Animal urges

Long ago, in 2008, this swampy little site emerged from the primordial ooze to say some contrarian stuff. It dissed house porn when horniness was universal. It warned of rough economic times when few cared. American mistakes matter, it cried, when most scoffed that we’re different here.

When the storm hit in 2009, more contrary. Buy what others are selling, this pathetic blog urged. But almost everyone wanted to bail. The needle was stuck on Fear, and there it has remained. Too bad.

Two years later my view is that the long emergency is about to be replaced with the long, halting recovery. The US has more crap to wade through including a polarizing election and a housing Hades.  Then, tepid but steady growth. A few European states will capitulate because it’s easier for politicians to default than to grow a set. But no dominoes. China will continue to act like the biggest toddler superpower in history, and then slowly mature. Central bankers will seamlessly weave their policies, and debt will be restructured continuously until new growth and revenues click in.

Lots of hedge funds and banks (none here) will blow up, and unemployment will be structural for at least a generation. So expect more riots and a rush of the ill-informed to support political movements that can be reduced to chants. The divide between rich and poor will widen. A lot. Maybe a future society will address the inequality. But not this one.

Debt won’t bring down major sovereign states, like the US or Germany, or corporations like Apple, Google or Pfizer. But it will bring down families who have over-borrowed and over-consumed. In that, housing’s still doomed to be an asset class to avoid. But real estate’s inevitable correction, in Canada, will not kill banks or tip us into middle class depression. It will simply create a quiet and difficult drop in the standard of living, and remind everyone what happens when you believe TV.

These are my views, based on what I know, see, hear, read and believe. And, once again – at least on this site, and across a growing swath of society – they are contrarian. Last week’s wild gyrations on stock markets was akin to showing some thong to a sex addict (we have a few here). It resulted in an utterly predictable response, replete with foam and fluids.

Those who want the world to end, America to choke, banks to topple, rich people to be screwed, corporations to stumble, China to be hammered, money to fail or stocks to hit zero, have been emboldened by what they see as evidence. In fact, they viewed their own humanity being played back, as waves of fear and greed rippled across trading floors. There’s nothing new about this, except the people who have yet to learn the world already ended. In 1932, 1945, 1973, 1987, 1998, 2001 and 2008.

The herd is now looking for a cliff. So it’s time to move on. This is why I told you a few months ago to buy bonds, despite their low yield, and to get a balanced portfolio, even if that dampens returns. Last week proved how few people actually took this advice.

Today it makes much sense to slowly bet against the shrill doomers who yesterday tried to overrun this site and force their views on everyone else. There are indicators to watch, showing what most retail investors are doing, so you can do the opposite. For example, we’ve just see the greatest cashing-in of emerging market equity funds since the pre-panic days of 2008. This puts them at the lowest valuations in over two years after $8 billion was yanked last week alone.

The last time this happened, the leading emerging market index jumped 17% in six months after retail investors ran screaming for the exits. It’s classic contrarian thinking. When money torrents out, it shows the inexperienced little guy has left the room. This usually happens when assets have become their cheapest, clearing the way for the pros to move in.

This will be the case with housing, as well. In the not distant future will be markets where fear paralyzes buyers and motivates sellers, when prices tumble and mainstream thinkers can’t get far enough away. That is where many great American cities are at this moment. Yes, the ones this site’s doomers keep telling you are going to dust.

Many people won’t agree with me. Hell, most won’t.

We are, after all, pack animals.

220 comments ↓

#1 Hoof-Hearted on 08.15.11 at 10:04 pm

Phhyyyrrrzzzzzttttt!

#2 T.O. Bubble Boy on 08.15.11 at 10:06 pm

So, if emerging market equities are cheap… are emerging market bonds (with their above average yields) about to take a dive?

#3 Hoof-Hearted on 08.15.11 at 10:13 pm

I dunno….

The “X” factor may be the Internet…..

The masses may wish to do a little homework and read some REAL history, versus the propoganda that is served up.

I mean , several reports of Churchill in bed with Rothschilds interests, and travelling to the US the personally observe the carnage that was wrought with Churchill’s assistance to create the 1920’s depression.

I wish I knew then, when in university , what I know now.

Who knows…each Canadian Province is bigger than most European Countries
—–Newfoundland is approx. 1/2 the size of Germany.

——-France and Spain combined could fit in most other Provinces.

Separate and start over…with NO Private Banks aka F#ck em

#4 Wasteland on 08.15.11 at 10:21 pm

Garth, seems you have ruffled some feathers in old Toon Town.

http://www.teamfisher.com/saskatoon-real-estate-week-in-review-august-8-12-2011/

#5 Moneta on 08.15.11 at 10:24 pm

Today it makes much sense to slowly bet against the shrill doomers
—–
Can someone please give us a definition of doomer because in my book, you’re a doomer.

#6 TS Harpoon on 08.15.11 at 10:25 pm

Via Metafilter:

Roubini warns of global recession risk. In a video interview with the Wall Street Journal, Economist Nouriel Roubini of Roubini Global Economics warns that the risk of a global recession is higher than 50%, suggests investing in cash, blames George Bush for the United States’ economic predicament, advocates higher taxes, warns of a possible break-up of the European monetary union and states that “Karl Marx was right”.

http://online.wsj.com/video/roubini-warns-of-global-recession-risk/C036B113-6D5F-4524-A5AF-DF2F3E2F8735.html

#7 MarcFromOttawa on 08.15.11 at 10:27 pm

10th

#8 Kathryn on 08.15.11 at 10:30 pm

This is brilliantly written. We so enjoy reading your blog Garth. And we do in fact agree with you. My father of 87 years is described by his broker as an old war ship in the North Atlantic. He has shown him a thing or to about not panicking when the waves get high…So his three daughters, now in their 50’s do our best to follow his lead…..and yours. Thank-you.

#9 Halton region on 08.15.11 at 10:32 pm

$150,000 for a wood lot in Brampton and lot size is only 100ft deep, the agent said it was a steal.
Cost to 2000sqft house $600,000.

Make me wonder if we should be investing in stocks for these home builders?

#10 Ron Paul on 08.15.11 at 10:32 pm

tie for first….

Dont delete me for being experimented, honest,
And peacefully handsome.

Just censor me!!

#11 Ron Paul on 08.15.11 at 10:39 pm

No!!!

ignore me instead

Like the bombed real-estAte from Baghdad to Tripoli

Buy the preferred shares of munitions and drones manufacturer, it happen in the past, your investement is garanteed by Obama teleprompter!!!

just a cOmmon thing to do really…
Get a new tie the msm says
It’s just a neck restraint dude, like fake white powder and hair before the guillotine was invented

Sadsick society

#12 Smoking Man on 08.15.11 at 10:41 pm

The last time this happened, the leading emerging market index jumped 17% in six months after retail investors ran screaming for the exits. It’s classic contrarian thinking. When money torrents out, it shows the inexperienced little guy has left the room. This usually happens when assets have become their cheapest, clearing the way for the pros to move in.

So true nice one:)
I can’t wait for the end of the worlders to try and put in an ask bid on gold when they are over the falls. been there done that. no bids free falling enjoys the scenary.

#13 Jay Currie on 08.15.11 at 10:44 pm

The doomsters have lots of points; just no momentum. They can’t figure out if it will be zombies or aliens.

I am amused by the Swiss who are moving Heaven and Eath to try and save their currency from massive over valuation vis a vis the Euro and, to a lesser extent, the USD.

Canada could face the same problem as fright capital looks at our oil, hydro, marginally sane federal government and not actually insane BOC and conclude this might be a place to park wealth. Which would be no bad thing as Canada has lots of projects which could use cheap financing.

As to the question of stones, growing pair of, the political classes in Europe (with the exception of Mrs. Merkle) have yet to reach adult hood. Stones cannot be expected. As for Obama, hope and change will occur in 2012. I only wish I saw an adult on the Repug side.

#14 Smoking Man on 08.15.11 at 10:47 pm

Hey Ron Paul #10

Main stream media by ignoring you success will mobilize the fringe, it will re enforce all conspiracy therioes, look what they did to you. 911 must be an inside job, area 51 one is real, man did not land on the moon.

Ok truthers I too have a problem with building 7 but that debate is for the alex jones website.

#15 Utopia on 08.15.11 at 10:48 pm

“Many people won’t agree with me. Hell, most won’t” ~~ Garth Turner
——————————–
For the record Garth, I do agree with you.

But then, like you, I have seen these panics come and go over the years and know how it usually turns out.

Actually, I wish I had taken up more of the incredible opportunities that were handed me on a silver platter in the midst of some past crisis of confidence.

I would have been stinking rich had I followed my natural gut instincts for opportunity instead of getting all cozy with the fear-pandering idiots who consume so much of the air-time.

If only I could get those days back again. It was so easy really and I always knew it. Foolishly I was just like many of those who post on this site today. Gripped by fear and unsure of the future.

Obsessed with the drama as opportunity slipped from my grasp. I won’t ever make that mistake again.

Thanks for another terrific post.

#16 not 1st on 08.15.11 at 10:51 pm

Ok Garth, so you are a contrarian which is someone who usually takes the opposite side of a bet (investment). Thats fine, many people work like that.

But honestly, do you really think (or want) this ecomic model to continue as it is?

– Do you want one superpower pushing its ideas all over the world while borrrowing from everyone to do it?

– Do you want the wealth of the world to be made from shuffling complex financial instruments rather than building or making things?

– Do you want people bail out banks while entire countries starve (read: Somalia)

– Do you want to be beholden to special interests who go out of there way to lobby politicians and suppress new technology? The TARP program cost 750 billion. That was enough money to put solar panels on every home in the U.S.A.

– Do you want to see continued environmental degradation just to service the almighty buck?

Why don’t you clarify your views? You want our current system to just restart as is? Personally, I don’t and I am willing to suffer through an economic depression to see real change.

Well, Mr. Social Justice, a depression would destroy the lives of millions, erase the meagre wealth of millions more and dash the hopes of a generation. But if it makes you feel more moral, what a small price to pay. — Garth

#17 Life ain't so bad on 08.15.11 at 10:52 pm

Garth,
I really enjoy reading your blog. Even though I don’t always agree with you, I respect the fact you take the time to respond back to the bloggers. It shows you actually care.
P.S: If you were a leader of one these nations in serious debt trouble, what would you do to fix some of their problems
Cheers

Raise taxes and retire. — Garth

#18 Utopia on 08.15.11 at 10:57 pm

#9 Halton region on 08.15.11 wrote…

“$150,000 for a wood lot in Brampton and lot size is only 100ft deep, the agent said it was a steal. Cost of 2000 sq. ft. house $600,000.
———————————————-

Ridiculous. Just stupid prices. I was given a house today for free. Eight hundred and fifty square feet of good quality space on prime Ag land on the bald prairies for absolutely nothing. You read that right. It is FREE. All he expects is that I will take over the taxes and take it off his hands. I just might do it.

You other guys all live in the wrong part of the country.

#19 Dave on 08.15.11 at 10:58 pm

Garth, you mentioned the pros are stepping in. With the Moving Averages on the S&P up to the 150 day negatively sloped and the 200 day flattening, don’t you think this “stepping in” will be very short lived – isn’t this just a retracement? Don’t the lower highs on the S&P since Apr/May into July mean something? You have to respect this price action. Isn’t this the calm before the storm? I’m not a doomsdayer, but the technicals don’t look pretty. I don’t think I would be owning stocks or bonds at these levels….or anything but certain currencies at these levels.

#20 Condo Sucker on 08.15.11 at 10:58 pm

I can’t help but feel that buying shares of RIM right now at this bargain basement price is good contrarian thinking.

I’m certainly not one of those doomers who thinks they are destined to become a penny stock like Nortel. So I’m buying.

#21 tigerbaby on 08.15.11 at 10:58 pm

> Do you find fiction helpful?
like atlas shrugged?

#22 ClaudiusEmperor on 08.15.11 at 11:01 pm

I would like to see some technical analysis that shows the impact from outsourcing on the decline of the real GDP in US. With the debt and the inflation factors taken out of the equation.

On another topic:
Garth, what are the real inflation number that you are expecting in the years to come?

I can not see future growth unless driven by relatively high inflation (to allow for the deficits). In this case we should think about how to preserve our savings, correct? Would the miserable returns from the bonds compensate for the inflation in this case? I would agree with shares in big international companies in this case.

Would the inflation be low? Then how can we run deficits to support the economy and keep the consumption? I think US is at the end of it’s ability to print money, where the growth will come from in this case?

Or we simply don’t know so we must hedge for both scenarios (that is what we call balanced portfolio)?

Or it will be a walk on the edge to prevent deflation:
QE3–>inflation/deflation(when QE3 runs out of steam) /then again QE4–> inflation /deflation/QE5 –> inflation until they eventually mess it up and the hyperinflation shows its horns?

I think the FED from now on has some very limited tools at its disposal and can use them with very limited success in order to keep the things under control and in the desired course. I can hardly see good news coming from the US economy, it mostly would be the FED as the driving forces of the markets in the near future. And they have a proven track of screwing up… so I am really concerned about the markets and expect huge volatility without economic fundamentals to support stable growth.

#23 Utopia on 08.15.11 at 11:03 pm

#5 Moneta wrote……..

“Can someone please give us a definition of doomer because in my book, you’re a doomer”.
————————————————

You seem to have confused the ideas of a realist with those of simplistic negative thinkers sweetheart. But you should know better…

judging by your website.

#24 Patz on 08.15.11 at 11:08 pm

I don’t share Garth’s confidence, muted as it sometimes is, in our future, whether we’re talking about Canada, the U.S. or the world. Garth says, “Don’t bet against America!” and I picture myself in the mother of all casinos with one scratched chip saying, “Well what could I win even if I did?”

But look around, this is not your daddy’s recession or changing times. If you are concerned about where we’re going, read The Great Splintering in the Harvard Business Review–I know, a rabble–rousing doomer rag–by Umair Haque. One of his choice lines: “The eye of this perfect storm is extreme income inequality that makes the Glided Age look Leninist:” His theme is the consequences of broken social contracts. Sanguinity is not called for in our world today.
http://tiny.cc/0786b

#25 nonplused on 08.15.11 at 11:31 pm

You are right of course, Garth, the world will not end. It’s only money after all.

But there are a lot of big money messes that need cleaning up out there. And if history is any indication, this generation will be the one to clean them up, not some future one. No generation has ever managed to push much down the road. It just doesn’t work in real life. What is much more likely is that the people who ran up trillion dollar deficits are going to see the funds called in within their own lifetimes. Of course the young will suffer too, they always get sent to the front, but once whatever it is that is coming has come and gone they will have time to recover.

And speaking of super-powers acting like juveniles, $1.5 trillion dollar deficits as far as the eye can see? That isn’t going to work. Something is going to break.

Can the world avoid a depression? Probably. But my gut sense is this isn’t the way to do it. Actually, I think Peter Schiff is kind of loony but his description that “the government is doing not only the wrong thing, but the exact opposite of the right thing” might turn out to be prescient.

I read somewhere that the first rule of economics is scarcity: There can never be enough physical products to meet all potential demand. And the first rule of politics is to ignore the first rule of economics.

#26 Jet Pilot on 08.15.11 at 11:32 pm

And then there’s a article for Gordon Pape in yesterday’s Toronto Star…

http://www.moneyville.ca/article/1038675–you-need-a-fortress-portfolio-for-this-storm

A “Fortress Portfolio” sounds great in name at least but I’d love to get Garth’s take on this… where he agrees and not.

#27 kitchener1 on 08.15.11 at 11:34 pm

We desperatly require a new growth paradim. making things and exporting them is no longer viable. Free trade took care of that.

What will happen in the years and decades to come will be slow, agonizing drop in our standard of living.

Gen X, Y and so on will never have it as good as the boomers did. To bad that everything we perceive as sucess is modeled around what the boomers have (had).

Meanwhile, emerging countries will see their standard of living rise, as they are were we in the west were 50 years ago.

See Garth comment about the rich getting richer and the poor getting poorer. Thats the harbinger.

That better not evolve too fast or too violently or else we will end with riots as a way of life.

#28 S on 08.15.11 at 11:39 pm

As usual, fantastic writing, one where Garth’s opinion is fortified with an overdose of confidence. Just in case, though, it might be wise to also check out what Bill Bonner at http://www.dailyreckoning.com or Danielle Park at http://www.jugglingdynamite.com are saying. Also brilliant writers with moderately different views. We can all hope everything will be alright. It won’t. Times are different. Think 1917, 1936. Prepare.

#29 disciple on 08.15.11 at 11:49 pm

I had a really bad day. Problems sprang up from every nook and cranny, nothing but problems, problems, problems.

But here I sit and type having fixed all my problems before midnight. I even had time to serve up some beer-battered sole with cajun spice for an after-dinner snack for my wife and kids. I hope tomorrow will be better. Good night compadres…

#30 Devore on 08.15.11 at 11:53 pm

#20 Condo Sucker

I’m certainly not one of those doomers who thinks they are destined to become a penny stock like Nortel. So I’m buying.

No, but they could become like Palm Pilot. They’ll have to do much better than cut a couple thousand people to show this is a company with serious growth potential, ready to eat into the business of Apple and Google, because they sure as heck aren’t paying any dividends.

#31 $froma$ia-(C Tire Money makes great toilet paper) on 08.16.11 at 12:02 am

PAck Animals?

OK, Me gots my Gumb Boots!

When I am done with the sheep, its on to the wolves.

$

#32 When will this madness end? on 08.16.11 at 12:11 am

The average Canadian home is 100% more then the average American home? How can this house of cards continue? How can the government continue with the ponzi CHMC? Why do the conservatives hate the free and open markets? If CHMC would close down today how much would housing fall Garth? I am going crazy looking at prices of homes that at 2.5% would leave me poor and 4-5% interest rates would bankrupt me. It’s crazy how people who bought 4 years ago are asking for prices they could never or would never pay. Some of them can’t afford the home at the prices they paid. Mortgage borkers must be making up numbers to qualify people as I know a few people who are close enough to being broke and yet they qualified?. It’s almost impossibe this ponzi hasn’t crashed if the numbers were real.

#33 GARTH, GOVERNMENT, AND MONEY CREATION POWERS PART IV on 08.16.11 at 12:20 am

“The elected government does not set monetary policy. Fact.” — Garth

I’m sorry, Garth. I’m just not getting this apparently.

If, in Canada, monetary policy is the responsibility of the BANK OF CANADA; and, the Bank of Canada is owned by the people. How is it possible that the government that represents the people does not control (at least partially) the country’s monetary policy?

I’m honestly baffled by this.

Food for thought :)

P.S. Thanks for the earlier replies–appreciated.

#34 HouseBuster on 08.16.11 at 12:21 am

“This usually happens when assets have become their cheapest, clearing the way for the pros to move in. ”
————————————————
True but not for Nortel or Bre-X.

#35 Free Markets not Doom Garth on 08.16.11 at 12:25 am

I think Garth you mistake people’s wishing for free and open markets void of manipulation as doomers. Many of us understand economics and how the governments of the world are manipulating the markets in so many ways. CHMC is just one reason why Canada is 50% overvalued. The market would price risk accordingly since no bank would lend out a penny at current interest rates to all those sub-prime borrowers. I just wish Canada was a free country with open markets that were free of manipulation. I guess freedom is only a dream in North America?

#36 Another Albertan on 08.16.11 at 12:28 am

It’s been a while since I’ve posted an anecdote… the armchair analysts have been barking back and forth most of the summer, ergo the signal-to-noise ratio has been degrading.

In any case…

My sister put her starter home in south Edmonton on the market 3 weeks ago. It was priced for practical perfection. 27 showings in 21 days. They accepted ~$4k (~1%) under list. Nothing else in the surrounding neighbourhoods is moving.

I spent the weekend at Sylvan Lake at a colleague’s cabin. There are For Sale signs everywhere, on properties ranging from barely-standing shacks to mansions. Nothing is moving. The market has essentially stalled out, except for the odd transaction to “people with more money than brains who pay too much and just crank up everyone else’s tax assessments” (in the words of the Central Alberta businessmen whose beer I was quaffing). At least they don’t cheap out on the suds…

The cabin next door is a fiasco. I guarantee nothing would meet code on this 45-year-old shack. Technically it is winterized, but the natural gas bill would still be $2000/mth (not joking…). 0.85% of the assessment value = $9000/yr for taxes. It would have been nice and cozy in its heyday. Right now, any renovation would require a ‘dozer and a demolition permit. 1000 square feet on an average to small piece of lake frontage with a dilapidated dock on Honeymoon Bay. $1.05M.

Ski boats towed by lift-kitted F350s. A large proportion of all the Escalades in western Canada in the driveways on the lakefront. Kids in their 20s. Boomers in their 50s. Some retirees in their 70s. Nothing in between. All serviced by a hellhole of an oil patch service town.
Gotta love being woken up at 8 in the morning by a bunch of kids waterskiing.

The piece de resistance was arguably all the chatter about the plumber (or was it welder?) building the $4M place with the 3-storey indoor waterfall.

“Does that guy know what you can get in Hawaii for a quarter of the cost?” lamented one businessman about the monstrosity.
“He’s never been to Hawaii!” snarked another.

Everyone else’s mileage may vary.

#37 Free Markets not Doom Garth on 08.16.11 at 12:31 am

BTW Thank-you Garth for your work on this blog. I bought Money Road today and looking forward to learning a trick or two on investing.

#38 Ron Paul's shadow on 08.16.11 at 12:40 am

@smoking man
Nice optimism if only I wouldn’t hear that general screaming “codered” all over…

Canada Royal air force interpretation of Jack Nicholson with an accent!
http://m.youtube.com/index?desktop_uri=%2F&gl=CA#/watch?v=2d3KaCNs290

Irak real estate foolssss
Without Gold Granite pantry
and silver appliances…
http://theiraqidinar.com/2011/05/20/market-rates-to-keep-prices-and-real-estate-is-on-the-rise-by-150-percent/

talking about buildings and precious hardware,
Ican feel Garth beardish hair tingling:)
Who really cares about reality anymore??
http://angelsfortruth.com/FollowTheGold.html

Vampirefordarkness among us all

#39 Cookie Monster on 08.16.11 at 12:41 am

#21 tigerbaby on 08.15.11 at 10:58 pm

> Do you find fiction helpful?
like atlas shrugged?
——-
Good point, Atlas Shrugged is to Human Action what 1984 is to Das Kapital plus The Communist Manifesto.

The first relation is based in truth, empirical evidence and philosophical certainty that glorifies the best of mankind and the principles of individual freedom, liberty and achievement, whereas the second epitomizes the worst of human suffering, control, repression and gray dull existence.

#40 Nostradamus Le Mad Vlad on 08.16.11 at 12:47 am


Holy Bouncing Bunnies! Chicago Tribune cartoon from 1934 Karl Marx in lower left? Marx said that capitalism would eventually eat itself.

“The needle was stuck on Fear, and there it has remained. The herd is now looking for a cliff. Lots of hedge funds and banks (none here) will blow up, the leading emerging market index jumped 17% in six months after retail investors ran screaming for the exits.”

As an investment manager told us last Friday, there are trillions of dollars sitting on the sidelines, most waiting to come back in. Now seems an opportune time!

All sides can have their say, ‘tho. It is up to the individual to decide for him / herself which way to go. Pour moi, GICs and CSBs are equal to bags of manure. A balanced portfolio would not include them.
*
Jobs in UK Less north, more south; Thar she blowz! World economy, that is; US Treasuries Japan selling? Fukushima repairs have to be paid for somehow; Soros Selling gold to buy farmland? Spain and Switzerland; Two Reasons why Japan could join PIIGS and others; Energy Downgrading Oil and Upgrading Gold.

Iran Russia (and China) expect some sort of military action against Iran, but don’t expect R&C to just sit idly back and watch; One Eurozone incl. the UK; Soros Trying to bankrupt Germany, just as he did Ireland? 3:01 clip Chinese riots; Acting Up “Taken in conjunction with the announcement this past week of fresh lava flows off the coast of Oregon, I would say we have a full blown seismic event underway on the west coast of the USA.” plus 2:07 clip, and HAARP.
*
#195 Daisy Mae — A former neighbor was an undercover RCMP drug expert, who frequently had to give evidence in court. He once told me that when a full moon happens every month, all leave is canceled for a few days, the hospitals are full to overflowing and just about anything that could happen does.

The RCMP transferred him to Vancouver Island a few years ago, complete with a desk job. No longer does he break down doors, guns drawn with pitbulls and dobermans flying toward him.

Also, see this — I was on holiday there a few weeks ago. Guess this past weekend showed what Full Moon Fever does! Pineapple Smoothie with a banana and coconut milk. Doesn’t say anything about alcohol, so add yer own!

#41 Hoof-Hearted on 08.16.11 at 12:53 am

Real estate tourists from China land in Richmond

http://www.richmond-news.com/R…..story.html

QUOTE:

The age of real estate tourism is upon us — and it landed, quite literally, in Richmond on the weekend.

The city’s housing market is well known as a hot spot for Asian investors, but their fervour for Richmond reached another level on Friday.

Less than 24 hours after stepping off a flight from mainland China, 19 potential property investors were rounded up onto a bus and driven, as part of a bonafide tour, to the local Remax office, where they were welcomed by realtor Steve Latham.

And after a short “welcome to Richmond” video presentation, Latham, with the help of a translator, acted as their guide for the day on the bus.

Latham took the group to see a total of five luxury properties in Richmond and Point Grey, all of which were valued between $2.5 million and $3 million.

“It was pretty successful and they were all very anxious to get out there and look at houses,” Latham said.

“They flew in on Thursday to stay at the River Rock and as well as looking at houses, they had a good look around Richmond secondary.”

A Chinese-based tour operator pulled the visit together, said Latham.

“It’s kind of a new idea. We met with someone from immigration — who these people deal with when they come over — and we began to talk about this and it kind of came from there,” he added.

“They also looked at houses in Point Grey, but they looked at houses in Richmond, all more than 2,500 square feet and all were less than five years old.”

Latham said no sales, as such, were actually made on the day.

But he said he wouldn’t be surprised if someone were to make an offer before they hopped a plane back to China.

#42 Jsan on 08.16.11 at 1:01 am

Many people have been warning about a China boom that will inevitably go bust.

Hong Kong’s slump signals global trouble: analysts

“HONG KONG (MarketWatch) — Hong Kong is suffering an economic chill that could soon go global, according to analysts who say the territory is showing omens of a dire economic outlook.”

http://www.marketwatch.com/story/hong-kongs-slump-signals-global-trouble-analysts-2011-08-15

.

#43 Tom from Mississauga on 08.16.11 at 1:03 am

Buy emerging markets, but I’m too scared…

#44 smartalox on 08.16.11 at 1:05 am

If you were a leader of one these nations in serious debt trouble, what would you do to fix some of their problems?
Cheers

Raise taxes and retire. — Garth

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

There’s the rub, isn’t it?

So many of these global financial crises could be so easily solved if the politicians had the guts to sacrifice their hopes of re-election, and pass the legislation their countries require to get their economies back on track.

While most professional politicians can retire relatively unscathed, (if not WELL-cared for,) with state-sponsored perks and pensions – the majority would rather trade the prosperity of future generations, for a few fleeting moments of ‘power’.

Is that courage? Is that integrity? HA!

Garth, congratulations for doing the ‘honourable’ thing, and getting out of politics.

#45 westopia on 08.16.11 at 1:06 am

Jon Stewart scolds media for ignoring Ron Paul. You have to admit, it’s pretty blatant.

http://www.mediaite.com/tv/jon-stewart-scolds-media-for-ignoring-rep-ron-paul-i-mean-fck-that-guy-right/

#46 The Box cutter pilot chronicles on 08.16.11 at 1:12 am

Have you ever stood and stared at it, marveled at its beauty, its genius? Billions of people just living out their lives, oblivious. Did you know that the first Matrix was designed to be a perfect human world, where none suffered, where everyone would be happy? It was a disaster. No one would accept the program, entire crops were lost. Some believed we lacked the programming language to describe your perfect world, but I believe that, as a species, human beings define their reality through misery and suffering. The perfect world was a dream that your primitive cerebrum kept trying to wake up from. Which is why the Matrix was redesigned to this, the peak of your civilization. I say your civilization, because as soon as we started thinking for you it really became our civilization, which is of course what this is all about. Evolution, Morpheus, evolution. Like the dinosaur. Look out that window. You’ve had your time. The future is our world, Morpheus. The future is our time.

#47 Makaya on 08.16.11 at 1:18 am

You have your own views and I respectfully disagree with them. I know it’s hard to be a contrarian and a public figure at the same time, just have a look at the “Peter Schiff was right” video on youtube and you’ll see how he was treated by the journalists…

I think Garth you have a hard time to understand the scale of the transformation of our societies over the past decade. I talked ad-nauseam about off-shoring our industrial production to China in my previous posts.

These is not just about a few jobs lost here and there or increased profits. This is about families and communities being destroyed, this is about our entire society being destabilized. It’s hard to see it when you live a comfortable life. Just go to a school in a low income neighborhood and talk to the kids (I can give you the name of a school if you want). In Canada, today, there are kids that are eating only once a day because both parents have lost their jobs and have run out of EI, can’t find another job and can’t afford basic necessities. These are people that are fragile, that have no wealth to protect, and worse of all, that are losing hope. The resentment in these communities is growing.

What we have seen in London is just the start of more massive social unrest if nothing is done to curb the wealth inequalities our society are producing. When people have nothing to lose and have lost hope, violence become the last mode of communication. The only way is to give people a job so that they can look after themselves and their family. And to re-develop our industrial base and create jobs, the only solution is to address the “Chinese issue”.

“the puspose of the economy is not just to improve indexes, but to improve the state of a nation”
James Goldsmith, US Senate Speech Nov. 15 1994

You can listen to it here: http://www.youtube.com/watch?v=maouTP8vTO0&feature=player_embedded#at=244

#48 http://m.youtube.com/index?desktop_uri=&gl=CA#/watch?v=UgyrlJa3ZMU on 08.16.11 at 1:18 am

I know you’re out there. I can feel you now. I know that you’re afraid. You’re afraid of us. You’re afraid of change. I don’t know the future. I didn’t come here to tell you how this is going to end. I came here to tell you how it’s going to begin. I’m going to hang up this phone, and then I’m going to show these people what you don’t want them to see. I’m going to show them a world … without you. A world without rules and controls, without borders or boundaries; a world where anything is possible. Where we go from there is a choice I leave to you.

#49 Randis on 08.16.11 at 1:26 am

Garth I agree with you.

Btw, you are right the herd they are pretty hopeless. Today I talked to someone about how stocks are cheap right now after the panic selloff and anyone who wants to develop a nice balanced diversified portfolio should get back into it. Basically he went off and asked why I am so sure can I guarantee it. Then I was like ok you sucker go have sex with GICs don’t waste my time if you won’t listen

Anyhow, yes I agree with you

#50 TakingResponsibility on 08.16.11 at 1:28 am

“Many people won’t agree with me. Hell, most won’t” – Garth Turner

I would argue, au contraire, that most do. Flaherty, et al, most certainly are in agreement that all is ‘stable.’

It is, of course, the fear and fealty displayed toward our “funders” that is not contrarian whatsoever.

And, is somewhat paradoxical with the fervent patriotism on the ‘state o’ Canada’ on July long weekend – you know, the one where we all celebrate the independent Sovereign Canada.

Me, I am all for democracy – imo, we should at least be able to vote for the president – and have a few or more in Congress.

Just sayin’

#51 Kaganovich on 08.16.11 at 1:29 am

For Patz, Coho, Claudius Emperor, Junius and all others interested the problem and consequences of wealth inequality, here is an essay by R. Rorty written in 1996, entitled ‘Looking Backwards from the Year 2096’:

http://download396.mediafire.com/k01cs86jeubg/4m1zkocjomn/Richard+Rorty+-+Philosophy+and+Social+Hope.pdf

Rorty was adamant about the useful role that fiction could play in educating people to treat each other as ends rather than means. On reading it twelve years after I first read it, methinks Rorty was had a fairly good hunch about the path we were travelling and where it might lead….unfortunately. Oh, and before I forget, here is a year old essay by M. Hudson on the distinctions between finance and industrial capital since it is highly relevant to all the talk of jobs and outsourcing that has been happening lately:

http://michael-hudson.com/2010/07/from-marx-to-goldman-sachs-the-fictions-of-fictitious-capital1/

#52 Jody on 08.16.11 at 1:37 am

“The doomsters have lots of points; just no momentum. They can’t figure out if it will be zombies or aliens.”

It’s aliens man, the Rothchilds have like totally hired these lizard men aliens to enslave all of humanity. When they come for me I’m going to off myself so my thetons get destroyed and then I can escape earth and join with others in the stars. I will be with the supreme enlightened one Mr. Hubbard and together we will rule the universe. I just have to find the $8,000,000 it will cost me for the theton machine and come out of the closet, like John Travolta and Tom Cruise. Like totally man.

#53 mike on 08.16.11 at 1:49 am

I dont get it Turner, everything in the world will be fine but Canadian Real Estate.

#54 Mister Obvious on 08.16.11 at 1:57 am

#5 Moneta

“Can someone please give us a definition of doomer because in my book, you’re a doomer.”

Honestly ma’am… have you been paying any attention at all to the core message of this blog?

Pointing out the end of a thirty year debt party is not the same as predicting imminent societal collapse.

Wake up. Its Monday morning in the twenty-first century. We’ve been spending like drunken sailors all century end. Time to crawl out of bed and start working for a living again. Bummer!

Fortunatley, there’s still a world remaining where that can be done. It’s not too pretty at the moment but its far from hopeless. That’s positive news in my book for which I thank Garth.

#55 Dr. Fred on 08.16.11 at 2:14 am

“Diversification and asset allocation/management are for idiots.” – Mark Cuban

http://online.wsj.com/video/cuban-on-investing-diversification-is-for-idiots/233AE43E-9DA3-40A3-8F6B-9DC23DD82BEF.html

He makes a good case. I agree.

#56 betamax on 08.16.11 at 2:46 am

#20 Condo Sucker: “I can’t help but feel that buying shares of RIM right now at this bargain basement price is good contrarian thinking.”

The herd is often but not always wrong.

“I’m certainly not one of those doomers who thinks they are destined to become a penny stock like Nortel.”

Probably not, but partly down is still down.

Have you read the open letter from a RIM insider? Pretty damming indictment of RIM culture and vision (or lack thereof):

http://www.bgr.com/2011/06/30/open-letter-to-blackberry-bosses-senior-rim-exec-tells-all-as-company-crumbles-around-him/

It’s your money, but there are better bets out there.

#57 betamax on 08.16.11 at 3:28 am

Garth, you’re right that the long non-emergency is going to be more like rush-hour gridlock than the Apocalypse.

I’m not as bullish as you on the markets, but kudos for putting up with the uber-doomers. Like Montaigne, their lives must be full of terrible misfortunes that never happen.

#58 Dorothy on 08.16.11 at 4:16 am

The scariest thing these days is the fact that the future is so very unpredictable. The world is in economic turmoil, and no-one knows for sure how things will turn out in the end. Not even Garth. The riots we’ve seen in various places are symptoms of this turmoil, and if the politicians and the elites don’t soon “wake up and smell the coffee” things will continue to deteriorate.

As the gap between rich and poor continues to widen, and the middle class continues to shrink, evermore social unrest will be the inevitable result. Because it’s very unwise for a society to constantly bombard the majority of its members with images of “the good life”, while at the same time making that life difficult or impossible for them to obtain. Its no wonder those who feel deprived are so frustrated they’re driven to lashing out at the society which torments them with unfulfilled promises.

Unfortunately I haven’t heard anything from any of the world’s politicians addressing this issue of economic inequality which is threatening the very fabric of our society. Yet history tells us that if change isn’t introduced from the top, then sooner or later it will be forced on us from the bottom.

Greed and fear got us into this current financial quaqmire, and greed and fear are going to keep us there for a long time to come. Nothing is going to change until we have leaders who are more concerned about the greater good, than they are about themselves and their powerful cronies. But if that doesn’t happen, then anger and desperation may be what finally leads to societal change. And in the midst of such social unrest, the state of the real estate market might be the least of our worries!

#59 WaterlooResident on 08.16.11 at 5:47 am

My feeling is that Canadian real estate is stuck up on high prices for as long as interest rates are at emergency lows, and that will be for the next 2-3 years. Only once mortgage rates tick up at least 1%, maybe 2%, will home prices even begin to level off.

So get used to home prices going up and up and up 20% per year because for the next 3 years thats what we are facing here.

That $800,000 house will soon be $2 Million, like it or not.

#60 Rob now in Nova Scotia on 08.16.11 at 6:12 am

Garth, I’m curious as to how you envision the USA or Germany not falling because of massive debt? Does that debt and the resulting interest payments paid off with much higher taxes or doesn’t it matter?

You see, most precious metal bugs (OK, maybe just me), believe that all debt either gets repaid or defaulted on. Since it is now mathematically impossible for the US to pay off its debt, a default seems the only logical outcome.

So, what am I missing here?

#61 David B on 08.16.11 at 6:44 am

Markets go up … markets go down and the Rich make money both ways …. so why not you?

Forbes Focus
How The Rich Are Getting Richer
Steven Bertoni, 07.20.11, 06:00 PM EDT
Forbes Magazine dated August 08, 2011

http://www.forbes.com/forbes/2011/0808/focus-credit-meltdown-unemployment-brig-rich-richer.html

#62 Aussie Roy on 08.16.11 at 6:45 am

Garth great article today again, thank you.

Aussie Update

Not only do we have out of control inflation in Australia, we also have full employment, rising incomes, and house prices still at bubble levels. If the RBA can’t raise rates now, how do they expect to be able to raise them later as inflation continues to rise while those other economic indicators weaken? Now is the time to act, before inflation becomes entrenched as an acceptable part of Australian life, as happened in the 80s. Failure to act now will lead to an even worse recession in the future. Kicking the can down the road just delays the inevitable and makes it worse.

http://www.differenthere.com/2011/08/rba-cracking-up.html

Top 10 most discounted properties in Australia

http://www.propertyobserver.com.au/queensland/top-10-most-discounted-properties-in-australia-at-july-28/2011072850952

#63 Robert Dudek on 08.16.11 at 6:46 am

Today’s piece was one of your best Garth.

BTW, there are only 4 great American cities: NYC, Boston, Chicago and San Francisco – all have held up well in real estate terms.

Is it time to buy some Brazil ETF?

#64 James is back on 08.16.11 at 6:48 am

Best post in a long time Garth.

You are correct I am part of the heard that thinks we are in for a very rough patch, it is reassuring that you believe the world will not end. But I think your right that the middle class will disappear or at least those who have too much debt. I will buy stocks this week, you are right too low to pass up.

#65 Jody on 08.16.11 at 6:52 am

My doomer sermon:

The thin veneer of civilization that we all take for granted is starting to disappear. Hatred and anger are growing by the day. The United States is becoming a very frightening place.

The veneer is thin indeed and it becomes thinner every minute. If/when it cracks it will be everyman for himself, government against all. Here in flyover country we face limited threats from the anarchy of collapse. In urban areas it will get nasty. Gentlemen and ladies, prepare to defend yourself.

I have been preparing for societal collapse for three years now. I am certain it is coming. The only uncertainty I have is what does it look like? Prolonged deep recession/depression? Post apocalyptic world? I have been searching the web for thoughts about this, and there are many web sites saying prepare, it’s going to be ugly. That’s about it. Not very helpful. Read ” The Patriot”. It will keep you awake at night. When he says ugly, he means armaggedon ugly. His scenario is VERY realistic. I fear the worst. We have become a splintered amoral society with an entitlement mentality fueled by decades of liberal programs which have institutionalized immoral behavior and championed criminals over victims.

#66 Imstupid on 08.16.11 at 6:56 am

#20 condo sucker

Don’t buy rim. It’s a losing bet. I am not a doomer and enjoy risk. I’m look at the business, what will they do to compete with apple, and others. When they first emerged they were market leaders with black berry not the are followers. They do not have the same market following as apple. I could be wrong, but you would be betting that they create something new. Tablets etc will become as cheap as gps systems. Blackberries are lagging tech innovation and tablets are just dumb down pc’s. Where will they generate profit in next 5 ten years? If you could answer then buy. Rim in my opinion is the corporate equivalent of a one hit wonder.

#67 BrianT on 08.16.11 at 7:09 am

#14Smok-Congrats-I think you might be the first to bring up that stupid moon landing reference-somehow it is felt by the sheep to validate all MSM B/S.

#68 BrianT on 08.16.11 at 7:15 am

#23Ut-No-you are the one that is confused. She is simply stating an obvious fact.

#69 Promised Land on 08.16.11 at 7:18 am

I think a European default and the break up of the Eurozone is now part-priced into the market. I don’t think the coming recession in the US is fully priced in as current p/e is historical of course and companies like Apple are unlikely to do so well if there is more uncertainty about jobs.
What is not priced in though is China. When the clothes are seen for what they are, then the market will have one more correction, I reckon taking another 10-15% off, before settling down for a long period of stagnation. That will knock Oil and other commodities, which will weaken Canada for a few years…which will of course be the buying opportunity of a generation (property and equities), as this country has got a great future.
Having just arrived from the UK, houses still look cheap here, and whilst there will be a few years of stagnation and possibly in the GTA, modest losses, and in Vancouver, serious losses, in the long term property here is not a bad bet. There might be millions of boomers wanting to trade down, but there are millions more lined up at the borders seeing this as the promised land who will gladly take the keys of the wrinklies.

#70 Moneta on 08.16.11 at 8:00 am

You seem to have confused the ideas of a realist with those of simplistic negative thinkers sweetheart
—————–
When you think that more than 50% of a population’s way of life is going to suffer, I call that doom. And whether it is right or not, it’s still doom.

One thing I have noticed when cycles roll over is that ANYONE who does not only see more gains ahead starts getting called names. Instead of getting ignoed, the y get ridiculed. And it’s not only the freaks anymore.

The irony is that even those who used to be on the same side start poking eachother. When you reach the peak, nearly everyone can be called a doomer because nearly everyone starts to see the cracks. And everyone has a different definition of how bad things have to get to be labeled doom.

#71 Utopia on 08.16.11 at 8:05 am

To #16 not 1st on 08.15.11

Do you want to make sense in context to the post today?
Did you understand the article was about real estate/investing?
Are you on the right blog, Mr challenger?
What have you done to fix the world lately?
Have you made a contribution to the Somali hunger disaster?
We do not have TARP in Canada. Do you know you are not American?
Do you realize preaching here makes no difference?
Have you manufactured anything (ever)?
Why don’t you ever make sense and stick to the subject?

Why don’t you clarify your views?

#72 TurnerNation on 08.16.11 at 8:09 am

Breaking…this weblog will be re-named as “Royal Greater Fool”.

$3b re-branding campain to follow. Tighten your belts Little People! Our Glorious Leader knows that blind patriotism and war sells. El Presidente, please keep us safe from The Other, the Bogeymen!!
Look for the recruiting booths at Winnipeg Jets games. Free warplane/Jets stickers for the kids!

#73 TurnerNation on 08.16.11 at 8:13 am

Perhaps this weblog could publish Mon, Wed, Fri and Sat. allowing for more breathing room and digestion of topics at hand.

#74 Utopia on 08.16.11 at 8:18 am

#19 Dave said….

“I don’t think I would be owning stocks or bonds at these levels….or anything but certain currencies at these levels.
——————————————
You are right Dave, the correction is not over and I agree the technicals are telling us that. Commodities in particular will see a further decline and that will affect stocks over the short term.

Each event is offering good buying opportunities on dips though. Most people I know are not buying and holding in any event. Rather, they are buying and selling on swings.

Risky perhaps but it is paying off with the wild action right now and the money is good. They are trying to catch the trend in both directions and actually, most of them are doing ok.

This has been going on for months now as the correction was pretty much a foregone conclusion. So to answer your question from my own perspective, it is not crazy to buy stocks right now if you get them at the right price. Some stock has been on sale lately, really good bargains.

It is not crazy to sell into a massive rally and take some profit off the table either. Even if that event comes three days later.

You have to figure out what your own strategy is going to be and know what level of risk you can handle.

#75 Moneta on 08.16.11 at 8:21 am

I have to admit that for me, Garth’s perspective is more depressing than that of the gold bugs and the other he calls doomers. At least with some of those he calls doomers, there is some sense of finality or change where people can feel empowered.

To think that the economic power of people is going to erode gradually and that the only way you can stay ahead is buy preying on greater fools because that’s your only choice is not healthy IMO and can only lead to more trouble. Even if I see his outcome as quite realistic, I see it as bigger doom than with some of the other doomers where riots or some other shock would force us to change course.

Just a thought.

#76 jess on 08.16.11 at 8:35 am

…”The rise in commodity speculation represents the banks’ first profit stream. They have catered for – and fuelled – demand by creating a huge range of commodity derivatives, such as exchange-traded funds and commodity index funds, which have allowed pension funds and other investors traditionally barred from commodity exchanges to bet on their prices. As a result, the amount invested in commodity funds hit a record $451bn (£281bn) in April – more than 40 times higher than a decade ago – and the banks take a small percentage cut for managing them.”

Tom Bawden guardian.co.uk, Wednesday 29 June 2011 17.43 BST Article history
=
Fisher, who opposed the Fed’s current $600 billion asset purchase program, or QE2, said it may have been partly to blame for higher commodity prices.

====
In October 2010, Nobel laureate Joseph Stiglitz explained how the U.S. Federal Reserve was implementing another monetary policy—creating currency—to combat the liquidity trap.[3] Stiglitz noted that the Federal Reserve intended, by creating $600 billion and inserting this directly into banks, to spur banks to finance more domestic loans and refinance mortgages. However, Stiglitz pointed out that banks were instead spending the money in more profitable areas by investing internationally in commodities and the emerging markets. Banks were also investing in foreign currencies which, Stiglitz and others point out, may lead to currency wars while China redirects its currency holdings away from the United States.[4]

#77 Utopia on 08.16.11 at 8:36 am

#25 nonplused

“Can the world avoid a depression? Probably. But my gut sense is this isn’t the way to do it. Actually, I think Peter Schiff is kind of loony but his description that “the government is doing not only the wrong thing, but the exact opposite of the right thing” might turn out to be prescient”.
———————————————-
My issue with Peter Schiff is that his views revolve too much around his personal agenda and the high taxes he pays as a small business owner.

He manages to rope weak minds into his world by saying logical things like “savings rates are too low” or “government spending is out of control” which are truths. Then he spins those ideas into a diatribe against the size of all government and why it is essentially a hopeless endeavor that we should all reject.

But if you listen to Peter closely you will understand that he would also do away with many entitlement programs, eliminate much of the nations social welfare programs, kill off the safety net and set us all on a course to compete with two dollar a day incomes in rural China.

Peter is no saint and he in an outsider in Washington for god reasons. His views are actually fairly extreme at their core and they come from a purists perspective of capitalism where only the strong survive and the weak are eliminated.

I suggest you send his messages to the “Junk” box.

#78 timo on 08.16.11 at 8:40 am

#62 Aussie Roy,

thanks for that link..more to think about.

http://www.youtube.com/watch?v=v7TctLPrOzA

I do not necessarily agree with everything said but is an interesting look at today’s markets and economies.

#79 dd on 08.16.11 at 8:55 am

“Debt won’t bring down major sovereign states”

Yes it will. Watch over the coming months how the markets deal with this issue. The debt isssue will works it was up the food chain.

#80 Utopia on 08.16.11 at 8:58 am

#33 GARTH, GOVERNMENT, AND MONEY CREATION POWERS PART IV

“The elected government does not set monetary policy. Fact.” — Garth

I’m sorry, Garth. I’m just not getting this apparently.
——————————————-
Then try to wrap your head around this. Why do you think we have a Judiciary that can render law in this country invalid based upon the opinion of a single Judge?

Why would a Government respect (or even respond to) what a Judge has ruled when it comes to constitutional issues?

Why do democracies have checks and balances built into their systems that afford power to respected individuals that exceed the will of a democratically elected body who voted in majority on a piece of law?

Why do we cooperate as a society with the wisdom of a few when the many object as is happening now?

I hope you are catching the drift here.

#81 dd on 08.16.11 at 9:00 am

2008 was an ilquidity issue. 2011+ is about solvency. Watch and learn.

#82 BrianT on 08.16.11 at 9:07 am

#72Moneta-I have no idea how anyone could categorize a conclusion that PMs are a strong investment choice as “doom” of any type. Look at the performance of gold and silver over the last 5 yrs-was that period “doom”?

#83 dd on 08.16.11 at 9:11 am

G&M “Europe’s sagging growth prospects make it even harder for governments to shrink their debts. Economic growth in the 17 countries that use the euro sagged to a lackluster quarterly rate of 0.2 per cent in the second quarter, as a previously robust expansion in Germany almost ground to a halt”

Some hedge fund analyst suggested bonds will have to be trimmed in order to kick growth into gear.

http://www.theglobeandmail.com/report-on-business/international-news/merkel-sarkozy-meet-as-eu-economy-struggles/article2130830/

#84 Many worried Realotors on this blog on 08.16.11 at 9:18 am

Sales in July were horrible and they are trying to spin it like crazy. More and more realtors are going hungry as the falling housing market continues. If the RE was doing well why are realtors on this blog?

#85 dd on 08.16.11 at 9:23 am

G&M “The European Central Bank revealed Monday the steep cost of relieving interest rate pressure on Italy, Spain and other indebted member countries. The central bank spent a record €22-billion ($31-billion) last week scooping up sovereign bonds as it struggled to halt the spread of the debt crisis. It was the most the ECB has spent in any week since it launched a bond-buying campaign in May.”

Steep costs – yes, it is called inflation = money printing. This will keep on until the euro zone faces the music.

http://www.theglobeandmail.com/report-on-business/international-news/pressure-grows-for-adoption-of-euro-zone-bonds/article2129463/

#86 sam on 08.16.11 at 9:27 am

can you suggest any good emerging market ETFs?
Thanks

#87 Utopia on 08.16.11 at 9:29 am

#58 Dorothy said…

“….then anger and desperation may be what finally leads to societal change. And in the midst of such social unrest, the state of the real estate market might be the least of our worries!”
——————————————————-
Stop watching so much damn TV Dorothy. Riots in London, shootings in Norway, trillion dollar deficit dramas in the US and a modern Greek tragedy unfolding as expected are just so many distractions from reality.

Next week the airwaves will be filled with stories of rabies.

I swear, you people do not get that your minds are being polluted by the media. Every hairy wart is exposed for all to see and you are in a panic and an uproar as you fall helplessly into the arms of the daily dramas.

You now expect major social upheaval and possibly even revolution to come about on the basis that your standard of living is going to decline a little.

Sorry dear, it won’t happen like that.

Compared to the rest of the world we are still disgustingly rich and we will not easily part with our perks by destroying our own culture and civilization from within.

To do so would prove we are idiots. Try again.

#88 dd on 08.16.11 at 9:34 am

#69Promised Land

“I think a European default and the break up of the Eurozone is now part-priced into the market”

Oh too funny. Patch work is priced in not break up.

#89 dd on 08.16.11 at 9:43 am

#60Rob now in Nova Scotia

So, what am I missing here?
””””””””””””””””””””””””””””””””””””””””””””””’
Rob you are not missing anything. The market hasn’t priced this reality in. Bonds will have to be valued to reality. However when this does the market could (commodities) take off to the upside.

I think the market is a little more attuned than you. This is, indeed, priced in. — Garth

#90 dd on 08.16.11 at 9:45 am

#59WaterlooResident

…That $800,000 house will soon be $2 Million, like it or not…

We are at max debt. The only way this will happen is for wages to increase at a greater rate than inflation.

#91 Sky on 08.16.11 at 9:46 am

@ Jody ( # 65 ) –

How will the future unfold , you ask ? Two words : Agenda 21 .

http://www.canadafreepress.com/index.php/article/15713

Prepare for the Khmer Vert. Give me Mad Max anyday!

Oh, and if you’re one of the many who has a skin condition or suffers from migraines from the mercury filled CFLs, then grab those 60 watt incandescents while you still can ( Our local hardware store just placed its last order in July ).

I’ll kind of miss being able to see or read properly. And taking a header down the stairs while waiting for the CFL to heat up and throw some kind of light isn’t all that much fun either. But then what is these days ?

#92 Utopia on 08.16.11 at 10:00 am

#60 Rob now in Nova Scotia asked…..

“You see, most precious metal bugs (OK, maybe just me), believe that all debt either gets repaid or defaulted on. Since it is now mathematically impossible for the US to pay off its debt, a default seems the only logical outcome.

So, what am I missing here?”
—————————————-
What you are missing is that debt represents very long term obligations of governments and their people and that we will eventually see a recovery and grow our way out of the problem.

It is not “mathematically impossible” for Americans to pay off their debts. Some just do not want to do it. They prefer an easy way out and one that affects others rather than themselves.

You are not appreciating that it is current spending and annual deficits that need to be tackled with the most urgency. The debt is not an issue for it is more akin to a mortgage that is paid over time. Long-term mortgage debt is always manageable if you behave responsibly with current spending.

We can afford the debt from that perspective as the power to tax remains intact. It is just not being used in the US as a tool to resolve the problems but that will soon change.

Americans may object vociferously but a GST or consumption style tax is surely coming. It will bring with it a realignment of public expectations for National and State entitlements programs with the realization that citizens are not yet contributing sufficiently to draw on government income programs which cannot be paid without inputs.

That is reality.

Nothing going in means nothing comes out. It takes energy to create propulsion. The idiocy of continually cutting taxes to create growth has proven itself a failed idea over the long term.

That simplistic method of driving consumption through the policy of lowering household expenses was only a short-term one-trick pony that worked for one administration and its implementation, born as a contrivance to get us through a soft patch, has badly hurt the US economy over the longer term.

It is akin to saying putting less fuel in your car will provide better gas mileage. (Not a bad plan if you don’t want to go anywhere). But seriously, who in their right mind that is not on drugs actually believes that we can get more by paying less in the long run?

The deficit meanwhile is the real threat and is what is causing the damage. That is what we need to be most concerned about now.

The problem does have a solution. It just takes guts.

#93 Moneta on 08.16.11 at 10:01 am

72Moneta-I have no idea how anyone could categorize a conclusion that PMs are a strong investment choice as “doom” of any type. Look at the performance of gold and silver over the last 5 yrs-was that period “doom”?
————
Since I don’t know the future, I entertain a multitude of potential scenarios and one where gold keeps on soaring is one of them. But it’s not my scenario withe the highest percentage.

My strategy has been to position myself for both inflation and deflation.

#94 MasterBootLicker on 08.16.11 at 10:02 am

Its sad when facing and accepting reality becomes termed a doomer point of view. You know a society has become completely domesticated when believing and focusing on a false reality is looked upon as good and productive. Being lied to has become a religion and is cute and trendy. And being wrong about global events time after time is met with praise at sarcastic jokes like its cool to be dooped. People who have been right and try to point out the truth of the situation are ganged up on and marginalized by a group of delusional yuppies who think its hip to be constantly wrong. Is there something wrong with this picture ? People on here who foresaw the sovereign debt issues 3 years ago and where we were heading are still laughed at by the hyenas who can not predicted issues even from day to day. A louvre Accord meeting is coming, and the gullible public will be as surprised as ever .

#95 Onthesidelines on 08.16.11 at 10:07 am

Actually, the only contrary view that you seems to express is that you consider yourself a contrarian when, in fact, your views seem to more or less mirror those of the elite, business class, namely that the current system is fine but temporarily weakened, and that everything will go back to normal as long as corporations continue to make good profits and people get infront of the money curve to rip off their greater fool neighbour in the zero-sum game that is investing.

Moneta 75 is correct in the comments that your views are indeed darker by implying that the solution to the deep systemic failure of capitalism on steriods is to play the game better than the other guy.

Pity humanity if that’s the best anyone can come up with.

Tough. This is not a social justice blog. Not a revolution blog. Not a fix-capitalism blog. It’s about financing our sorry asses through this vale of tears. — Garth

#96 dd on 08.16.11 at 10:08 am

#89dd

…I think the market is a little more attuned than you. This is, indeed, priced in. — Garth…
””””””””””””””””””””””””””””””””””””””””””””””
The market priced in the Italy and Spain bond buying from the euro central bank over this past week. When this buying stops watch what happens to the price / interest rates of these countries newly issued debt.

#97 Utopia on 08.16.11 at 10:09 am

#70 Moneta said….

“One thing I have noticed when cycles roll over is that ANYONE who does not only see more gains ahead starts getting called names”.
————————————–
And one thing I have noticed is that the moment times get just a little tough the weaker members try to cannibalize the strength that still remains and bring everyone down into their personal little pit of despair.

You fail by having no faith. Brian too.

#98 eddy on 08.16.11 at 10:17 am

Thanks for the links Makaya.
I watched the Carlie Rose – Goldsmith interview twice. I agree with him.
Many believe he is Diana’s father. They both seemed to be at odds with the elite’s ‘agenda’ at around the same time, and she died 6 weeks after him.

#99 Echo on 08.16.11 at 10:17 am

#30 Devore:

Don’t bet against RIM.
Google is much too invasive and insecure for Corporate use and iPhone not only has a major Corporate issue due to a fixed battery but also there seems to be no qwerty in sight, an absolute necessity for people who don’t need the pain in the butt ‘toy’ effect of touch. Most ‘real’ companies, if not all, won’t let you work there without a Blackberry. The platform is more secure, it has a (professional) keyboard, and the battery can be removed in boardroom meetings. TRIPLE THREAT. The others are catering to the masses, the herd, the less informed re invasive technology (Google), that crowd and it’s purchasing power is not a threat to the business world. Think everything you eat, drink, wear, touch, and calculate. That’s the business world. Corporate espionage is worth billions plus no one has time to waste on a non tactile keyboard. I’m doing this on an iPhone 4, am a lightening fast typist, thumbs as well as desktop, and this took about 5 min longer than a qwerty would have. Blackberry crosses both sectors beautifully. RIM is the smartest player on the planet by far. The new OS7 is heaven, the 9900 & 9930 are masterpieces, and the heard may even (gasp) eventually figure out how Google is using Android as one of the final nails in the coffin for their invasive technolgy agenda.

Why is this relevant to the economy ? Because not too far beyond today everyone, not just Corporate, is going to need a smartphone to function in society. I’m buying RIM. Restructuring is part of business. It’s not a negative. News media has lots if space to fill, that’s
all.

#100 bj192ndbase on 08.16.11 at 10:38 am

I’ll never buy a condo again: http://www.thestar.com/news/crime/article/996348–i-ll-never-buy-a-condo-again-years-of-low-fees-lead-to-condo-in-crisis

– Funny part of this: “NOTE: This article has been edited from a previous version.”
– Comments Closed (and apparently removed)

#101 CSIS, THE SIDEWINDER, AND CHINA on 08.16.11 at 10:38 am

To #47 Makaya

The Canadian government has known about the “Chinese issue” for quite some time.

In 1997, CSIS, in conjunction with the RCMP, published the “Sidewinder Report”, where it was stated that China “proceeds initially to buy and/or legally set up a company in Canada that, once under their control, buys other companies and so on… ”

Because of this, “China remains one of the greatest ongoing threats to Canada’s national security and Canadian industry.”

—————————————————–

To #80 Utopia

I get the drift. It is telling that Garth said that “the elected government does not set monetary policy.”

He did NOT say that “the elected government CANNOT set monetary policy.”

It’s difficult to wrap one’s head around the gross level of government corruption today.

I suppose, as Goebbels said, that if the gov. is going to lie, they might as well make it a big lie.

Food for thought :)

The elected government has never set monetary policy, does not set it, and will not set it. Move on to something that actually matters. — Garth

#102 Echo on 08.16.11 at 10:45 am

#66 Imstupid:
My previous post is for you too. I hadn’t seen your comment yet. Now you know the facts. Get a 9900 if you’re going to stay put and a 9930 if you’re a jetsetter. RIM will respect your privacy, also encrypt your personal info beyond the norm, and give you the best of both worlds with a high quality qwerty and a very well designed touch screen. Oh, and the OS7 is a masterpiece. Tell your friends, wise them up. Teach them that what Google is doing is NOT ok. As for Apple, the only way they’ll ever be a threat to RIM is if they make a removable battery and manufacture a phone with a qwerty keyboard. I love my Mac but it syncs with Bkackberrys and will be syncing with a 9930 soon! I’m not the only one drooling. Corporate orders will be off the map.

#103 bigrider on 08.16.11 at 10:53 am

Back to real estate please.

Everyone I speak too thinks T.O is a “world class city” and that we are grossly under-priced in terms of our RE.

I don’t believe we are a world class city for a number of reasons, but interested in hearing all viewpoints.

Get some friends who are not Italian. — Garth

#104 Bottoms_Up on 08.16.11 at 10:56 am

I’m getting a little sick of all this economics/cycles talk.

Bring back Nosty jr. and D.A.!!!!

#105 dd on 08.16.11 at 10:57 am

UK inflation at 4.4%

Watch out all you investors that are getting 5% for your preferred div bank stocks. Are you really keeping ahead of inflation?

http://www.bloomberg.com/news/2011-08-16/u-k-inflation-jumps-more-than-estimated-to-4-4-.html

Did we just move to Britain? Is your gold sending you a monthly cheque yet? — Garth

#106 BrianT on 08.16.11 at 11:01 am

#96Utop-IMHO, both myself and Moneta are quite confident we will fare better than yourself-is that enough faith for your religion?

#107 Echo on 08.16.11 at 11:02 am

… and when their new QNX OS hits the phone that will be a whole new Corporate celebration. It’s not far off.

#108 bigrider on 08.16.11 at 11:02 am

After all of the incredibly difficult economic stimuli we have endured and continue to endure, RE prices in T.O and Vancouver continue to rise .Surely there has to be a better answer to the phenomenon than buyers are ‘greaterfools’.

Can it possibly be different here? I am bearish on RE and I am not buying anymore of it but I am forced to re-examine my point of view simply because of the shear evidence against it.

T.O is completely house and condo ‘rabid’.

#109 Utopia on 08.16.11 at 11:04 am

#95 DD wrote……

“When this buying stops watch what happens to the price/interest rates of these countries newly issued debt.
——————————————
Yes, and then we will all watch as one more of your negative and ill-informed prophecies bites the dust. You try to speak as a person with inside knowledge but you don’t have even the first two clues about what is actually taking place.

Maybe ask more questions and make fewer assertions.

#110 Sharpen The Saw on 08.16.11 at 11:12 am

I will have to be one of those that ‘disagrees’. Garth, your prediction follows in the footsteps of many other economists out there. Most economists sift through information from published articles, websites, books, etc. which can all be done in the comfort of one’s office. Predictions are made based on two-dimensional data, trends, graphs, guesses and so on. The truth is that Economics does not always work so predictably.

Some economists try to see years into the future. They talk about China and India, and how, for example, over 400 million people in these countries will be driving their way on wide roads, living in the suburbs, raising their standard of living to a point where they will be buying American’s durable goods. What these economists never *or rarely ever* mention is that this is correct on an infinite planet which behaves predictably. Economists may make predictions using mathematical models. I can look at a model and see the trend; Chinese people will be consuming around 25 Billion eggs annually by the year 2020. That’s what the math says. No economist asks where the chickens will come from, where the feed for the chickens will come from, who and where the chickens will be raised etc. That’s not for an economist to worry about. The math says ’20 billion eggs’. Let the ‘free market’ worry about the mundane detail.

Predictions like this are used for a number of things:

– human population growth
– amount of cars that ‘will’ sell in the future
– amount of oil we will consume in years. (we may not have found it yet…or will we ever find it…but the numbers say ‘120 million bpd’ so that’s what it will have to be)
– coal numbers
– gdp growth

…etc.

There are a lot of things that can go wrong.

– Sudden natural disasters. (Japan will have to ‘retool’ it’s economic forecast, no doubt).
– The slow disasters (climate change; more and more massive crop failures around the world + flooding in other areas).
– debt load. Sovereign, commercial and private. (Garth, you repeat that sovereign debt is easy to solve as governments have the power to print money and tax their people. True enough. What if people don’t want to pay those higher taxes? Greeks nearly burned down Athens when austerity measures were put in place. The T.E.A party’s popularity has not waned in the least. etc.)

– A sudden terrorist attack somewhere in the USA. (Look at what 911 did in the longer term to the USA. Look at the countless billions and billions of dollars spend directly (homeland security, airport security, manpower for ‘security’) and indirectly (Iraq war. Afghanistan/Pakistan war. Tourism to and from the US has fallen …)

My prediction for the next two years…..is that I have no educated prediction. Economists have about as much power to predict the economy in a few years as the weatherman has of predicting the weather in your town in a few years time as well. He/She might be able to ballpark the temperature, but has no clue if it will be rainy, or cloudy, or if a massive F5 tornado is about to rip up your cozy trailer park. Both the weatherman and economists use trends, graphs, computers, ‘science’ and the like and both of them don’t really know jack****.

#111 debtified on 08.16.11 at 11:27 am

Garth, I actually bought US dollars a couple of months ago when it was around its latest peak. Just like you, I don’t think the US will choke.

However, when it comes to investing my money, I don’t think right now is the right time to jump in. Do not underestimate the influence of the herd. This market is not governed by fundamentals. This market is very irrational and emotional. The news have more power to move the market than corporate profitability. It’s likely that the equity market will be down further before it begins to go up again.

Don’t you think it is prudent for a retail investor to stay on the sidelines for now until this current market volatility settles down before buying into it again?

#112 disciple on 08.16.11 at 11:28 am

Utopia…you make some interesting points…most of which I totally disagree with…

More taxes are the solution to the debt held by the kleptocracy over the middle classes? I don’t think so. The only solution that has ever worked was…war. “Royal” or not, I am deeply ashamed of our “elected” government’s embrace of glorifying violence via the military. Are they preparing us for something, I wonder…hmmm….

The judicial system has nothing to do with justice, social or contract. The financial parasite class has the Supreme Court Justices in their back pocket. Similar to the Hollywood casting couch in many disgusting aspects. You know it and I know it. Let’s not beat around the bush. Constitutional issues are not in the jurisdiction of the Supreme Court. Enjoy the irony.

I do not believe in the necessity of federal governance. In fact, any central government is probably archaic already. Our young people (younger than me) are far more intelligent than any other generation before them. You don’t give them enough credit. They see right through the hypocrisy and outright lies, and illusions of the old world power structures. Change is afoot, the world will be better for it. Let the illusions crumble, so that all can see what is behind the facade. The war is not for land, oil, gold, or water. The war is for your mind.

#113 Utopia on 08.16.11 at 11:35 am

#94 MasterBootLicker wrote…….

“Being lied to has become a religion and is cute and trendy. And being wrong about global events time after time is met with praise at sarcastic jokes like its cool to be dooped. People who have been right and try to point out the truth of the situation are ganged up on and marginalized by a group of delusional yuppies who think its hip to be constantly wrong”.
———————————————–

OK. Lets deal with you now. Can we begin with a few facts to get started first though. Here are a few questions that I have after reading your nonsense post.

First though: It is “duped” and not “dooped”
Second: Who exactly are the people who are being marginalized. That is an easy one, right. You surely knew what you meant when you wrote that comment.

I don’t know though. Not a clue. Fill me in a little please.

So who is being lied to anyway? Who is doing the lying? How do you know they are lying? Where is the evidence? Do you have names by any chance? Is it individuals or groups? Are you just making stuff up to sound interesting and to engage others for shits and giggles?

Do you even realize that your post makes no sense at all to anyone but you. You have not defined a single term. You only managed to produce a self-inflicted ramble of nonsense thoughts into a group of sentences that don’t connect to anything at all in the real world.

There is no meat there, no evidence, no data as reference and no graphs to look at. What was your point except to waste everyones time with some general blithering?

Did you think your thoughts might persuade me to “your side” with no facts and nothing of substance in the remarks?

You should try harder. Or don’t bother posting anymore.

#114 vyw on 08.16.11 at 11:38 am

from CREA:
The national average home price is forecast to rise 7.2 per cent in 2011 to $363,500. This is an increase from the previous forecast, reflecting continued strong price growth in Vancouver in the second quarter of 2011 and acceleration in prices elsewhere, particularly Toronto.

“These two markets exert an outsized influence on the national average due to their relatively high level of activity and average price,” CREA said.

The national average home price is expected to moderate in the second half of 2011, returning to normal following a heavily skewed start to the year due to a surge in multimillion-dollar sales in selected areas of Greater Vancouver and a higher than normal share of overall sales in more expensive markets.

http://www.theglobeandmail.com/report-on-business/economy/housing/crea-hikes-2011-home-sales-forecast/article2130990/

There’s an interesting graph in the CREA report:
http://creanews.files.wordpress.com/2011/08/monthly-stats-chart-aug-2011.jpg

The share of sales activity for Vancouver + Toronto (vis-a-vis the country) is declining. In 2008/09, a large decline coincided with the market correction; in 2010 – at least in Vancouver – a short decline coincided with a seasonal pause with lower sales and flattening prices.

#115 disciple on 08.16.11 at 11:39 am

By the way, Utopia, I really enjoyed that link to Siwa. Made me think about the ancient city of ON, fabled empire of Amen (Am-ON), original home of one of the divisions of the Solar cult SOL, ergo, SOL-OM-ON, house from which sprang Moses, aka Akhen-Aton, chased out by the Pharaohs for being too bloodthirsty, written by none other than Sigmund Freud before he “died” conveniently. Don’t know what the heck I’m talkin’ about? The younger generation does, enough said.

Why do I see a conspiracy in everything? Because all THREE of my eyes are open.

#116 Utopia on 08.16.11 at 11:43 am

#105 BrianT wrote in his usual juvenile way…..

#96Utopia – IMHO, both myself and Moneta are quite confident we will fare better than yourself-is that enough faith for your religion?
————————————

First off, neither of you is doing better than me. I promise you that. Second, if “common sense” is a religion now then you had better convert quickly because the both of you are making losing bets from a philosophical point of view and time will prove that analysis is 100% correct.

The cup is still half-full Brian. Drink up and enjoy.

#117 O.R. on 08.16.11 at 11:45 am

@ #24 Patz

Thanks for that link. A tremendous read and really lays flat a lot of my feelings while remaining constructive.

http://tiny.cc/0786b

#118 foolsrushin on 08.16.11 at 11:51 am

“So, I’ll say it again. There is no systemic financial collapse. No stockapocalypse. No bankrupt America. No depression. No 2008. Fear and greed will continue to spin, but no news there.”
Just keep saying it and tapping your heels together…there’s no place like home…there’s no place like home…by the way the wands in the mail. I seem to remember the Great Wizard of OZ was nothing more than a fraud hiding behind a curtain. Reminds me of government which it seems to me some people have alot more faith in than others.

At least you could try to make an argument instead of criticizing those who hold another view. This suggests you have none. — Garth

#119 foolsrushin on 08.16.11 at 11:52 am

Sorry I forgot to ad…just follow the yellow brick road

#120 Junius on 08.16.11 at 12:03 pm

#24 Patz,

Umair Haque is one of the more original thinkers out there these days. He is hardly a doomer. Quite the opposite.

His book, “The New Capitalist Manifesto” is excellent and a worthy read for anyone looking for a way through this mess to fix Capitalism. His is the path I would follow.

I see four groups out there today.

1) The apologists and nothing is wrong crowd who want us to keep shovelling money at the banks. This includes all of the G7 heads, The Fed, ECB and Banks.

2) The Tea Party types who have now turned all of this on its head and blamed the mess on too much gov’t.

3) The sky is falling and there is nothing you can do crowd who we would call the doomers.

4) The people that are trying to be honest about the mess and seek to improve the system without throwing it out. I see Umair Haque as one of these along with Yves Smith, Matt Stoller, Barry Ritzholtz, Dylan Ratigan, Danielle Park, John Mauldin and others including our host Mr. Garth Turner.

#121 Junius on 08.16.11 at 12:08 pm

#35 Free Markets Not Doom,

You said, “I just wish Canada was a free country with open markets that were free of manipulation.”

Careful what you wish for. We need competitive markets – not “free” markets. Free markets quickly become monopolized and anti-competitive.

However I certainly agree about the CMHC. What does it say about a supposedly “free market” gov’t that they intervene to this extent?

#122 bill on 08.16.11 at 12:08 pm

Don’t bet against RIM.

If they brought out a product that contained all the good points of the competition , remedied their failings and upped the ante by making it somewhat better.
In other words a real game changer, like the original, they would do all right.
is that possible? its within their grasp.
I might even divert some of the oil and gas stock to a bit of rim if it was cheaper.

#123 dd on 08.16.11 at 12:10 pm

#108Utopia on 08.16.11 at 11:04 am

Maybe ask more questions and make fewer assertions.
…………………………………………………………………………..
And let see what you have to offer our readers today:

“Actually, I wish I had taken up more of the incredible opportunities.. would have been stinking rich.. If only I could get those days back again…”

Lots to say, judge, but failing to act. A “if only” investor.

#124 Mrs Loquacious on 08.16.11 at 12:11 pm

“This is why I told you a few months ago to buy bonds, despite their low yield, and to get a balanced portfolio, even if that dampens returns.” – Garth Turner

Admittedly, when I first saw my portfolio dip, I panicked like the rest of the herd. But I’m glad I’m still sticking with you, Garth!

In a recent chat with my father in law, I learned that my mother in law kept her investments throughout the financial crisis of 2008. I asked how her funds were performing today, and he told me that they’re not only back to pre-2008 levels, but she has made some profit.

There must be wisdom to the old adage, “Slow and steady wins the race.” I just need to sit patiently and wait out the storm.

#125 T.O. Bubble Boy on 08.16.11 at 12:11 pm

@ #104 dd:

UK inflation at 4.4%

Watch out all you investors that are getting 5% for your preferred div bank stocks. Are you really keeping ahead of inflation?

Didn’t the UK just raise the VAT from 17.5% to 20%, and wouldn’t that create a spike in all UK inflation readings in 2011?

#126 SRV ES339 on 08.16.11 at 12:14 pm

#5 @ Moneta…
“Can someone please give us a definition of doomer because in my book, you’re a doomer.”

A doomer is one whose financial / economic views do not align with Garth’s view of the world economy, and in particular, his “it’s different here” views on Canadian banks (while better than most, they have significant derivative exposure that could turn very nasty)… but hey, it’s his bat and his ball, so he makes the rules.

#127 LAST on 08.16.11 at 12:24 pm

@condo sucker #20 unless you’ve got liquid assets north of a million don’t buy individual stocks, as Garth always says buy ETFs, it’s simple

#128 BC Genx on 08.16.11 at 12:27 pm

Great reading – glad I found this site. I too share your contrarian views on housing basing such belief that an asset class (albeit one that provides shelter) cannot outstrip income growth indefinitely. I practice law on Bay Street and my wife also has a great job and yet we are priced out of SFHs in the core because I heed the advice of financial planners on housing leverage/net income. I also believe the Argos will turn it around this year – how’s that for a lonely position?

#129 mid-Ontario on 08.16.11 at 12:31 pm

DELETED

#130 Daystar on 08.16.11 at 12:47 pm

#60Rob now in Nova Scotia on 08.16.11 at 6:12 am

Just to add to what Eutopia has to say, and it gets right to the heart of the widening gap between the rich and the middle class and poor, is that the U.S. debt issue is one of taxation/spending.

Lets look at it in these terms for a moment. We consider household debt to be “healthy” or “sustainable” when debt to income is at 3.5 times or less, meaning at 100% net income, we have earned our debt equivalent. Between 3.5 times and 5 times debt to income ratios, borrowers face an uphill battle if rates rise to say… 10% for obvious reasons. 5 times debt income at 10% means 50% of every earned dollar goes towards interest rates (without tackling principle or compound interest, how many of us can make it if half our income went to interest alone on debt?).

When the ratio grows to outrageous proportions such as household debt is in Vancouver at 8:1, 9:1, 10:1 ratios or higher (its so unrealistic now in Vancouver, I’ve stopped paying attention), interest rates around 5% are enough to cause widespread insolvency so interest rates factor huge in terms of what people can take on with debt. (the true crime in Canada is that banks lent to borrowers ignoring the obvious high ratios because banks wouldn’t have to pay for default in Canada, CMHC/government will, just as the U.S. bailed out Freddy/Fannie. Taxpayers have or will get hosed over time and it matters, trust me)

You are right, Rob. It is a mathematical equation but it doesn’t just stop with household debt, as we well know. The integrated systems of banking factor 3 main types of debt: Public (government), household (mortgages, lines of credit, credit cards), and corporate. There too, debt to income ratios apply in much the same way, but with government, income is generated by taxes, royalties and one time sales of assets such as crown land. With old nations of long history, often there is no crown land like here in Canada, to sell off and as such, like with nations such as Greece, debt to income ratios at the public (government) level become much more sensitive so having government assets definitely matters.

Comparing BC for example to say, Alta or Sask where BC is 96% crown land and the southern half of Alta/Sask is more than 96% privatized makes a difference in terms of how one can view public debt and naturally, as risk rises, so do interest rates which further exasterbates debt issues.

Getting to the U.S. debt problem, while it is perceived that public debt is high (roughly 5 times income which, like I say, can easily drop if the U.S. raises their taxes especially on the rich) and household debt is high (roughly 1.5 times debt income… high but the poor can’t borrow and the middle class is bearing the brunt of it, the rich can be taxed here without causing solvency issues. Think for a moment… the rich, I mean truly rich folks don’t carry mortgages. They can pony up the dough more easily than anyone, its just that they don’t want to and they have tremendous political power) and corporate debt to income issues are not so disconcerning there either. Garth has a large point concerning the health of large cap corporate profits and balance sheets (‘course, I wouldn’t want to be RIM facing Apple right now, there are winners and losers in the markets to be sure), corporations are doing well in a sub zero interest rate climate (when they have access to capital, that is) so… the key is balance.

By balance, I mean fair taxation. Tax the rich as much as the middle class, and income soars potentially back to public debt ratios of 3 times income in the U.S., highly sustainable and low interest rate provoking. Its why one can never bet against the U.S., they have the means to get themselves out of their debt issues quickly, but….

What you are in reality witnessing in our governments is the wealthy excerising their power through taxation. Wasn’t anyone paying attention to GWB’s tax cuts to the rich at all? And the mantra chants of how social programs are too costly and unaffordable, where do you think this mindset spin comes from, the voiceless poor?

Should the gap between rich and poor continue to grow as Garth believes (and I do intitially), only three things can sustain the tax imbalances I speak of: media lying its asses off (and actually believed by the masses because the masses are too doped up or dumbed down to get it), Two party systems in government are both bought out by the rich (its my belief that this is the case in the U.S. and the ruling party in Canada is bought), or voter apathy, as a consequence fuelled by the fact that our incumbant parties are in fact, bought by the rich or in essence and summary, the rich continue to be greedy, stingy, miserly and hoard their stink piles of wealth toward their own peril, regardless of the warning signs.

Now…. what I see in my crystal ball is that the rich would rather see riots and social unrest than pay higher taxes. The rich will stall, delay, procrastinate even when they know its best for themselves to pay higher taxes because thats what happens to people when they become rich. They can never have enough… y’know? (and oh, most of us don’t ever think we will react this way, that affluence doesn’t condition us to want more growth/preservation of wealth, that we won’t “hoard” if our humanity is tested in this way? The weaknesses of human nature know no boundaries, faithful readers) It is for these reasons that I see a painful end (scratch the “end” word, try “conclusion”) coming myself but we are not there yet. It is a mathematical equation, after all. We are not there yet, but we likely will be some day because the collective human race really isn’t all that strong. Our weaknesses are widespread and ugly and perhaps so, our weakness to our own predatory nature of exploiting the weakness of others, the greatest weakness of us all.

And… if thats unsettling to you, all this talk of weakness and apathy and social “conditioning” and doom and gloom fulfilled because of greed and hoarding of wealth then learn from it and do the opposite. Become strong within yourself and take the fair taxation message to the masses should you ever become ready to lead. Don’t hoard your wealth or kindness. Recognize the simplistic truth that not all truths can be written on a single page. It may take a blog going on and on… and on to reveal but a piece of it, but a very important part of it just the same.

#131 Nemesis on 08.16.11 at 12:57 pm

…” a quiet and difficult drop in the standard of living, and remind everyone what happens when you believe TV.”… Hon. GT

There’s an old saying in TheShowBiz, GT – “No one ever went broke underestimating the intelligence of American audiences.”

Accordingly, with Perry&Bachman gaining traction and that well known ‘quality retailer’, Walmart reporting its ninth consecutive quarter of declining US/domestic sales I wouldn’t be popping the corks on too many Clicquots. Yet… ;)

#132 Daystar on 08.16.11 at 1:03 pm

Ah yes, looking at the mistakes in my previous post now. Debt to income ratios, is that net or gross, never explained it. Its gross income:

http://en.wikipedia.org/wiki/Debt-to-income_ratio

I was murky with no mention of the word “annualized” as in annual income but for some reason, I’ll roll over and sleep on it. Wups, busy now, y’all have a great day!

#133 Steven Rowlandson on 08.16.11 at 1:16 pm

Did we just move to Britain? Is your gold sending you a monthly cheque yet? — Garth

No monthly check but it has been appreciating in value for the last 17 years by an average of +10%PA.
Not too shabby for a barbarous relic.
Thats just my situation FWIW.

#134 arctodus on 08.16.11 at 1:22 pm

contrarian Garth?……I don’t think so……

Even if you believe your book (and talk it) the basis for decline is non linear one way event. It is not driven by fantasies of keynesian economics run wild (although they have), it is not because we are massively overindebted in the fiat currency sense (although we are)…it is not because of “moral decay” (although we have that in spades)…..and it is not because we watch to much CNN (or “lord” forgive the CBC).

It is so utterly simple at its base (and so convoluted by the time it hits the developed worlds collective psyche) that we do not even see it right before us.

We are beginning the downslope of oil production on a planetary scale.
With that fact economic activity will slow (and all the attendant issues that people actually see will occur…..widening rich/poor gap,
debt crisis worldwide, even world war (hey even Krugeman is wanting this…and he won a nobel prize….funny that)

Get over it.

Most people have no idea and do not want to be told.

There are no doomers on here. Ya’ll don’t know what doom is…..but it will come for us all…slowly, creeping into our standard of living, our expectations of the future, our vaunted view as a chosen species…..

World Made by Hand….closer every single day….

#135 Daystar on 08.16.11 at 1:25 pm

#98Echo on 08.16.11 at 10:17 am

I like what you have to say, but its the herd that worries me. They are the one’s with the numbers and they don’t need the security yet.

#136 WaterlooResident on 08.16.11 at 1:27 pm

DON’T BUY STOCKS, NOT NOW:

“Market in Death Cross Mode: Stay on the Sidelines Says Louise Yamada”

( http://finance.yahoo.com/blogs/breakout/market-death-cross-mode-stay-sidelines-says-louise-152153683.html;_ylt=Aqm1pPWZBVKiUovmucJDDy67YWsA;_ylu=X3oDMTE1bDI2MGprBHBvcwM0BHNlYwN0b3BTdG9yaWVzBHNsawNtYXJrZXRpbmRlYXQ-?sec=topStories&pos=1&asset=&ccode=

Louise Yamada? Really? — Garth

#137 Peakoilist on 08.16.11 at 1:29 pm

#92 Utopia on 08.16.11 at 10:00 am
What you are missing is that debt represents very long term obligations of governments and their people and that we will eventually see a recovery and grow our way out of the problem.
======================================
Bwa ha hahahahahahahahahaha gasp, snorkle, hahahahahahahahahahahahahahaha. haaaaaaaaa
Its time for somebody to up the meds !

#138 bill on 08.16.11 at 1:32 pm

echo
do you see any weakening of the stock price ?
I am not that tech savvy and would like to compensate for that by getting rim cheaper than the current 26 buck or so price.
thanks

#139 gumshoe on 08.16.11 at 1:33 pm

majority of markets have positive technicals setting in……don’t buy until I’m sitting pretty OK?

#140 Shane on 08.16.11 at 1:34 pm

Garth, Media just came out today again and said Toronto red hot housing market is still sillizing!! till the end of 2011 through to 2012…not sure what to belive anymore???

Shane

So what? Today does not forecast tomorrow. — Garth

#141 Blacksheep on 08.16.11 at 1:36 pm

Ya, No one saw this coming:

The leaders of Germany and France are proposing collective governance for the euro zone led by the European Union president.

Angela Merkel and Nicolas Sarkozy announced the proposal Tuesday after meeting in Paris, as new figures showed economic growth in the region all but stalled even before last week’s turmoil on the financial markets.

Sarkozy said he and Merkel want a “true European economic government” that would consist of the heads of state and government of all eurozone nations.

Link: http://www.cbc.ca/news/business/story/2011/08/16/merkel-sarkozy-europe-debt-crisis.html

take care
Blacksheep

#142 Dorothy on 08.16.11 at 1:37 pm

#87 Utopia – “Stop watching so much damn TV Dorothy.”
_____________________________________________
I agree with you that TV news gives us a very slanted view of society, and that things are often not as bad as they may seem after watching a daily diet of madness and mayhem. However, sometimes TV news works the opposite way and helps conceal ugly truths that their elite corporate owners don’t want the general populace to get too worked up about. In other words, TV is frequently used to manipulate public opinion about all sorts of issues.
However, for those of us who don’t want to be so easily manipulated, there are ways to conduct research to try to find out the truth behind the headlines, or see the bigger picture. And what I see is a world ruled by greed and fear, where those at the top maintain their positions of wealth and power by continually exploiting those beneath them. And although this dog eat dog kind of society has always been in place, ever since the dawn of civilization, history shows us that when it becomes TOO extreme it can lead to the demise of one type of civilization and rebirth of another.
If the world continues on its current path of economic self destruction, then huge societal upheaval in one form or another will be the inevitable result. But if those holding the levers of power start to consider what’s good for society as a whole, rather than just the narrow selfish interests of them and their powerful friends, it’s not too late to turn things around.
I agree with you that governments’ getting their collective fiscal houses in order by reducing their deficits is a necessary first step. But they must do it in a way that is seen as being fair to all; not by placing an unfair share of the burden on the less powerful members of society.

#143 Dood on 08.16.11 at 1:37 pm

Hi Garth,

I’ve been reading your site for over a year now. From my own research, I’ve thought that real estate is a bad investment since early 2008, when I sold my rental property in Calgary. I sold my own home last year, and shorty after was drawn to your website and have been an avid reader since. Your site is very informative and gives me a good chuckle.

I’m wondering why you don’t think stocks will crash though. Like emergency rates propped up the Canadian real estate market, QE1 an QE2 propped up the stock market. Will there be a QE3 and will it arrive fast enough? Companies are making huge profits, but it’s not coming from consumers. Where will all this future prosperity come from if not consumers, who face high unemployment and stagnate income growth in the face of growing inflation. I think something’s gotta give.

#144 Junius on 08.16.11 at 1:56 pm

#107 bigrider,

You asked, “Can it possibly be different here?”

Of course not. Only the timing can be different. Remember your JM Keynes – “The market can stay irrational longer than you can remain solvent.”

#145 Junius on 08.16.11 at 2:01 pm

#102 bigrider,

You asked, “I don’t believe we are a world class city for a number of reasons, but interested in hearing all viewpoints.”

It depends on your definition of World Class. In economic terms I think it would mean a city that is a global hub for economic finance and development. Based on this definition Toronto falls short as it is almost entirely a regional hub as the centre of Canada only.

It is not New York, London, Tokyo or Shanghai in regards to finance. It is not a major developer of innovative technologies like San Francisco, Seattle or Seoul. It does not have a fashion industry like Paris or Milan. It is not a gateway like Singapore.

It is less vulnerable than any Canadian city but not compared to many international ones.

#146 Utopia on 08.16.11 at 2:04 pm

#111 Peakoilist

And your comment shows your foolishness.

Every single debt will be eventually be settled by debtors, by creditor losses or a combination of the two.

You folks who look forward to a hyperinflation to save your sorry arses and are praying that all debt will be eliminated through the production of money to solve your woes and raise your house prices had better take cover now.

Salvation is not coming for you.

#147 bigrider on 08.16.11 at 2:07 pm

#102- Garth to Bigrider-“get some friends who are not Italian”

LOL ..yes no question Italians are RE crazy but I have many other friends of different cultural backgrounds and for the most part(certainly not all of them) are RE crazy.

One comment yesterday night during a poker game that left my head spinning and I kid you not I swear, quote ” ..no I don’t think RE will continue to go up as much as it has..it’s gonna cool..I think my house will probably just double more or less in the next ten years” Unquote.

Left me speechless..for about a minute..after which the game degenerated into a heated battle of words/opinions

#148 somejerk on 08.16.11 at 2:15 pm

Raise taxes and retire. — Garth

they must be pretty big ;)

(since none in power have any)

#149 bigrider on 08.16.11 at 2:24 pm

#142 Junius response to Bigrider as to why T.O is not a “world class” city.

All good points. I agree with all of them.

#150 betamax on 08.16.11 at 2:27 pm

#98 Echo: “not too far beyond today everyone, not just Corporate, is going to need a smartphone to function in society.”

Yes, but it won’t be a Blackberry. The “masses, the herd” you deride are vast majority buying, and they’re buying something else. Numbers matter, and it won’t be the first or last time that arguably good technology failed to achieve or maintain critical mass in the marketplace (see my name above). Thanks anyway for the sales pitch.

More letters from RIM employees:

http://www.bgr.com/2011/07/01/more-letters-to-rim-employees-rally-alongside-anonymous-exec/

#151 Utopia on 08.16.11 at 2:28 pm

To Daystar:

Love your posts. I don’t always agree with them but they are always thought provoking, very interesting to read and tell me that you have made the time to express some creative out of the box thinking.

#152 Cookie Monster on 08.16.11 at 2:30 pm

Hey Garth, I agree everything will be fine. One of your fellow (bearded) Nobel Prize winning economists has the solution. Global Space Alien Defense!

http://newsbusters.org/blogs/noel-sheppard/2011/08/14/paul-krugman-calls-space-aliens-attack-earth-requiring-massive-defens

I’m sleeping much better now knowing I’ll be safe.

Utopia, get help.

#153 Devore on 08.16.11 at 2:32 pm

#98 Echo

Don’t bet against RIM.

I am not betting against RIM, just not betting on it. The world is not black and white, with us or against us. I’m not convinced RIM is positioned to be a continuing threat in the smartphone (and, more importantly, beyond) space. Apple continually innovates by improving on and bringing into the market things that were previously not viable. They’re always pushing technology.

Your beef with security or privacy is irrelevant, because the consumer and end user does not agree with you. Hoping they will all change their minds, see the error of their ways, and rush out to buy a Blackberry is not sound.

Right now I see RIM as resting on their laurels and riding the corporate “security” coattails. But to get behind a growth company, you need to see vision and leadership and strategy. Milking the corporate sector and maintaining market share with what has been essentially a static product portfolio for years, is the stuff of utilities, and RIM does not pay like a utility.

#154 Utopia on 08.16.11 at 2:35 pm

#125 SRV ES339

“A doomer is one whose financial / economic views do not align with Garth’s view of the world economy…”
——————————————

OK, I finally hit a post that totally cracked me up and made my day a little lighter. Too funny and maybe even a little tiny bit of truth in it.

#155 poco on 08.16.11 at 2:39 pm

#59 WaterlooResident
My feeling is that Canadian real estate is stuck up on high prices for as long as interest rates are at emergency lows, and that will be for the next 2-3 years. Only once mortgage rates tick up at least 1%, maybe 2%, will home prices even begin to level off.
So get used to home prices going up and up and up 20% per year because for the next 3 years thats what we are facing here.
That $800,000 house will soon be $2 Million, like it or not.
______________________________________________

Please, Mr. WR, when you post anything concerning real estate, refrain from referring to it as the “Canadian real estate market” as you obviously know nothing of the status of the Van lower mainland market and many other housing markets in various BC locations.

Do you not read any of the posts submitted here from many of the people who closely follow their own area housing market and their findings ? Maybe you should– you’ll be much better informed
— postings from the island
— postings from different parts of the Okanagan
–postings from the tri cities (Coq-Pt Moody-Pt Coq)
–postings from the Valley-(Langley–Abbotsford)
All of these BC areas have seen price drops, and some since last spring (2010)( significant drops to boot)
I’ve posted on my findings within the tri-cities and it aint pretty–many owners underwater–many properties with numerous price drops and still no takers—if you don’t do your homework you’ll never know
–interest rates don’t matter any more —prices still dropping-
For me, and i think i can speak for many of us who do follow the housing market closely, your posts lack any credibility whatsoever with regards to the BC market–sorry

#156 Utopia on 08.16.11 at 2:40 pm

#122 dd wrote to Utopia…..

“Lots to say, judge, but failing to act. A “if only” investor”.
—————————————————-
Pay attention. I was referring to history long past. To be more accurate it was likely a decade or more before you were even born (if you are curious) and that gives me the rights to express regret about the past and should also tell you that experience has modified my position in the present.

#157 Devil's Advocate on 08.16.11 at 2:45 pm

What you (really) made on your home

MoneySense Staff, On Tuesday August 9, 2011, 10:04 am EDT

In recent years, homeowners have been feeling pretty smug about their investing prowess as they’ve watched home prices surge. But the costs homeowners face to buy, sell and maintain their homes mean they haven’t made nearly as much as they think.

In this example, we calculated your real profit — after expenses — if you bought a typical home in the Greater Toronto Area 10 years ago, and sold it this year. We assume that it was purchased with a 10 per cent down payment and a five per cent fixed-rate mortgage. The home would have cost $248,601 to buy in 2001 and today it would sell for a hefty $456,147.

So does that mean you made $200,000? Not even close.

2011 sale price: $456,147

Subtract:
• $168,434 for the amount still owing on the mortgage;
• $4,000 for legal fees to buy and sell;
• $22,807 in realtor fees for the sale;
• $159,265 for 10 years of mortgage payments ($1,327 per month for 10 years);
• $42,000 for 10 years of property taxes;
• $19,000 for 10 years of home maintenance;
• $2,211 for the land transfer tax when the home was bought;
• $24,860 for the original down payment; and
• $358 in provincial sales tax on the mortgage insurance.

Actual profit: $13,212

Plus, you got a place to live for the last 10 years, of course.
http://ca.finance.yahoo.com/news/What-really-made-home-msense-3611190498.html?x=0

#158 kitchener1 on 08.16.11 at 2:47 pm

Folks, stocks will crash at some point, you guys are missing the point that Garth is trying to make.

Stock markets go up and they go down– Garth is talking about long term hold in money markets

BUT

with active management that gets your stop losses in place and allows for constantly changing asset mangement so you are best posistioned to do well, either way the market goes.

The biggest money in the market is also the highest risk, day trading etc.. for most people, that is not an option.

Stop trying to relate your day to day lives and views and opinons on the stock market.

The stock market does not care– thats why when companies lay off people, stocks rise as it means more profit. Thats why when oil prices rise, the market rises as it means companies are producing and growing etc..

the dow can very well go up while main street person is hurting beyond beleif. Look at the DOW, US economy is not doing well, people getting foreclosed etc.. yet the DOW is doing relativly well.

Seriously– Smoking man as got it right when he talks about herd mentatility– it might not make sense but it does make $$.

Follow the big money otherwise known as the smart money== see what they are doing and replicate.

#159 Utopia on 08.16.11 at 2:55 pm

#111 Disciple wrote…..

“The war is not for land, oil, gold, or water. The war is for your mind”.
——————————
Actually that last line was a pretty smart comment and it is one that I wholly agree with. Good stuff Disciple. It should be framed.

I had a hard time getting through the middle part of your post though. I was laughing my head off after the first sentence and so I think I missed it all.

So the war is for our minds. Not bad. Is that your own?

#160 Robins on 08.16.11 at 2:58 pm

Vancouver real estate pimps are at it again.

http://preview.tinyurl.com/3gd6o5a
http://preview.tinyurl.com/3u7ju3h

#161 Evangeline on 08.16.11 at 3:20 pm

#142 Dorothy

((However, for those of us who don’t want to be so easily manipulated, there are ways to conduct research to try to find out the truth behind the headlines, or see the bigger picture. ))

That is very true, however most people only believe the information in their research that affirms their preconceived biases.

For example, if someone hates Sarah Palin, no amount of “research” about her will change their mind. Even though there is as much positive information about her out there as there is negative, the person who hates her will discount the positive and only believe the negative.

People who research with an honest and open mind on any given topic are very few and very far between.

#162 Moneta on 08.16.11 at 3:20 pm

Utopia:

10 years ago, when I was pregnant and announced to a business associate that I was pregnant again, not long after having had a son with a disability, she looked at me in disbelief and said: “OMG… You are an optimist after all!”

People see what they want to see.

#163 City Slicker on 08.16.11 at 3:21 pm

Garth you’ve been writing something everday for this blog since 2008. I don’t know how you keep the pace going.

#164 Macrath on 08.16.11 at 3:29 pm

Emerging markets, It`s not every day that we get a hot tip from Mr. Turner. Thank you Sir !

Time to do some research and get some growth in that TFSA.

#165 Utopia on 08.16.11 at 3:29 pm

#153 Devore said…

“Your beef with security or privacy is irrelevant, because the consumer and end user does not agree with you. Hoping they will all change their minds, see the error of their ways, and rush out to buy a Blackberry is not sound”.
—————————————–

Totally agree Devore.

I would go further. RIM just made a huge mistake in offering complete cooperation and compliance with UK authorities in tracking down the thugs who were “purportedly” using Blackberry devices to cause mayhem and arrange riots.

That was a red herring if there was one and just another way to undermine this great Canadian company.

Of course many other providers were also offering cellular services that enabled text messaging and voice for the roving bands of wilder’s and vandals.

But the news that Blackberries were being used went viral as though they held a franchise on the creation of spontaneous. Who heard that I-Phones were also implicated?

The folks at RIM fell into the trap like a bunch of fools.

Had I any input there I would have refused to cooperate and would also have challenged the faulty conclusions of law enforcement thus ensuring the sanctity of the device in customer minds.

I would be extending confidence that my product was secure come hell or high-water and telling my customers not to be concerned.

I would be on their side.

As it stands now,…..nobody can have confidence in that company anymore or be sure that it’s security protocols will not be violated every time there is a riot somewhere. Users cannot be certain that their texts and e-mails and voice calls will not be intercepted by law enforcement without legal permission.

They even talked about shutting down the system in England to end the crisis that was supposedly caused by the use of their products.

How idiotic was that? Just nonsense.

If that is not a reason to change service providers then I don’t know what is. I would dump my Blackberry in a heartbeat on that news and go with a reliable provider that could guarantee my service no matter what transpired in the world of mayhem.

RIM has hurt the confidence of its core user group and I believe they will learn to regret the public statements they made.

For the record. I do not use Blackberries any longer.

#166 Makaya on 08.16.11 at 3:33 pm

To #100 CSIS, THE SIDEWINDER, AND CHINA

In western countries, we have a hard time to understand how the Chinese government thinks and behaves. The strategic policies adopted by the ruling communist party have a 50 years time frame. In our western countries, it’s a maximum of four years, until the next election…

The Chinese strategy is actually very clear and predictable, for those who are willing to open their eyes and look at the facts. To understand the Chinese strategy, you only need to read Sun Tzu. Here are a few quotes from him:

“Be extremely subtle, even to the point of formlessness. Be extremely mysterious, even to the point of soundlessness. Thereby you can be the director of the opponent’s fate.”

“Hence that general is skilful in attack whose opponent does not know what to defend; and he is skilful in defense whose opponent does not know what to attack.”

“In the practical art of war, the best thing of all is to take the enemy’s country whole and intact; to shatter and destroy it is not so good.”

“The opportunity to secure ourselves against defeat lies in our own hands, but the opportunity of defeating the enemy is provided by the enemy himself.”

We are in a global economic war and China is simply applying Sun Tzu’s principles to fight this war…

Here is what China said about the downgrade of the US Treasury Bonds by S&P last week:
“China, the largest creditor of the world’s sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of China’s dollar assets”
(…)
“the U.S. must slash its “gigantic military expenditure and bloated social welfare costs” and accept international supervision over U.S. dollar issues”

After ruining the US with currency manipulation, China, is now telling the Americans how to manage their finances:

– ‘slash your defense budget while we grow ours’: Fri Mar 4, 2011 8:23am EST (Reuters) – China will beef up its military budget by 12.7 percent this year (…) The budget went up by just 7.5 percent in 2010, after a long period of double-digit hikes.

– ‘slash your “bloated” social welfare costs so that you will lose support of your population and hopefully social unrest will be triggered’.

In America and Europe, we are blind and naive. The massive transfer of wealth from our countries to China is not going to end anytime soon unless we start addressing China’s issue. It’s really exasperating that today, in the name of the “free trade religion”, we are not even trying to defend our economies.

Sir James Goldsmith got it right: “There is a divorce between the interests of major corporations and of society. When one used to say and believe – and probably rightly – what is good for General Motors is good for the United States. That is no longer true. Today [in 1994] the transnational corporations have annual sales of $4.8trillion. They account for 1/3 of all – the top alone account for 1/3 of – direct investment. Now how do they operate? They’re no longer linked to the United States, the American ones, or to France or to Britain. They operate by farming out their production to whatever company produces the cheapest labor, wherever they can get the biggest return on capital, and pay the lowest part to labor.”

He also expressed the solution in his speech to the US Senate:
“The alternatives are not just closing the market, becoming protectionist; the alternatives are not saying we are now going into protection and we’re going to isolate ourselves from the world, each one of them. The alternative is to have regional trading blocs which have similar economies so we’re not trying to make our labour forces compete with people whose labour costs 2 percent of theirs and thereby destroying them–but–and reducing their salaries and eliminating their jobs–but having negotiated bilateral agreements between trading blocs so that each region, each nation, imports those products that it needs, not those products that destroy its jobs.”

I would like to finish with these very wise words of him:
“The economy, like everything else, is a tool which should be submitted to, should be subject to, the true and fundamental requirements of society. (…) You cannot enrich a country by destroying the health of its population. The health of a society cannot be measured by corporate profitability.”

“The economy is there to serve the fundamental needs of society, which are prosperity, which are stability, and which are contentment.”

Enough with the James Goldsmith. Nobody cares. — Garth

#167 Devore on 08.16.11 at 3:33 pm

Oh hey, looky here:

http://money.cnn.com/2011/08/16/real_estate/buy_rent/

According to real estate web site Trulia, buying was cheaper than renting in 74% of the country’s 50 largest cities in July.

But how many are taking advantage and buying?

“It’s a personal decision, of course. But if you have a steady job and you are planning to stay for seven years or more and have enough cash to put 20% down and enough left over for seven or eight months of expenses, you’re better off buying in most places,”

Oh ok, I take it not very many.

h/t [email protected]

#168 Utopia on 08.16.11 at 3:40 pm

#152 Cookie Monster said…..

“Utopia, get help.”
——————————–
And here we go again with another of the fools.

Cookie Monster, your comment does not mean anything at all. What is the context? What is your objection? What comment are you referring too?

Don’t be so lazy. If you don’t like my remarks then address then directly and we can discuss it. I suspect you are not up to it though and you just prefer to leave vague meaningless remarks suggesting you know better.

Here is a hint. You don’t.

#169 disciple on 08.16.11 at 3:45 pm

#150 betamax…thanks for the RIM link. Great read…I see these same types of complaint at most companies, so what I ask myself is, “why don’t these people just start their own companies?” That would solve the problem for everybody. The answer is that we are discouraged from doing so, and it begins with our “free” education. We are trained to be obedient workers, never to be gracious bosses. No, that’s only for a selected few. And I mean “selected”.

#170 BrianT on 08.16.11 at 3:46 pm

#120Junius-??? These doomers post on this site every day and tell you exactly what to do-you don’t like the answer so you say they are giving up. Like the other poster said-just keep clicking your ruby slippers together.

#171 BrianT on 08.16.11 at 3:47 pm

#149Big-At last glance, the TO economy was the 4th largest in NA. Seattle is tiny, economically speaking, compared to the GTA.

#172 Neil on 08.16.11 at 3:56 pm

Good day Garth, just looked at TREB’s midmonth numbers for Aug. It appears 905 is propping up 416. Mid month May 2011 avg selling price 416 was $543.8K, mid month Aug 2011 avg selling price 416 is $443.1K. Is it too late to list?

Lifeboats are still available. — Garth

#173 MasterBootLicker on 08.16.11 at 4:01 pm

Out of engineered turmoil always comes more centralized power and control.
“Merkel, Sarkozy seek euro zone economic government”
Its easy to predict these criminals game plan because they write about it through all the government funded think tanks. Trilateral Commission , Council on Foreign Relations, etc. Consolidation of power into fewer and fewer hands without electoral input . But the trendy, hip yuppies on here who know everything will just take this as something else to laugh at.
http://www.theglobeandmail.com/report-on-business/international-news/european/merkel-sarkozy-seek-euro-zone-economic-government/article2131220/

#174 jess on 08.16.11 at 4:10 pm

dark market 600trillion : regulated market 5 trillion

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=7131

bart chilton crtc commissioner
For an example
http://www.ft.com/cms/s/0/dc5136aa-8633-11e0-9e2c-00144feabdc0.html#axzz1VDuAVQJj

#175 randman on 08.16.11 at 4:27 pm

Mike #53

LOL! Good one and simply put!

#176 Utopia on 08.16.11 at 4:49 pm

#161 Evangeline

Well said Evangeline. And so true.

#177 THE CHINAFICATION OF AMERICA on 08.16.11 at 5:04 pm

To Makaya:

Thanks so much for the detailed response! You are quite right about large corporations.

This, I feel, is exactly the reasons why early companies (i.e., hundreds of years ago) were essentially “authorized” to operate by the government…and their license would be revoked if they didn’t show evidence of public good.

Ahhh, the good ol’ days ;)

Most of America’s history is protectionist. This, I think, is why they stayed away from WWI and WWII initially.

This protectionism (mostly from European agents) brought them great prosperity…much of which we still see remnants of today.

Obviously, it is a “different” world now, but there is still something to be said for protecting domestic business through the governmental levying of tariffs.

Oh, and I thought you might like this video, after what you said about China:

http://www.youtube.com/watch?v=F-lZJni6qN4&feature=youtu.be

Looking forward to hearing more from you.

Food for thought ;)

P.S. Garth: “Somebody” does care. Unfair generalizations are below ya ;)

#178 Ultraumatic on 08.16.11 at 5:05 pm

DELETED

#179 Utopia on 08.16.11 at 5:07 pm

To all of you posters who come here regularly and to those who I don’t often respond to….the folks who offer great links and brilliant commentary on real estate and so many other issues

I can only say thank you and stay the course.

Sorry about so many posts I left today. This is my last.

It was just time to push back a little against the mountain of fools who are trying to overtake this great site and turn it into the same hogwash and dogs breakfast that is already available in abundance everywhere else.

Those fools are ruining the opportunity to carry on a meaningful, intelligent and reasonable discussion about R/E and our domestic economic prospects.

I encourage those of you with good minds and plenty of insights to reject the fallacious, ignorant comments that keep popping up here and let those fools know they are no longer welcome.

Not in our home.

#180 O.R. on 08.16.11 at 5:17 pm

Enough with the James Goldsmith. Nobody cares. — Garth

That statement is false and easily disproved. The poster cares. I care.

Then go to http://www.james_goldsmith_rocks.com. — Garth

#181 Daystar on 08.16.11 at 5:37 pm

#151Utopia on 08.16.11 at 2:28 pm

Ditto. Can’t always agree with you either, but I admire your efforts and creativity.

Getting back to where the world is headed, as I believe it to be the theme of Garth’s entry today… a double dip could occur or U.S. slipping into recession for sure. I think it will. Note, I said recession, not depression and thats a big difference. Sure, it will make stocks cheap and present new opportunities but like Garth has said, don’t put all your eggs in one basket, whether its real estate, equities, bonds, cash, whatever one invests in unless your pot is so small, the choices are few. And if I’m right and the world slips into recession, will there be a recovery to follow? Of course. Systems as we know it will not crash or end. No doom, no gloom (are we short? Can’t buy gas or oil? Can’t find groceries in the store? We aren’t there yet by a long shot).

Investors should take note of what happened a week ago in the markets. Bad news of sovereign debt worries from Italy, Spain… its not that these nations have hit a critical mass (well, in the case of Italy, its bad), its that the future prospects of their economies don’t look bright so more red ink is expected for years to come and I think, from a speculators point of view that if either nation goes insolvent, its quite possibly the end of the Euro. Germany/France will not bail out either of these nations and how wil the world adjust to the possible end of the Euro, or PIGG nations on their own? This could have a tremendous impact on money markets but its at least 2 or 3 years away, its not tomarrow.

Lets get back to Greece for a moment. Technically, (everyone uses the word technically to describe it) Greek bonds had to be “altered” to return their value. Its not a bankrupcy scenario where loss is total here, its a loss of an investor’s time. Did Greece go far enough to tax their own rich? They might not have. Did Greece go far enough to explain the numbers to their own people? Likely not. I doubt that the majority of politicians understood it themselves. Heck, if some of them would have understood their mess, they would spoken out long before (lets hope). The Paul Martin’s of the world, love him or hate him, are a rare breed.

So… whats happening is in reality, the obvious. The rich are undertaxed in the U.S., as it is in Canada because they are the most influencial and simply want it that way. Governments elected intially to represent ALL its constituents are found far too often to represent only the rich including especially so, corporate america and therein lies the problem.

My own outside the box thinking here is actually quite old, but needs to be applied to income classes.

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

And sure, there is government waste. Its easy to spot, especially with the right effeciency expert:

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

But lets not have blinders on shall we? Good God, corporations waste too and it all comes down to management.

America needs another revolution and this time, its one of which all classes are represented in democracy, not just the voices of the rich and affluent. In some respects, its already happening and has given birth to Tea Parties who claim the problem can be fixed by cutting spending with no tax hikes, the middle class has seen enough but in reality, it takes cuts and tax hikes on the rich to see it through. Oh, they will never publically run on a tax the rich platform unless they can win a landslide and actually deliver, but thats what it will take to fix their problems like as not.

Whats the middle road here to fix america’s problems, Garth has already touched on it. The U.S. could introduce a consumption tax on everything like the GST and it will likely take this for the U.S. to show the world they have the political will to get their fiscal house in order, but it lets the rich off the hook in intangible ways and in the end, they will have to at some point raise taxes on the rich regardless if they want to increase government revenue and they have to, in my opinion. Its either cut social spending to the bone and watch London riots spread to New York and L.A., and/or cut defense spending dramatically (and we know how God, guns and pro “family value” lovers would never allow such a thing, “homeland security is soooo important y’know”, we must be militant with our values) and/or raise taxes to the rich or all three and if I was prez, I would do all three in an effort to actually balance budgets for a change and restore world confidence but to what degrees? Try a balanced one but it has to in some way preserve the american dream for all classes and that dream is eroding in america, sadly. The signs and lack of wonders are there.

And war? Someone said our problems will be fixed by war…. like what kind do we have in mind. Iran this time? Iraq and Afghanistan wasn’t expensive enough, we need the mother of all wars to borrow and spend on? (key word, borrow) Hey, we can talk peak oil all we like and how the U.S. is an oil empire, blah, blah, blah, but the true future is electric cars and it won’t be the U.S. that leads the way first. It should be, but it won’t be. It will be China (God, I so love the future prospects of rare earth) and to the victor goes the spoils. Sorry, can’t help but say it, I’m an optimist.

At what point will the richest taxpayers of America finally admit that if they don’t pay their share U.S. dollar devaluation will hurt them more than taxes ever could? This is what the rich will face if they don’t bite the bullet and I can’t begin to stress this enough. Its either that or the social fabric of their nation continues to break down some of it quickly, some of it quite slowly, but it all spells decline and one of the nations to truly watch going forward is England.

How England rebounds from years of overspending and undertaxation to the wealthy with social cuts, structural unemployment and only modest tax increases to the wealthy (they could have gone farther), time will tell but its a nation to watch because the same medicines are needed here perhaps in the same strong doses or even moreso with increased taxation to the wealthy and the public reaction in England is a good signal of what americans can expect going forward not so much because U.S. politicians may some day tax with actual representation the way David Cameron is trying, but because society will break down regardless if their debt mountain climbs too high. The U.S. simply cannot afford to run double digit deficits for the next 2 years, never mind 5 or 10. S & P rated U.S. treasuries wisely recently with this in mind.

People must at the very least admit, no matter how optimistic they are, that the gridlock that is happening in the U.S. and the massive government deficits is creating instability in the world markets and its as easily seen as the flight of gold. If the markets continue to run up ’cause money is cheap and then correct ’cause its “overbought”, whats Bernanke going to say to “stablize” the markets next time? Will the “markets are oversold” mantra work if numbers turn negative? Nope. They won’t. But as Garth atests, we’ve been here before in 1932, 1945, 1973, 1987, 1998, 2001 and 2008..

As an aside Utopia, just to make a mother of long posts, I obviously disagree with your stances on public wages in the areas of teaching. Perhaps its because my sister is a principal of a school now having taught for 14 years, administrated for a couple and acquiring a second degree in child psychology. Her insights have obviously rubbed off on me. I see Canada as scoring high on international student evaluations such as PISA:

http://nces.ed.gov/surveys/pisa/

For a reason and it didn’t come by being cheap. It won’t come through offering teachers a 5th of what they currently make (it doesn’t strengthen a long term argument to exaggerate) with the idea of paying 1st world teachers with 2nd world wages. As much as the corporate world wants total market share of any pie, the simple fact is that corporate america simply does not have the resources, humanpower and systemic knowhow to compete with public schools, even ones as large as Cisco. Education should not be “for profit” to begin with or we literally get what we pay for (greed and fear included) and there has to be some level of understanding as to what 4 years or more enrolled in secondary/university actually costs not just monetarily but in terms of income potential to acquire a teaching degree so its like this.

Should the day come when private can provide just as good teaching as public in terms of schooling, then let the completition begin (and in some ways, U.S. colleges are like that but how many students get there not because they were talented enough but because they were born into it?) but from where I am standing, with a sister who taught special Ed for 14 years and spent her career identifying students who slipped through the cracks for the myriad of reasons one would expect be it fetal alchohol syndrome or genetic disorders to something more simplistic such as hearing loss or poor vision, whatever the the barriers to the increased awareness it takes to soak like a sponge knowledge may be, one of the interesting deficiencies that came up with students needing special help came from students who were subjected to private schools. You tell me why, but basically I’ve already alluded to why that is. Simply put, they don’t have the resources or systems in place to compete.

Just like any other business in introspect, we don’t want to pay too much, or pay to little regardless of how “cheap” we may have a tendacy to be because we know what “too little” means, it means decline/insolvency. Going forward, unions will have to pay their share as we all will, from the poor to the rich. Rollbacks, public as well as private will need to occur, naturally, as challenging times dictate but it doesn’t begin or end with incomes be it public, household or corporate. Cutbacks in spending aren’t the magic bullet either. To heal U.S. economic woes truly, it begins with “taxation with representation” and efficient spending going forward with investments in the industries of the future (efficiency itself).

Could you expand a little on these themes, please? ;-) — Garth

#182 Nostradamus Le Mad Vlad on 08.16.11 at 5:38 pm

#58 Dorothy — “The scariest thing these days is the fact that the future is so very unpredictable.” — That’s the great thing about life — no one knows what’s coming tomorrow, next month or next year, whether the Shake ‘n’ Bake ‘quake (the SAF + Cascades) shift into high gear (they’re rumbling presently).

I much prefer living an unpredictable and unplanned life, than to be doing the same old, same old every day. How thoroughly boring!

#69 Promised Land — “I think a European default and the break up of the Eurozone is now part-priced into the market”

Interesting take. Could be that is why David Cameron is being pressured to have another public referendum on whether the UK joins the Eurozone.

Scotland (Quebec) clearly wants separation, not sure about Wales and Ireland. But if the UK is forced to join, as was Ireland, TPTB could then bring down the whole house of cards.

#91 Sky — “Two words : Agenda 21 .” — ‘Sright. At least we do have warning of some of the ‘known’ stuff. It’s just the ‘unknown’ none of us know about (yet).

#136 WaterlooResident — Looks like it’s a good time to jump in, then. After all, weren’t these the same so-called experts who encouraged buying Nortel and Bre-X?

I would rather take a chance and get in.

#166 Makaya — “In the practical art of war, the best thing of all is to take the enemy’s country whole and intact; to shatter and destroy it is not so good.”

China has been doing that for a while now, ever since the US started borrowing way beyond their means. The Chinese actually make deals with others, the US just bombs and ultimately, destroys. See Iraq, and most of the MEast.

#173 MasterBootLicker — “Out of engineered turmoil always comes more centralized power and control.”

Well written. See response to #69 Promised Land’s post.

#183 Makaya on 08.16.11 at 5:44 pm

Enough with the James Goldsmith. Nobody cares. — Garth

Maybe it’s because nobody cared about what he said back then that we’re in such a mess today… It’s never too late to care!

I bet you also wish more people would care about what you have to say about Real Estate in Canada in order to protect their financial future and avoid personal disaster. You’ve rightly tried to influence Canada’s policies from the inside, as a politician, and from the outside, as an influential blogger. You do so because you care about your country and its people. So do I.

I’m not anywhere as important or influential as you are, I’m just an average citizen. I have strong belief on the root cause of what is happening to our economy now and I’m using the tools that are at my disposal to spread my message, the same way as you do.

Nobody has more eloquently and more accurately diagnosed the root cause of our current economic problem than JG, and this is the reason I’m quoting him so often.

I’m actually glad that a few blog dawgs actually cared about my comments on your blog and took the time to watch his videos, listen to his speech and read the quotes. A few people were thankful for the comments I posted yesterday.

I’m not here to convert anybody to a new religion, be it gold or anything else. I’m providing what I consider relevant information to help readers make up their own mind.

Thank you. — Garth

#184 Imstupid on 08.16.11 at 5:45 pm

102 echo

I respect your post. It does have merit, I agree that the security on rim is better. But

1 the masses pay the bills
2 it’s easier to amp up security than it is to create new product
3 I’m not saying that restructuring is bad, if done to streamline business to generate more profit. Rim is restructuring because the business model is failing.

You could agree or disagree, that’s the beauty of the market. Only time can tell what the right choice is. They could very well come up with the next big thing and shares can go threw the roof but I don’t buy shares on theoretical possibilities.

Now that’s not to say apple is any better. The problem with them is the share price, too expensive. I’m not saying it’s not worth it, at it’s current price I would have too many eggs in one basket. If it had a 5-10 to 1 split maybe I would look at it more. At $380 a share I don’t dare.

#185 Timing is Everything on 08.16.11 at 6:03 pm

Bienvenue a Montreal…

http://tinyurl.com/4xdh4nw

#186 Standard Deviation on 08.16.11 at 6:12 pm

This autumn the world will see its 7 Billionth person. Despite America’s trials and tribulations its role in consumption throughout the world is declining. But what it is giving up is being taken up by others. I see some rough patches ahead but armageddon, financially speaking, still seems a long way off.

#187 Jwb on 08.16.11 at 6:16 pm

Auction this morning on Maui. 5 bed, 4 bath built in 2006. Sold new for $1,038,000. Auctioned this morning for $525,000!

#188 bigrider on 08.16.11 at 6:24 pm

Nobody reads posts more than a couple of paragraphs long.

Keep it short and succinct.

#189 jess on 08.16.11 at 6:42 pm

Perhaps mr. buffet fears his own fellow americans

Op-Ed Contributor
Stop Coddling the Super-Rich
By WARREN E. BUFFETT
Published: August 14, 2011

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

#190 Peakoilist on 08.16.11 at 6:55 pm

#146 Utopia
Sorry, nope …that wan’t what I was thinkin’.
c’mon it was funny. Who knows who the fools will be…maybe all of us.
I am in very good physical condition, meditate regularly, cure myself naturally, am a vegetarian,…( a good survival mechanism )
you my friend are a chain smoker and will probably die earlier than later.
who’s really smart and knows everything these days?
NOOOOBODY !!

#191 Conflicted Pumper on 08.16.11 at 6:56 pm

#116 Utopia –

First off, neither of you is doing better than me. I promise you that.

OK, I’ll bite. How good are you?

#192 dd on 08.16.11 at 7:09 pm

#181Daystar

Wow. Hope you didn’t take too long composing. Too long so I skipped over.

#193 waterloo Resident on 08.16.11 at 7:14 pm

#155 Poco:

(( “Please, Mr. WR, when you post anything concerning real estate, refrain from referring to it as the “Canadian real estate market” as you obviously know nothing of the status of the Van lower mainland market and many other housing markets in various BC locations.
……………
I’ve posted on my findings within the tri-cities and it aint pretty–many owners underwater–many properties with numerous price drops and still no takers—
…………
–interest rates don’t matter any more —prices still dropping- ” ))

Yes, you are correct about that, sorry, I’m sort of in a vacuum when it comes to information, that’s why we really need input / info from enlightened individuals like you, thanks for your time and your efforts. I really don’t know much other than the space between Kitchener-Waterloo and Toronto, and even then all I see is prices going up and up, I have not seen anything come down yet.

#194 April on 08.16.11 at 7:22 pm

Poco-#155
Right on Poco…love your posts… Also New West condos sitting on market some up to 7 mths … taken off the market.

#195 TurnerNation on 08.16.11 at 7:31 pm

Globe says experts warn of possibly false TSX recovery

Tuesday August 16 2011 – In the News

The Globe and Mail reports in its Tuesday edition that on paper, stocks look like bargains in the wake of their recent sell-off. The Globe’s David Parkinson writes that may not be the case. On Monday, stocks extended their recovery from the two-week plunge that shaved 14 per cent off the S&P/TSX composite and 17 per cent off the S&P 500, as investors continued to be drawn back to the market by what look like highly attractive stock valuations. Even with the gains of the past few sessions, the S&P 500’s “forward” price-to-earnings (P/E) ratio based on earnings forecasts for the next 12 months is around 12 times, well below the historical norm of about 15 to 16 times. “[The recent market slide] did leave the valuations looking more attractive,” said George Vasic at UBS. These valuations need to be taken with at least a grain of salt. The slowing economic outlook has made earnings forecasts highly questionable. David Rosenberg at Gluskin Sheff said that if the U.S. were to fall into a “garden-variety recession,” the typical slowdown to the earnings outlook that would follow “would mean that the [market’s] forward [P/E] multiple is closer to 16 times” at current levels.
© 2011 Canjex Publishing Ltd.

Are we supposed to be impressed because something is in the Globe? Why did you post this promo? — Garth

#196 Echo on 08.16.11 at 8:13 pm

#135 Daystar:

Yes, the herd NEEDS the security, they are just too out of it to understand what’s happening. Even if they don’t and keep blindly falling into Android’s trap and the iPhone touch toy (although a beautiful computer to have for fun, just not a business phone), their numbers won’t compete with the need of the business world with respect to Blackberry’s. Read it again? 99,102,107. The corporate world is larger than the guy on the street, worldwide. Many countries citizens don’t have smartphones but they have corporate security needs and need to function day to day with smartphones.

One more thing ~ one day you’re going to wake up to a trend towards the zombies awakening and realizing that they no longer own their private life at all. (happened long ago, you may want to try http://www.scroogle.org/cgi-bin/scraper.htm ) , close your Facebook account, get a Blackberry, etc.

When that happens watch the wave. Just like everything else, they’ll be arms outstretched, stiff legs, walking towards the tech that doesn’t do such bad things. Even before this happens, there is NO phone that can do what a Blackberry does. Remember, try to see beyond in front of you and ask yourself where everything in your house came from, on your table, the screen you’re looking at, the car in your driveway, and the TV you watch tonight, and your Bank account. None of those people will use Android or iPhone to get through their day because they can’t.

Trust me, don’t worry about the herd. You’re brainwashed by the media. Not your fault. Even the 9930 reviews, the ones that aren’t perfect, are not written by a business person, they’re written by a herd member that has no clue about espionage or Corporate requirements re security or software platforms. It’s like a comparative toy to them in the least sophisticated manner, and it still gets rave reviews. They just leave out the over the top points like I’m making because they’re ignorant of the corporate world.

#197 Echo on 08.16.11 at 8:20 pm

#138 Bill:
I see the price sticking a bit only because of the new platform on it’s way, QNX, and a lot of people in the know know about it coming soon. Sort of mainstream news to those who care to find it.

On the other hand, a lot of Corporations, and also Blackberry addicts, will by this OS 7 series because it’s awesome. Corps will buy this, then the QNX. It happens.

Bottom line ~ for me, buying RIM today will get me a nice profit in the long run, and maybe even in the short term. No one can argue with what I’m saying about there not being another phone to compete with it for business. It’s a joke. What you should watch for is if by some miracle Apple makes the battery removable and adds a qwerty. Then it will get HUGELY interesting! Android? Doesn’t have a chance in ‘real’ corporate. Even having a Gmail address puts you on the shitelist in Corporate, and for a very good reason.

#198 Echo on 08.16.11 at 8:25 pm

#150 Betamax:
Not a sales pitch, that’s insulting. People like you act like the Corporate world doesn’t exist as soon as you hear the word “herd”. Sorry, but it does, and it’s gigantic. You will never be able to say here that there is a smartphone other than Blackberry that can be used in the Corporate world. Why? Because it doesn’t exist. You are also forgetting, and underestimating, how many regular citizens love Blackberries and are loyal. The new OS7 and QNX coming to the phone, will keep them there.

Finally, I’m very hip to the herd mentality in tech, study it a few times a week Senor Betamax. You’re not God, just a techie. ; )

#199 Nostradamus Le Mad Vlad on 08.16.11 at 8:25 pm


Thought For The Day: “Confidence is going after Moby Dick in a rowboat and taking the tartar sauce with you.” — Zig Ziglar
*
Buy Eurobonds! They’re all broke! Hmmm; Imposter Funny to see how easy big biz. is fooled; 4Closure Fraud Rampant across the land; Four min. clip Pentagon pensions gonzo? US$3.7 trillion for wars “Until you look at the $27 trillion the Mortgage-Backed Securities Fraud cost us all!” wrh.com; Four Choices for the EU in the next few days; Big Money Break the monopoly and have a revolution!

Gold Hedging A warning? Silver Hedge yer bets? Rich and Poor Law? There’s a law for just about everything else; 8:10 clip Govts. rob taxpayers (duh);

China vs. US It had to happen sooner or later; 5:30 clip Social media and social unrest; Libya “Is Gadhaffi losing? Au contraire.”; FFs Govts. freely admit they do invent them, such as bin Laden and Sadaam’s nook WMD; Michelle Bachmann Oh dear. “Today is actually the anniversary of his death!” (Elvis). wrh.com; Cdn. view Who will run against Obama? Marie Antoinette or the male version, but using roughly the same methods; Cluster-bomb industry funded by UK banks; Protests / Revolutions The seeds are being sown; Growing Lettuce Atlanta is doing it, as well as plenty of other people.

GoM “You just wait until the Fukushima radiation gets into those north Pacific fishing waters. That will make two major food production areas destroyed by reckless money-junkies who shortcut safety to save a few pennies. That’s when the food riots will begin!” wrh.com; Police State David Cameron Vol. II; 3:07 clip Volcano Ring Around the Collar.

#200 Junius on 08.16.11 at 8:27 pm

#171 BrianT,

You said, “The TO economy was the 4th largest in NA. Seattle is tiny, economically speaking, compared to the GTA.”

The subject was World Class. Seattle has Microsoft, E-Bay, Starbucks and host of other world class companies. What does Toronto have that is comparable? Toronto is a regional capital, not a world class economic hub. Please try and keep up.

#201 Echo on 08.16.11 at 8:28 pm

p.s. As for the article, I follow all of that as well. Nothing new, and check out the date. It made for very good news because it was “Blackberry”. The big (real) meeting was a success. How about you buy whatever stock you want. : ) I’ll do the same.
Peace.

#202 Echo on 08.16.11 at 8:41 pm

#153 Devore:

First of all, blessed Apple stole almost all of their so called “new” tech for the iPhone from Nokia, primarily the business capabilities of the E71. Do your homework. ; ) Lawsuits abound.

It’s not that the consumer doesn’t “agree”. The consumer is totally ignorant, which is why the pushes are coming so fast. There’s a huge agenda, it’s working, but it may implode because the herd is as fickle as it gets. They also DO care about their privacy, they will wake up one day. It’s happening to a degree already.

That’s what’s irrelevant though. No one seems to understand how big the corporate world is. If you don’t then let it rest. Buy whatever stock you want. : )

“Hoping they will all change their minds, see the error of their ways, and rush out to buy a Blackberry is not sound.”
I never said anything so foolish. I don’t really care what they do actually, Blackberry will still be a great stock to invest in, and that is the point I’ve been making.

“Right now I see RIM as resting on their laurels and riding the corporate “security” coattails.”
Then you’re not paying attention, sorry. An educated opinion is best.

“you need to see vision and leadership and strategy”
True, and they are doing that in spades right now. Again, you need to do your homework. Keep up.

“Milking the corporate sector”
This has to be the funniest thing you’ve said. Thanks. : ) The corporate sector doesn’t have to be milked. There is only one choice for a smartphone due to tech reasons and on top of that the Blackberry is a beautiful device for business. The other reason it’s funny? Millions of Blackberry users all over the world have nothing to do with the corporate world. lol They just love the device because they should. With the new advancements in the OS, even the 7 which won’t last long due to further advancements coming, they’ll be flying off of the shelves.

Man, there’s a lot of bs based on anything but the facts out there.

#203 Utopia on 08.16.11 at 8:42 pm

#191 Conflicted Pumper to #116 Utopia

“OK, I’ll bite. How good are you?”
—————————————–

Well, on a Triple-Dog-Sunday-Dare you might just get to see me naked in the shower (even though I have already reserved that special privilege for another poster). On second though……nawww.

It is not going to happen. Just trust me. I have a set.

#204 Echo on 08.16.11 at 8:48 pm

#165 Utopia:
Actually, it wasn’t a shot in the dark, it was the BBM that was being used and the city was out of control. As far as whether that was right or wrong, one thing for sure is that the mainstream media went nuts with it trying to rile up people like you. It worked I guess. Most don’t consider it such a big deal as it was highly circumstantial and just made for good copy. It was a very tough call on their part, no doubt. You need to think laterally, have all of the facts. It also sounds like you are taking these other comments, which don’t have the real facts in them, and building on that.

Again, don’t buy RIM stocks, and yes, toss your Blackberry. Go with the idea of everything you do being easily grabbed for public consumption. And, you’re obviously not in a boardroom talking about competitive things (or you wouldn’t have tossed it out), so you’re free to do whatever you like. If you don’t already use an iphone, just wait until you have to send an urgent email that’s highly detailed. Should be fun! lol

(written by a Mac head, never going back, but also use PC’s all of the time, so oh god, please don’t pigeon hole me there as well)

#205 Echo on 08.16.11 at 8:52 pm

#169 Disciple: lol You guys really need to catch up with news that’s more current than 6 wks old in the world of tech, and yes, I knew all about that stuff.

It’s easy to tell that you’re part of the herd, not your fault. Anything mainstream says, and on top of that a few rogues from Blackberry, and woohoo, down goes RIM!

Gee, I hope not. I have to work.

#206 Echo on 08.16.11 at 8:58 pm

#184 Imstupid:
1) The masses include the corporate world, bigtime. Then there’s the individual BB addicts.
2) It is NOT easy for Apple to develop a removable battery in the iPHone. It is a HUGE issue. They are out of the business market unless they do. Do your homework. ; )
And Android? IRRELEVANT because the last thing Google will be doing, EVER, is dealing with security concerns. Their agenda is the opposite of that. Hmmm, that leaves Blackberry in the HUGE corporate world, worldwide.

Companies restructure all of the time, they made some minor mistakes in the past re leadership but no bigtime investor takes that as a negative. Add to the the need for BB out there and well, like I said, I’m buying. : )

#207 Echo on 08.16.11 at 9:01 pm

Everyone, sorry about the subject not being about R/E!
I was only trying to talk about facts relating to BB and the impact on the economy re smartphones in general and I’ve had to defend it ever since. Well, I’m outta here so go for it. I’m putting my garbage can lid down. : )

#208 Hoof-Hearted on 08.16.11 at 9:19 pm

#92 Utopia

http://www.youtube.com/watch?v=tGk5ioEXlIM&feature=related

The American Dream Film-Full Length (30 minutes/animated)

Quite good…they should show this in schools

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

Much debt cannot be paid….ever….moreso now than ever.

#209 Utopia on 08.16.11 at 9:26 pm

#196 Echo on 08.16.11 at 8:13 pm

Are you kidding??!!!

Walk any street in this country and you will discover the hottest tech being dumped cheap is Blackberries. I used to pay 75.00 dollars each (second hand) and sent them to friends in Africa as gifts.

Times have changed dramatically of late.

Overnight I can get them on the street for ten bucks apiece no questions asked. Everybody wants Google, Windows and I-Phones now.

Blame the negative press, customer reviews and the poor touch-screen interface on Blackberry phones. They need to seriously get with the times and partner-up or they will be history soon.

I mean it. That company is dead if they don’t marry-up and marry a real leader.

And soon.

#210 vreaa on 08.16.11 at 9:31 pm

“Dull”, “Steady”, and “Flat” Canadian RE Markets? [Highly Unlikely]

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

A speculative mania never ends with a flat, boring market; not even in Canada.
We suspect “Dull”, “Steady”, and “Flat” are hopeful terms being used by vested interest insiders who are seeing the first signs of coming weakness.

#211 MasterBootLicker on 08.16.11 at 9:40 pm

200 Junius

Toronto is the largest hub with regards to head offices of mining and natural resource companies in the world. There are more IPO’s , Venture Capitol, bought deal etc in the resource sector than anywhere else. Ever hear of the TSX. With inflation ready to do a scorched earth attack on anything retail. I think natural resources trump coffee ,pc’s and internet sales. You’re falling behind

#212 Nemesis on 08.16.11 at 9:41 pm

#110/Sharpen The Saw…

Correct. “Nobody knows anything.” [thank you, William Goldman]

The above quote refers, of course, to ‘knowledge’ in the absolute/epistomological sense, STW.

However, a good social scientist is never daunted by the prospect of of a little field/’micro’ work.

Which is, unsurprisingly, where you get down to the real ‘nitty-gritty’.

Seldom pretty [especially of late].

PS – quick topic change, STW – don’t beat up on GT too much – you should see the way his wife looks at him… Most guys should be so lucky. You can’t just buy that shit [pardonez moi, SVP]. You earn it. His former constituents missed out on the representative they needed – albeit, they well and truly ‘got what they deserved’.

#213 cookie monsta on 08.16.11 at 9:44 pm

LOVE THE TITLE AND PICTURE LOL

#214 Utopia on 08.16.11 at 9:50 pm

#204 Echo to #165 Utopia:

“Actually, it wasn’t a shot in the dark.”
——————————————-
Sorry. Did not mean to offend you personally.

I have always liked Blackberries (even loved them) and have bought and shipped many but that company is just out to lunch lately.

There seems to be some weakness at the management level. I cannot understand why else they are barely treading water when they used to be in such a leadership position. They have just fallen behind and management is clearly at fault.

It starts at the top.

There is just no confidence at that company anymore. Look at how they are behaving. Turtle time. Sucking their heads and legs into their bodies like a major attack is in progress,…. laying off thousands.

Do you recall when Nortel did that?

If they cannot get their act together soon they are done.

#215 TurnerNation on 08.16.11 at 10:14 pm

195 TurnerNation on 08.16.11 at 7:31 pm

(Slow night, replying to my own post ;) )

I posted this summary sent to me by a Canadian stock news service because it provided a short quantative look at stock valuations. However, not wishing to steal anybone’s thunder I will in the future keep this information in my inbox).

#216 Killer Chicken or Imploding Boomer? on 08.16.11 at 10:34 pm

200 Junius – OK we get it you’re not hot on TO. But check these lists:

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

#217 bill on 08.16.11 at 11:01 pm

thankyou echo

#218 echo on 08.17.11 at 12:23 am

#209 Utopia: (sorry, I’m back)
First, you are obviously way out of touch with reality when it comes to actual BB use in the corporate world. If they tossed them they wouldn’t have a phone. lol Where are you getting your information? Don’t answer that, I know it’s not real. As for the herd dumping their BB’s, not the OS7 baby, and definately won’t be tossing the QNX anywhere. What you said about the BB touch screen, etc, proves you are way out of date. It’s leaps and bounds ahead of the previous OS. You may want to catch up before you make such comments.

Anyhoo, if anyone on here was an actual corporate suit they’d back me up. I’m so excited about my new 9930. It’s a work of art. Even nicer than my old E71 which I had shipped from Asia before it was available in N.A. Yup, bin doin’ this awhile. E71 was the top business smartphone in Europe and Asia. But you knew that, didn’t you.

#219 hemp on 08.17.11 at 12:53 am

Not bad huh?Investing is not sitting in your underwear day trading real estate as some may proclaim -if it works this would be a business as one is totally dependent on a constant flow of inventory to turn -totally speculating attempting to find short term deviations on property not even viewed. I know many people that are stuck with those steals they were going to resell only to learn that the local market knew the true value. While the speculator had no idea other than it s perceived value compared to what there vision of value was from their own backyard. Truly most that attempt this are dreamers or the naive whom deem wealth can be created without work. Maybe for the minority but certainly not the masses. Remember though you ll want to be paid to wait and that requires positive cash-flow.I think I know why some people tend to be averse to stock investing or mutual funds .

#220 Paul Collins on 08.17.11 at 3:01 am

Maybe if we weren’t all wasting so much money on overpriced housing there would be some left over for retail therapy.

This is just more proof that housing bubbles destroying economies. Here in Australia the RBA has obviously abandoned the notion of inflation targeting. All the readings pointed to a need for the RBA to lift interest rates yesterday – inflation is well outside their comfort zone, the housing bubble is still fully inflated, unemployment is low, and the mining boom is funnelling huge amounts of money into the economy. But the RBA chose to sit on their hands and allow inflation to continue bursting outside their 2-3% target range.

There’s a lot of information here – http://australianpropertyforum.com/topic/8943962 – about why the RBA abandoned its inflation target, and the problem now is all this money flooding into Australia is inflating retail prices but leaving us with nothing to spend because we have directed all the money into repaying debt on overpriced dwellings.

Ridiculous. Sack the RBA!

Paul Collins