Surprise

As you know, I was wrong. So were the nation’s economists. And F. Even brother Mark’s hand was shaking and his lip was dewy when he signed off on the central bank communiqué. We all thought interest rates would be heading higher along with the pollen count. In fact, Mr. Carney spent much of the last nine months touring the country and telling people to repent.

But there she sits. The Bank of Canada trendsetting rate is unchanged once again and may well be that way until at least the end of the year. I noted with more indigestion than usual that some people are rejoicing over this, suggesting status-quo mortgage rates signal a new leg up for residential real estate sales and prices.

Nothing could be further from the truth.

First, why are rates rusting in place? Why emergency levels for almost three years? A better question is, how can anyone think this is good news?

It’s a rare time indeed when, two years after the official end of a recession, the feds are afraid to see mortgages tick higher even a quarter point. As brother Mark said today, the world’s a scary place.

“The European sovereign debt crisis has intensified, a broad range of data has signalled slower global growth, and financial market volatility has increased sharply. Recent benchmark revisions show that the U.S. recession was deeper and its recovery has been shallower than previously reported. In combination with recent economic data, this implies that U.S. growth will be weaker than previously anticipated.”

Of course, investors know all of this stuff, and that was not the audience those words were aimed at. In fact, the Toronto stock market romped 200 points higher even as Carney spoke. No gloom there on Wednesday, as corporate profits continue to roll by.

The real danger of low rates is for those with high debt. Cheap money means you can count on sustained unemployment, a glacial economy, flat incomes and less money flowing into the country. It means little if any expansion for small businesses and no hope higher salaries will make monthly bills any easier to pay for families. None of this is positive for those countless greater fools who swallowed the Kool-Aid, borrowed a mother lode of debt and bought a house near its historic price peak.

Proof? Look south. Mortgages are the cheapest in 50 years and houses are the most affordable ever. And yet real estate’s a pariah. Unloved, out of fashion and viewed as downright dangerous. Once that market turned, it chewed through middle class net worth. It’ll take a generation, at least, to forget.

Low rates are an admission of economic failure. They should tell those shopping for a $2 million tear-down in Vancouver that the government’s lost it. The vaunted Canadian miracle turns out to be a PMO media release. Our economy’s shifted into zero growth, job creation has fizzled, rising prices squeeze every household and these cheap rates have encouraged an orgy of borrowing that itself created real estate inflation. Nothing here to be proud of.

But there is good news.

If enough idiots think Carney’s announcement heralds a new housing surge, then grab yourself one. Sell now. Climb out of debt. This could be a reprieve.

If you have a mortgage coming due, go VRM. Even if cheap rates last just a few more months, the best strategy is to slice monthly payments, bank the difference, then throw it at the principal as soon as you’re able. Whatever you do, don’t VRM, then use the extra cash for a new kitchen. It could be your last.

Best strategy is to thank those degenerates in Greece and the whackjobs in the Tea Party for helping to destroy the future, so you have more time to pay off your loans at dumbass rates. This is a gift – given for the wrong reasons, but presented nonetheless. Run with it.

Nothing has altered my view of real estate as an asset class. If this is the bulk of your net worth, change that. If you have more debt than equity, worry and take action. If you’re 45 and still have a mortgage, you bought too much. If you closed with 5% down, I hope you can live on love.

Did I mention I was wrong? What a shocking day.

219 comments ↓

#1 vancouver sucks on 09.07.11 at 9:53 pm

Hey Garth, have you seen this? Comparing Vancouver to Manhatten? I almost puked…
http://vreaa.files.wordpress.com/2011/09/vanhattan.jpg

#2 Tim on 09.07.11 at 9:54 pm

Housing is still holding up in most major centers in Canada, despite Garth’s predictions and interest rates remain at near record lows, rewarding those who bought before 2008. The states housing market remains in the tank, despite record low interest rates, and the housing market here remains relatively strong.

That’s insightful. — Garth

#3 Danforth on 09.07.11 at 9:54 pm

If you’re 45 and still have a mortgage, you bought too much.

45 – exactly when i’m scheduled to be mortgage free, in six years!

#4 JuneBug on 09.07.11 at 10:00 pm

first!!!

#5 JP on 09.07.11 at 10:01 pm

Hi Garth,

I think I missed this because I have not been following your blog since the beginning.

But why do you believe they will raise interest rate during bad economy?

The only time that was done was during asian monetary crisis and that was because the asian countries were subject to IMF rule. It did terrible things to the economy including near hyperinflation. I am from one of the asian countries so I experienced it first hand.

Low interest rate is the only way/hope that government have to keep spending going, basically they will keep kicking the can down the road while praying a miraculous recovery will kick in somehow. Government fear deflation.

That is what I know anyway, I am afterall another fool.

#6 martin on 09.07.11 at 10:03 pm

as always funn and great !!

#7 T.O. Bubble Boy on 09.07.11 at 10:04 pm

right on the prediction, wrong on timing.

#8 Michelle on 09.07.11 at 10:06 pm

I just sent a certified cheque to the bank to discharge (pay off) my mortgage today. A little late at age 50 but debt free still feels great with the other 2/3rds of my net worth in liquid investments.

Garth has my trust!

#9 Mr. Lahey, Economic Tea Leaf Reader and Trailer Park Supervisor on 09.07.11 at 10:06 pm

Does the fact Carney didn’t raise rates surprise you Garth? How can he? The whole debt charade will collapse faster than Ricky’s weed field in a Nova Scotia hailstorm. Rates have to be kept low or the economic gig is up. Savers will be punished but Carney and company don’t care. Rate hikes would bring on sudden death to the economy. “Randy let’s take cover, the shithawks are overhead”.

#10 ballingsford on 09.07.11 at 10:11 pm

First!

Nothing much to say that Garth has said already. We are so screwed!!! Watch what happens!!!

#11 BPOE on 09.07.11 at 10:17 pm

Folks, not only are interested rates going DOWN (stay tuned) but credit is about to flow big time. Check your mailbox for more cheap credit from the credit card companies coming your way. I’ve been pounding the table for months now stating that interest rates will never rise again. The banks will be lowering their rates in short order. Double up on your mortgage payments and in just over a decade you are mortgage free. Folks Richmond BC has given a 225% return in the last 10 years and the west side of Vanhatten has been even better. Thats a face folks don’t let The American and Junius fool you! Folks what a wonderful day for the owners and a dismal day for the renters who have wasted another precious year of life and their hard earned dollars down the toilet. Tonight and everynight in Vancouver WE BOOGIE AS WE ARE NUMERO UNO
http://www.youtube.com/watch?v=7lu81z2E6pE

#12 bill on 09.07.11 at 10:20 pm

Garth if the central bank doesnt raise the rates do the rest of the Canadian banks put their rates on hold?
thanks for your time anyway…

No. — Garth

#13 Peakoilist on 09.07.11 at 10:21 pm

It takes a big man to admit that he was wrong . Dick couldn’t do it…

http://www.rawstory.com/rawreplay/2011/09/cheney-refuses-to-admit-making-any-mistakes/

#14 InvestX on 09.07.11 at 10:23 pm

Rates keep remaining low. Reminds me of Japan.

Whatever happened to the bond market forcing up rates by now?

#15 CoreyMC on 09.07.11 at 10:25 pm

Mr. Turner why don’t you just say to people a a rule of thumb, when it comes to the asset class, (including gold mine investors) not gold investors! “The only thing that matters is selling.”

#16 Peakoilist on 09.07.11 at 10:28 pm

So Garth, we have a VRM already. We are paying double to pay it faster..not a good strategy now?

#17 Dark Man on 09.07.11 at 10:33 pm

Like I said in my last post, nothing makes sense. Expect the unexpected, therefore I expect the housing market to burst, but in fact it will continue to inflate! Maybe our predictions are based on economic parameters that no longer hold true. New parameters are developing and we must watch them unfold and change our beliefs along with a changing economy. Maybe it is different this time after all.

#18 Stinky the Fish on 09.07.11 at 10:38 pm

Who gives a sh-t about interest rates on hold? Man, I want that beer the girl is spilling in the photo. What matters is consumer confidence is back to 2009 levels. Get with the program Garth. Sh-t!

“The Index of Consumer Confidence in August continued its recent downward trend, dropping 6.6 points to 74.7. Similar to last month, negativity toward future job creation and making a major purchase was the primary cause of the waning consumer confidence. But pessimism was also higher on responses to both financial questions. Index values dropped in four of the five regions this month; only British Columbia was able to avoid a significant decline in August.”

Back to my apartment lawnchair and back to some serious drinking.

#19 thirsty on 09.07.11 at 10:39 pm

Japan has been at 0% for two decades. Their overnight rate trends into negative at times and the BOJ pays interest to their borrowers to borrow Yen! This is all a function of demographics, Canada and most of the western hemisphere lagged Japan by fifteen years in inverting their population pyramid. Interest rates are a function of the free market, rates are set according to principles of supply and DEMAND. Inverted population pyramids tend to have high inventory (real estate) and low demand (buyers). This has been the case for Canada since 2005-2007 when its population pyramid inverted and it has followed the rest of the western hemisphere into ZIRP (zero interest rate protocol) not because there is lack of supply in regards to credit, but because there is a lack of demand into willing debtors!

http://www.nationmaster.com/country/ca-canada/Age-_distribution

I can’t see the situation changing unless the perception is there that the Canadian Govt can’t cover its bills (see PIIGS). At that point you get a one year bond at 50% and your mortgage rates would not be much different.

#20 thirsty on 09.07.11 at 10:45 pm

Studies show that people in the modern western economies max out their debt loads at 41-42 years old. Looking at a population pyramid for Canada shows the year 2005-2007 being the the highwater mark for credit demand. Its just long slow Japan like slide into oblivion from here. Tokyo real estate is 25% of what it was at the height of their mania in 1991. The Nikkei isn’t much better hitting a high of 38000, its at 8900 tonight. No wonder our banker overlords having been moving their operations to emerging markets and high growth areas over the last decade-stick a fork in the western hemisphere, we are done!

#21 Jsan on 09.07.11 at 10:47 pm

Ah yes my little friends we are here for your best interest. And speaking of Interest, don’t worry about taking more and more loans and going deeper and deeper into debt, we will make sure that interest rates are low enough so that you lose all perception of debt after all, it’s not the size of the debt it’s only the monthly payments on that debt that matters. This way you will be lulled into a state where half a million, even a million dollars worth of debt, debt that would have been inconceivable to most normal people only a decade ago, will now be considered very manageable. Forget the fact that you will never be able to pay this debt back or get out of debt, that’s not what matters. All that matters is that you keep piling on more and more of it.

What else explains governments that have allowed their citizens to take on what could be called obscene levels of debt? What else can explain governments that have allowed their citizens to cash out their entire home equity all for the sake of deeper debt?

“Most People in the World Are Poor, The Global Elite Like It That Way”

http://saskfarmersmarket.com/0-20882-most-people-in-the-world-are-poor-the-global-elite-like-it-that-way.html

.

#22 Utopia on 09.07.11 at 10:47 pm

“As you know, I was wrong”. ~~Garth
—————————-

Don’t sweat it, man. It is water over the damn. And you are not alone. I just came within a whisker of getting invested in that glittering iconic relic (you know what) and making a huge mistake at exactly the wrong time.

I should know better. It burned me badly once already.

Meanwhile, who new Mr Ben Bernanke would announce that he would hold rates low for two more years? Who knew that Greek bonds would be yielding better than 50% this month (pricing in an almost certain default) or that the ISM data, Philly Fed and US employment data amongst many others would report such stunningly dismal numbers?

Right out of the damn blue too.

Mark Carney simply had no choice but to back away from a rate increase. There was no other option as a raft of bad data suddenly pointed in the direction of a fresh recession. A global recession this time.

It could not have gone any other way as Ottawa is still intent on balancing the budget. In the absence of infusions of public dollars to stimulate and at a time when cost cutting is underway the only good prospects left for our economy were to hold the line on interest rate increases.

Private consumption can no longer be relied upon to pull us up by the bootstraps. The consumer is tapped out already. So with public dollars being diminished and private spending withering there was no other means to promote reinvestment except by low rates.

And business wants that right now.

This is why I am onside with the recent variable rate increases introduced by our big banks. Those will help to achieve what the Bank of Canada cannot do at this time while bolstering their bottom lines, improving profitability and increasing spreads.

It must be this way now.

#23 Hot Condo in Richmond on 09.07.11 at 10:48 pm

Living well within my means here in Richmond. 35 yr mortgage, fixed at 3.5 for the next few years. Doing the prudent thing, wifey and I can well afford it on our 2 person Gov’t salaries.

But seeing as we missed the boat on stupid low IR’s, and we’re making all efforts to save prudently, what advantages can we grab onto with this situation as it stands. Top up the TFSA’s with cheap money in preferred shares and corporate bonds?

#24 vyw on 09.07.11 at 10:48 pm

excellent post Garth.
GDP fell in the 2nd qtr due to a drop in exports and increase in imports
a hike in interest rates would boost the dollar making exports even less attractive and imports cheaper
also the Fed has promised low rates for 2 years and their rate is 0-.25%, ours is 1% so we can’t move up

also we are facing a technical recession
-0.1% in the 2nd Qtr, we just need a crappy Sept and we’re 2 months negative growth
The fed Govt must be kicking themselves – if they had spent about $500 million in Qtr 2, they would have avoided the negative numbers. Morons.

As for housing, I still think we have another leg up in Vancouver – maybe 33% – the bubble blow-off. Demand is still strong for housing. Unless this falls off, and the market is saturated with listings, prices will continue to climb IMHO. Of course an external event ie private debt bubble collapse, sovereign debt collapse, bank collapse may intervene. So you are right to advise people to get out of debt and I would also advise newbies to stress test their finances. Prices in Van and Toronto will eventually follow Calgary and Kelowna and fall.

People need to beware that BoC is fighting deflation in debt based assets and inflation in food and energy prices. Deflation might win which means higher unemployment, higher deficits, hoarding, good times for seniors on indexed pensions but a disaster for the unemployed, young people and workers in export industries.

#25 Utopia on 09.07.11 at 11:01 pm

#17 Dark Man

“Expect the unexpected, therefore I expect the housing market to burst, but in fact it will continue to inflate! Maybe our predictions are based on economic parameters that no longer hold true. Maybe it is different this time after all”.
———————————

Sorry Dark Man. It is not different this time. Did you look at the TREB numbers for August? Down again month over month and if this keeps up there will be no hiding the truth anymore.

Toronto fell flat on its face in July and August did not bring redemption. Average prices for September could easily fall below those of 2010 based on the current trajectory and then….surprise(!)…..the Emperor has no clothes.

No more YOY fiction to feed the late night news junkies.

The media will NOT be able to ignore what is actually amounting to a price crash in Canada’s largest city. Not anymore. Just thirty more days and counting.

The bubble has burst.

#26 LH on 09.07.11 at 11:03 pm

I owe about CAD 1.8 million on my four mortgages.
More than 5/6 of that is VRM. I am financing those at 2.1%, 2.4% and 2.5% with 3% cash-back (effectively sub 2%, thank you CIBC).

OIS market is pricing in some chance of a Carney CUT towards the end of 2012, not hikes.

The other 1/6 (3.75% fixed from mid-2009 when VRM rates were prime+X) will be paid off by Q1 2014.

HALLELUJAH!

#27 Tre on 09.07.11 at 11:03 pm

Just because Garth is early on this, doesn’t invalidate the whole thesis. It just means the drop will be much harder. As there is more time allotted to inflate prices even higher. When it does happen it’s going to be downright ugly.

#28 Cookie Monster on 09.07.11 at 11:03 pm

When the price of the DOW Jones equals the price of an ounce of gold then everyone, including Garth, will admit that economic reality does exist. Just like gravity is a simple concept, its implications are profound and complex, the complexity of the universe is gravimetric, the complexity of economics is simply monetary. The problems are irrefutable, government can not have your cake and eat it too.

#29 OttawaMike on 09.07.11 at 11:04 pm

Finding your Detroit property taxes too high?

Run up your tax bill until the house goes into Power of Sale.
Buy the house back at auction for pennies on the dollar under your wife’s name. Since nobody is buying much property, you have little competition.
Erase your debt.

This wouldn’t work here in Ontario since they now hold the funds from the POS for one year in the courts.

http://www.detnews.com/article/20110907/METRO01/109070383/Owners-escape-tax-debt-by-rebuying-foreclosed-homes

#30 Junius on 09.07.11 at 11:08 pm

#190 Penpal and #192 Cookie Monster,

Sigh. More of this B.S.

CM – Your characterization of the US as a free market economy until 1913 is incorrect. The industrial revolution didn’t really kick into gear in until after the civil war. By the 1880s the US had entered into the age of the robber barons with Carnegie, Mellon and Rockerfeller.

The first Ant-Trust legislation was passed in 1890 – The Sherman Act. Later Teddy Roosevelt (he of the big stick and a Republican) worked hard to create competitive markets because free markets had almost destroyed the economy.

CM and PP – The Caryle Group was a company first and it corrupted gov’t officials. Not the other way around. This “moral corporate” behaviour is fiction. The point is that rules need to be made and enforced to prevent these things from happening.

Again, markets don’t self-regulate and power corrupts. Without rules and regulations we are doomed to keep learning these lessons.

#31 Utopia on 09.07.11 at 11:08 pm

#11 BPOE

“Folks, not only are interested rates going DOWN (stay tuned) but credit is about to flow big time”.
————————————————-

Are you even vaguely aware that we are in the midst of one of the biggest credit bubbles in history (ending) or are you just a very, very foolish and arrogant person?

#32 vreaa on 09.07.11 at 11:16 pm

Vancouver RE Mentioned In U.S. Republican Candidates Debate

“Incredibly, one of the candidates on tonight’s nationally televised US republican nominee debate mentioned Vancouver. He wondered aloud why Vancouver’s real estate has such high growth, suggesting the US should implement immigration policies similar to ours!
If that’s not an anecdotal sign of a bubble, I don’t know what is!”
– from ‘S’, via e-mail to VREAA, 7 Sept 2011.
[We will update with verbatim transcript when available.]

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

#33 Cookie Monster on 09.07.11 at 11:21 pm

whackjobs in the Tea Party for helping to destroy the future
—-
What? What? What the hell are you talking about?
The tea party revival is due to the whack job done in government since 1973!

I can’t believe you’re blaming the constitution for the madness, it’s the lack of adherence to the constitution that is the problem, the tea party is the solution, SMALL government!

#34 Waterloo Resident on 09.07.11 at 11:21 pm

So Obummer is going to give massive tax breaks to Corporations, all in hope it will create jobs? WHAT A LOAD OF BULL !!! The only thing that’s going to do is make corporations richer, and then in a few years when it comes time for the taxpayers to pay the national debt off it will make ordinary citizens MUCH POORER. So is Obama insane? No, he is doing this for his corporate friends, so that they can become more rich. I really don’t know why American are not rioting in the streets right now as we speak to try to get that crazy guy out of office. The longer he stays in power the richer the rich get and the poorer the average middle class gets in America.

#35 nonplused on 09.07.11 at 11:22 pm

Wow. Garth was wrong. On the other hand, things are very hard to predict, especially the future.

In a command economy (such as our financial system), the market doesn’t set prices or rates, some person does. Anyone who has reflected on their interactions with other people knows that you can’t always predict even what you are going to do, let alone other people, so realistically it was a tough call to be making. But with the Bernank setting rates at 0% for at least 2 more years, I don’t know if Carney had a choice. He probably had an inbox full of suggestions from the Fed, the IMF, F., the Swiss Central Bank, the ECB, Goldman Sachs, and Ann Landers on what he should do if he wanted the black cars to stop following his family around.

But now we know for sure the pension funds are screwed for at least another year. Freedom 75 is the new black.

The secular deleveraging cycle will continue regardless. We haven’t seen any of it in Canada yet, but in much of the world including the USA, this phase of the cycle has already started, and it won’t be stopped. The phase “pushing on a rope” or perhaps “you can lead a horse to water, but you can’t make him drink” comes to mind.

On a serious note, this is bad news, as Garth alluded. The only reason that Carney can maintain a NZIRP (near zero interest rate policy) is because there is next to no secular demand for borrowed money. Oh sure, the governments of the world still want to borrow, and in spades, but that is a reallocation of wealth not a genuine demand for capital (mostly, they build the odd bridge to nowhere). 2 sub-points arise out of that: The wealth won’t actually be redistributed because you cannot move tangible assets or production through time, and also the economy, whatever that is, is contracting big time.

Gold is now moving up to $50 in a few minutes at times, with the ups out pacing the downs somewhat, but with a scary up trend. Expect that to get worse, with at some point limit days on the CME and London. But it pretty much only trades up in Singapore, from wherever they open. In London they sell (what I don’t know, they don’t have any actual gold), in the US they speculate, and in the Far East they are accumulating.

I don’t know how this all ends, or when, but I don’t see a “soft landing”. It’s either bankruptcy or inflation at some point, and I don’t think we should be thinking “eventually” anymore. The time when we count who has what on the Monopoly board is probably now only a few rolls of the dice away.

#36 BC Bring Cash on 09.07.11 at 11:22 pm

In my humble opinion Carney and Companies interest rate policy is pegged to the US rates. BOC will not raise rates until the Fed. Reserve does. Why? Because high Canadian interest rates would sky rocket the value of the Canadian Dollar. Central Banks all over including Switzerland are doing what ever they can to keep their currency values low. The Swiss National Bank has taken a position that they will take whatever action is necessary to keep the franks value down,including buying foreign currency reserves without limit. A high Swiss Franc is hurting exports. A high Canadian Dollar would kill our export industries aswell. BOC and Carney do not really control interest rates. That I’m afraid is likely more a political decision than anything else. In other words F the Finance Minister.

#37 Waterloo Resident on 09.07.11 at 11:28 pm

#11 BPOE (“I’ve been pounding the table for months now stating that interest rates will never rise again. ….. Not only are interested rates going DOWN (stay tuned) but credit is about to flow big time. “)

YES, THAT IS EXACTLY WHAT’S GOING TO HAPPEN.

My feeling is that instead of home prices falling, the common people will be buying a second house , then a third, then a fourth one, etc, etc, all as investments. This means that that $800,000 Toronto house will soon be well over $10 Million dollars, I kid you not !!!

#38 Cookie Monster on 09.07.11 at 11:29 pm

Did I mention I was wrong? What a shocking day.
—–
Garth, you’ve been wrong many many times, and I and others keep pointing them out to you, but you often refuse to acknowledge or capitulate.

But this most recent error is totally forgivable, no one knows what’s going to happen in the near future, it’s only principles that one can rely on. The market/gov can stay irrational longer than most can stay solvent or correct. But principles will always concur overall over time.

#39 Cookie Monster on 09.07.11 at 11:31 pm

conquer

#40 special-k on 09.07.11 at 11:41 pm

“If you’re 45 and still have a mortgage, you bought too much.”??

C’mon Garth, I agree with most of what I’ve read here in the past 2 years… but that’s a little out of touch with reality, we didn’t get the easy ride through life that all you crusty boomers did. You and the rest of the Eagles fan club wouldn’t have lasted 5 min. if you were part of our generation. At least all our angst produced some real music.

#41 Nostradamus Le Mad Vlad on 09.07.11 at 11:41 pm


“Surprise! As you know, I was wrong. Mr. Carney spent much of the last nine months touring the country and telling people to repent.” — Hah! Pope Garth is fallible! Pigs do fly, and the ‘konomee is in really good shape! St. Bore of the Als can introduce us to the aliens who will now invade and tickle our fancies.

“In combination with recent economic data, this implies that U.S. growth will be weaker than previously anticipated. Nothing could be further from the truth. The real danger of low rates is for those with high debt.”

Why don’t we all go to banks, credit unions and the like then borrow so much — say, sextillions — that everyone goes broke, and we can all start again? Not much seems to be working to great effect these days.

“Low rates are an admission of economic failure. Proof? Look south. This is a gift – given for the wrong reasons, but presented nonetheless. Run with it. What a shocking day.”

Ummm, if this was a gift given for the wrong reasons, then who told MC to keep the status quo, knowing full well that most people have a greater understanding of America’s Got Talent than basic finances?

If C had followed his gut instinct, he would have raised rates to keep the herd on edge. Would Benny And The Jets, plus the IMF have anything to do with this?

See #170 Helicopter Ben and #195 TurnerNation below for further info.
*
#170 Helicopter Ben — Well written and correct. No Muslim banks collect interest. The IMF does, and makes a fortune in doing so.

#191 ballingsford — “Anyway, we are all puppets and it probably doesn’t matter.”
— and —
#195 TurnerNation — “Are we free or not?”

Good points and a great question, so Egomaniac? Affirmative.

#197 Timing is Everything — Good choices, esp. Dogs. I also like Echoes — full length 25:11, with a 40-piece symphony orchestra (David Gilmour Live In Gdansk).
*
Big Banks offered fraud settlement deal; 15:10 clip As mentioned to #21 Hoof-Hearted and #71 shanks in the previous post, all this has been in the works since 9-11, but karma is exacting. This too shall pass, but not before a bunch of criminal elites lose everything they took from others; CitiGroup VP pleads guilty plus other links; Bailout Fatigue Are taxpayers tired? Well, taxpayers are not responsible for govts. fiscal policies, govts. are; Civil War on Wall St. (2nite’s edition).

We’re #5! US economy, that is; 7:06 clip USPS — another manufactured crisis; 1:15 clip SAAB — bankruptcy protection.

Far Out Aliens in BC — Al (Lardbutt) Gorgonzola was right! Willie Wonka ties it all together.

#42 vreaa on 09.07.11 at 11:42 pm

Vancouver RE Mentioned In U.S. Republican Candidates Debate

“Incredibly, one of the candidates on tonight’s nationally televised US republican nominee debate mentioned Vancouver. He wondered aloud why Vancouver’s real estate has such high growth, suggesting the US should implement immigration policies similar to ours!
If that’s not an anecdotal sign of a bubble, I don’t know what is!”
– from ‘S’, via e-mail to VREAA, 7 Sept 2011.
We will update with verbatim transcript when available.

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

#43 MSC on 09.07.11 at 11:49 pm

Doesn’t this have at least something to do with slowing the rise in our dollar?

#44 disconnect on 09.07.11 at 11:50 pm

I hate to see good beer wasted.

#45 Timing is Everything on 09.07.11 at 11:56 pm

I don’t give a rats: deflation, inflation, stagflation, obamanation…Bring it on!

Adapt or die.

It’s never too late to make a better decision.

I broke my Snoopy sno-cone maker. Damn. At least they’re down in price….But I think they make ’em cheaper these daze.

http://tinyurl.com/4yd4z9q

Oh Garth, you’re not wrong, just the timing. This IS a gift. Use it wisely.

#46 Utopia on 09.07.11 at 11:57 pm

#5 JP asked…

“I think I missed this because I have not been following your blog since the beginning. But why do you believe they will raise interest rate during bad economy?”
—————————————-

Keep in mind how quickly the landscape has changed.

Rates were originally slated to rise based on rising inflation data that had come about as a result of US stimulus measures and debt monetization.

Those Fed efforts were causing speculators to shift capital into hard assets and commodities thus driving prices higher and placing a pincer on growth as wages stalled but the cost of living rose. Fuel costs, corn, wheat and sugar were particularly affected.

Many of our economists had reasoned therefore that a rate increase was a near certainty as headline inflation numbers were rising. They were wrong though.

They had not considered that “Easing” would actually end as the Fed belatedly recognized that the severe burst of commodity prices was actually going to send us directly back into a recession.

Oil in particular was leading the charge and if you are familiar with your charts will know that most energy spikes only result in new recessions.

David Rosenberg however did see what was coming and the data (which he published) did not please him. He accurately predicted the outcome we are now seeing and this data set in itself should have been a signal to our banking community to review their own facts with regards to future rate hikes.

I also commented here on the current outcome incidentally and while I am no Rosenberg I have also been proven absolutely correct in my own arguments which I presented here on this site with regards to the real prospects for domestic inflation.

In short, that it was a Red Herring issue. A stimulus induced tax on global consumption at a time of flat growth and falling wages in the West.

It could only result in worsening our falling standard of living while not delivering the bang for the buck that a true dollar devaluation was intended to deliver in order to ameliorate our public debt issues.

As I said to Moneta the other day: We are in checkmate. Garth meanwhile was absolutely correct in predicting a rate hike as this is exactly what was being telegraphed by both the Bank of Canada and our Finance Department.

What was not recognized was that those words were really only intended to talk down the real estate exuberance without any actual consequences following. The message is important and Canadians must hear it.

At the very minimum though, there needs to be a broad recognition that low rates are not here to stay and that there is indeed risk in taking on too much debt. From that perspective, everyone got it right and I applaud their efforts in conveying the message.

Meanwhile. You all got the gift of more time. Use it well.

#47 Andrew on 09.08.11 at 12:13 am

What people continually fail to understand is that you can’t time a bubble. They generally burst because of some unpredictable trigger that spreads and leads to a reversal in the psychology of the masses. There’s not much that’s more difficult to predict and time than mass psychology.

The bubbles are just floating around right now, growing and growing, looking for a pin. The U.S. housing bubble was lucky enough to find its pin rather quickly, limiting the fallout and causing the housing collapse to be less severe than it would it been had it kept growing.

When it seems like the bubble has gone on far too long, it’s tempting to think that we’ve found a new normal. They thought the same thing with 20%+ returns on the stock market around a decade ago. If you fall for this mirage, you’ll be slapping yourself in the face pretty damned hard.

People need to understand that bubbles can continue to grow longer than anyone expects. However, the more they grow, the more fragile they become and the more likely they are to burst for any reason or no reason at all.

This economy is NOT the new normal. I can’t emphasize that enough. Our world economy is fundamentally an oxymoron right now. Interest rates and bond rates are running well below the inflation rate. This is utterly unsustainable. Bonds are in the same overpriced mania that we’ve seen in housing.

There’s nothing stopping the government from keeping interest rates permanently low. But here’s the catch 22. Doing this results in significant inflation. This means that interest rates will be running significantly below the inflation rate. This puts UPWARD pressure on interest rates in the bond market. “But wait!” you might say. “The U.S. has been doing all of this and bond rates are at an all time low!” Yes, the bond market is paying an incredibly high price for bonds that trail inflation by far. There’s only one good reason why any investor with two brain cells would buy a 10-year bond at 2-something percent interest if inflation is running north of 5 percent: If they think the government will buy bonds and push yields even LOWER, allowing the investor to FLIP their bond, selling it at a higher price and turning a profit. This is EXACTLY what’s going on right now, and it’s no different than the U.S. housing market in 2004-05. Just as speculators bought houses “risk free” in 2004 because they know they could send jingle-mail if market collapsed, speculators are buying treasuries “risk free” because they know they can sell their treasuries to desperate governments if inflation breaks loose and the currency collapses.

We all scratch our heads in astonishment that the world is continuing to go crazy over U.S. bonds that continue to perform worse and worse against inflation. There’s no reason to be confused. It’s a damned bubble. If the market was genuinely trying to protect its capital, it would be holding gold at 0% interest, not treasuries at negative 5% interest. The market isn’t buying treasuries as a safe haven, you fools! It’s buying it for profit!

Get away from real estate and bonds.

#48 BullBear on 09.08.11 at 12:20 am

Remember: The bull market is over once the last bear turns.

#49 The InvestorsFriend on 09.08.11 at 12:21 am

PENSION PLANS HIT HARD…

Pension plans are getting crushed by low interest rates. Their deficiencies get worse as interest rates decline.

Pension contributions keep rising but in many plans are already over 20% (between employer and employee).

The big winners are those on government defined benefit plans. Government workers can sometimes leave with their commuted values but only prior to age 55. Worth thinking about in some cases…

Corporations and even governments are going to want relief from pension contributions that keep going through the roof.

#50 The InvestorsFriend on 09.08.11 at 12:24 am

STOCKS are cheap, Money is almost free.

hmmm should those without other debt and who have good income and can afford risk consider borrowing to invest in stocks?

Unlike Garth, I would never predict what WILL happen in future. No one ever knows for sure… I THINK stocks will work out well, but there is always a risk.

#51 Patiently Waiting on 09.08.11 at 12:27 am

The main reason that the stock market has rocketed higher, is not because Carney didn’t raise interest rates – it is because Barack Obamanation is about to announce a $300,000,000,000 (that’s 300 Billion) job creation stimulous plan. No real difference between this and Quantitative Easing/Money printing.

#52 George on 09.08.11 at 12:38 am

I suggest that yields on long Treasuries will fall further as the euro crisis worsens and as a results there is a substantial gain to be made.

#53 City Slicker on 09.08.11 at 12:38 am

If the economy is getting so bad why does Alberta keep beating the drum there are labor shortages to keep the oil and gas going?
And you look at the stock charts of the major oil companies like Nexen, Suncor and especially Husky, and they are at or below 2008 crash levels.
Nothing really is making sense anymore. Does this mean the second coming of Christ is upon us!

#54 tjmikey on 09.08.11 at 12:54 am

I dunno Garth.

I agree with most everything you say in terms of common sense.

The days of common sense seem to be long gone.

#55 Timing is Everything on 09.08.11 at 12:55 am

Come on and take a free ride…

http://tinyurl.com/3blc7qr

http://tinyurl.com/26httfy

#56 LS on 09.08.11 at 12:56 am

Speaking about Japan….

Stephen King: Our economic woes show that there is nothing unique about Japan

http://www.independent.co.uk/news/business/comment/stephen-king/stephen-king-our-economic-woes-show-that-there-is-nothing-unique-about-japan-2341801.html

But there is also a difficult new political reality, one that wasn’t around when Mr Bernanke gave his 2002 speech but one which, today, has made the economic challenge so much greater.

Mr Bernanke referred to it in 2002, but thought it was a challenge that applied uniquely to Japan: “The failure to end deflation in Japan… is a byproduct of a longstanding political debate about how best to address Japan’s overall economic problems… comprehensive economic reform will likely impose large costs on many, for example, in the form of unemployment or bankruptcy. As a natural result, politicians, economists, businesspeople, and the general public in Japan have sharply disagreed about competing proposals for reform. In the resulting political deadlock, strong policy actions are discouraged, and cooperation among policymakers is difficultto achieve.”

People too often forget this part of Mr Bernanke’s speech. It is a convenient form of economic amnesia because it turns out that, with political stasis on either side of the Atlantic, there is nothing unique about Japan’s problems after all.

#57 Onthesidelines on 09.08.11 at 1:04 am

I think you must be one of the very few that’s actually surprised about the rates. Still, give you credit for admitting being wrong on that.

#58 ADRA on 09.08.11 at 1:06 am

“New parameters are developing and we must watch them unfold and change our beliefs along with a changing economy. Maybe it is different this time after all.”

Yikes, do you really believe that? We’re special. We deserve our own economic theory to describe the irrational behavior of people’s irrational fear. Nay. If Anything, the system is behaving exactly as we’d expect. Investors are dumping money hand over fist to become RE owners because they see it as a safe holding (maybe even profit) in a world where everything else seems to be going to hell. Irrational fear == Irrational Behavior.

#59 HouseBuster on 09.08.11 at 1:12 am

We’re in the crash now…interest rates don’t mean [email protected]# to prices anymore.

2003 is on the way. A bounce and then back to 1998.

It is not good news but use the information to your advantage while you still can.

#60 sam on 09.08.11 at 1:35 am

another blockbuster month in toronto real estate. 10% gain in property values yoy.

http://www.torontorealestateboard.com/market_news/market_watch/2011/mw1108.pdf

#61 Mr Buyer on 09.08.11 at 1:36 am

not different place, just different route

#62 Bill Grable on 09.08.11 at 1:51 am

Greek bonds at 97% – and tiny little Canada is tied to an American economy floated by 75% Consumer spending.
The Bond Vigilantes are all waiting for Trichet and Merkel to tip their hand – and so everyone is holding their breath.
Debt will be the golden chain that drowns many chowderheads that thought their home was a way to buy a boat and a $1500 a month boat slip, plus a joint on the lake.

It takes guts to call anything in this market. Mr. Turner is right, he is just early.

Vix is doing a moonshot, and with good reason.

#63 Thetruth on 09.08.11 at 1:57 am

Always stated that interest rates won’t rise until after the USA raises theirs! It was known over 2 years ago that most USA ARM’s were to have reset by early 2012…so of course no one was going to raise rates…so don’t know why everyone is shocked.

To top it all off, Canada will not raise their rates for the next few years even after the USA raises theirs in late 2013. Always stated that Canada will let its currency suffer with respect to the US dollar!

With respect to housing, F will tinker a little further with CMHC and maybe even foreign investment in residential housing in order to dampen any potential leg up.

Just like Japan, Canadian communities with stable or low population growth will experience a RE melt. Cities with Explosive population growth (unlike Japan) will continue to maintain, or even increase, RE prices. All this in a zero rate environment.

#64 rentin on 09.08.11 at 2:06 am

Garth, you will be wrong 3 more times before your right.

That’s okay, in the end, you will be right. House prices will drop an undetermined amount.

Owning a house will end up being about equal to renting on the bottom of the price slide.

It’s really the only way it stops.

#65 Betty Danin on 09.08.11 at 2:32 am

To BPOE #11 I am investing in foreign bonds outside Canada getting 11% interest in emerging markets. I will not be subsidizing you free ultra low mortgage. I am also helping the bank of Canada keeping our dollar lower so I’m killing two birds with one stone. If Canada does not want my money than other countries will gladly pay more for it. Vancouver is the new Valejo. Richmond will be more Poormond than Richmondis now. I give it tops 36 months starting after October-2011.

#66 Debt's Dark Embrace on 09.08.11 at 2:42 am

I’ve been saying it here for years, interest rates will not rise to “historic norms” because it will bankrupt the West. The old rules don’t apply anymore and the bond vigilantes are irrelevant.

#67 Betty Danin on 09.08.11 at 2:42 am

To BPOE#11 I hope you like living in a shelter like I saw on PBS because low interest rates are a trick to make debt ridden real estate at 30%+ over priced look like an investment. I’ve been long term government bonds for 20 years and can now live off my $103,000 a year interest so I don’t need to invest in Canada like I use to. Brains-people-of-emptiness BPOE#11. I knew that they did not want babyboomers to retire so I planned well ahead. I’m debt free cash is king and debt is dumb. Good luck suckers!

#68 Betty Danin on 09.08.11 at 2:53 am

To BPOE #11 Brains-people-of emptiness you will soon be homeless but I will enjoy my debt free life living on $103,000 of interest per year. Low interest rates are for fools.

#69 Betty Danin on 09.08.11 at 2:55 am

To BPOE #11 Real estate agents, mortgage brokers tec. start looking for a McDonalds near year. Nothing in life is free.

#70 pat on 09.08.11 at 4:24 am

This is really bad policy from Carney; inflation is almost always higher than their target of 2% and yet they leave rates low.

Now it is clear that US is going to inflate their way out and Carney is following. I will start buying gold tomorrow.

#71 B on 09.08.11 at 4:43 am

I was wrong too. I thought Canada would have the “truck balls” to raise interest rates, repair Canada’s growing debt load and act responsibily.

What I’m learning as a Canadian Ex-pat in Europe, is that Canada isn’t that significant in the world really. Canada rarely even gets a mention the news over here (and I have 20 news channels!).

Come on Canada, be a leader, not a USA follower.

#72 big T on 09.08.11 at 5:08 am

I noticed the obit for ex finance minister Benson, of
the Trudeau era, his boast was we would “wrestle
inflation to the ground” well it took a long time, it is
now dead, I am of the opinion that inflation, like wine
in moderation, is a good thing, it does indicate forward economic momentum, compare China/India, verses
Japan, big problem, we switched the economy off, and
just can’t restart it..

#73 Live Under Your Means on 09.08.11 at 5:19 am

BTW, how do you like the double top on gold? Hope you’re covered. — Garth

……………..

Had no idea what a double top meant so I did some research.

http://davidpetersen.articlealley.com/what-does-a-double-top-mean-for-a-stock-1284302.html

Amazing what you can learn on this blog. Just wish I could retain the info I learn. :-)

#74 timo on 09.08.11 at 6:49 am

http://www.youtube.com/watch?feature=player_embedded&v=9I5GHI03uCc

Video Game Allows Players to Slaughter Tea Party Zombies Like Sarah Palin and Bill O’Reilly

when you need a punching bag to take out your frustrations. :)

#75 David B on 09.08.11 at 6:59 am

You were not or not have been wrong Mr. Turner …. interest rates will go up … but not now .. what is going up are the costs to own buy and sell a home … heck even if you pay your mortgage off it costs money at the deed office and you still need more paper work to sell.

Now if I may …. we have been told time and time again to save energy …. heck they even have a night once a year we turn off all our lights.. Well .. here in NS a very large industry is closing (sadly) and will not be using a very big bundle of energy … so they will up the power rates for all others. Should we not get lower rates as less energy is used?

Point: If y’all think a bigger house is better and will finance your life , please, please stop and think about just who wants their share first and every month before you cash in your chips.

Interest rates stay low = government services & business services rise which means higher prices everywhere.

Pay down debt and save wisely because those are your tools so use them wisely and piss off government and big business.

#76 debtified on 09.08.11 at 7:02 am

I, too, am wrong about the interest rate. I sure hope I am also wrong about the consequences.

For Canada’s sake.

#77 Danforth on 09.08.11 at 7:04 am

@#8 Michelle on 09.07.11 at 10:06 pm

Congratulations!
age 50, mortgage free, and nest egg value of two houses in the bank!

Well done!

#78 Smoking Man on 09.08.11 at 7:06 am

Garth what if Ron Paul wins? what is going to happen?

http://firstread.msnbc.msn.com/_news/2011/09/07/7658608-who-do-you-think-won-the-republican-debate-at-the-reagan-library

They trivilaze him, ignor him yet poll after poll shows he has a masive lead. msn even distorted the scale on the chart of the poll they did last night where he won buy almost move votes that the field put together.

80000 votes

#79 T.O. Bubble Boy on 09.08.11 at 7:08 am

The REAL reason Canada is running a deficit, despite high oil and commodity prices:

http://www.google.com/hostednews/afp/article/ALeqM5i-xngJ98GQezKk2x1-nrdf_ywB7A?docId=CNG.1ed529f5773eca2a7522d667c5bbf188.a91

…In total, Canada devoted an additional CAN$92 billion (above the pre-2001 spending levels)…

…Canada’s military expenditures have nearly doubled since 2001…

Where’s the “austerity” for this major chunk of Government spending???

#80 BrianT on 09.08.11 at 7:28 am

#71Pat-IMO Gold is a buy, but the USA is definitely not going to fix their mess with inflation. Their main focus to date has been on transferring public funds to the connected parties-that is basically all that can be accomplished. Some bills are simply too large to be paid.

#81 House on 09.08.11 at 7:30 am

Does this mean Stevie and Jimbo will be gone before the next election so that their successors can pick-up the blame.(Like Gordon Campbell) Markie was only a door mat for them anyway.

#82 NotAGreaterFool on 09.08.11 at 7:41 am

Does this now mean the Feds will tighten the scews on the CMHC further that maybe what was planned in 2012? If rates stay low, does Mr. F have a bigger onus to control Canada’s debt consumption via tighter down payment rules etc?

#83 detalumis on 09.08.11 at 8:11 am

Sorry #40 I am an old-lady boomer born in 1960, I bought my house in 1990 at the top of the last peak with a very low down payment at a very high interest rate from a very shady trust company which didn’t verify your income too much. What I did was put about 80% of my disposable income against the mortgage. I lived like I was in poverty for 11 years while I paid it off in it’s entirety. I didn’t even own enough clothes to wear something different to the office for a week, 2 skirts 3 blouses. Never even went to Tim Horton’s, no vacations, no restaurants, no nothing, just work, work and more work. The house remained in a state of suspended animation for 11 years with no renovations and that includes a 40 year old kitchen and bathroom. I sincerely doubt you would find any 30 year old woman today who would live that sort of life to pay off a mortage – if you did, I would suggest you scoop her up.

#84 Mr. Lee on 09.08.11 at 8:12 am

Mr. Turner in light of the interest rate decision and appearant neatral bias, do you see the Fed Gov increasing CMHC qualifications? For example, 25 year ammortization and or 10% down?

Thanks

#85 fancy_pants on 09.08.11 at 8:22 am

What ever made you think Canada would raise rates, even after the US declared their rates weren’t going anywhere until 2013 at the earliest?

Told you so. It’s all about the exchange rate with the US. screw the rate of inflation. Action speaks louder than words. Don’t get mad at me, Carnage made the decision.

I believe we are looking at flat/sideways to slightly lower RE for a good while – s-l-o-w decline over the RE markets as a whole. No crash anywhere in sight.

It’ll be a while yet.

Garth, renew your lease on your DNS name IP, internet provider and this blog cause this same song may be sung two years from now as it was two years ago.

#86 AM on 09.08.11 at 8:26 am

#61 sam on 09.08.11 at 1:35 am
another blockbuster month in toronto real estate. 10% gain in property values yoy.

http://www.torontorealestateboard.com/market_news/market_watch/2011/mw1108.pdf
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Check the last page of the document. The 2011 stats tell a different story from the perceived message from TREB. If the trend continues, January will be negative y-o-y. As usual, all spin.

#87 dd on 09.08.11 at 8:32 am

This is not a liquidity issue. Solvency is the issue. Governments are allowing banks to slowly build capital by buying – selling government bonds. However massive write downs have to occur before the economies can move forward.

#88 Rudolf on 09.08.11 at 8:42 am

It is unbelievable how politicians can influence markets. Jim Flasherty’s political decision to keep interest rates at a historical low is the same as keeping a seriously sick person on life support to postpone the inevitable. The fact that Obama was able to stop the downward trend on global stock markets at least momentarily with one pep talk, has been one more example how easily politicians can manipulate their peasants regardless of the economic mess they have created.

#89 gladiator on 09.08.11 at 8:42 am

looks like the show will go on, folks. check this out:
http://news.yahoo.com/top-chinese-wealthys-wish-list-leave-china-065826880.html

#90 Waterloo Resident on 09.08.11 at 8:46 am

#38: Cookie Monster ; said (“Garth, you’ve been wrong many many times, and I and others keep pointing them out to you, but you often refuse to acknowledge or capitulate.” )

Heck, with me it seems i’m wrong more times then I am right. When that happens I say to myself; “Oh Crap!” and then I go away and feel really stupid about myself. This happens quite often. I think everyone is like that, we are human and making mistakes is simply part of being human. :-)

#91 Paperboy on 09.08.11 at 8:46 am

Hey Garth, didja see this?

“My political hero was Garth Turner, a leadership candidate for the Tories in 1993 — my last year of high school.

It wasn’t Turner’s policy proposals that earned him a place in my bedroom between “The Wall” and “Pour Some Sugar on Me.” I was inspired by his approach and philosophy. Simply put, he had the guts to admit that he couldn’t win the race and he had the sophistication to explain why that didn’t matter.

Standing in front of 3,400 delegates, on live TV, he proposed that a leadership race isn’t just about choosing a leader, but also a time to share ideas. In an environment focused on winners and losers, he boldly said: “There’s more to life than winning and it’s called principle and that’s what you stand for.”

He also spoke about risk. “It would have been easier and cheaper for me to sit this race out,” he told the crowd. “But my whole life has involved taking risks because that’s the only way that you move forward.” This was inspiring for me as a teenager and the audience was receptive, too. The loudest applause came when Turner asked: “If avoiding risk was the only principle, who would ever put a crop in the ground or go out and start a small business?”

In a political culture dominated by risk aversion, these were refreshing words. My teenage crush was cemented when Turner finished his speech by firmly saying “damn the odds, damn the risk and damn the armchair critics!”

By shifting the focus away from winning, Turner made politics seem more accessible and inviting. For the first time, I could imagine myself on that stage.

The television commentators mocked him, making references to Dana Carvey’s Garth character on Wayne’s World, but fortunately a guest panelist disagreed. Liberal Senator Michael Kirby interrupted and said “candidates like Garth contribute significantly. If campaigns only allowed people who were among the top two or three likely to win, you would have a sense of parties being closed. Frankly, I have to admire someone for making the effort that he’s done.”

I agree with Kirby and believe the same applies to our general elections. Today’s younger generation has grown up in an open world with hundreds of television stations and millions of websites. More than ever, people expect diversity, choice and access to information.

With this in mind, I’ve been recruiting Liberals, Conservatives and New Democrats to endorse a non-partisan statement calling for fair televised debates that include Ontario Green Party leader Mike Schreiner. The list of endorsements is growing each day, including Liberal candidate Sarah Thomson and NDP candidate Jonah Schein. We’ve also seen recent commitments from John Tory and from TVO’s The Agenda to include the Greens in their election coverage.

Some will argue that if Schreiner is invited, then the leaders of the other eight small parties should be invited, too. Truth is, in 2007 none of those parties received more than 1 per cent of the vote. Meanwhile, 8 per cent of Ontarians voted Green with 19 candidates placing second or third, and local results as high as 33 per cent. The Greens have earned a seat at the table.

If we want to foster a healthy political culture, encourage debate and attract younger voters to the election process, then we should strive to make our televised debates inclusive and fair.

After all, elections aren’t just about winning. They provide a moment when we allow ourselves to be collectively inspired by the exchange of ideas. Garth Turner taught me that 18 years ago. What are we teaching our younger generation today?”

#92 Andrew on 09.08.11 at 8:57 am

Sounds like Japan to me…

#93 disciple on 09.08.11 at 9:01 am

“I’m always right, even when I’m wrong, I’m right” – Pacino in Donnie Brasco.

#94 BrianT on 09.08.11 at 9:09 am

#29Ottawa-Detroit is wild-that woman in the article is paying 100% of the value of her house in property taxes annually.

#95 Ron on 09.08.11 at 9:14 am

RE bubble talk is starting to sound like the yearly predictions of world end by nutty pastors in Oklahoma.

As discussed yesterday, our expert leaders don’t have a clue what to do, or what will happen…..just like the rest of us.

At the end of the day, people who bought houses within the bubble are laughing because they will continue to have cheap money to finance their debt while building equity.

All this talk about cheap money and inflated RE prices reminds me about reading some books in the 90’s when the so called experts were advising us to borrow so we could top-up our RRSP’s.

How much have the markets made compared to realestate over the past decade?

Are the markets more secure now than RE?

mmmmmm

#96 BlorgDorg on 09.08.11 at 9:17 am

More than half of Canadians living paycheque to paycheque:
http://www.cbc.ca/fp/story/2011/09/08/5370059.html

“40% said they now expect to retire later than planned. Almost half cited lacklustre savings as the main reason behind a delayed retirement. Three-quarters of those surveyed said they have saved less than a quarter of their retirement savings goal thus far.”

#97 disciple on 09.08.11 at 9:18 am

What’s not a surprise is that Tim Hudak is pandering to the rednecks. Right on script. Blaming “foreigners” for the failed leadership of his own party in the last two decades of gutted manufacturing. What you have to realize is that the media is ultra right-wing. The media is used by the corporatocracy to recruit the rednecks of our society as foot soldiers, and also to act as decoys so that the rest will target these racist individuals (of all faiths and colours) and deflect attention away from the real puppeteers. They would rather you not vote (notice the fearmongering by the talking heads saying that the barking dogs will scare away voters), that way there would be less effort needed to conduct their usual vote-counting fraud. Trust me, it doesn’t matter who you vote for, the outcome is pre-planned. There is too much money and power riding on you placing your X on a piece of paper. Don’t be fooled.

For some of you, this is old news, but I suspect that there are lurkers here who have never known this. Education is the answer to our problems. Strong, fair and balanced leadership is the mechanism.

#98 Macrath on 09.08.11 at 9:27 am

I just seems incredible to believe that Mr. Carney with all his proprietary data, would not know what`s going on and do a complete reversal within a couple of weeks.
The supposed hike was just propaganda from the banksters flim-flam man.

How much tax revenue is being lost with this ZIRP ? Next is austerity from a broke government and hoards of wiped out pensioners. We will soon have more need for cardboard boxes than tinfoil.

#99 timo on 09.08.11 at 9:27 am

http://www.marketwatch.com/story/us-jobless-claims-rise-to-414000-from-412000-2011-09-08?link=MW_story_latest_news

U.S. jobless claims rise to 414,000 from 412,000

http://www.bloomberg.com/news/2011-09-08/german-exports-unexpectedly-declined-in-july.html

German Exports Unexpectedly Fell in July

http://www.bloomberg.com/news/2011-09-08/u-s-trade-deficit-narrowed-more-than-forecast-to-44-8-billion.html

The U.S. trade deficit narrowed more than forecast in July, reaching a three-month low as exports climbed to a record and crude oil imports eased.

U.S. companies imported 350,657 barrels in July, the fewest since April.

#100 disciple on 09.08.11 at 9:30 am

Perhaps it matters very little what the Bank of Canada does with its rates. I don’t see any good reason why the retail banks cannot raise their VRM’s at any time. Do you? I’ve heard on the radio just today that they are mad as hell with Carney and are threatening to raise their retail rates regardless of what he does. This would increase their spreads and alleviate any profit shortfalls for shareholders. I’m sure that wouldn’t be a precedent…

#101 disciple on 09.08.11 at 9:38 am

Canada Revenue Agency is saying that 60% of people would cheat on their taxes. Really, CRA? Why are you under-reporting the actual number? Don’t our income taxes pay for schools and roads and social programs? NO THEY DO NOT.

Gasoline taxes pay for roads and in spades I might add. Property taxes pay for schools, and every year we get less and less quality for our money. Sales taxes etc… pay for everything else. So, what then do criminal income taxes pay for? Anybody?

#102 cory on 09.08.11 at 9:41 am

#84 Detalumis

One of our clients at work lived like you. She had a house fully paid for and investments over 1.5 million. She died 6 months ago at 53 of cancer. Her distant relatives are going to enjoy her fruits of labour as she was not married and had no children.

#103 Ret on 09.08.11 at 9:48 am

If a quarter point increase will kill the economy, we have to be close to the edge as Garth suggests.

The party continues as long as Canada’s two unofficial stimulus plans, CMHC and the Canada Student Loan program, keep goosing the economy with billions of $ of taxpayer backed loans.

I have never seen so many homes being constructed in Burlington, Oakville, Milton, Hamilton and Niagara Falls.

Ninety thousand first year students hit Ontario universities this week, 5600 at McMaster alone. The CSL program will enslave them with debt for years after graduation.

Don’t worry, be happy. Party on Canada!

#104 Toon Town Boomer on 09.08.11 at 9:52 am

# 49 The InvestorsFriend on 09.08.11 at 12:21 am
PENSION PLANS HIT HARD…

Pension plans are getting crushed by low interest rates. Their deficiencies get worse as interest rates decline.

Pension contributions keep rising but in many plans are already over 20% (between employer and employee).

The big winners are those on government defined benefit plans. Government workers can sometimes leave with their commuted values but only prior to age 55. Worth thinking about in some cases…

Corporations and even governments are going to want relief from pension contributions that keep going through the roof.
Garth should one consider taking thier commuted value out even if there within a year of getting their pension? They would loose money that way as well. Once your getting your pension can you loose it for any reason? Please explain?

#105 Devil's Advocate on 09.08.11 at 9:55 am

While so many will bark at me for saying so, especially those who consider it coming from a self-serving point of view, keeping interest rates low at this time is EXACTLY the right thing to have done!

Good on you Mr. Carney. You are doing an excellent job keep it up.

Where Garth IS correct is when he says;

“so you have more time to pay off your loans at dumbass rates. This is a gift” – Garth

But as far as;

This is a gift – given for the wrong reasons,” – Garth

I say Mr. Carney has done an excellent job and this recent hold on rates is for all the right reasons and so yes…

“Run with it.”Garth

Mr. Carney has given you a gift… don’t look that gift horse in the mouth. Run with it. He knows, three years later, you must have learned from your recent indiscretions or is willing to gamble you have. Indeed he can afford to take that gamble as our economy IS stronger and currently in a more resilient position than most. We’ve got the wiggle room. This is your opportunity. He has given it to you for all the right reasons not wrong. Take advantage of it – for all the right reasons.

#106 disciple on 09.08.11 at 9:56 am

I have a lawyer friend. (Yes, oxymoron, I know, ba-dum). He’s also in politics at the municipal level. No way! Anyway, I once asked him if, as an elected politician, if he could provide me with a written report outlining where all of our provincial income taxes go. And I didn’t mean a generalized report, I wanted an actual auditor’s report for the previous year accounting for every single penny. He laughed and told me to keep dreaming. But I wasn’t joking. It seems that such a report does not officially exist. Am I wrong? In our space-age, computerized fantasy world, why is this impossible?

#107 Hammer1 on 09.08.11 at 9:58 am

#75 timo on 09.08.11 at 6:49 am
that’s great..can we order one with neo-CON zombies here in Canada. How about lining up Kenney, Baird, Ford zombies.

#108 Devil's Advocate on 09.08.11 at 10:03 am

And yes it (keeping the bank rate low for a time) will put downward pressure on the $CDN and there-by increase our competitiveness. Another good and right reason.

Interest rates will eventually rise as sure as the sun. But why would we raise them now when there are so many still tender healing segments of our economy? That would be nothing less than punative and ultimately come back to hurt us all.

Want a “Double Dip” – raise rates needlessly.

#109 Cautious on 09.08.11 at 10:17 am

You were wrong this time, so what. You routinely provide your educated analysis and opinions based on the current facts and your best guess as to how the many macroeconomic pieces will fit together. I for one commend you on making such predictions.

It seems to me that there are quite a few of us on this website (regular posters and readers) that would be considered nut bars due to our opinions on a wide array of topics, including the quality of the real estate market. The more I think and read about various topics, the less it seems that things are as they appear. I think its utter naivety/ignorance to ingest most things the way they are fed to you. But such an approach does facilitate peace of mind I guess.

#110 Ronaldo on 09.08.11 at 10:18 am

#47 Andrew – excellent post.

#111 tired on 09.08.11 at 10:19 am

Things here in St. Thomas do not look that rosy. I wonder, was holding off the interest rate related to the kick off of the provincial election?

#112 JP on 09.08.11 at 10:20 am

#46

Thank you for answering my question.

#113 B on 09.08.11 at 10:26 am

11BPOE “in Vancouver WE BOOGIE AS WE ARE NUMERO UNO”

Hate to break it to ya guy, but Vancouver doesn’t even have a blip on the world radar map. The majority of the world couldn’t care about it, sorry. The only thing people in Europe (that’s more people than in Vancouver BTW) are talking about via Vancouver this whole year was is the Vancouver Riots.

BPOE, you should travel more. Get educated.

#114 Cautious on 09.08.11 at 10:27 am

Heard on talk radio this morning that Ryerson is holding a “Truthers” discussion panel in the next days. I don’t have a strong opinion on what really happened (except that things aren’t quite as they are presented), but it’s good to see that the topic is getting due credit by being explored in a formal academic environment.

http://www.theglobeandmail.com/news/world/americas/september-11/for-truthers-911-was-an-inside-job/article2157340/

#115 bill on 09.08.11 at 10:28 am

6 houses for sale ,all in a row on the east side of Granville street south of 41st. not to mention numerous others for sale on the same stretch [41st to 57th on Granville ]
i wonder who is going to buy these?

#116 bill on 09.08.11 at 10:29 am

in vancouver….

#117 Utopia on 09.08.11 at 10:34 am

#63 Bill Grable

“Greek bonds at 97% …..”
—————————-
Does anyone else see any symbolism here as Greece, the birthplace of our modern democracies, is about to take a swan dive and potentially take down a few European banks in the process? Maybe the word I am really searching for is “irony”.

#118 Smoking Man on 09.08.11 at 10:35 am

Garth

Nothing wrong with being wrong so long as it does not cost you anything…

I check out your Wikipedia profile, well done man. Two things I read I really liked.

1) That Hosni Harper boomed you. Why, Your crime. you have a brain….Guess that’s a no no

But the best was Garmp’s Name
Ebenezer Vining Bodwell Nice!!!!

What is it with Hosni he just declared war on Islam and now he wants to bring back terror laws.

You know him, is there anything in his cocconut?

#119 PTDBD on 09.08.11 at 10:36 am

Disney’s “Sorcerer’s Apprentice” tells the story.

The inept wizard’s Paperprestidigitation is out of control and the world is awash in newly created money. It’s ironic that they use the term “bailout”.

We need the wisdom and control of a real professional to take the magic wand away from the bearded academic juvenile maestro who doesn’t have a clue.

Unfortunately, that won’t happen.

#120 Steady Eddie on 09.08.11 at 10:40 am

Of course interest rates were not going to rise. Most western countries are tied to the anglo saxon banking cartel. Most of the ‘tin foil’ wearing people and ‘metalheads’ on this site are aware of this.

It was quite lovely how anyone holding Swiss Francs just lost 10% over night as they govt pegged their currency to the Euro.

Ultimately this is a currency crisis. It is a race to the bottom. Wait until the CAD is pegged to the USD.

Housing will crash in Canada when the next US financial crisis hits. Until then it will be smooth sailing.

#121 Utopia on 09.08.11 at 10:49 am

#37 Waterloo Resident

“This means that that $800,000 Toronto house will soon be well over $10 Million dollars, I kid you not !!!”
————–
Not likely, If the bleeding does not stop it could soon be cheaper to buy the average home in Toronto than it is in Saskatoon. How scary a thought is that?

#122 BrianT on 09.08.11 at 10:52 am

#103Cory-I knew somebody like you that got killed by a Mack truck while jaywalking-they were lost in conversation on their special phone with the Bluetooth.

#123 Devore on 09.08.11 at 10:53 am

#75 timo

Scapegoats and boogeymen are all lined up… sad times.

#124 Daniel on 09.08.11 at 10:55 am

If you want a good read:

Financial Reckoning Day: Surviving The Soft Depression of The 21st Century

Was a little before it’s time, called for Japan style depression and was written in about 2004, about 5 years early … but everything in there is what’s happening now.

#125 BrianT on 09.08.11 at 10:58 am

#121Steady-Basically we have the equivalent of day traders running all these countries (with the possible exception of China). No long term thinking allowed-ever. As we slide down the oil depletion slope this competitive devaluation of currencies will get real interesting-hard to picture a nice restful USA with $15/gallon gasoline.

#126 Mr. Plow on 09.08.11 at 10:59 am

#168 Smoking Man – From Yesterday

You’re right I apologize, I should have been more specific… My experiences and opinions of teachers are the same as you. But you are correct, our specific encounters differ greatly and are no way the same.

Having said that, I don’t feel like I can convey to you here that my lesson did not make me a quiet, conforming “yes-man”.

A light bulb did go off, and I guess what I can best explain it as is that I learned when dealing with someone in power, regardless of how much smarter or more right I am, I need to choose my battles carefully.

And as an aside, I didn’t consider it plagarism, I considered it a social experiment. When I was 16 I was smart enough to not go to class and still do all of the work and get good grades. Most teachers didn’t care as long as my grades stayed the same. But this guy was hell bent on teaching me a lesson and would not give me a good grade even if I deserved it.

It all came to a boiling point when he called a parent teacher conference and I just showed up to the meeting. He was livid that my parents were not there, I said “my parents are fine with me and my behavior as long as my grades don’t slip, my Dad said he is too busy at work to come here at 300pm and my Mom is out of town.” Well, after that comment he made sure my grades slipped. I also got benched for the football game that Friday for being late to practice cause of this stupid meeting.

He did teach me a lesson, but not the one he intended. I was arrogant and childish about it, but I was still right. If I could still satisfy all of his requirements on my own time he shouldn’t give a shit whether I was in his class room or not. But in his little brain he had a problem with it, I could have continued to beat heads with him and fail the class or suck it up and show up and still get a shitty grade cause he though I was a pompous prick, and deep down I think he didn’t like the fact that a 16 year old kid was smarter than him and was able to work the system in his favour.

You can tell my arrogance hasn’t really changed much.

#127 BrianT on 09.08.11 at 11:01 am

#115Cautious-We need McGuinty to step up to the plate-pass a secret law and declare Ryerson a no go zone. Things are getting out of hand now.

#128 BrianT on 09.08.11 at 11:10 am

#79Smoke-I am surprised that site would actually print those results-every once in a while the MSM surprises to the upside.

#129 Utopia on 09.08.11 at 11:20 am

#113 JP to #46 Utopia

“Thank you for answering my question”.
——————
No problem JP. Glad I could help. After rereading it though I just realized I need to check my ego at the door. I am not really the proud type. I am just happy when I got it right.

#130 Big Al New on 09.08.11 at 11:33 am

Cheap Peak Oil, everything now and in the future will revolve around this issue. You can’t stimulate the economy without oil demand increasing driving the price of oil up in turn killing the economy. Wait until the China, India/Pakistan and Brazil come online with increased consumption, it will make 1:30 a ltr gas seem like a gift. There is no solution to this problem, not government stimulus not low interest rates, nothing.

#131 Devil's Advocate on 09.08.11 at 11:36 am

Mortgages are the cheapest in 50 years and houses are the most affordable ever. (you said it) And yet real estate’s a pariah. Unloved, out of fashion and viewed as downright dangerous. Once that market turned, it chewed through middle class net worth. It’ll take a generation, at least, to forget. – Garth

There is a swell of want to be homeowners about to enter the market. This demographic has no significant experience with a failing economy. They were born after that of 1981 and little more than pubescent teens at the time of this most recent. This is the generation you speak of but it is a lot closer than you appear willing to admit. They are eager but not naïve. Look around and you will see them. They are there coming up behind us.

Add to that the fact we are now better than three years in to this most recent peak to peak cycle which suggests that, all things being equal, we are nearer the end of the reparation phase than the beginning of it. Of course there are those who will say not all things are equal this time around which is nothing more than saying “this time it’s different”. It’s not any different yet it’s always different. History does not repeat itself but it sure does tend to rhyme.

This is a period of reparation and there is no better time to be optimistic about things than when we are actually setting about fixing and improving them, and that is exactly what we are doing – fixing things, which, when on such a scale as that consequential to the recent credit implosion, doesn’t just happen overnight. When will the next dip take place? No one I know of has a crystal ball with which to answer that question with any definiteness. Come it will though, but not until after, first, a period of excess economic exuberance. That’s just the way it is. Unless, maybe, somehow we learn to stop the natural ebb and flow of the economic cycles. Ya right…

So, for now, enjoy these relatively stable and predictable markets for they, just as turbulent times, will not last forever. Or hide under a rock waiting for the inevitable doom which surely will return… in about 8 years’ time, give or take two or three, barring some unforeseen circumstance. But such uncertainty is what makes things so interesting a gamble with which can come rewards to those who are willing to take a calculated leap of faith one way or the other. It’s hard to take that leap from beneath the dark shadows and weight of a rock though.

#132 Steven Rowlandson on 09.08.11 at 11:43 am

Before banksters and politicians tell people to repent it is only proper for banks and government to repent.
I can assure you all the sins they need to repent of are both damning and legion. I will sum it all up for government. What ever they did in the last 100 years should not have been done and should be repented of.
Banks should never have gotten involved with fractional reserve lending, gold smith scams/ bullion banking, short selling or fiat money and should have maintained double digit interest rates to discourage government borrowing and real estate price inflation.
Once you get away from basics it is only a matter of time before things go to hell in a hand basket.

#133 Peakoilist on 09.08.11 at 11:58 am

#34 Waterloo Resident on 09.07.11 at 11:21 pm

I hear you and understand your frustration. First of all, he’s doing it to get re-elected…that’s what politicians do. Fish swim. Americans understand that their system is broken and don’t trust Washington. It was no different under the former regime, and if Obama leaves office, his successor will follow the same trajectory. It’s the way our political system works now that corporatism rules..its all about the money. Even if Ron Paul is elected, he will be corrupted too.

#134 Live Under Your Means on 09.08.11 at 11:58 am

#105 Toon Town Boomer on 09.08.11 at 9:52 am

My pension was a defined benefit plan (prov. govt. employee) unionized, but could not strike. We rec’d a notice in 2010 that said that indexing would be 1.25% for the next 5 yrs. After that the trustees will determine the level of indexing the plan can afford – I.E. our plan will be deindexed.

I know I’ve said this before, but managers and above would receive the ‘anticipated arbitrated wage increase’ – sometimes 2+ years before ‘unionized, but unable to legally strike workers’. In the meantime, with inflation, we lost out big time.

#135 BrianT on 09.08.11 at 12:05 pm

First Krugman, now another high profile moron Friedman is getting picked on publicly by Rick Santelli http://www.zerohedge.com/news/rick-santelli-tells-arch-globalization-advocate-friedman-he-idiot

#136 Thetruth on 09.08.11 at 12:06 pm

#19 & 20 Thirsty

Best posts of the day!

#137 Michelle on 09.08.11 at 12:07 pm

@#78 Danforth-
Thank you for your encouragement, however I should have added that my mortgage was for a large but modest older condo which I bought 10 years ago at a cheap price. I will have to keep working for another 10 years before my “liquid” investments are large enough for me to retire on (self-employed), but at least I won’t have to work as hard or as much as I used to.
It’s always nice to have that flexibility as you get older and health problems can arise.

@#84 Detalumis- I too subscribe to your philosophy of frugality. You can still have fun on a modest income if you use a little imagination and are open to adventure, but a Toyota Yaris gets you around town just as well as a Lexus.

@#40 Special-K- While I appreciate the tougher job market that Gen-X has faced, your attack on the music of the baby-boom generation is untenable!
The Eagles “Hotel California”, Supertramp’s “Crime of the Century”, Pink Floyd’s “Dark Side of the Moon”, not to mention my favourite genre: The Sex Pistol’s “Never Mind the Bullocks” and the Clash’s “London Calling” have all been re-hashed by subsequent generations in one form or another.
…and ketamine is used by vets for anesthetizing large Elephants etc…At least our “Angle dust” made people fly off of rooftops :P

#138 boomorbust on 09.08.11 at 12:16 pm

#94 disciple

“I’m always right, even when I’m wrong, I’m right” – Pacino in Donnie Brasco.

and then

“I always tell the truth, even when I lie.”
Pacino in Scarface.

#139 OttawaMike on 09.08.11 at 12:16 pm

#105 Toon Town Boomer on 09.08.11 at 9:52 am
Why would anybody take their commutted value out of their pension you ask?

I’ll give you an example of a friend. City of Toronto water utilities electrical superintendent. Turns 55 this year. Has 30 yrs service. Just got his communted value statement that he requested: $940,000 of that about $250,000 will be paid in tax. He is also entitled to the 6 months buyout payment plus has 220 days of banked sick time and some banked overtime. Grand total before tax=$1,000,060.

Even with indexing and 66% survivors benefit for his younger spouse, he will never get that out of the plan by drawing monthly.

Investor’s Fiend is correct in #49 post..

Also the word is spelled “lose”. “Loose” is in reference to loosen a lid from a jar.

#140 Kevin on 09.08.11 at 12:27 pm

With rates low, mortgage rules may be tightened: RBC
http://business.financialpost.com/2011/09/08/with-rates-low-mortgage-rules-may-be-tightened-rbc/

Mortgage credit growth is growing at close to 8% yoy while inflation, wage and GDP growth are not even close to that.

The Bank of Canada has also placed the ball in the Finance Minister’s court to tighten mortgages.

Here is their Summer Review. On Page 36 “Mortgage Debt and Procyclicality in the Housing Market”
http://www.bankofcanada.ca/wp-content/uploads/2011/08/review_summer11.pdf

#141 Live Under Your Means on 09.08.11 at 12:40 pm

#91 Waterloo Resident on 09.08.11 at 8:46 am
#38: Cookie Monster ; said (“Garth, you’ve been wrong many many times, and I and others keep pointing them out to you, but you often refuse to acknowledge or capitulate.” )

Heck, with me it seems i’m wrong more times then I am right. When that happens I say to myself; “Oh Crap!” and then I go away and feel really stupid about myself. This happens quite often. I think everyone is like that, we are human and making mistakes is simply part of being human. :-)

……………

Wow, finally agree with you. Wonders never cease.

#142 timo on 09.08.11 at 12:40 pm

http://globaleconomicanalysis.blogspot.com/2011/09/mortgage-rates-at-record-lows-30-year.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29

Fixed mortgage rates fell this week to the lowest levels in six decades. But few Americans can take advantage of the rates to refinance or buy a home.

The average rate for the 30-year fixed mortgage fell to 4.12 percent, down from 4.22 percent, Freddie Mac said Thursday. It’s the lowest level on records dating back to 1971. Freddie Mac said the last time rates were cheaper was 1951, when most long-term home loans lasted just 20 or 25 years.

man is it ugly down south.

#143 Victor on 09.08.11 at 12:48 pm

Most workers living ‘close to the line’: survey
Thursday, Sep. 08, 2011

A majority of Canadian employees are living paycheque to paycheque and report they would be in financial difficulty if their pay were delayed by even a week, according to a new survey on the financial health of the country’s workers.

The survey by the Canadian Payroll Association also found 40 per cent of Canadians now report they expect to retire later than they had previously planned, acknowledging they are not saving enough for retirement.

The main reason for low savings is that most workers are living “close to the line,” the CPA reported, with 57 per cent reporting they would be in difficulty if their pay were delayed by even a week. That number jumps to 63 per cent for workers aged 18 to 34, and to 74 per cent for single parents.

http://www.theglobeandmail.com/globe-investor/personal-finance/most-workers-living-close-to-the-line-survey/article2157089/

#144 Utopia on 09.08.11 at 12:50 pm

Cool story,

Tomorrow Allana Potash (AAA) will list on the Toronto stock Exchange for the first time. Allana, a Toronto based company is the first miner with Ethiopian assets to see such a listing and so this is pretty exciting news in the Horn of Africa where attracting any Western investment dollars has always been very difficult.

I still think Africa is the place to be if emerging markets are your cup of tea. I am very bullish on the region actually. Ethiopia’s GDP growth is the fifth highest in the world and is even running ahead of China’s.

Naturally I wish them the best and hope this small company plays a positive role in developing the regional agricultural base (Somali included) as locally mined potash and fertilizers are brought on stream.

This is not an endorsement for Allana by the way, but rather an expression of my hopes that in some small measure Ethiopia will slowly pull itself out of its poverty trap as investment is attracted to that country.

#145 Timing is Everything on 09.08.11 at 12:56 pm

BOC rate should at the very least be similar to Australia’s (4.5% I think). But we’re tied to our massive ‘you know what down south’ and it calls the shots.

http://www.youtube.com/watch?v=pj0bwLBckkI&feature=related

#146 Devil's Advocate on 09.08.11 at 12:58 pm

‘The Bank of Canada has also placed the ball in the Finance Minister’s court to tighten mortgages.” #141Kevin on 09.08.11 at 12:27 pm

As it should be.

Give those who bought into recent ultra-low rates time to deal with the issue while curtailing more from doing so thus perpetuating the matter.

Looks to me like we are learning. Carney knows what he is doing. A great orchestrator he has become and will be due to be recognized as such once things pick up elsewhere and it is clear we never went there to begin with.

#147 Snowboid on 09.08.11 at 1:14 pm

#76 David B…

Interesting comment “Should we not get lower rates as less energy is used?”

The same thing happened in Victoria, but with water. The CRD encouraged water conservation but last year stated because we were using less water rates had to go up.

The current water rates for Victoria are 55% higher than Phoenix. Of course the water quality is much better in Victoria (naturally soft) but the Phoenix water has to travel in a canal almost 200 miles long (from the Colorado River).

In any case, you made a good point that most homeowners don’t realize despite the low mortgage rates, the costs of everything else will increase substantially – especially in BC.

Low mortgage payments for a couple of years won’t help if you can’t afford electricity, gas, water and maintenance!

#148 Live Under Your Means on 09.08.11 at 1:15 pm

Totally OT – Woke up at 3:30AM (normal) and instead of watching some inane TV shows made a huge batch of spaghetti sauce to use up some fresh veggies and left over ratatouille. Simmered for 5 hours and just realized I forgot to add red wine. So, will simmer for another 30 mins. Frozen, it’ll do us for 6-8 meals. I use it to make lasagna also. Cooler weather is on its way. :-(

#149 Snowboid on 09.08.11 at 1:27 pm

#140 OttawaMike on 09.08.11 at 12:16 pm…

The value of the pension in cash is only more if the recipient dies before 10-15 years. Took my pension at 55 and if I live to 80 will receive almost double what your friend took in cash (and my salary was most certainly less than your friend at retirement).

By the way, it is “Investors Friend” not “Fiend” and the word is spelled “commuted” not “commutted” or “communted”

#150 Junius on 09.08.11 at 1:31 pm

#136 BrianT,

Santelli comes off looking like an arse as usual. No surprise that you and the other tea baggers like this one.

The notion that Social Security is a Ponzi scheme is a new favourite of the teabaggers but it is flawed for 2 reasons.

1) No one is being misled. Unlike a Ponzi scheme that promises unlimited riches and constant rising prices SS is nothing of the sort. Ponzi schemes are a fraud from the outset.

It is a mandatory payment system under which current workers are taxed on their income which is to be reinvested for their future and returned in retirement.

2) All Ponzi schemes, by definition, must fail. Social Security can be fixed. Clearly it has challenges due to changing demographics but it there is a difference between a scheme designed to fail and one that could be fixed if the political will was there.

Freidman essentially said that it could be fixed but Santelli rudely shouted over him.

This is the sort of discourse you support?

You want to make Social Security a Ponzi scheme then do what Bush was trying to do and the Cons here in Canada are also looking at doing – turn the money over the Wall Street or Bay Street.

#151 Robert Dudek on 09.08.11 at 1:35 pm

“I’m always right, even when I’m wrong, I’m right” – Pacino in Donnie Brasco.

and then

“I always tell the truth, even when I lie.”
Pacino in Scarface.

“I bury those cakaroaches!”
Pacino in Scarface.

#152 Snowboid on 09.08.11 at 1:36 pm

#106 Devil’s Advocate on 09.08.11 at 9:55 am …

Glad to see you back, although I seldom agree with you.

But I cannot fathom how you can possibly believe “…our economy IS stronger and currently in a more resilient position than most.”

After watching the RE market in Kelowna for the last several months (mainly condos) it is really not strong and the local economy is definitely not resilient!

#153 dodgedbullet on 09.08.11 at 1:38 pm

Garth, I followed your advice – I now have a diversified portfolio of ETFs.

I did miss out on the Tax break incentive for Canadian investments but will pick some CAD stock up next time.

Thanks for making it clear – I didn’t fret when my portfolio yo-yo’d.

Up and down she goes, I’m detached.

Thanks again, your advice and counsel have kept me thinking rationally.

#154 Ronaldo on 09.08.11 at 1:43 pm

#101 Disciple – banks will do whatever they need to…remember in 2008 when BOC prime went from 4.25% in January to 1.75% in December. Prior to the big crash that fall they were dishing out mortgages at prime minus 1.5 to 2% to keep the housing bubble alive. A lot of people who had gone variable ended up with mortgages at less than 2%. My sons mortgage was at around 1.75% and his interest dropped over half. Then not long after, we kept hearing about how rates were going to go up and we should run to lock in. I told my son, DO NOT LOCK IN, rates are going to remain low for a long time.

Others ran to the banks and locked in at over 4 and 5%. You can bet these people are kicking themselves today. Today, people are realizing that VRM is the way to go and the banks don’t like it. They love the security of the 4 and 5 year lock-ins. Stay variable.

The only time that I can truly say that I was wise to have locked in was in March of 1979 when I locked in my mortgage at 10.5% and watched rates go to 21% in 82. I couldn’t believe that people were still rushing to buy houses at these high rates thinking that rates were going to go higher. It was insanity. They were likely the same people lining up to buy a 1 oz gold bar in minus 30 degree temperatures in January of 1980.

Even when my mortgage came up for renewal 4 years later, rates were still around 14% but I was able to put a large sum down and at that time went with an open mortgage. Plus my wages had gone up a lot in that time so even the higher interest was not that big a deal.
But even at 14%, it only represented 1/3 or so of my income which was average.

Also, an average home only cost 3 times the average income for one person. Not like today as in Vancouver where it takes 92% of average family income (not one income) to own a crack shack. And this is the reason why this market is not sustainable regardless of how low interest rates are. Heck, people would have a hard time just paying back this amount with no interest over a 25 year period as it would amount to 40,000 per year on a 1 million dollar debt. Interesting times ahead. Happy am retired. Was tough swimming against the current all these years but its paid off.

#155 timo on 09.08.11 at 1:47 pm

http://www.nytimes.com/interactive/2011/09/08/nyregion/911-tapes.html?hp

The 9/11 Tapes: The Story in the Air (live replay)

this is sad but I thought I would pass this on.

#156 Snowboid on 09.08.11 at 1:50 pm

#149 Live Under Your Means on 09.08.11 at 1:15 pm….

Wouldn’t it be hilarious if spouses were independently posting to the same blog!!

That’s what I thought (in horror) when I first read your post because I woke to the most wonderful odours emanating from the kitchen (slept in, slightly hungover from dinner party last night).

Luckily, I realized we didn’t have any leftover ratatouille.

Okay, now I know I’ve posted too much already today – not even on topic (as usual) so off to find the Tylenol!

#157 Live Under Your Means on 09.08.11 at 1:55 pm

The Terror Industrial Complex

http://redtory.wordpress.com/

I watched the PBS Frontline story the other eve. It’s unbelievable the trillions of $$$ the US has spent since 9/11 to supposedly keep America safe….. Makes one wonder if Al Qaeda has succeeded in brining down the American economy.

#158 Live Under Your Means on 09.08.11 at 2:04 pm

Re my previous post re Frontline. Should have stated that maybe Al Qaeda helped to contribute to America’s debt situation.

#159 City Slicker on 09.08.11 at 2:07 pm

BTW, how do you like the double top on gold? Hope you’re covered. — Garth

……………..

Had no idea what a double top meant so I did some research.

http://davidpetersen.articlealley.com/what-does-a-double-top-mean-for-a-stock-1284302.html

Amazing what you can learn on this blog. Just wish I could retain the info I learn. :-)
———————————————————
Garth what do you think of this triple top on a gold play, then big brake out to the upside? I was never a firm beleiver in technical anaylisis:

http://www.stockhouse.com/tools/?page=%2FFinancialTools%2Fsn%5Foverview%2Easp%3Fsymbol%3DT%2EDGC

#160 Utopia on 09.08.11 at 2:09 pm

And not to put too fine a point on the issue in Toronto, but does anyone even want to make a crude guess at how many people have fallen into negative equity there in the last 120 days?

How about almost every single person who bought during 2011 using the average 7% down payment just for starters….

That would be…umm…. a lot of people.

#161 disciple on 09.08.11 at 2:23 pm

#134 Peakoilist…”Even if Ron Paul is elected, he will be corrupted too.”

Totally. Or blackmailed. Or threatened. Or betrayed. Or falsely accused of something inappropriate by the oil-soaked media. Or assassinated. Or replaced with a robotoid clone, (which is another form of assassination).

#162 Devore on 09.08.11 at 2:29 pm

Yup, as predicted here earlier, retailers are hurting, and Christmas shopping season is beginning right after labor day.

Walmart kicks things off, as even they have been feeling the spending squeeze: http://business.financialpost.com/2011/09/08/wal-mart-kicks-off-holidays-early/

#163 Hoof- Hearted on 09.08.11 at 2:35 pm

#107 disciple on 09.08.11 at 9:56 am

I have a lawyer friend. (Yes, oxymoron, I know, ba-dum). He’s also in politics at the municipal level. No way! Anyway, I once asked him if, as an elected politician, if he could provide me with a written report outlining where all of our provincial income taxes go. And I didn’t mean a generalized report, I wanted an actual auditor’s report for the previous year accounting for every single penny. He laughed and told me to keep dreaming. But I wasn’t joking. It seems that such a report does not officially exist. Am I wrong? In our space-age, computerized fantasy world, why is this impossible?

=====================================
Ambrose Bierce” Devil’s Dictionary”

Lawyer: One trained in circumvention of the law

Too Funny:

Buy your lawyer/elected offical friend a PITCHER of beer to further lubricate their lips.

Local Gov’ts are the LEAST accountable of the (3) levels of Gov’t . It’s a joke how this lowest rung on the governance totem pole can literally get away with murder.

Ask him. ….is ” Inmates running the asylum” a good analogy of how Local Gov’t works ?

Report back.

#164 disciple on 09.08.11 at 2:43 pm

We often accuse our leaders of being puppets (myself included) but this is a process which does not happen overnight. Yes, many of those in political power are “bred” in elite schools for their purpose, but many are also recruited as ambitious young studs and stud-ettes, and once they are placed into the role of their dreams, then the monsters enter the fray and the real business begins. During this corrupting process, some of these people try to run from the system and they are taken care of through the back door so to speak with a resignation or “plane crash”, others try to actually change the system and leave no choice for the puppeteers (Joe Kennedy). In some instances, and becoming increasingly common through technological advances, it is useful to get rid of the person but keep the political figure, that is where dopplegangers or robotoid clones come in handy. As a doppleganger, wouldn’t you want to suddenly become a powerful international political figure? Or a Hollywood star? The price of admission is simply to shut your mouth and play along. And I guess there is also the monetary compensation and Upper Manhattan lifestyle.

I often hear the argument, “disciple, it is too much of a stretch to imagine there is a global group of people able to manage all the minute details of a worldwide conspiracy to this extent”. Here is my answer: suppose you had more money and power than God Himself. What would you do with your time? Bungee-jumping? Skydiving? Secret trip to the Moon? Journey to the Centre of the Earth? Sure, but what then? well….

The biggest and most coveted prize of all…control of billions of people, physically, economically, politically, but most important of all…mentally. It is your mind they are after. Hence, the reference to tinfoil (aluminum-titanium alloy actually). It’s a fun, fun game for them. It not only keeps them entertained, but it helps to maintain their control and ultimately their wealth, by playing this control game. Are you amused?

#165 BrianT on 09.08.11 at 2:46 pm

#152-I like you Tony-there is no lying in you.

#166 Hoof- Hearted on 09.08.11 at 2:47 pm

Ok..I get the consensus

Scarface to replace Carney as head of B of C..maybe even future PM…but too honourable to govern anything in Godless Toronto/Ontario

#167 BrianT on 09.08.11 at 2:48 pm

#157Snow-Funnier if you hooked up with your spouse (by accident) through Lavalife one night.

#168 An Cat Dubh on 09.08.11 at 2:53 pm

Nice to read the posts where homes were paid off early, albeit with some sacrifices. Now any surplus income you have you can enjoy on yourselves.
Many boomers plan to spend their money instead of leaving it to their kids.
http://www.latimes.com/news/fi-la-boomer-inheritance-20110906,0,7087247,full.story

#169 Live Under Your Means on 09.08.11 at 3:12 pm

#157 Snowboid on 09.08.11 at 1:50 pm

in response to my 149 – shoot I can’t find the no. key.

Hilarious.

BTW – it’s my DH’s tip to add red wine to the Spaghetti sauce. He’s French – wine is essential. :-) B’ve been cooking from Julia Child’s ‘Mastering the Art of French Cooking’ 1971 edition since then- long before I met my hubby. Actually, last year a Librarian that my DH knows fixed the book as it was falling apart.

#170 Peakoilist on 09.08.11 at 3:14 pm

#173 Smoking Man on 09.07.11 at 7:03 pm to
#137 Peakoilist on 09.07.11 at 3:23 pm

I’m not bully just have strong opinions.
==============================
thanks for the reply SM..you’re very candid on here, which makes it tempting to have a little fun..take care bud

#171 disciple on 09.08.11 at 3:19 pm

Predictive programming is a subtle form of psychological conditioning provided by the media to acquaint the public with planned societal changes to be implemented. If and when these changes are put through, the public will already be familiarized with them and will accept them as ‘natural progressions’; thus lessening any possible public resistance and commotion. Predictive programming therefore may be considered as a veiled form of preemptive mass manipulation or mind control.

Look for scenes with human microchipping in upcoming Hollywood features…

#172 Pr on 09.08.11 at 3:21 pm

If you’re 45 and still have a mortgage, you bought too much… I think the majority of this group with a house still have a mortgage.

Too bad for them. Debt will not be a friend son. — Garth

#173 Peakoilist on 09.08.11 at 3:21 pm

#159 Utopia on 09.08.11 at 2:09 pm
Is this due to the 22% drop that GT told us about last week?
If so, holy crap, and they don’t even realize it yet and are sleeping like babies at night. Of course the RE bulls will just say that we’ll pull of that in the fall as usual.

#174 Waiting for the Sun on 09.08.11 at 3:22 pm

The Conservative gov’t of Canada is responsible for this housing bubble. They should be tightening lending standards, reducing CHMC guarantees, and making it harder for non-resident speculators to buy property (as Australia has done).

Instead, they make it as easy as possible to borrow huge sums of money, by keeping interest rates at historic lows.

#175 Peakoilist on 09.08.11 at 3:24 pm

Pardon, Utopia that was your posting at #161..

#176 disciple on 09.08.11 at 3:36 pm

I will give you yet another example of how far the absolute control by your mind-controllers extend:

Normally nowadays Google will autofill as you type in your search words. Try this: type in Corey Feldman pedophilia…it will go blank after “Feldman”. Find out why…if you dare.

#177 BPOE on 09.08.11 at 3:40 pm

Love this VREAA site. Pro BPOE at it’s finest. The reason is simple folks. The world wants a safe haven and they found it in the most beautiful cosmopolitan city in the world. As I type entire neighbourhoods are being bulldozed with mega houses being built. LOVE IT!

Vancouver RE Mentioned In U.S. Republican Candidates Debate
Posted on 7 September 2011
by vreaa| 16 Comments
“Incredibly, one of the candidates on tonight’s nationally televised US republican nominee debate mentioned Vancouver. He wondered aloud why Vancouver’s real estate has such high growth, suggesting the US should implement immigration policies similar to ours!

#178 Smoking Man on 09.08.11 at 3:54 pm

#172 disciple on 09.08.11 at 3:19 pm

You’re behind the 8 ball, they don’t need to chip the tax farm slaves, the slaves walk around with on in pocket. It’s called the

iphone

#179 cory on 09.08.11 at 4:00 pm

#123 Brian

What?

You don’t know me at all. I lived very frugally too and paid off my first house by the time I was 31.

Do I regret living as frugally as I did to aspire being mortgage free? Heck yea.

I should have travelled and seen more of the world – it’s the experiences in life not the paid off house at 31 that make a person happy.

#180 Ultraumatic on 09.08.11 at 4:14 pm

#150 Peakoilist (yesterday) and #131 Big Al New

Thanks for the link, Peak, and thanks for this, Big Al:

Wait until the China, India/Pakistan and Brazil come online with increased consumption, it will make 1:30 a ltr gas seem like a gift. There is no solution to this problem, not government stimulus not low interest rates, nothing.

Both of these sentiments, along with some personal beliefs (and not just paranoia) have me wanting to go off the grid in the next five years or so (I’m young-ish, renting and trying to build up a resume now). Not in a creepy, Soldier of Fortune subscriber type way, but in a commute to work, come home to a garden, solar panels and rainwater plumbing system type way.

#181 Kilby on 09.08.11 at 4:23 pm

Some BC active, residential real estate listings. Today
Qualicum Beach 265
Parksville 380
Comox (town) 166
Courtenay (town) 227
Nanaimo (area) 1,356
Penticton 836
Summerland 416
Kelowna (N&S) 442

#182 vyw on 09.08.11 at 4:27 pm

The trebnet report shows a decline in prices for detached homes MOM but an increase in prices for condos:
http://www.torontorealestateboard.com/market_news/market_watch/index.htm

Toronto and Vancouver experience seasonal dips during the summer. We’ll see if house prices resume their upward climb in the fall.

#183 OttawaMike on 09.08.11 at 4:30 pm

#150 Snowboid on 09.08.11 at 1:27 pm
Thanks for the spell check but Investors “Fiend” was a deliberate error.Damn spell check is deteriorating my spelling abilities.

The amount also should have read $1,060,000.
This friend is pretty savy having a business on the side as well. He called the 89 RE correction, getting out of his condo right at the top and renting for 3 years before buying again.
He is expecting indexing to be chopped and wants to control his own money. It sure made me think..

#184 OttawaMike on 09.08.11 at 4:36 pm

Utopia
You are right on about Africa. IBM for one along with other blue chippers are focusing their growth there.

http://www.ibm.com/ibm/gio/africa.html

It is the future hot spot for new commerce. There are 2 US ETF dedicated to it. Symbols AFK and GAF.

#185 Bill Gable on 09.08.11 at 4:43 pm

If you look at credit absorption rates, this economy is dead in the water.
America is going to do the Twist, with SS benefits and a lot of folks are going to be unhappy.
When the richest country on earth is making it easier for the 27 million people on foodstamps, to buy food, and maybe other gods, something stinks.
Wage growth for the middle class has stalled for 20 years, while the top end get amazing growth in compensation.

In the end, I fear that a lot of folks that are desperate enough, will start listening to idiots like Michelle Bachman, and other wingnuts – and the 200 million weapons in the hands of angry civilians will be TROUBLE.

Posse Comitatus be damned.

#186 jess on 09.08.11 at 4:49 pm

cookie from the other day

Exclusive or inclusive ?
You said that WE are,” ALL compassionate and well meaning good people worldwide.” So humans within government are not good nor proper or smart ?

You also said, “You need to give a little more credit where credit is due and quit your high and mightiness.”

I would rather believe the Queen’s ink which is witnessed by all rather than a robo signer anyday

#187 Devore on 09.08.11 at 5:01 pm

#177 disciple

Normally nowadays Google will autofill as you type in your search words. Try this: type in Corey Feldman pedophilia…it will go blank after “Feldman”. Find out why…if you dare.

Google routinely omits “inappropriate” words from the search dropdown.

Or maybe they’re trying to control your mind.

You decide.

#188 Ronaldo on 09.08.11 at 5:04 pm

#173 PR

”If you’re 45 and still have a mortgage, you bought too much… I think the majority of this group with a house still have a mortgage.”

Too bad for them. Debt will not be a friend son. — Garth

Given that the highest rate of divorce is between the ages of 45 and 65, I suspect that there would be a good number of people in this country finding themselves with mortgage payments after they split the spoils. Either that or they split up the cash from sale of the shack and rent. Don’t think so though.

#189 penpal on 09.08.11 at 5:17 pm

@ # 84 Detalumis

With all due respect for your self -discipline, and you exhibited lots of it if your posting is accurate, I would run from anyone who denied themselves that much in the prime of their life, certainly not scoop them up.

Perhaps it worked for you, but forgoing that many things in life, (and believe you me that I am fairly frugal), at that time in your life seems kinda tragic for me given that we are talking about a house here.

I really do hope you felt it worth it in retrospect.

#190 smoking man on 09.08.11 at 5:19 pm

So garth econmists an f. All got it wrong. I’m not surprised. Kids what is the commom denominator? They all read from the same text book followed the same rules of liner dynamics. Every phd math guy build the same delta gamma risk modles. Dangous as hell

Hate to toot my own horn. Ok maby I don’t but I have been blkoging that since last summer. My vision is incredable please excuse the bad spelling typeing on the bb icant see the keys well

But all I do is taken info. The sub consous takes over rain man kind of thing been try to code what happens deep in the wine ravaged brain for years in hops of selling it for big buck. Not even close so I gave up

#191 Junius on 09.08.11 at 5:22 pm

#159 Live Within Your Means,

You said, “Should have stated that maybe Al Qaeda helped to contribute to America’s debt situation.”

They did but not in the way they intended.

Georgy went to war in both Afganistan and Iraq. While we can understand Afganistan the second one was unnecessary and ended up costing more than $3 Trillion – some say $5 Trillion.

Of course, Georgy had to pay off his supporters with a tax cut and no new taxes while he increased spending. Nuts. His Presidency is responsible for roughly 50% of the US national debt. Add in his daddy and Ronny Raygun and you have the biggest spenders in the US history. So much for being Conservative.

Greenspan lowered interest rates to try and keep the economy going during this time. A mistake. The result is the mess we are in.

Of course the foundation was laid earlier in the 1990s with the banking deregulation as Glass-Steagall was gutted. Add in the failure to deregulate derivatives and other financial innovations on Wall Street to the mix. However these things only compounded the problem.

So, in a nutshell, Al Qaeda was successful in goading a US President who never served and his chicken hawk VP into an unaffordable war at a time when they could least afford it. There goes the American Empire.

#192 Snowboid on 09.08.11 at 5:26 pm

#184 OttawaMike on 09.08.11 at 4:30 pm…

Assuming your friend was making around $ 115K as a super, and wanted 70% income, then he would have to invest the $1.06 million in fairly high-risk areas or he would run out within 15-20 years.

The only former co-workers of mine that took the commuted value were the ones planning to work in the private sector at 55.

Of course, with Toronto having serious financial issues, the pension plan may be at higher risk for de-indexing?

#168 BrianT on 09.08.11 at 2:48 pm…

Either I am happily married or incredibly sheltered (naive), but I had to Google ‘Lavalife’.

Now that would be as funny as getting hit with molten rock spewed from a volcano!!

#170 Live Under Your Means on 09.08.11 at 3:12 pm…

Actually, we use port in our sauce – but any wine is fine. We love cooking at home, and also make most of our own sauces, rubs, etc.

#193 shanks on 09.08.11 at 5:31 pm

disciple, you dont need to look to hollywood for human mental prep for microchips, just look at the montreal metro system. using RFID chips in bus passes, people have quickly grown accustomed to putting their hands on a scanner to gain access. add 1 and 1 and 1 together and the dots connect and the picture becomes that much clearer.

in regards to your question about why it is not possible to account for government spending to the penny and produce a detailed and accurate audit of government spending is lack of willpower. the people who are in a position to have such a report created do not wish to have one made. why? because they have a vested interest in not having those details made public. Any other business balances their books and know exactly what was spent where and how and why and when. to the penny! those nice old copper pennies that they want to take out of circulation. again why? because there is actual value in a copper penny, it is worth more like 4 cents for the metal value, not to mention that copper is a useful metal for humans with ingenuity. After robbing the comman man of gold, silver, and dollars, tptb know want to rob us even of our copper.

#194 Nostradamus Le Mad Vlad on 09.08.11 at 5:46 pm

#20 thirsty — “Studies show that people in the modern western economies max out their debt loads at 41-42 years old. No wonder our banker overlords having been moving their operations to emerging markets and high growth areas over the last decade-stick a fork in the western hemisphere, we are done!”

You are correct, and the wars will hasten the end of the western cycle; then, the Chinese – Mongolian races take numero uno.

#27 Tre — “When it does happen it’s going to be downright ugly.” — Which is why central banxters are in a “do-nothing” mode right now (on the exterior), while at the same time shipping more of the mfg. and industrial jobs (and wealth) to cheaper markets like Sri Lanka, Bangladesh, etc. Lower costs = higher profits, that’s the bottom line.

#51 Patiently Waiting — “No real difference between this and Quantitative Easing/Money printing.” — ‘Sright. Different terminology, same thing. All the shills have run outta ideas — heads empty upstairs!

#80 T.O. Bubble Boy — “Where’s the “austerity” for this major chunk of Government spending?” — Excellent question, and no doubt the answer will be a myriad of nonsense-talk about what the CPC has done (spend taxpayers’ money into oblivion).

They won’t say that citizens are not responsible for govt.’s debts, ‘tho. They will keep quiet about that part.

#92 Paperboy — Great post! Good to know that winning isn’t everything, but working for the betterment of the whole is.

#104 Ret — “Don’t worry, be happy. Party on Canada!”

Yay, boogie on, baby and when TSHTF (as it is now), what can anyone do about it? Nada, nothing!

#121 Steady Eddie — “Most western countries are tied to the anglo saxon banking cartel. Ultimately this is a currency crisis. It is a race to the bottom. Wait until the CAD is pegged to the USD.”

Good point. To put it nicely, we’re screwed, aren’t we? It’s just the timing, of course.

#158 Live Under Your Means — “Makes one wonder if Al Qaeda has succeeded in brining down the American economy.”

Good post, and yet another (false) reason to blame Muslims for something they didn’t do.

#167 Hoof- Hearted — “Scarface to replace Carney as head of B of C” — Go where all the moolah is, young ‘un and spend with wild abandon!

#186 Bill Gable — “America is going to do the Twist, with SS benefits and a lot of folks are going to be unhappy.”

Dare I say austerity-induced riots all over NAmerica? Don’t bet against it.

#195 Dracula on 09.08.11 at 5:47 pm

Much of my inspiration (that keeps the old blood flowing ) is via Public Servants.

See ya Oct 31 !!!

#196 Batman on 09.08.11 at 5:49 pm

Smoking Man

Want an autograph ?

#197 Junius on 09.08.11 at 5:51 pm

#182 Kilby,

Those look like big numbers. Especially on the Island. Thanks for posting.

Any idea how they compare to previous years?

#198 Junius on 09.08.11 at 5:54 pm

#178 BPOE,

So what is your point? Because one of the Republican Teagassers doesn’t understand economics you think that is relevant to something?

#199 penpal on 09.08.11 at 5:56 pm

@ 186 Bill Grable

Latest number of “foodstamp” (now called the SNAP program) recipients is aprroximately 49,000,000 (fourty-nine million or 1 in 6.25 people in the US) currently.

As unbelievable as it seems, 36% (thirty six percent, NOT a typo) of the State of Alabama residents are now registered in the SNAP progam. (source is ZeroHedge, sub source the BLS I believe).

There were “bread lines” and “soup kitchens” in the Depression to evidence the state of the economy, now it is somewhat hidden as you are given an electronic debit card that resembles a normal credit / debit card so you look like everyone else at the checkout counter.

#200 Devil's Advocate on 09.08.11 at 6:38 pm

#153 Snowboid;
I am not back, just passing through from time to time telling the alternative story.

Come spend a day with me and it will surely change your mind. Of course if you want to compare today to four years ago then yes the market volumes are down and have been for those past four. But they have not gotten any worse since four years ago and average prices are still where they were four years ago which would take more explaining as to why than I am prepared to do right now. Suffice it to say they went up a whole lot, came down a bit and appear to be hangin’ in there.

Bottom line is after 3 – 4 years I think it is reasonably safe to say we are not going up or down too quickly anytime soon and THAT is a predictable and stable market. Certainly a lot more stable and predictable than 4 years ago when buyers were scrambling to buy houses they didn’t actually even like just to gain a foothold in a market the believed would otherwise price them out forever. A market in which some sellers actually backed out of deals just before the crest because they thought they had undersold their property. Those were unhealthy unpredictable markets.

Our volumes are reasonable, could be a tad higher but reasonable given the population. Prices are steady, could be a bit lower as far as I am concerned but I’ll take steady over free-fall any day. Like I said, spend a day with me and you will surely change your mind. [email protected]

#201 Just(not)AnotherSheeple on 09.08.11 at 6:40 pm

#178 BPOE
Love this VREAA site. Pro BPOE at it’s finest. The reason is simple folks. The world wants a safe haven and they found it in the most beautiful cosmopolitan city in the world. As I type entire neighbourhoods are being bulldozed with mega houses being built. LOVE IT!

Vancouver RE Mentioned In U.S. Republican Candidates Debate…..
====================================

Then why the latest REBGV news release is titled “Greater Vancouver home sales trend toward buyers’ market over summer”

And it starts with this statement – “August marked the third consecutive month that home sale activity in Greater Vancouver was below the 10-year average for the month. In contrast, home listing activity in the region has exceeded the 10-year norm every month since the beginning of the year.”

And other bits and pieces:
“Last month’s new listing total was the highest volume recorded for August in 16 years.”
“Year over year, prices are up. However, in the detached home category, benchmark prices have come down slightly in each of the past two months”

#202 Bast on 09.08.11 at 6:43 pm

O.M.G. A “garage” in Calgary now costs $275k. I believe the tippy-top has been reached, no? When will the madness end?
http://tinyurl.com/3spbh2l

#203 Ronaldo on 09.08.11 at 6:55 pm

Well, better get out of my rocking chair and turn on the telly. Mr. Obama is addressing congress in a few minutes and expected to present them with a request for $400 billion for job creation. Just did a quick calculation and that amount is roughly what the total value of the 8100 tonnes of gold the US has in reserves. Dollar sure doesn’t get you much nowadays does it?

If they could just get the price of gold up to 7500 that would at least be enough to cover their deficit for 1 year while they figure out how to get the country out of this mess……don’t envy his job

Oh well, they can just keep printing paper and if the price of gold stays where it is now, it’ll eventually buy them a lot less………I figure maybe they should just sell the stuff now and buy up those 1.8 million homes that are sitting empty down there. That would amount to about 250,000 per house on average. Not sure what they’d do with them afterwards though.

Yep, 8100 tonnes of gold sure doesn’t get you much nowadays does it?

#204 b on 09.08.11 at 7:08 pm

It’s no surprise when Bernanke said last month that rates will be held for next 2 years.

That double top in gold looks less likely every day…

#205 Ronaldo on 09.08.11 at 7:14 pm

oops, that should have read 18.4 million vacant homes and cost would be 25,000 each not 250,000….even better

#206 Westernman on 09.08.11 at 7:15 pm

#40 Special-K
“At least our angst produced some real music”
Wrong-o Bong-o … what your generation produced was NOISE, obnoxious, mindless, screaming crack-head noise with absolutely nothing of value to say. No musical talent and NOTHING useful or insightful to say. Thats what your generation produced in the field of music… and everything else you “produced”

#207 Bill Gable on 09.08.11 at 7:31 pm

The US is thinking of issuing 50 year bonds. There is even talk of 100 year bonds.
No problems here – son of an Inuit, this is crazy.
Like not raising rates, so people can get stuck further down the rabbit hole. People will be working until they drop, to pay off homes that are way too large, underwater financially, and broke as pilgrims.
Disturbing to see so many people admitting that they were one paycheck from oblivion.
Sounds like 2008 to me.

On a personal note…glad BPOE has realized Vancouver for what it is. NOWHERE. This town has been turned into a casino with bad traffic, a Mayor that makes Flaherty look smart – and taxes that are going up because of the HST Fiasco and our crucified Post Olympic credit worthiness.

Man.

#208 Hoof - Hearted on 09.08.11 at 7:31 pm

#182 Kilby

IMHO…and experience, people get royally sucked in visiting (4) season hot spots.

The worst thing to do is go to a small town in Spring-Fall aka May to August, when weather is great…then buy on the premise this is 24/7/365.

A few years ago we were in Penticton BC , in middle of November ….talk about a town that rolls up the carpet…you would think it was deserted.

The large Trade and Convention Center they built was busy…..for about 90 minutes ….. for a Remembrance Day event..otherwise dead.

They were also mid – way completion(2007) for a huge Rec Center……way out of proportion to the population(= taxpayer subsidy to Politicians egos).

Advice , if have to buy in these outlying areas…do it in Winter and.or early Spring.

#209 OttawaMike on 09.08.11 at 7:40 pm

Snowboid
“The only former co-workers of mine that took the commuted value were the ones planning to work in the private sector at 55.”

Bingo. That is exactly what he is doing with a consulting career and side biz.
It is also my intention after 55 and that is why the commuted value option got me thinking.

You are sheltered never having heard of Lavalife:”Where the odds of meeting somebody are good but the goods are usually odd”

#210 Hoof - Hearted on 09.08.11 at 7:40 pm

#165 disciple

Re politics:

Smart and ethical people often choose to avoid getting involved directly.

With very few exceptions, those that go in with good intentions reach a phyrric moment wear they see how the system works, and have to decide either
(i) quit or
(ii) check their souls in at the door.

I did a personal research project for my Local Gov’t, a (9) member Council ….went over every Committee and Council Meeting minutes from Jan to May 2011.

Every Staff recommendation (approx. 300) was PASSED or”CARRIED “, the vast majority unanimous, the odd one or two opposed . Not ONE recommendation
was defeated.

#211 OttawaMike on 09.08.11 at 7:43 pm

Stick around Devil. We need somebody to kick around and every once in a while you come up with some profound, insightful commentary.

Just keep your posts to under 25 per day and you’ll be fine.

#212 Live Under Your Means on 09.08.11 at 8:10 pm

#76 David B on 09.08.11 at 6:59 am

Hi fellow Nova Scotian (& Dartmouthian :-). Yep, power rates are going up – 20%, if not more, over the next 3 years.

We put in a large ETS system downstairs last year (we’ve a split entry). It cost us $3,117. But, base charge increased from $10.83 to $18.82 a mo. We will now put in a smaller ETS unit upstairs – $2,800. ROI should be about 4 years. Our power bills have decreased. Even tho I’ve been a shareholder since it was privatized, I’m totally PO’d with their never ending increases and huge CEO/mgmt. bonuses.

#213 Nostradamus Le Mad Vlad on 09.08.11 at 8:17 pm


#191 smoking man — “They all read from the same text book . . .” — Would this be the book? They never accomplish anything at all!
*
1:02 clip Belgium — No govt., no problem. Send this to Oddawwaahahahahaha, then fire the f’ing lotta them, and SEC It’s a start; Swiss Franc Abdicates Gold and silver have replaced it; 13:13 clip We’re coming unstuck! More glue! China Gold price suppression? California Sumtin’ doesn’t add up; Banxters Want More Hence austerity.

Turkey This will put the cat among the pigeons; US – UN – NATO It is clear which side the US is on; 2:10 clip UK govt. on the carpet for David Kelly’s ‘suicide’ (’twas murder); Fuel Shortage? Just about everything else is running out; 2:34 clip Math 1950s style; Chretien says Blair pushed Canada to join war. It’s well-known that Blair is a war-monger; O’bomba Jest like dubya and Blair; Wonder what else they can see from there; Rick Perry It is well-known that his IQ is equivalent to a zombie (pic is worth a thousand words); Homeland Security Just in time for another FF; Mall of America Visitors unknowingly end up as guinea pigs.

#214 Cookie Monster on 09.08.11 at 9:05 pm

#187 jess on 09.08.11 at 4:49 pm
I was saying for the most part that I contend that people are generally good and well meaning. Yes that would include politicians. But it’s true, often good people will at times do bad things in the course of doing their job. My point was just that all people by their nature are generally good.

#215 Cookie Monster on 09.08.11 at 9:17 pm

I was in a good mood yesterday so maybe I shouldn’t have said such nice things about people in such a general manner because I also do think there are evil people too, evil in their nature, people who hate the good or hate the successful for being the good or the successful, people who don’t like to see others do better than them. People like that are rotten by nature.

#216 Smoking Man on 09.08.11 at 10:01 pm

#197 Batman on 09.08.11 at 5:49 pm

You want mine :)

#217 Smoking Man on 09.08.11 at 10:03 pm

#214 Nostradamus Le Mad Vlad on 09.08.11 at 8:17 pm

You read my book LOL

#218 Smoking Man on 09.08.11 at 10:28 pm

#127 Mr. Plow on 09.08.11 at 10:59 am

I can help you read the art of war by Sun Tuz at leased ten times then grow some

#219 Snowboid on 09.08.11 at 10:33 pm

#201 Devil’s Advocate on 09.08.11 at 6:38 pm…

May take you up on your offer some day, but like I said my opinion is Kelowna (especially condos) are going down – I will wait until the $ 350K ones are down to $ 250K before we buy back in.

Otherwise it doesn’t make any sense for us since the rents are so low right now.