by the way she still lives in her house so if you are waiting for the boomers to dump their properties to survive in retirement you likely will be 70+ by the time I do so. I have always lived a simple life and now I have no stress to go with it. When I go to Toronto now I take the ladies-that-lunch train not the sardine-special or the red-eye. Life is sweet. The biggest problem this country faces will be all the people like me who are net takers and demand more and more services that somebody else has to pay for.

#178 miketheengineer on 08.07.11 at 8:45 am

Garth et al:

Stock market…..

General trend down all of August.

In Sept…drop in the 1000’s of points, not hundreds.

Hold on to your knickers folks cause the ride is going to be interesting.

Should make for a good time to buy quality blue chip dividend paying stocks.

Does anyone have any good blue chip stocks to recommend and or watch?

I was thinking of Ford stock.

#179 Prof ANON on 08.07.11 at 9:52 am

@ 170 Mr. Buyer

I think that you would find that the scientists would repeat the same mistakes as everyone else has made. They are humans with greed, hubris, and limited information, just like everyone else.

#180 Daisy Mae on 08.07.11 at 10:40 am

Onemorething on 08.06.11 at 8:47 pm
“Weather in the Okanogan Awesome…RE prices falling!”

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

Lots of ‘new prices’…and even the occasional ‘rent to own’ which I haven’t seen for many years.

Of the 149 homes in this gated community, we have 5-6 on the board. We haven’t seen price spikes or bidding wars but are seeing a very slow decline.

We have already downsized from our family homes and are in an excellent location, close to all amenities. May not be what Garth recommends, but at this stage of the game the vast majority of senior homeowners prefer to stay put.

#181 Imstupid on 08.07.11 at 11:00 am

The definition of insanity

Doing the something over and over and expecting a different result.
Let’s buy Italian debt, that will help. The fact the debt remains and is just transferred from banks and investors to the euro union, will not create a different result other than the losers change. The banks yet again get out jail free card and tax pay pays the bills. Germany is going to riot in the next few days as they know that they are being screwed buy the rest of EU.
What happens tomorrow when the pention funds (who are mandated to only carry aaa rated debt) begin to sell as required by law? Will they just change the rules to allow them to hold aa+ debt? Who knows.

How is it that, everyone knows what needs to be done (allow market to purge itself and correct) but no one has the balls to let it do it.

Would politicians prefer to be remembered as the ones who enslaved a generation or be thrown out of office for taxing and letting the people who extended the debt actually realize the risk that was involved?

If I’m wrong please do let me know. This is not free market it’s just market manipulation at a global scale. If confidence in the market is what everyone wants governments should just stay out of the markets.

#182 Imstupid on 08.07.11 at 11:14 am

Sorry the pention funds are required to hold certain % of AAA debt are they going to sell Monday to get required AAA debt?

#183 eaglebay - Red Deer on 08.07.11 at 11:36 am

#180 Imstupid

The US still has a AAA rating according to Moody’s and Fitch. Now you know.
As for the pension funds, they all operate under different rules. Most of them are quite satisfied with ratings as low as AA or even better at AA+.
France and Germany will do fine and no riots.
This is all doomer talk.

#184 Grim Weeper on 08.07.11 at 11:40 am

The sooner I win the lottery, the sooner this boomer will be upsizing into this Calgary property for not a penny more than $4.8M. Reckon I could live very comfortably in the main house and my full-time chef can live in the cabin.
http://www.househunting.ca/calgary/real-estate/Final+pieces+Happy+Valley+grabs/5190149/story.html?tab=PHOT

#185 timo on 08.07.11 at 11:42 am

Imstupid #180

If I’m wrong please do let me know. This is not free market it’s just market manipulation at a global scale. If confidence in the market is what everyone wants governments should just stay out of the markets.

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

Governments takes their orders from those who put them in power. People are angry because social safety nets are under attack when a simple roll-back to the tax distribution of the 50’s would solve a lot of problems.

Smile and watch the show.

#186 Dorf on 08.07.11 at 11:55 am

It is easy to find someone who will tell you exactly what you want to hear. They are everywhere.

You must desperately seek out those who have the parts to tell you exactly the truth, with no concern whatsoever for your stomach ailments, blood pressure or heart condition.

In the process of this seeking, I found Garth Turner.

“And the realization almost everybody you know – in your family, at work, in your own house – just pissed away three years in which they could have prepared.”

Thank you Garth for giving me the wonderful gift of your knowledge, and the time to prepare. I am perfectly positioned because I HEARD every word you said.

My stomach recovered much sooner than my finances would have.

#187 TurnerNation on 08.07.11 at 12:04 pm

Israeli market are open and are down 7%…

Israel
INDEX VALUE CHANGE % CHANGE TIME
TEL AVIV 25 INDEX 1,074.27 -80.69 -6.99% 09:25
TEL AVIV 100 INDEX 972.80 -75.46 -7.20% 09:25

I think Israel has a few more problems than we do. It lives off US largesse. — Garth

#188 TurnerNation on 08.07.11 at 12:06 pm

p.s. if Dow Jones Average drops 7% this is ~800 points.

#189 TurnerNation on 08.07.11 at 12:12 pm

When the TSX drops 500 points in one day and people on here say: OH, stocks are on sale! They put stocks on sale so the little people like us can scoop them up and make money!

NO… a 500 point drop in one day is the beginning of a financial take-down, a warning shot across the bow.

Did 2008 not teach you anything?
-10% later in the week last week proves this.

Wars and Depressions turn millionaires into billionaires.

‘War and depression’? You’ve lost it. Go find a doomer site. — Garth

#190 TheBigLebowski on 08.07.11 at 12:18 pm

The U.S and Western world is like a person who has spent everything they have, run up their credit cards and then been fired from their job. Except this is on an International level. We are about to enter phase three.

#191 OkanaganInvestor on 08.07.11 at 12:25 pm

#63 Future Expatriate on 08.06.11 at 3:11 am

Regina had the highest Gov’t radiation readings. Saanich 61% over yearly recommended dosage, Resolute Bay, Nunavut 3 1/2 times. “Infant mortality in eight cities in the U.S. Northwest jumped 35 percent after Fukushima.” Our Gov’t promotes Nuclear reactor and uranium sales and thus has radiation safety levels 54 times higher than the EPA in the US. Having radiation readings only released once a week is convenient too because the Jet Stream determines where the radiation fallout occurs each day. Any wonder why the Bush family bought a ranch in Argentina years ago with the HAARP technology used to punish countries supporting Palestine and indications are that the Japanese earthquake was caused by it days after Japan declared support for their homeland.
However, we are talking about real estate on this blog and not the statistical deaths in the Canadian population caused by cancer from the hot particles we are breathing in each day, which will be 1 in 2200. So house prices will more likely fall by half or two thirds in Victoria from wages and jobs not keeping up with inflation, which is also under reported by both Canadian and US gov’ts.

What to do?
Sell and rent. Get out of debt. If you have children and grandchildren like I do living in Australia or somewhere else in the southern hemisphere, tell them to stay there. Follow the daily news on http://www.whatreallyhappened.com like below:

“Aug04
06:52Japan’s Fukushima catastrophe brings big radiation spikes to B.C.
By: J.T. Waldron
Tags: FUKUSHIMA & OTHER NUKE DISASTERS
After Japan’s Fukushima catastrophe, Canadian government officials reassured jittery Canadians that the radioactive plume billowing from the destroyed nuclear reactors posed zero health risks in this country.

In fact, there was reason to worry. Health Canada detected massive amounts of radioactive material from Fukushima in Canadian air in March and April at monitoring stations across the country.

The level of radioactive iodine spiked above the federal maximum allowed limit in the air at four of the five sites where Health Canada monitors levels of specific radioisotopes.

http://weeklyintercept.blogspot.com/2011/08/japans-fukushima-catastrophe-brings-big.html

#192 TheBigLebowski on 08.07.11 at 12:28 pm

What is the reserve currency of the world ? That is the simple question people must answer. A downgrade of the U.S dollar is a downgrade of the entire fiat currency world since all currencies are tied to the dollar. We all follow the dollars trend since it is the medium of exchange and pricing point for all goods exchanged on the International level. This downgrade is the beginning of the end on a global scale for the confidence propping up paper money. If people still can’t identify this slow motion train wreck then holding their hand and lying to them may be the only solace they can find on this blog.

Nice speech, but, speaking of lies, the US dollar was not downgraded. — Garth

#193 TurnerNation on 08.07.11 at 12:44 pm

What is a good Depression without some union busting!

WASHINGTON (MarketWatch) – Some 45,000 Verizon Communications Inc. VZ +0.37% workers went on strike Sunday morning after their contract expired midnight Saturday, according to reports. Verizon said in a statement that it couldn’t reach an agreement with its workers in two unions representing the company’s wireline employees in the Northeast and Mid-Atlantic states and union leaders announced a deal to call a strike, the phone and internet company said Sunday. http://www.marketwatch.com/story/45000-verizon-workers-go-on-strike-2011-08-07

#194 Waiting for the sun on 08.07.11 at 12:50 pm

(Garth) So what happened in Victoria? Cue the crickets. In the last full week there was a grand total of 18 residential sales, only seven of them single family homes.

FYI, others are reporting 120 sales in Victoria for the last full week.

Source? — Garth

#195 shifty on 08.07.11 at 12:56 pm

Re. #177 miketheengineer
Ford has some long term risk, don’t think this economy will support future sales. Look at BCE and the dividend payout.

#196 Beach Girl on 08.07.11 at 1:09 pm

# 176 Detalumis

My neighbour just turned 91 which means with all the health care demands I will make of you guys I will very likely sit around and do nothing for 41 more years. Oh by the way she still lives in her house so if you are waiting for the boomers to dump their properties to survive in retirement you likely will be 70+ by the time I do so. I have always lived a simple life and now I have no stress to go with it. When I go to Toronto now I take the ladies-that-lunch train not the sardine-special or the red-eye. Life is sweet. The biggest problem this country faces will be all the people like me who are net takers and demand more and more services that somebody else has to pay for.
_________

I am totally with you. This is my lifestyle. With the exception of a nasty Jack Russell and I live at the beach. I could live larger. No need to.

#197 Imstupid on 08.07.11 at 1:18 pm

#184 I agree I just don’t think gov’t has balls to implement it. Knowing full well it means being unelected. The biggest mistake happened in the run up to 2008, gov’t should have been prudent then to be able to spend now. I am far from a doomer, the sun will come up tomorrow, I have no debt and a war chest to sustain lifestyle for 5 years. I year in cash the rest liquid assets. As for Germany, they protested the Greek bailout, if an Italian bailout comes their will be riots. The mob is a funny thing we all saw first hand in Vancouver during playlets and g20 in Toronto what happens when a group gets angry, all morals go out the window and otherwise good people find themselves doing things they never thought they would.

#

#198 Imstupid on 08.07.11 at 1:25 pm

#182

How long do you think it will talk Moody’s or fitch to follow suit. While I understand that pension fund all work differently, and that they are content with AA debt. They are also mandated to hold Aaa debt aswell. The percentage might be different depending on the fund but they must all have some.

My only concern right now is trying to find bottom or close to it, if timed right I think I can double my net worth in less than 5 years.

#199 Kitchener1 on 08.07.11 at 1:30 pm

This week is going to be tough on the markets.

Regarding the US downgrade, you have to look at all the periphal countries that you would not otherwise consider for a fallout.

US pretty much via its foreign aid funds many countries worldwide, these countries exisit or rely on that $$ to continue day to day operations.

If the US cannot support those, what we saw in the middle east so far is nothing compared to whats coming.

I am seriously starting to think that we will hit some lock limit down circuit breakers on various markets this week.

Other issue that worries me a lot is the Q3 numbers that will be coming out late sept/early oct. If the ISM numbers are correct and Canada has had to readjust their GDP #’s down– its not going to be a good Q3 for a lot of companies. Well for future guidance, just look at some of the massive layoffs we are hearing about world wide– Cisco 6000 people, HSBC, RIM etc…

A bad Q3 earnings and we will see much more layoffs.

Here is the issue right now, all the kings men (countrys worldwide) all put all their chips on this being a V shaped recovery. Bet it all on black at the roulette wheel, well, that was the wrong bet, its comingup red.

Now what?

If anyone is trading tomorrow, GLD is looking like a great way to make some nice returns, it might even rally to mid $1700’s this week. As a quick trade, in and out its looking pretty good. Dont trade it as a metal, trade it as a stock, so you can get in and out FAST.

#200 Bill Gable on 08.07.11 at 1:44 pm

#161 Snoboid re: Arizona property.
Before anyone considers an Arizona property….please realize that there is an ipso facto, Civil War going on across the Rio Grande.
Arizona also faces water, pension, tax and income issues.
I’d avoid the place.

I lived in Mexico, and know Arizona quite well too – please use caution and for God’s sakes make sure you follow every grinding and tedious step if you buy US property – the paper trail is larger than Mr. Turner’s Harley.

#201 Utopia on 08.07.11 at 1:52 pm

#180 ImStupid wrote….

“How is it that, everyone knows what needs to be done (allow market to purge itself and correct) but no one has the balls to do it”.
————————————————–

Oh, some do….some do indeed.

So bankrupt then.

Kick those sorry bank asses in the butt and tell your creditors to shove-it up their carrot-filled arses. It is as easy as 1,2,3.

You just waltz into any office of a bankruptcy trustee anywhere in the country and tell them you are stressed and cannot pay the bills anymore.

They get out a little form. You sign it. Your worries are over. No more phone calls, no more garnishee orders, no more tax-man biting your ass and no more high-stress late-night, sex-killing calls from puke creditors.

You just pay a little monthly bill…..get all your monthly income back in the process and kiss your credit rating goodbye for seven years (that is the downside) …but big freaking deal. Who really cares. Life is short but debt is long.

And anyway. The banks have already calculated in the cost of your default. So just do it and walk away. It is just a normal cost of business. No worries, no guilt.

So this is one way to take control of your life again and register a vote against the easy credit that got you trapped in the first place. Maybe it is not all your fault after all. Maybe you were duped by the system and low interest rate come-ons. Maybe the broker, the Realtor and the lender all made it too easy and suggested outcomes that were known to be impossible.

So screw them.

Don’t like how you were tricked into taking out a huge mortgage at the top of the market?… Stuck paying CMHC fees monthly?…Trapped in your credit cards?…Cannot afford to go to work because the bank took your truck?….Lost your job and have no hope?….Resent the banks who made false promises?…

Bankrupt and forget it.

The more people who do it now the faster the banks will learn that normal families are not going to tolerate this bullshit anymore. Then things will change and future borrowers will not be hurt.

Here is a short list of major national trustees. Call one. Solve your problems. They are in the Yellow Pages under “Bankruptcy Trustees”. So stop complaining and get out of debt. Walk away.

Deloitte and Touche
Price Waterhouse Coopers (PWC)
Myers Norris Penny (MNP)
KPMG Inc (Kerr Pete Marwick whatever)
BDO Canada Ltd.

The above is a short list of some of the biggest in the country. If you are seriously underwater on your mortgage or combined debts in the next year or two you should consult a trustee for advice about eliminating all your debts.

I do not care if anyone out there opposes this comment.

Canadians have been hung out to dry on mortgages and other forms of credit and the banks are confident all of you will pay.

There is a legitimate process available to every debtor in this country to extinguish excessive un-repayable debt burdens. It is presided over by the Superintendent of Financial Institutions.

It is a 100% legal process. Learn about it.

So show them you won’t tolerate their bullshit anymore. Bankrupt legally and say goodbye to all your mortgage and Line of Credit debt for good. Chuck out your credit cards and tell your phone company to get lost too.

Then forward this post to your friends. Show them a way out. I have been posting about our easy credit problems and over-leveraged mortgage market for two long years now and every day it has gotten worse. The banks still hump zero down lending. Nobody listens. So Fuck them.

Maybe they will finally get the message.

#202 BrianT on 08.07.11 at 2:02 pm

#188Turner-There is no money to be made in war-only doomers believe this. Those high tech weapons are free-everybody knows that.

#203 Cookie Monster on 08.07.11 at 2:06 pm

#148 Junius on 08.06.11 at 8:26 pm
Wrong. Dead wrong. It was caused by the virulent form of “free market” or “unfettered” capitalism that dominates our current politics and our financial system.
—–
What free market unfettered capitalism are you talking about, the one where the government is involved in everything?

My use of the term capitalism is to mean an econimic system where people can combine their wealth and own property, plant and equipment used in the production and distribution of goods and services and to retain their earnings if they succeed and to eat their losses of they fail.

#170 Mr Buyer on 08.07.11 at 5:26 am
—–
You sound confused.

#204 BrianT on 08.07.11 at 2:07 pm

#191-The Swiss franc hasn’t done that bad overall-a lot better than 95% of all the active fund managers.

#205 Junius on 08.07.11 at 2:09 pm

#159 Eaglebay,

You said, “The banksters and the large corporations are protected by our governments which is wrong. No monopolies should be allowed and no franchises should be given to anyone.”

Yes, and that is the problem. You don’t seem to get the contradiction in the so called free market position. Markets DO NOT SELF REGULATE. Large corporations have always found it easier to squeeze out competition than to innovate or create better services. This is our history.

Government has a significant role to play in keeping the system competitive and the laws properly enforced. Those who advocate less gov’t and less regulation are simply naive as the past few years have shown. This is the ideological position of the Tea Party and it is nonsense.

Good government and proper regulation does not mean big gov’t. I am all for cutting many areas of the gov’t. However it needs to work better to keep our markets competitive and to assist small business and entrepreneurs. Right now it only works for the biggest companies and we know where that has left us.

#206 Devore on 08.07.11 at 2:17 pm

#175 BrianT

The CBO hasn’t been able to predict much of anything with any degree of accuracy beyond 1 year (ie, they’re auditors basically), because the assumptions they place in their models are ridiculous and not reflective of reality.

#207 45north on 08.07.11 at 2:18 pm

Jody: I think they’ll be a massive sell off in equities, bonds and western curriencies. There will be a massive bond auction, it won’t destroy the farmer who farms

yeah it will

#208 TurnerNation on 08.07.11 at 2:23 pm

As I posted last weekend, corporate profits are doing well. There will be a time to buy, but as in 2008-2009 we may have to wait a few months by.

Yes War as a business. WW2 lifted the world out of the Depression, and 2001 War of Terror was a segue after the 2000 market crash.

No laws apply, no vote is taken. Brute force acquistions, no laws concerning the environment, human rights (remember the quaint old idea of a “geneva convention”?) apply.

A few headlines from mainstream papers showing the million of war dollars that were handed out:

-Canada mulls ways to fund Libyan rebels with frozen Gadhafi assets

– US Pays $400 Per Gallon For Gas In Afghanistan: Pentagon

-How the US sent $12bn in cash to Iraq. And watched it vanish
(Have to include the link, a facinating story. And contrats to the new billionaries!)

http://www.guardian.co.uk/world/2007/feb/08/usa.iraq1

Closer to home we have the no-bid fighter jet contract.

#209 TurnerNation on 08.07.11 at 2:30 pm

Back to R/E, latest Toronto condo update – I’ve highlighted the fun section:

http://www.remaxcondosplus.com/blog/julyaugust-market-report-2011/

We have reached the midpoint of the year with June sales on TREB ahead 21% over June of 2010. On a year-to-date basis, sales are still 4.5% lower than a year ago. Condo sales were also up 23% over June of last year and downtown condo sales were up by 25% over the same month a year ago. On a year-to-date basis, downtown condo sales are actually up 1%. But the real story this year has been a reduction in active listings by 24% over the same time last year. Even in the downtown condo market, active listings are down 3% from June 30th of last year. And that is after we have had several thousand new condo units being registered this year. What is happening is that these units are either being sold as assignments before registration or investors are renting them out.

In a normal year, 55% of all sales take place in the first six months. Last year, with the introduction of the HST on July 1st, that number was 57%. Even the experts have now conceded that 2011 sales will be greater than 2010. ***They are now forecasting a market correction in 2012. If you recall, these same experts have been calling for a market correction every year since 2007! One year they will be right. But by that time, those who have been renting will have lost too much to ever make it back. The secret to real estate is: don’t try to time the market but be in the market! If prices rise and you are not in the market then you lose. If you are in the market and prices fall, then what you want to buy next has also fallen – in fact falling prices are the best time to trade up as higher priced properties tend to drop more in absolute terms than cheaper properties***

#210 Cato on 08.07.11 at 3:19 pm

#140 Victoria Tea Party
Like you illustrated there aren’t any safe havens, especially for the really large players on wallstreet. Everyone likes to decry the US debt fiasco but what is the alternative for the trillions in capital sloshing around system. There are no safe havens, just lesser evils. The only solution becomes continued intervention so the markets can be the safe haven. Yes, fiat money will be debased but investors who remain in the market will see holdings keep ahead of the debasement. I suspect thats now the main priority of the Fed. Preserve the wealth of the investor class so they can rebuild and lead an eventual recovery. It’ll be a rough ride but the markets will continue moving higher with additional rounds of intervention.

#155 daystar
I think the ratings agencies are a little myopic in their world views. Yes, US gov’t debt & deficit is a serious problem but the consumer debt picture is far more ominous. Its consumer, not gov’t, debt that threatens to bring down the whole house of cards. If the tea party & ratings agency have their way the opportunity to heal debt burden of the consumer would be lost, and rating of gov’t debt would be meaningless in face of much larger economic catastrophe.

There will never be an ideal form of gov’t, they all have flaws because human nature is flawed. People prosper when individual rights,freedoms and liberties are respected by society and guaranteed under the law. The US has mechanisms within its constitution to allow its citizens to take back freedoms if they feel the need to do so. The US is unique in the world for this reason, its why money from around the world still seeks US markets as a safe haven.

#149 Roland – Canada flourished during the cold war because we aligned on the side of freedom. We were fully prepared to mobilize and face any threat from the USSR with our nato allies. There was no nation more committed to defeating communism than Canada. Had conventional war with the USSR ever come to pass it was Canada who would have sacrificed itself on the front line. The war was to be fought on Canadian soil.

Putting aside ideological differences between Canadian values and red China there are very important economic interests that require the US to continue to dominate the world stage. I’ve found most Canadians oblivious to just how intertwined our economies are. When you look at self-made millionaires in Canada you’ll often find a strong US connection. If we want to maintain our standard of living we need much more than a resource based economy. We need a strong connection to a strong America to drive innovation & entrepreneurship or we risk becoming more like the littany of other countries around the globe who are rich in resources but bereft of any economic opportunities for middle class. I don’t see too many Russians benefiting from the vast resource trade Russia already has with China. Whats to say Canada would be any different.

#211 TheBigLebowski on 08.07.11 at 3:28 pm

The cockroaches are starting to circle their wagon in desperation. Trying to find a way of protecting their beloved banks while downloading all the loses being incurred to the taxpayer . But isn’t this how Corporatist-fascist governments are suppose to operate ?

http://www.theglobeandmail.com/news/world/americas/worlds-leading-economies-hold-urgent-talks-after-us-credit-downgrade/article2122053/

Austerity is just a politically correct term used to describe how the banks are trying to offload their loses onto the average citizen.

#212 Snowboid on 08.07.11 at 3:40 pm

#199 Bill Gable…

As I stated in previous posts, research and planning are key to purchasing US property. Of course in the US it is far easier to access RE information online and the information provided is twice as detailed as compared to what MLS.ca provides.

There is no Civil War in Mexico, but there is a problem with drug battles, albeit on a bigger scale than our local biker wars. If you lived in Mexico you know that it wasn’t nearly as dangerous as the Canadian and US MSM would lead you to believe.

In all our trips, even to border towns, we never had problems.

Arizona was worried about water, but the lakes are way up from last year (Powell, Mead) – they do take their water for granted and will need to readjust their addiction to lawns in future (we have desert landscaping – xeriscape). Pension, tax and income issues have no bearing if you are a snowboid.

There will be tax implications when we sell – assuming a capital gain. There are no tax issues otherwise unless you need to send in the IRS form indicating your substantial presence is in Canada.

As I also mentioned before, there are nice areas of the valley, and not so nice. It is not hard to find the areas to avoid.

I know Arizona quite well, too – and to say “avoid the place” is just poor advice.

There was no ‘grinding and tedious’ steps to buying – what are you talking about? The process from initial offer all the way to close of escrow was done electronically – we had one and only one piece of paper that had to be signed with a notary. Even the inspection reports came via email.

Also, no tax on the sale, no lawyers, total fees for the transaction – $ 280, low property taxes, low sales tax, low HOA (strata) for use of pools, spas, tennis courts, bocce, rec centres, clubs, and common maintenance.

In fact – food, booze, entertainment, recreation, dining, fuel, etc are on average 40% less than here. Don’t get me started on booze – a 1750 ml bottle of vodka is about $ 10 less than we pay for a 750 ml here in the Okanagan!! Fuel? How does .75 Canadian a litre sound? That was the price a few minutes ago at a station near our Phoenix neighbourhood.

Sorry for the rant, but I can assure you our experience, along with the dozens of other Canadians who bought in our Phoenix neigbourhood, was far easier and enjoyable than any comparable RE experience in Canada.

Paper trail? Smaller than a 1:32 scale model of a Harley on its’ side!

#213 Timing is Everything on 08.07.11 at 3:53 pm

#200 Utopia – said “They are in the Yellow Pages under “Bankruptcy Trustees”.”

Just BEFORE ‘Banks’….Kinda bass-ackwards. Life’s like that.
—————————————————-

For what it’s worth….Victoria and Vancouver July MLS #’s

http://tinyurl.com/3uybrtg

http://tinyurl.com/428awwt

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Plus, one for the locals…(Sooke)

http://tinyurl.com/3rkx96k

#214 Nostradamus Le Mad Vlad on 08.07.11 at 5:11 pm

#168 Jody — “. . . and canned bacon.”

Thanks for the link to canned bacon (and a whole lotta other stuff) — I’ve bookmarked it, and it may come in very useful someday!

#172 Beach Girl — “What did he actually graduate with?” — BPOE, Mikey the Realtor, politicians and banxters!

#169 reality guy — “They want US to cut social security and the MILLITARY.”

Cutting SS (Lieberman wants to raise the age to 70 before citizens can apply for it, but most don’t have jobs anymore) and the forces is already underway, with drones replacing soldiers and the like.

#179 Daisy Mae — “…and even the occasional ‘rent to own’ which I haven’t seen for many years. ”

Our new neighbors, from Rumania are doing the same thing — renting (two years prior to purchasing). By then, RE will have tanked so, if they can either leave without offering to buy, or extend their current lease, they will be fine.

If they choose to buy, that’s close to a divorce and / or a death sentence, esp. if either or both lose their jobs.

#184 timo — “Governments takes their orders from those who put them in power. People are angry because social safety nets are under attack . . .” — Ssshhhhh! Posters will view you as a total whacknutbarjob like me! It’s called austerity, and you’re right (but don’t say that out loud!).

#192 TurnerNation — “What is a good Depression without some union busting!” — Well underway — look at the police depts. which have been completely fired, then replaced by part-timers. Fire depts. next? Possibly. Unions had their day in the sun, but like everything else, they’re fading away now.

#209 TheBigLebowski — “The cockroaches are starting to circle their wagon in desperation. We are about to enter phase three.” — Guess that means GS, JPM and the big, naughty banxters will try to pull more wool over our eyes.

Some of us know what is going on, ‘tho and really couldn’t care less anymore. It’s more tiring to read the latest m$m BS. In the big picture, which isn’t very big to begin with, it’s all smoke and mirrors.

#215 Ben on 08.07.11 at 5:51 pm

A case of 12 Natural Ice beer here in Texas is $10

#216 waterloo Resident on 08.07.11 at 6:24 pm

( “I know a business model that is returning 200, no wait, make that 300%, even better, make that 40,000%” )

What a load of madness! I pissed my pants I laughed so hard!

To me that sounds a lot like the madness behind Canada’s housing market.

#217 waterloo Resident on 08.07.11 at 6:41 pm

If you want to invest in real estate that is liquid and easily sellable within minutes (not weeks), then buy these two ETFs, here are 3-year charts of these investments:

XRE.TO = iShares CDN Capped REIT Index Fund:
http://stockcharts.com/h-sc/ui?s=XRE.TO&p=D&yr=3&mn=0&dy=0&id=p78085740630

CAR/UN.TO = Canadian Apartment Properties Real Estate Investment Trust:
http://stockcharts.com/h-sc/ui?s=CAR/UN.TO&p=D&yr=3&mn=0&dy=0&id=p58039187154

The only problem here is that you have to pay 100%, you cannot just put down 5% the way you can buy a house. So if you want $500,000 of the stock then you need to have $500,000 of cash. Immigrants to Canada don’t have that much, so what they do is they buy a $500,000 house with 5% down ( $25,000 cash ) , plus a few more thousand for other closing / transfer costs. Over the past 8 year homes have gone up and up and everyone now thinks that buying and owning a house is one’s road to riches, they think that we are different from Americans and our homes will all be worth MILLIONS AND MILLIONS each, very soon !

Frankly, I don’t know if that will happen, but if enough people are crazy they just might push it that way from the sheer force of mental stupidity, and that just might push up the Toronto housing prices another 30% to 50% over the next 4 years.

And I think that Canadian mortgage rates will be heading DOWN very soon, not up.

Yes, call me crazy, but that’s just my crazy opinion.

#218 The InvestorsFriend (Shawn Allen) on 08.07.11 at 7:13 pm

DOW futures trading indicated down about 250 points when I checked:

http://www.cnbc.com/id/17689937

But things could change in the next 14 hours.

#219 shanks on 08.07.11 at 7:25 pm

#188 TurnerNation
Hey Garth, I thought this *was* a doomer site : D

On a lighter note, my wife has just convinced me to go out and buy that condo first thing Monday morning.

#220 Nostradamus Le Mad Vlad on 08.07.11 at 7:57 pm


3:45 clip Domestic Terrorists? Communities minting their own money now; Oz Stox Going Down Under and Gulf Stox dropping, incl. Dubai, dropping the most since Jan. (Dad — Nostradamus Jr. was right — the US is bankrupting TROTW); Greenspan PRINT MORE AND BE DAMNED!; Gold and Silver Nice ornaments, but not for moi; BoA Fraud, fraud and more fraud plus other fraudulent links.

Europe fondling its’ buttocks; EuroBank Bailout v.2 Italy — “Some interesting photos inside.”; Tomorrow is the first day of our financial lives, and Tuesday is the last; USAF spending while the money is still on the press; US$1 Bln. bet “Or did they simply see what was obvious to everyone outside the self-delusions of Wall Street?” wrh.com.

Secession Apply roughly the same methods here and kiss Oddddaaawwaahhhaaaa bye-bye (along with the CPC dumbbells); Gazillions to buy, but they don’t work; Jobs Where are they? Like a fart in a calendar, they’ve flown the coop; Yes! Humor does exist in polytix; Pakistan Better believe they cozied up to Iran and Iraq; Fukushima Anyone remember? Oh Dear! Not enough forethought? US expands its drug habit; 18 Volcanoes Alert status in Indonesia.

I haven’t touched north London (on fire) or Israel (imploding, just like the rest of the Eurozone). Too much like hard work.

#221 Mr Buyer on 08.07.11 at 8:13 pm

#202 Cookie Monster … Ah the old you do not understand MY meaning of the word capitalism routine. I will be sure to reference definitions in this and future responses. I will draw out each and everypoint in future as well so as not to be so confusing. Good luck with the whole capitalism thing. Did you know that capitalism(1), free market(2) and democracy(3) do not have each other as prerequisites?
(1) http://en.wikipedia.org/wiki/Capitalism
(2) http://en.wikipedia.org/wiki/Free_market
(3) http://en.wikipedia.org/wiki/Democracy

#222 Devore on 08.07.11 at 8:15 pm

FYI, others are reporting 120 sales in Victoria for the last full week.

Source? — Garth

http://househuntvictoria.blogspot.com/

HHV consistently reports 100+ sale weeks in the VREB region. If suddenly you’re only seeing 20ish, you’re either only looking at one day (July 31?), or some market segment.

The number quoted was for the city proper. — Garth

#223 Market Madness on 08.07.11 at 8:17 pm

Looks like the markets are going to take another big beating on Monday. It seems that the S&P downgrade has spoked a lot more investors.

Stock Futures have opened – they are down 2%-2.5% or 270 points on the Dow

You don’t even want to look at the Asian markets (I know they are lagging, but they are messy – down 3-4.5%)

#224 timo on 08.07.11 at 8:23 pm

http://blogs.wsj.com/marketbeat/2011/08/07/statement-of-g7-finance-ministers-and-central-bank-governors/

fire up the helicopter and put more presses on-line.

#225 Mr Buyer on 08.07.11 at 8:25 pm

#202 cookie Monster … Drawing out of points so as not to be so confusing (I have to admit my response does not have as nice a flow as I would like and seems somewhat disjoint).
Point
” I happen to lump banks and bankers into the capitalism you are speaking of so passionately.”
Clarification
Capitalists privately own but in fact ‘own’ with the help of banks more often than not…
I will continue to clarify when I have more free time…

#226 timo on 08.07.11 at 8:32 pm

http://www.zerohedge.com/article/must-watch-david-stockman-says-fed-injecting-high-grade-monetary-heroin-financial-system

watch the video and laugh

#227 thecomingdepression on 08.07.11 at 8:47 pm

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#228 Bottoms_Up on 08.07.11 at 8:48 pm

#210 Snowboid on 08.07.11 at 3:40 pm
——————————————
Agreed. My parents bought a place near Phoenix and it was easy-peasy. Beautiful desert landscape, took a trip to Sedona (amazing) the wild horses were pretty neat too.

And how about costco-sized wine stores, the biggest Ikea I’ve ever seen and the cheap baseball and hockey tickets.

Really there are no pressing water issues because of trenches that were built thousands of years ago that still supply water to the area.

The 90oF (in April) dry heat was really nice too.

The people were friendly.

I’d watch out for the spiders and snakes though, they can be quite nasty.

#229 timo on 08.07.11 at 9:00 pm

http://www.youtube.com/watch?v=7D4Ud8-jric

The Knights Who Say, “Ni!”

damn evil word should have a good day tomorrow.

#230 thecomingdepression on 08.07.11 at 9:03 pm

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#231 GaRTHdeletesallgoldcomments on 08.07.11 at 9:09 pm

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#232 Jody on 08.07.11 at 9:41 pm

Our monetary system.

1) Whenever money is injected into the economy, the government borrows it by issuing government (promise to pay) bonds (via the Bank of Canada) to private banks. The money is created out of thin air and loaned to the government with compounded interest attached (debt).

2) These banks are private corporations with shareholders. The interest payments are their profit. In other words, we pay them to issue us our money.

3) Even though our government has the legal authority to create our own debt-free money, they choose to saddle us with debt by borrowing it from private corporations.

4) What this means is that the working class is born into a system of perpetual debt because new money is always being introduced into the economy. And because this money comes with attached debt (in the form of compounded interest), we can never get out of debt. It is a legalized system of perpetual debt. Legalized economic slavery.

5) Canadians are currently paying $160 million in taxes toward this debt per day. Think of what $160 million per day would do for our infastructure, our institutions, our health care!

6) Every western democracy uses usury on fiat money. The system benefits an economic oligarchy, an investment elite class of people sometimes referred to as a shadow government, that masquerades as democracies by keeping our politicians in their pockets. These men behind the curtain are the men behind the IMF.

7) The mainstream media will not make this information public knowledge and this is why you’ve never heard of it.

8) Go to #3.

Google ‘fiat money canada’… to research.

Unbelievable rubbish. — Garth