Five years ago Ritchie moved from Winnipeg to Minnesota. “I was right out of university, young and naive and completely oblivious to the housing bubble that was building down there,” he says. A local helped him apartment-hunt before he started working at a new job, then suggested he buy a house instead.

He had no savings, and no income. But he got financing.

“The bank approved a $250k mortgage with no downpayment required.  They even told me I could evade the mortgage insurance by taking 20% as a HELOC and using it as a downpayment and getting a mortgage for the remaining 80%.  It sounded too good to be true.” And it was. He came to the conclusion there was too much risk in all debt, no equity. Ritchie took a pass. One year later the market started to collapse.

He continues. “I moved back to Canada last winter and now living in Ottawa.  I feel like it’s deja vu, except now I’m five years older, but its happening again.  Most of the people I know here “own” (I use the term lightly, more like renting from the bank with a 30 year lease agreement…) a home or looking to borrow huge sums of money to “own” a home in the near future.  I’ve been trying to argue the merits of renting, but to no avail.  In fact, I’ve gotten into some heated arguments and I just avoid talking about it anymore because there’s no point.  “It’s different here” and “house values never go down” are the common arguments.  My family constantly hounds me to buy a home.  I feel like I’m in zombie land and everyone is trying to infect me.  But I know better.  I’ve lived through it once and I will live through it again.”

Of course in Canada today if you can fog a mirror, you get money. Houses are routinely bought with no money down. The banks will give you a cash bribe if you take a mortgage, and then you can use that as a qualifying downpayment. The government backs the bank loans, so the banks will lend to almost anybody.

The feds are so afraid of deflation and negative growth that we’ve had emergency interest rates for almost three years. That means prudent, conservative investors with money in the bank, in a GIC or the orange guy’s shorts get 2% when inflation is 3%. Then the government taxes them on the interest. This is wealth confiscation.

At the same time kids without savings can borrow 95% of the value of a house with a 3% loan. The sheer volume of borrowing and buying pushed real estate values higher, forcing more borrowing. So, government policies caused housing inflation and rewarded borrowers, while government actions devalued investments and punished savers. How screwed up is that?

Screwed enough that, as I told you last night, Macleans magazine asked this pathetic blog for a few people who are living through this injustice. I said I’d pass on names of those who wished to speak about it, and was promptly buried under an avalanche of heated emails.

Frankly, that pleased me. I’m proud of those of you who now speak out on this. Nations and economies cannot be built on a foundation of debt, nor become stronger by being more indentured. Families and households which consume more than they earn and save should not profit at the expense of those who live within their means. And our leaders fail if their best strategy against dark times is to encourage the people to borrow against their own futures.

Nowhere is this all more evident that with housing. The last three years have witnessed a massive shift of wealth from the prudent to the flagrant. And all along this orgy of consumption’s been called ‘growth’ by economists and politicians while it’s celebrated as ‘success’ and ‘accomplishment’ by HGTV and your damned mother-in-law.

Of course, it can’t last. We will revert to the mean. But in doing so, a growing number of people fear there will damage to everyone. And I think they may be right.

Here are a few of the comments that I passed on today to the magazine guy.

From Vancouver:

I have $32k in a Canadian bond fund. We have combined $53k in RRSPs. We squirrel away $3200/month into savings each month – $1200 to an RRSP and $2000 into a TFSA. RRSP and TFSAs are all in a growth-oriented mutual fund. The TFSA and bond money is meant for a future down payment. Our dream is to one day have a small house on the East Side with 20% down without stretching ourselves too thin. When will we actually be able to buy this house? Who knows, but prices have to come down a lot.

My financial adviser tells me that my wife and I are “way ahead of the curve” when it comes to our financial futures and that we’ve learned lessons that people in their 60s are only learning now. That’s nice to hear but is no comfort to use when one of my peers sells his Richmond home and can now buy a house in Coquitlam and live mortgage-free with his stay-at-home wife and child. Or when another friend buys a nice little house in North Van and can drive to work in Vancouver in 25 minutes.

It’s hard not feel like a chump sometimes living in somebody’s basement, can’t bring myself to gamble on real-estate and watch people around me seemingly cash in on it. At the same time interest rates are kept abysmally low and the return on my down-payment money investments is peanuts.

From Ottawa:

I’m completely liquid and loving it!  I love that if I want to reduce my costs, I can just move to a cheaper apartment.  I don’t have this heavy financial burden on me.  I’m free and flexible!  However, I’m a little saddened that prudent behaviour isn’t encouraged by the authorities.  Why can people still borrow for 30 years with only a 5% downpayment?  Yes, there are perfectly legitimate reasons to buy a modest home to live in, especially in a two-income family with a big down payment.  I get that people want their space and a backyard for their kids to play in.  What I don’t get is leveraging up to buy a home with so much borrowed money.  Can people stop telling me that its a risk-free investment?  That’s a blatantly false statement.  Do we allow people to use so much leverage when buying any other asset?  No, we don’t.  But the government allows all this leverage to buy a home.  Why are interest rates still at record lows?  There’s no incentive to save money at all, but there’s plenty of incentive to borrow.  And when the bubble burts, the government will likely enact policies to support the people who acted imprudently because they will form the majority of the population.  Savers and the prudent may get the screw job on the way down too.  The authorities should be encouraging saving, not borrowing in these times.  What does a saver do in these times?  I can’t say I know the right answer to that.

I guess people never learn.

From Calgary:

My wife and I are both young professionals working in Alberta, income of over $150K, less than $3K of non-revolving debt, $70-$80K of savings and liquid assets, 2 nice paid-for cars, and… renting a house for $1300/month.

We are both astounded and frightened by the credit binging going on around us and feel that we are the greater fools for being “financially responsible.” I would love to share with that reporter our thoughts and experiences and hopefully speak for the silent minority of young Canadian professionals that are receiving the short end of the stick for going against the herd.

We have 4 academic degrees between the 2 of us and just cannot fathom the debt madness permeating the country. As you often say “this will not end well”, and both prudent and foolish will suffer for it. Please, please, send my contact details to the reporter, I owe it to my daughter to try and do something so that her generation does not have to pay for the mistakes of mine.

From Victoria:

  • Get lucky with .com bubble and make a million on options in 1999
  • Turn into an entrepreneur, not buying a house because I’d rather be liquid as long as my job is financially unstable
  • Fail at one company, sell the second company in 2006 for another seven-figure gain, but continue to work there (we now employ around 30-35 people)
  • Now have a stable job, so look at buying a house.  Realize that the numbers don’t make sense.
  • Realize that the correct strategy wasn’t to start businesses — I should have just got a regular job, levered up and bought a bunch of real-estate. (If real estate goes down, I declare bankruptcy, and CMHC/the Canadian taxpayer pays off the debt for me.  If it goes up, I make large amounts of money.  If you have few assets, it’s really a no-brainer when the government subsidizes gambling.  As long as they don’t have qualms about the ethics, I’d recommend that strategy to anyone with less than $50K in assets.)

From Toronto:

I hear everyone around me tell me how stupid I am (as they are all in paper profits – even the guys who have fixed incomes with government jobs, who have no way ever of paying of their homes).  My biggest fear:  when price fall, and yes they will, that the government and/or banks subsidize or help those in a loss.  My money going to help a foolish buyer. No way.

Love your blog, keep up the good fight.


#1 T.O. Bubble Boy on 09.16.11 at 9:49 pm

In case anyone wondered why those “416” and “905” average prices keep converging:

Exodus to the burbs: why diehard downtowners are giving up on the city


What could they possibly mean?

$839k for a basic semi-detached

$1.2M for a tear-down bungalow

#2 supersocco on 09.16.11 at 10:00 pm

Yup. In the words of Robert Kiyosaki: Savers are Losers.

#3 timo on 09.16.11 at 10:10 pm


who needs to compete against overseas low wage labour when we have it in our backyards. I now have lost my appetite for Chocolate bars.

Racing to the bottom folks!

#4 Seven Stars and Orion on 09.16.11 at 10:15 pm

These responses, with very little change, could have been written by me. I’m in O-town too, and the zombies are scratching at my (rented) front door. Have I got this right? In the future, tax revenue will grow to erase the mistakes of the real estate binge, and these policies will surely come to pass as so many voters are about to be buried? Garth, be a good papa and tell me Santa really does exist, and a frugal family like mine will have our day in the sun.

#5 Hoof- Hearted on 09.16.11 at 10:34 pm

Phhyyrrzzzztttt !


#6 Blair on 09.16.11 at 10:35 pm


Count me in among that Avalanche of emails for MacLean’s.

I bought a house in Ottawa at 255K in Dec ’06. Sold for 389K in Dec ’10. Roughly a 50% gain in four years. I didn’t see my salary go up by that amount to support that cost. But some single guy bought it. I found my greater fool. Now my wife and I live in a bungalow much smaller than the homes of our friends. I just don’t see the need for these larger homes with higher price tags and more maintenance.

I sum up the overall coming bubble burst to be attributed to the following:

1. Many people are listening to what banks and realtors and the media are saying they should do. They mistake them as experts. They are salespeople.

2. We embrace You Tube ads, social media and “group think” and not look at their own pocket books. They choose based on emotion. You’d think the technology savvy generation would open up a spreadsheet on their computer, plug in their expenses and look at the bottom line to see a zero or negative balance.

3. Remember we were encouraged to learn about Science and Technology and embrace social media. Nowhere was financial education tought ANYWHERE in schools.

4. Money, in my view, is still very much a taboo subject in society. We don’t openly talk to our friends and family about salaries and money management or money woes. We are reluctant to know to ask for help.

5. These two problems are contributing to the coming bubble burst.

6. And let’s not forget greed.

I am afraid that the economy will take a huge nosedive in the near future. All this debt is going to catch up on all of us. Then the media will change its long-standing positive tune about real estate. Then the politicians will try to bail out the fools. Thanks to people like me.

As Garth says, “this will not end well.”

#7 george on 09.16.11 at 10:35 pm

The total government (federal, provincial, and municipal) household, and business debt in Canada is 4662 billion$ (4.662 trillion $), and over the last 12 months it has gone up by 268.5 billion $, (roughly speaking because the household and business credit numbers are from the end of July 2010 to the end of July 2011 while the increase in the total government (gross) debt number is from the end of June 2010 to the end of June 2011)

I think for the Governments of Canada and the Bank of Canada to let the total debt in this country increase by 268.5 billion $ in the last 12 months is proof beyond a shadow of a doubt that the great borrowing and spending binge that has gone on in this country for the last 40 years is running on fumes, and they are very fearful of what the future may bring. (Just to put this 268.5 billion $ increase in the total debt in this country over the last 12 months into perspective, the Canadian Federal Government’s expected total program spending for this year is 248.4 billion, according to the 2011 Budget Document)

Our whole way of life in this country is a big lie. It has been built up on a massive and ever expanding unsustainable mountain of debt, and it is about to come crashing down around our ears.

The one thing I can’t figure out though is why are the lenders still lending all of this money. Clearly the debt numbers in this country (and in the rest of the so-called western world) are astronomical and there is no possible way that the folks doing all of this lending are going to get anywhere near all of their money back (no matter what promises may have been made to them, as the debt numbers are just too big), and if they do get their money back the value of it will be severely debased by all of the money printing that is going on.

I think the great party ends when the bond markets of the “stronger” (relatively speaking) western world countries finally figure out that they indeed will not be getting all of the money they have lent out back (or if they do get it back the value of it will be severely debased), and start to sell off their bond holdings thus driving bond yields (interest rates) through the roof.


#8 jed on 09.16.11 at 10:41 pm

#2 Robert Kiyosaki?
His Japanese name translates as “scam artist #1 rate.

#9 Mr. Lee on 09.16.11 at 10:50 pm

Many of us should do what Germany appears to be doing as a country, and this not take it anymore. For those of us that save, live with in out means and are frugal, the time has come to even further role back our participation in this consumer economy. Whe reward the very entity that is bringing us to our knees……mindless counsumerism. Only purchase what you need when you need it.

#10 disciple on 09.16.11 at 10:55 pm

#7 george…don’t confuse corporate and government debt (bonds) with debt to the commercial banks by mortgagors. The former will be paid off via money printing to the vigilantes as you say, but the latter will never be, instead, and in return, the financial parasite class will demand something more valuable to them…servitude. The question will be, will the mortgagors realize that the money lent them never existed in the first place? If they do, all will be corrected and the bankster families will move along to the emerging markets, if they don’t, …mayhem will ensue in Canada, and the banksters will have finally won. As long as we continue to elect banker puppets, the darkest chapter draws ever closer. We need a Jackson, or a Kennedy, or a Tommy Douglas.

#11 Devore on 09.16.11 at 10:57 pm

#1 T.O. Bubble Boy

That’s a good article (on burbs), but outside Toronto, Montreal, Ottawa, maybe a couple other places, suburbs are not quaint little 200 year old towns. They’re the empty, soul destroying burbs where people go to sleep, because there was nothing there before except farmland and forest.

Suburbs have become such a poor choice especially since to do anything of any economic, cultural, social or political significance you have to be where the people are: downtown. Without a well thought out and efficient transportation system, including public transit and roadways, it takes far too long to get from A to B.

Until sufficient number of people are able to make a living locally, centrally located real estate and living choices will continue to command a premium. It’s great if you can work from home, or in the shop down the street. Most people can’t.

Although as globalization slowly winds down, due to cost of long range transportation if nothing else, that will begin to reverse, but for vast majority of people suburbs means bigger house longer commute. That’s the tradeoff.

#12 Nostradamus Le Mad Vlad on 09.16.11 at 11:02 pm

Unfair? Yep, life’s unfair. Life’s a bitch then you die!

“But I know better. I’ve lived through it once and I will live through it again.” — Nothing like having the experience of seeing firsthand what gluttony can and will do, then taking a pass. Good for Ritchie.
Youngstown Mmm, The Boss live in ’09. Great footstomping music!

#170 timo — “One gigantic credit bubble that desperately needs jobs . . .”

The jobs are going, going, gone . . . to BB (Brazil and Bangladesh), ChIndia — wherever it’s cheapest to produce something, then get those suckers in the west to pay grossly over-inflated prices for them. Good link.
Sucker Punched That’s us folks. TPTB are in the process of taking apart pensions all over; Soros More news, but Merkel shuts the door, no Eurobonds; 1:34 clip (Geithner) “Start watching at the 40-second mark for the uncomfortable Geithner smiles – This is pretty funny.”; JPM and silver manipulation (the latest); China Pulling the plug? On US Treasuries, yet; on the money, no; US – Euro clash. Someone’s ego has to give; 4:17 clip Sept. 17, 2011 is an interesting day — not only the Ottawa march for 9-11 truth, also flooding Wall St. with financial truthers; Obummer Don’t rule hyperinflation out yet. There are many things to come, and martial law is one; BoA Dumping their toxic mortgages on to taxpayers’ backs; Inflation Good for stocks.

Monthly Terror Drills or How to Scare Kids Shitless; Arab Spring ending with raping, pillaging and looting; Carter backs Palestinian statehood; French Nuke Blast “MOX fuel is TWO MILLION TIMES WORSE than normal Radiation! It is Plutonium!”; O’bomba “Who would benefit from such regulation of the natural supplement industry? Big Pharma.”; UK Govt. attempting to strip some workers of the minimum wage.

#13 disciple on 09.16.11 at 11:08 pm

Do you see or hear of any political candidate speak of reining in the banks? No. Not even a whisper. When was the last time you heard anything in the media about a politician who planned on bailing out mortgagors rather than the banks? Obama pledged over 50 billion, but gave out only 2 billion. Why is CMHC in the bankers’ pockets? I bet you nobody at your workplace knows the sheer number of mortgage debt insured by the taxpayer. And nobody at your church, mosque or synagogue, certainly nobody at your hockey rink.

Simple policy changes, little by little are snuck in under the radar while you’re at sporting events and drunk at the latest Gaga concert. Gaga by the way is another mind control state. They use distraction techniques to divert attention, and it’s not that difficult when they control every single newspaper, news network, magazine, journal, and online ISP conglomerate in the country.

The only semblance of power or control you have is your paper ballot and your wallet vote. Use them wisely, it’s still not too late. The banks have their claws in everything from groceries to auto purchases. Look for them, avoid them, and slowly we will divest ourselves of them. You must identify the enemy in order to defeat it, and solve your problems. No, it’s not this lefty or that righty, it’s the banking families that control both sides.

#14 vyw on 09.16.11 at 11:11 pm

#7 thanks for the post
Bankers lend if it is profitable against the risk.
They are not deposit constrained. They will lend based on assessment of the loan. Credit is created first and then the deposit. Banks do need to check in against the BoC criteria re reserves and if needed they will lend to each other or borrow from BoC.

If debts or spending is reduced, the economy will contract. Unfortunately, this will be upon us soon.

Bonds are relatively low risk especially Govt bonds because the fed Govt controls a floating fiat currency which is not tied to gold or anything that would constrain the Govt from spending it into existence. In other words it is the BoC that controls the interest rates through various mechanisms – we are not at the mercy of so-called bond vigilantes. The fed Govt through the BoC could if this wish purchase every Govt treasury.

#15 Waterloo Resident on 09.16.11 at 11:13 pm

I have a feelng that prices will keep SHOOTING TO THE MOON for the next 5 to 10 years as interest rates CONTINUE to stay at emergency lows.

Actually, soon interest rates on mortgages will start to head LOWER, not higher, so get ready to read more headlines like these in your city soon:

” Bidding war drives selling price of Bloor West home up $71,000 ”
days on the market = 7
(bought for $690,000 in 2008, listed for $899,000,
bidding war drove up price to $970,000):


” High Park homes draws $351,000 over asking. ”
days on the market = 4
(Asking price $1,299,000, bidding war drove up the price to $1,650,000 ):


” Busy street location, but upgrades draw $76,000 premium ”
days on the market = 7

( Previous selling prices:
2006 = $318,000
2008 = $547,000
Asking price = $699,000
Bidding war drives up the price to = $775,000


Another bidding frenzy example in T.O., house sells at $76,000 over list in just 6 days:


From what I can see, home prices have JUST STARTED heading up, so go ahead, borrow until your nose bleeds and enjoy the ride.
Once the ride comes to a stop and you are upside down on your mortgage, then just declare personal bankruptcy and get out of ALL of your mortgage debt, its as simple as that.

The examples you cite, as a realtor, are why the future is now sealed. The smartest people are leaving this asset class. Your words are shameful. — Garth

#16 timo on 09.16.11 at 11:23 pm

outsourcing is the key to recovery people


#17 Drew on 09.16.11 at 11:24 pm

George #7. Good comments, alarming but true.

#18 45north on 09.16.11 at 11:28 pm

T.O. Bubble: thanks for your link to TorontoLife, I don’t agree but it still very relevant

George: Our whole way of life in this country is a big lie. It has been built up on a massive and ever expanding unsustainable mountain of debt, and it is about to come crashing down around our ears.

the Federal Civil Service is built on ever expanding unsustainable debt and the present managers have no idea how to deal with it because they are the ones that have built it

#19 Leo on 09.16.11 at 11:37 pm

I hope this Macleans article gets tons of attention but I doubt it as the world unfortunately has more debtors then savers.

Savers are being forced to take on excessive risk, the foolish continue to milk the low interest rates and the worse part is politicians are throwing money at every problem around the world. That printing press is tax payer money- some today and some for infinity. There is no failure, no pain for stupid mistakes, no bankruptcy where deserved- just another blank cheque. We are all going to Hell for this because it breeds criminals, stupidity and lack of principle.

The same people that caused the 2008 mess are still milking the gravy train and warning of constant collapse if the blank cheques do not continue. We continue to kick the can down the road, we continue to let zombie banks and corporations exist and we continue to reward greed and stupidity.

The most funny aspect is how these politicians/economists etc want consumers to keep spending money to take us out of this mess???? hmm!!!! Everyone has tons of debt and you want them to spend more money ??? For those who have actual cash you pay them nothing in the bank so you force them into more risky assets that they probably dont understand.

I say bring on the collapse- wipe out the excess and start over. Those that borrowed too much- too bad- those who lent to Greece and every other country that can’t do basic math need a hard lesson in risk/reward with the RISK a possibility. Risk is non-existent these days. You fail and you get a bailout. You buy a house you can’t afford and the taxpayer pays the bill. Our politicians are an absolute JOKE! Put this nasty bill on your own tabs not mine, not my kids and not the next 500 generations. When housing collapses here in Canada Flaherty and Carney should pay the tab.

#20 cecilhenry on 09.17.11 at 12:08 am

Here is an interesting discussion from Mark O’Byrne, an executive director of international bullion dealer Goldcore, on the housing bubble in Ireland.

The implications and parallels with Canada are ominous.


#21 Tim on 09.17.11 at 12:18 am

I know of many people in the Lower Mainland who barely know the difference between stocks and bonds, but happened to buy property over the last ten years and they have made so much more than I have saved, despite the fact that my income is above average. There is such a gap between those who bought real estate here over four or five years ago and those who didn’t. Even if the market falls 30% they will still be way ahead. Thanks to the Conservatives and the dolts who voted for them, we have this situation.

#22 Jon B on 09.17.11 at 12:19 am

Savers are getting screwed. A reversal of fortunes is coming.

#23 Jimbo on 09.17.11 at 12:43 am

I’ve managed my own portfolio for over 25 years now (i.e. No mutual funds and I make all the asset allocation decisions) and my 7-figure RRSP’s average compound return for that period is 17.9%. I don’t trust the banks or any of their financial advisers. I think the whole industry is corrupt.

Call me a fool, but I suspect a big global shakeup is coming. Although I believe it will be in the form of a deflationary contraction, I can’t be certain that it won’t be hyper-inflationary or even that doom-and-gloomers might be proven wrong altogether. So where do I put my eggs to preserve my wealth? I’ve done a lot of research trying to answer this question.

My solution is to hold my portfolio in 4 equal parts that, to the best of my ability, have been set up to preserve wealth:

1. Cash. Should do well in deflationary credit contraction. (In Can$ and US$ T-bills because I don’t trust CDIC. If things unravel, I could just imagine a struggling CDIC paying me back… in equal installments over 20 years.)

2. Gold bullion. Should do well in hyperinflation and hold up in deflation. (There is no counter-party risk and you can’t print the stuff. 10,000 years of history is on its side. Plus it is very liquid, as I can sell it all with one phone call or keystroke.)

3. Gold stocks. Historically have done very well in hyper-inflation (late 1970s) and deflation (1930s). (Half in quality producers,and the other half in explorers and developers. But ALL my holdings are in companies with healthy financials in politically safe nations. I learned a big lesson from 2008.)

4. My own business. Should continue to do well if there is no global shakeup and business continues as usual in the world.

Real estate and general stocks? Nada… although the US is really starting to look cheap. I also hold some long-dated put options on the general markets.

#24 Nostradamus Le Mad Vlad on 09.17.11 at 12:46 am

“Nations and economies cannot be built on a foundation of debt, nor become stronger by being more indentured.” — That pretty much covers the west, so it’s time to say goodnight, Gracie!
Carbon Money If this happens, there is only one group who will benefit — TPTB; 4:20 clip Nigel Farage. This person is quite interesting, because he does not have a hidden agenda; Dangerous new phase, but how bloody serious is it? Well, it may be serious enough to talk of a union; Something’s Up Says so in the headline; ETF ban? That’s what is being called for; Rare Earths China tightens the noose; Building 7 and Securities Fraud “Salomon Smith Barney: leased over 1 million square feet in building 7. The firm was under investigation for its stock ratings and alleged securities fraud. Settled for $400 million in 2004.”; Link in. BoA — Countrywide bankruptcy? BoA just pawned off a whole lotta toxic mtgs. to Fannie / Freddie; Navarra region of Spain soon to be bankrupt, and Geithner believes in heterosexual fairies in tutu skirts.

Link in. Re: The plane crash in Reno Friday. Don’t forget sheeple are expendable. Was the accident designed to take attention away from Ron Paul’s speech? I wouldn’t bet against it; ‘Quakes 6.6 and 6.2 near Fukushima; 6:28 clip Libya — Time for a civil war? There is nothing civil about war; Two Beaches A commentary on England and China; Japan War with the US? Using Fukushima’s destroyed stuff and some other things, it is possible and Turkey Is this oven getting hotter? UFOs Strange lines in Peru and the MEast and another MEast riddle; Swissair “Diamonds and gems that would be worth half a billion dollars today were also never found.” Crashed at Peggy’s Cove, didn’t it? There are diamonds in Af’stan as well.

#25 mad vancouver on 09.17.11 at 12:48 am

Total family income: $190 000
Renting a small home in Vancouver for $1300
Most savings invested in farmland (stock market is becoming too nonlinear).
No debt.

Our savings are being eaten by inflation, but I do not really care that much. What bothers me the most is how to explain to my teenager kids how to lead a decent life. All the lessons I learned from my grand-parents (be prudent, save money, live like there is a tomorrow, remember that pension plans can collapse, save for your kids’ education, etc), seem to be invalid nowadays. Everyone around us has a BMW or a Porsche (even the building superintendent!). We are weird because we do not want to play our savings in Vancouver real estate casino. We are weird because we try to make money by working! It seems those values are really passé. Even the government is rewarding insanity.

We are surrounded by greed and virtual wealth. Money is the core value of our community, virtual money. People live in a mix of pride of owning too much, and periodic anxiety crisis when listening to economic news.

I do not mind being patient, and waiting for things to go back to normal. But if asked to pay taxes to save the crazy borrowers when the Ponzi scheme collapses, I will feel extremely upset. However, I will still be better off then most of the nut cases who played that old speculation game.

Does anybody remember when the French were paying incredible amounts of money to buy swamp land in Louisiana? Until somebody actually travelled there to have a look a this paradise. Prices collapsed, many lost their shirt, that was just before the 1789 revolution.

#26 nonplused on 09.17.11 at 1:00 am

Wow. Great post today Garth. The letters were ok but you were on fire.

#27 JCimt on 09.17.11 at 1:06 am

To Aussie Roy – I enjoy reading your posts here almost as much as I enjoy Garth’s insights and turn-of-phrase. Often I wish there was an an Australian version of Greater Fool.
So, do you a) have a blog of your own, or b) can you point me in the direction of something that comes close?

#28 Aussie Roy on 09.17.11 at 1:12 am

Aussie Update

Land Broker TV – Steve Keen versus everyone else.


Gee these “there is no bubble here” stories are getting common. Think I saw this excuse here, yesterday.

Housing bubble predictions simply silly, given growing population.


Meanwhile in the real world. Door to door selling of houses?.


Did I mention we have shortage and no demand.


SYDNEY’S spring market is awash with prestige properties, often on their second or third marketing campaign. Some of these properties are now selling as vendors drop their prices.

Examples include a house in Tamarama, which has sold for about $7 million after ambitious hopes of $11 million, and a Castle Cove house that dropped from $8 million to $6 million.


#29 Ozy - SOS for 60 years olds on 09.17.11 at 1:14 am

Dear 60 year old canadians, if you care to hear, your near future has jsut sent an S.O.S, it goes like this if you put attention:
Sell nOw or looSe!

Get the he– out of poluted, mental cities onto green quiet grass/nature of a small town and leave plentifully with house price difference. Leave your slave jobs, stop thinking you are doing anything useful there, and enjoy what’s left of your life before God Forbid you get sick of cancer and die soon.

I repeat: Get the he– out of poluted, mental cities onto green quiet grass/nature of a small town and leave plentifully with house price difference. Leave your slave jobs, stop thinking you are doing anything useful there, and enjoy what’s left of your life before God Forbid you get sick of cancer and die soon.

Sell nOw or looSe!

S.O.S wake up call fellas, is not gonna ring again for you

#30 DML on 09.17.11 at 1:36 am

Fantastic post.This is all so infuriating.True,nations cannot be built on a foundation of debt,but we sure as hell
tried,didn’t we?So many are complicit in this,from all levels
of government down to the guy who bought a flat screen
on the do not pay till god knows when plan.
But pay we will,and the prudent ones,the ones who resisted the siren call of cheap money and easy credit,well,they will pay too,and it is not fair.

#31 Observer on 09.17.11 at 1:58 am

Hats off to MacLean’s.

Injustice it is. Theft it is.

#32 Your Mom on 09.17.11 at 2:22 am

wow or ow. Canadian commentary will never be the same.

High School Financial 201 Course Syllabus templates taken:

#33 Not Wondering Anymore on 09.17.11 at 2:30 am

All this blame directed at “the government” for changes to regulation and oversight when, in fact, what has become blatantly obvious is that governments globally have been infiltrated and bought by the corporate and financial sectors, with the intent to gain unfettered access to public funds.

“Government”, as we understand it, with the purpose of representing,collecting from and addressing the needs of all, no longer exist. They are instead now only representing and existing for the benefit of these select few. It is the corporate and financial sectors along with individual politicians who must now be identified and made responsible and accountable.

The gradual realization of this within populations is resulting in citizens from all walks of life taking to the streets in protest. This is what we are currently witnessing happening around the world, with more to follow, and Canada will not be immune.

#34 Metro Van Observer on 09.17.11 at 2:30 am

“Nations and economies cannot be built on a foundation of debt, nor become stronger by being more indentured. Families and households which consume more than they earn and save should not profit at the expense of those who live within their means. And our leaders fail if their best strategy against dark times is to encourage the people to borrow against their own futures. ”

Garth you have summed things up perfectly with the above paragraph. Short-term material ‘success’ built on a speculative casino\ponzi scheme whereby people continue to flip properties to each other cannot be sustained. As is pointed out here daily, there is no wage growth, economic growth is actually negative, jobs are vanishing and yet house prices keep rising? On what fundamental economic basis? DEBT!

This gov’t will go down in history as being responsible for an economic pearl harbour in Canada. Mark Carney is to Canada what Alan (the ‘maestro’) Greenspan was to the US. Interest rates too low for too long = MASSIVE BUBBLE. US economic history (the housing bubble) won’t take long to repeat itself up North.

Canadians need to stop being so smug with their paper gains. Debt must be repaid and looking at the sheer size of alot of mortgages out here in Metro Vancouver, I doubt many ever will.

#35 Your Mom on 09.17.11 at 2:31 am

High School Confidential

Families and households which consume more than they earn and save should not profit at the expense of those who live within their means.

And our leaders fail if their best strategy against dark times is to encourage the people to borrow against their own futures.

#36 Amarillo on 09.17.11 at 2:37 am

Debt is a wonderful thing
It’s better than hot chicken wings.
To F & Stevie, it’s a lifeboat
To keep HMS Economy afloat-
… Until they both fade to posterity.
But Utopia & Disciple cry out, ‘Bullshit’!
This ain’t no way to sail our Good Ship!
Our descendants will suffer,
(Ee’n those who won’t get off their duffers)
We demand higher rates for a buffer!
Our US neighbors look on – aghast,
Knowing what’s transpired in their past
(And predicting we’re in for a blast …)
But could BPOE really be right?
He sure doesn’t sound all that bright
Must be the west coastal climate
You just havta ‘know how to time it’
Could be that strong shit he’s smokin’
The whole BC province is tokin’
Hey! Why bother to fix it, nuthin’s broken.

#37 Rural Rick on 09.17.11 at 2:49 am

If you are interested the history of interest is interesting.

#38 Pyra on 09.17.11 at 4:22 am

Blair makes a really good point about education. I think when I was in Grade 10 somewhere in the early 90s we had to take Business Ed, but that was more about how to write a resume, how to do a very basic budget, nothing about investing or financial planning beyond get a good job. It was assumed we’d learn the rest later.

I understand from a friend who does part-time tutoring of high schoolers that Business Education 10 is no longer required, so no one takes it unless they’re planning to go into Commerce at university.

Looking around at friends and family who are my age and younger, it’s no surprise most of them can barely balance a chequebook, let alone figure out economic trends. Of course they all think the market can only go up.

I was fortunate enough to come into a bit of money and smart enough not to waste it so I set about educating myself about investing and now I have a basic moderate portfolio worth 200K. Only 3 of my friends in my age range have investments.

Worse is that of my friends in their late 40s into their 50s, the number’s not much different.

Granted that I work in the music industry, but even so, you’d be surprised how many people I know who seem to think “become a rock star” is a viable financial plan. Of course, if even that works out, how many rock stars outside of Mick Jagger are still rich after the peak has passed?

And if that fails, they assume a 500 square foot ugly condo will rescue them.

#39 Byron on 09.17.11 at 5:05 am

What is the reference to “orange guy’s shorts”. I have seen this a few times. I do not have a TV; is it from an advert?

#40 GregW, Oakville on 09.17.11 at 7:19 am

Hi #31Observer, I agree. But I’m waiting to see what they actually publish before I give then that praze.
(Until then I’ll keep my hat on.)

#41 Incubus on 09.17.11 at 7:38 am

Excellent paper, but prices will revert below the mean because the final stage of a bubble is despair.


#42 Rudolf on 09.17.11 at 7:40 am

I have taken advantage of the real estate bubble by selling my condo in Toronto. Having lived in the building for about fifteen years, the monthly maintenance fee had risen to $758.00, and more than a million dollars of reserve funds had been spent by an incompetent Board of Directors for unnecessary improvement to save some HST. The timing to sell was obviously right, because units now offered for sale are selling for less already.

I now live in a nicely appointed 2-bedroom rental apartment in Burlington with two balconies overlooking Lake Ontario. The rent in the well maintained and managed building is $1,375.00 per month including all utilities – individually controlled heating and cooling – and two underground parking spaces.

I sleep very well these days without worrying whether condo prices will rise or fall in the future. But because I now only rent the roof over my head, my social status has been downgraded by “smart” relatives and acquaintances to “Second Class Citizen.”

#43 I'm stupid on 09.17.11 at 7:42 am

Not so fast Garth. I completely agree with everything you said, with the exception of one thing govt policy when shit hits the fan. If losses exceed the chmc insurance coverage, govt will change bankruptcy rules not raise taxes. It’s easier less politically damaging and still continues to support the banks. Wage garnishing will be everywhere. Look for changes in bankruptcy laws they will come well before the correction in housing occurs. Actually I will venture to say that when you see this happen it will signal the end.

#44 allister on 09.17.11 at 7:43 am

The prudent and hard working people always sacrifice for the stupid. Thats the way its been since socialism started in a big way around 1970.

We pay for the lifer welfare families who have no intention of contributing, we pay for the rovolving door in our courts for the drug culture, we pay for the criminals’ jails along with their house keeping and food, we pay for the bad parents who have their children removed to childrens aid, now they want a meth clinic in my town – you all know this is just a short list.

In the mean time we have lost our country to foreigners who now own most of our natural resources, most of what little manufacturing thats still in operation.

But we are so proud of whats been accomplished through all the socialism. Yes sir, take from the producers til they leave or give up – such a great plan.
( I am being sarcastic)

#45 Q on 09.17.11 at 7:45 am

Real estate has become just another MLM (Pyramid) scheme, but this time endorsed and encouraged by the inept government, via their banker handlers. As with all these schemes, sooner or later you reach the bottom of the pyramid and there is no fresh money(read suckers) left to play…then it all falls apart like an inexpensive chinese suit. Looks like we’re at the base of the pyramid now and the hucksters (government et al) are out of tricks to keep it going. The curtain is finally being thrown back and the tiny wizard exposed…..

#46 bigrider on 09.17.11 at 7:59 am

#2 Supersocco.

Yup, Robert Kiyosaki is so rich from all his borrowing to buy Real estate that he has to sell books and seminars to all of us ‘losers’.

Every read his stuff. I have for free in an Indigo. Wouldn’t give him a dime for his garbage. So contradictory.

Only a sucker believes his spew.

#47 Karl on 09.17.11 at 8:06 am

#39 Byron on 09.17.11 at 5:05 am

What is the reference to “orange guy’s shorts”. I have seen this a few times. I do not have a TV; is it from an advert?

I would also like to know what this means. Seen the reference several times before.

#48 T.O. Bubble Boy on 09.17.11 at 8:29 am

orange guy’s shorts = ING Direct savings account

In Canada, this expression will still hold… but in the U.S., you might need a new phrase soon if the ING Direct purchase by Capital One goes through (link).

With several other Canadian savings account options offering higher rates (Canadian Tire Bank, Ally, Manulife, and even ICICI from India re-emerging: link), ING may fade from its current position of Canada’s favourite place to stuff extra cash.

#49 Jane24 on 09.17.11 at 8:41 am

In a nutshell what has happened over the last decade is that people confuse the word ‘wealth’ with the word ‘debt’. That and the fact that anyone under 35 has never known a real estate correction.

When houses make more in a year than a middle class person working full-time, then yes indeed there is something very wrong with both the economic system and our values.

#50 Moneta on 09.17.11 at 8:42 am

@ 154 Moneta

What stress tests?

You don’t really think these civil servants have any idea of leverage or its implications do you
They’ve done stress tests because they do have to show they’ve done everything they could so they can say hoocoodanode.

#51 pbrasseur on 09.17.11 at 8:56 am

Garth – You make a difference!

This blog is awesome and getting even better!

Can’t wait for you next book


#52 Aussie Roy on 09.17.11 at 9:04 am

JCimt on 09.17.11 at 1:06 am

To Aussie Roy – I enjoy reading your posts here almost as much as I enjoy Garth’s insights and turn-of-phrase. Often I wish there was an an Australian version of Greater Fool.
So, do you a) have a blog of your own, or b) can you point me in the direction of something that comes close?

These may be of interest, in no order.

Aussie RE
http://www.debtdeflation.com/blogs/ Steve Keen

General – Both may have a little gold fever at times but otherwise, great value considering they are free.

Sorry no blog of my own and really nothing in Aus like Garth does here, this is why this old fella keeps coming back to this pathetic blog. – LOL

Thank you, I’m glad you enjoy my comments.

Aussie Update

Low rates (CPI) allow people to take much more debt relative to income, they make mortgages more expensive over the mortgage life and they keep people in high debt for much longer period by keeping loan principal high. This is not only the key reasons why our (spending) economy is suffering but also the reason why it will not be able to recover anytime soon (if CPI remains on these levels).

To avoid this debt trap caused by low CPI and mortgage rates, banks could adjust lending criteria and take into account CPI levels. They had to reduce maximum LVR and maximum repayment relative to income to offset low interest rate trap. During 2000s, not only that we let low rates to do the damage but also our banks increased LVR and maximum repayments relative to income, creating huge debt problem that will cause economic pain for extended period.


SSSH, dont spook the infestors

There is a new real estate record which may spook potential investors to hear – experts say Perth’s median house price is certain to drop for the sixth consecutive quarter.

It has fallen a further two per cent, predicted to take the median property price in the metropolitan area to $467,000 by the end of the year, down from a peak of $505,000 in March 2010.


#53 Moneta on 09.17.11 at 9:08 am

So, government policies caused housing inflation and rewarded borrowers, while government actions devalued investments and punished savers. How screwed up is that?
If consumerism had been kept in check, growth numbers would have been much lower over the last few decades and portfolios would be much smaller.

Growth stalled in the 70s when the US became a net importer and started to used its currency to maintain its lifestyle. We played along and are now stuck with their problem.

Without these excesses of the last few decades, profits would have been much lower, less money would have been available, market capitalizations would not be what they are today and a 1 million dollar portfolio probably would be much lower… probably closer to 500K.

So rates are low today because there is TOO MUCH money in the capital markets for the number of productive companies outstanding. Too many people sitting around sipping wine expecting others to make them rich. Too many boomers with not enough savings expecting the young ones to give them top notch care and buy their unmaintained jumbo houses in 10 years so they can pay for their long term care.

If government stopped interfering, markets would crash and those portfolios would shrink in a flash. So savers should stop complaining. Without these excesses, their portfoloios would be dismal.

Savers who complain about the low rates are just as bad as spendthrifts. They think life should be fair and easy, that saving and making easy money is a right.

Instead of being angry and pointing fingers, savers could be looking at how they could be improving Canada’s future.

#54 pbrasseur on 09.17.11 at 9:14 am

Interestingly enough, things are quite different is the US


In other words, in the USA unbalances are slowly (abeit painfully) getting fixed, while in this country they keep getting worse…

At some point this is going become obvious. I don’t like to make too much of stock market fluctuations (usually they are meaningless) but I’ve noticed recently that the spread between TSX end DOW is getting thinner, wonder id that’s a sign of things to come.

#55 Incubus on 09.17.11 at 9:16 am

“According to Dent, the spending in the boom years has led to the biggest global real estate and credit bubble in history. He believes the worst hit will be those places where the bubble hasn’t burst yet — West Canada, Australia and China.”

“”Bubbles go back to where they started,” he noted. U.S. housing prices, he observed, have fallen 34 percent since their peak, and will drop by another 30 percent. “There’s a lot more pain coming, especially in real estate,” said Dent, who sold his home in Miami, Florida in October 2005, and doesn’t intend to buy property until the market bottoms in a few years.”


#56 Moneta on 09.17.11 at 9:30 am

Savers who complain about the low rates are just as bad as spendthrifts. They think life should be fair and easy, that saving and making easy money is a right.
If the nominal economy is growing at 4-5% but you’re expecting to make more, that means you are taking money away from other Canadians. A few can get away with it but the majority won’t.

Most boomers have been sold this bill of goods and many still don’t understand that what they have been sold is mathematically impossible.

Our system works as long as we have a population pyramid, however with the boomers we have a 10-15 year bulge.

#57 Form Man on 09.17.11 at 9:56 am

One result of the easy availability of mortgage money in the last couple of decades has been to move a significant proportion of renters into home ownership. In the U.S., these people are now becoming renters again. The same will happen in Canada.
On another note, there is a movement afoot in Kelowna to influence the upcoming municipal election. This movement is being led by the owner of a prominent local online newspaper. The purpose is to remove so-called ‘anti development’ councillors and replace them with ‘pro-development’ ones.
Although the central Okanagan is awash in overbuilding ( for which there are few buyers), apparently the local economy is being held back by a lack of development……..
It should come as no surprise that this online news site is heavily supported by the real estate industry. The disconnect from facts and reality here is remarkable.

#58 Mr. Lahey on 09.17.11 at 9:57 am

#19 Leo The most funny aspect is how these politicians/economists etc want consumers to keep spending money to take us out of this mess???? hmm!!!! Everyone has tons of debt and you want them to spend more money ???

That’s all they have left Leo. It is the final gasp before the shithawks come swooping in. Once the debt fueled orgy of spending ends, things will, in the words of Captain Garth, not end well. To yesterday’s commentator on the cap rate of a $100k house with taxes at $4k and rental revenue of about $30k, I think it was your drink Randy spiked with whiskey.

#59 lars on 09.17.11 at 10:05 am

My wife and I just spent the last week riding Harleys around Washington state and Oregon. We passed hundreds and hundreds of for sale signs in cities and along beaches and did not see one sold sign. Not one!

#60 Al on 09.17.11 at 10:15 am

Called for a Thai Massage and they are fully booked until next Friday ! No depression here in TO !

#61 kc on 09.17.11 at 11:15 am

#50 anjing bau on 09.17.11 at 8:32 am

“The great reset upon us now is the move from a manufacturing based society into an informational/knowledge based society. ”

In a very strange way there is truth to what you are saying….

did anyone watch this “DocZone” episode? if not you can watch it all here. (and if you have ever wondered where and whom you talk to to complain when on the push 1 for english merrygo-round) this will try to answer some questions.

Customer (Dis)Service

Thursday, September 15, 2011 9:00 PM on CBC-TV


#62 oslec on 09.17.11 at 11:26 am

to #55 moneta:
I remember the old fable of the ant and the grasshopper. The ant worked his butt off and saved for the rainy days ahead. The grasshopper played and did not work or save. When the rainy day did come, the Ant actually did share his food to the starving grasshopper. Awesome moral to the story. However an alternate ending was found in some scrolls in the Dead Sea. In the End the ant was just fattening up the grasshopper and ate him in the end…LOL

#63 Macrath on 09.17.11 at 11:27 am

Excellent post Garth. Investing in hard assets seems to be the only recommendation available to avoid this wealth confiscation.
A paid off bunker, a copy of “After The Crash” and a diversified portfolio are indispensable.

Take a gander at this poor Greek who could not get refinanced.

Will cash become more valuable, as some suggest, as the global situation deteriorates ?

#64 TurnerNation on 09.17.11 at 11:31 am

It’s almost that time of year again: Halloween!

This year’s top kids costumes will surely include “Lil’ Garth”.

What better way to terrorize your neighbours than by having a mini GT tell them: This will not end well!
Or: Nice debt prison!
(While rotating head 360 degrees for added effect, if possible).

The ulimate prank: slap fake Reduced Price stickers on all For Sale signs in the neighbourhood. The screams of horror will be heard the next day!

GTA (Garth Turner Area) stores are already reporting an uptick in yellow tie and pint-sized cowboy boot sales.

You are so finished. — Garth

#65 Drew on 09.17.11 at 11:36 am

Some thread music:

#66 Snowboid on 09.17.11 at 11:40 am

#50 anjing bau on 09.17.11 at 8:32 am….

I’m sure the Morlocks will look after the knowledge-based workers just fine, no worries there!

#67 debtified on 09.17.11 at 11:44 am

I have a feeling Greece declares bankruptcy before Thanksgiving.

#68 The thing in the basement on 09.17.11 at 11:45 am

55 Moneta – an excellent point often lost in the shuffle. I suppose I can’t complain too much either. My business (and many others) have undoubtedly benefitted from the “wealth effect” of easy credit. It’s easy to look at your income and pronounce yourself a saver by living well under your means, but in reality, we cannot
determine the root of that wealth. Or as Shawn likes to say “if we are awash in debt we are also awash in savings”.

But how do you propose we go about improving the

#69 Randis on 09.17.11 at 11:52 am

Kiyosaki is a loser himself? Too addicted to pyrimad porn

#70 Aussie Roy on 09.17.11 at 11:57 am

Aussie Update

The property was auctioned a couple of weeks ago but failed to attract a single bid. A vendor bid of $500,000 was passed in.

Standing in the empty house, a bewildered Mr Westerhuis threw up his arms in defeat.

“I’m not sure what else we need to do to get people interested,” he said.

MMM, gee, could lowering the price, help?. I’m no rocket surgeon but it seems to me, it might help.

And this.
One woman browsing yesterday was reluctant to express any interest in the property but said that the no reserve auction was, in some respects, a turn-off.



Pushing on a string, Aussie style.

Aussie Banks back to risky lending – People say “No thanks” in record numbers.

BANKS have relaxed their lending criteria amid growing competition for the dwindling mortgage market.
Would-be borrowers are saving rather than taking on debt in the current climate, with lenders willing to hand over bigger sums of cash.


Hard to spur demand just with lower credit rules, when the driver, house price appreciation, is no longer with us. Its not just low rates which drive demand but the human emotion associated with housing and debt. Ours is slowly changing. The speculative price growth goes, people get cautious, the market wobbles effecting prices, people get cautious etc etc. This classic negative feedback loop, IMO is underway in Australia.

#71 shawn on 09.17.11 at 12:06 pm

Best post I’ve read yet. Keep up the good work Garth!

#72 Mr. Lee on 09.17.11 at 12:07 pm

Max Kaiser refers to this as the battle between speculators and savers, we will see if he is right. As for those who are preaching to keep on borrowing, interest rates will, fall, and just declare bankruptcy when the party stops……..look how that turned out for the US and its eviscerated middle class. While I am at it, things in Europe do not look to rosy either, hell you have got Soros making threatening statements about the people of Germany not too enthused with footing the bill for bailouts and Euro Bonds. Alas, I know, Canada is different. Our GDP, of which 70%, is directly tied to US imports means nothing. Over valued currency decimating exports……do not worry about. Just keep borrowing and all will sort it self out, right?
Then when things do finally “regress to the mean.”, the good old Government will step in and save the debtor slave. Just like they did in the US and Europe. Oh, that is right. The Goverments bailed out banks, not people. Can’t happen here right??????

#73 blase on 09.17.11 at 12:08 pm


What do you think are the chances that F and H change the laws so that mortgages are not covered under bankruptcy? Seems like 2012 budget would be a good time to do it, before the flit hits the shan.

#74 Nemesis on 09.17.11 at 12:14 pm

Hmmm… fit’s in rather nicely with GT’s “Unfair” on so many levels… For Nostra, et al.

“…ministers completed two days of talks marred by a clash of thinking between Timothy Geithner, the US treasury secretary, and leading European finance ministers, both German and Belgian finance ministers having highlighted the US as carrying the world’s heaviest debt burden.

Ministers wrapped up early because of reports of several thousand demonstrators assembling at a nearby stadium in the south-western Polish city of Wroclaw for an anti-austerity protest unions said would draw tens of thousands.”…

[AlJazeera] – EU bank chief calls debt level ‘encouraging’


Lipstick. PIIGS.

#75 jess on 09.17.11 at 12:25 pm

3 timo
From the website: cultural exchanges and their motto

Our motto is “Founded on Friendship”. We believe that the world becomes a smaller, friendlier place when we build bridges across cultures. This is why we offer a wide variety of quality programs that enable students from around the globe to work, study, travel, and receive professional training abroad.

The students paid CETUSA up to $6,000 to participate in the program. The students came from countries such as China, Mongolia, Kazakhstan, Moldova, Poland, and Romania.[38]

Many of the students were assigned to the night shift. They lived in apartments, five students per two bedrooms which had charged more to the foreign workers than to Americans.[36] Hershey, Excel, SHS OnSite Solutions and CETUSA all failed to provide any sort of cultural exchange program.(wiki)
and then as jobs became scarce countries were paying them to go and in Japan never to come back….
Countries that pay you to leave
Published: April 22, 2009

And what about “outsourcing” risk = less insurance ?

Remember the flight that crashed into the Buffalo neighbourhood?
A decade ago aircraft repairs were mostly done by the airlines flying the planes. Today, carriers are outsourcing the bulk of heavy maintenance. Should we worry? A co-production with the Investigative Reporting Workshop.
Read more: http://www.pbs.org/wgbh/pages/frontline/flying-cheaper/#ixzz1YDEPPIYQ

Flight 3407 Families Take on The Airline Lobby


#76 jess on 09.17.11 at 12:27 pm

Timo have you seen the 3d chocolate printer!

co-creation the disrupters


#77 Ben on 09.17.11 at 12:33 pm

Is Canada just plain stupid?

We’ve always been late to the party. The world is in financial crisis, finance chiefs bounce from meeting to meeting trying to hash out a strategy to contain their debt troubles but Canada continues to gorge themselves on debt.

Did I read somewhere this will not end well?

#78 Moneta on 09.17.11 at 12:39 pm

In the End the ant was just fattening up the grasshopper and ate him in the end…LOL
LOL! Thermodynamics…

Rien ne se perd. Rien ne se crée.

#79 bill on 09.17.11 at 12:40 pm

aussie roy
great stuff from down under. I thank you for introducing me to Professor Keene’s musings.
it is eerie how close Canada and Australia emulate a certain trend…..
it cant end well.

#80 Moneta on 09.17.11 at 12:40 pm

in reality, we cannot
determine the root of that wealth
I agree. I made my money in the financial industry, therefore I will never dare complain.

#81 The Emperor's Clothes on 09.17.11 at 12:47 pm

There once was a minister named Carney
From his mouth spewed nothing but Blarney
He dropped interest rates
Sealing mortgagers fates
And when asked if he was to blame said,”Hardly”.

#82 maxx on 09.17.11 at 12:56 pm

Bless you, Garth…..I often wonder how many you have helped acquire objectivity and insight vis-a-vis RE. I bumped into this pathetic blog a couple of years ago by sheer accident and have gained enormously and for that I offer my humble thanks.

With respect to “wealth confiscation”, I agree completely. So what does a responsible numerate do in a case like this? Why, slow the tax conveyor-belt to the absolute minimum! We’re constantly amazed at how well we live on very little even though we could spend a lot more. So, the more rates drop, the more we save. When rates normalize, we’ll spend. Here’s how we’ve done it for over 20 years and we’ll push the limit again with every drop in rates:

-Discretionary spending: OUT! (It’s mostly all defective junk anyhow); /TAX SAVINGS.
-Creative spending reductions: IN! /TAX SAVINGS.
-Buying at charity shops with no tax: IN! (usually church affiliated); /TAX SAVINGS. (unbelievable how much useful stuff and designer clothing you can score- better quality at lower prices than discount retailers).
-Taking advantage of Loss Leaders: IN! /TAX SAVINGS.
-Paying full retail: OUT! /TAX SAVINGS.
-Reduce, reuse, recycle, repair: IN! /TAX SAVINGS.
-Barter, trade and buy second-hand (ie: on-line): IN! /TAX SAVINGS.
-Processed, “convenient”, unhealthy foods: OUT! (N.B.: become a label reader, it will make implementing this principle a no-brainer); /TAX SAVINGS.
-Whole, healthful foods: IN! (waaay more nutrition at a fraction of the cost: eschew pesticide-laden imports when possible and incorporate more local produce into your diet); /TAX SAVINGS.
-2nd-hand car: IN! (who’s going to know, much less care);
-Donate goods to family and friends. /TAX SAVINGS.
-Lattes, eating out often: LOL!! /ENORMOUS TAX SAVINGS.
-Store bought wine: OUT! (except when bringing a bottle to dinner at friends, bien sur); /HUGE TAX SAVINGS.
-Home-made wine: IN! (we’ve been making it for 20 years; the juice quality is now exceptional. So easy to do and the ROI is enormous.

The point is not to live at or below poverty level, be a skin-flint or cheapo, etc., nor is it about contributing less than your fair share to society. It is about insane property taxes, utilities that explode in cost every year, and fees, fees, fees sucking the lifeblood out of your wallet. Either wages keep up (and they won’t-ever) or costs must be controlled. The point is to KEEP more of my hard-earned money.

Let the greedy retailers and purveyors of discretionary goods squeal, I say.

So many people need to realize that they have far more power than they use. If they did, savers would most definitely get the respect they deserve.

I often wonder at the misery foisted upon the less fortunate in our society, such as more fragile, under-appreciated seniors who have spent their lives performing their civic duties in good faith, only to end their days financially marginalized, highly stressed and doubtless some having their lives prematurely shortened. How can anyone reasonably expect the elderly to take chances on the great casino of equities with their savings? Who knows what illnesses might have been avoided? Exactly, and that is why corporations and policy makers chronically lean so heavily on intangibility to implement their will.

Poverty, perhaps most especially the sort that could easily have been avoided by people who knew precisely what they were doing, is violence in it’s purest sense.

#83 Ben on 09.17.11 at 1:00 pm

Canada can buy time, but it can’t change the outcome.

The western world is heading for hell in a hand basket. The global financial economy is heading for collapse.

In a nutshell, politicians and policymakers have no solutions for the problems facing the globe debt crisis.

The problem is the belief we have that our governments can solve all problems and more rules and regulations are the answer to economic ailments.

Did I read somewhere this will not end well?

#84 Live Under Your Means on 09.17.11 at 1:07 pm

#59 Form Man on 09.17.11 at 9:56 am

HRM report: Proposed $65-million condos too tall


I live about 1K+ from this proposed development. Worked in Maritime Centre in Halifax & the positioning of the building created wind tunnels.

#85 Suede on 09.17.11 at 1:22 pm

In 4 real estate transactions in my family circle in the last 18 months, I’ve yet to hear of anyone turning a profit. Most barely broke even (including myself) on 4 condo’s in Vancouver.

There is no hot market for townhomes and apartments in Vancouver – NONE. Prices now are less than they were in 2008 for these two classes of homes.

What I was told by a realtor, “You might be lucky to be able to break even or turn a tiny profit if you hold your current apartment for 3 more years.”

When you read an article in the Globe, Sun, Post, Province, etc… it has NOTHING to do with what is going on in the streets for real estate here in the LM. The only articles you’ll see are headline grabbers for the 1% of houses (in the ritziest areas) that sell for over asking. Do yourself a favour and skip those articles.

#86 Smell The Coffee on 09.17.11 at 1:23 pm

Credit policy swings, like very lax lending liar’s mortgage-loans don’t come out of thin air and just happen.

How could Hyper Cosnervatove Canadian banks which were tight, miserable, gimlet eyed lenders who were much hated by your average candian family in the 1990s suddenly turn in money spigot grossly spewing easy credit to any loser with a pulse?

Since 2001 there was engineered a colossal artificial boom, which is close to ending in “Snowistan.” An equally hard artificial collapse is soon on its way.

The object is to drive social mood to extremes and upset the natural stability in national economies to engineered extremes to shear the populace of its hard earned assets. Look at Ireland, Portuagal and others.

The Banks strip mine at the exuberant top and steal at the depressed bottoms. Credit becomes a cudgel.

The wealthy money-mavens have played the same game for centuries. Get ready for the shearing.

#87 The thing in the basement on 09.17.11 at 1:24 pm

76 Mr. Lee

” Our GDP, of which 70%, is directly tied to US imports
means nothing.”

Or do you mean that 70% of our exports (by value) go to
the US?

#88 sam on 09.17.11 at 1:24 pm

Hey Garth,

Been reading your blog for a while, and it has opened my eyes. I am an amateur when it comes to investing and finance, and need help.

I bought your book and I am enjoying it, but find myself lost in all the investing concepts. Do you recommend any resources or books for beginners.

#89 Moneta on 09.17.11 at 1:26 pm

But how do you propose we go about improving the
Karma and cycles.

All I can do is improve my skills and keep on looking for business opportunities. Help my family and those around me to also improve their skills.

Althouth it would be nice, I am not expecting my portfolio to support me. With all this money printing, the markets are out of control. A crapshoot. I plan to work until I can’t anymore. I am diversifying by generating different cash flow streams.

#90 CraigM on 09.17.11 at 1:33 pm

I’m a long time fan of this blog, and I probably should comment more. Based on the comments that I’ve been seeing lately, I’ve wanted to pose a question.

Now, the consensus across both sides of the housing issue seems to be that low interest rates will continue to allow people to purchase RE because it remains affordable, even if it means increase debt loads significantly. For those who encourage the purchase of RE, the argument seems to be that it is the best possible investment as its “value” never decreases, and the year after year gains in average selling price we’ve seen over the past ten years demonstrate that.

So someone purchases a home now, because they are confident that they will see the same type of returns in the future. Let’s jump forward 25 years. My question is this: even if (hypothetically big if, but bear with me) interest rates remain low for the next 25 years, who is going to be able to able to offer a price for that RE that will provide that expected rate of return?

In the 80s and early 90s, RE prices were such that a SFH or condo was affordable despite a requirement for a significant down payment and interest rates in the double digits. Now, as I said before, there seems to be agreement that it’s only the current low interest rates (the primary argument now being how long these rates will last), along with a minimal down payment, that make the same property affordable. Recognizing that a similar increase in the price of the same property will be expected in order to provide the same return, how will people be able to afford it then? The down payment really can’t be reduced further and the interest rates can’t drop below 0%, so how will people be able to offer the owner of that property the price they’ll be looking for to realize the returns they have been expecting?

This was the question that my wife and I considered at length when we needed to sell our place in the Okanagan as a result of job loss and were considering purchasing in Victoria. We didn’t: we were fortunate to have made a bit on the sale of our previous home, which we put into other investments instead of another down payment, and now invest a bit more than the difference between our previous mortgage and our rent (which has remained steady in a professionally managed building and is less than what we’d be paying for property taxes, strata fees, and assessments alone for a similar condo) into other investments. These regular investments, which amount to a touch more than 20% of my net pay, are transferred automatically every two weeks on pay day and we treat them as regular payments.

For those who think that by renting, we bring “shame” and “disgrace” upon ourselves and our family, well, it sounds like you’re a bit frightened and are trying to find additional arguments that will bolster the idea that RE can only go up. My wife and I have been through it, primarily with her parents as mine have never had a lot of money, both losing the better part of their twenties to WW 2, but as my in-laws now start to look at selling their home in the Okanagan to realize some of their equity, they have changed their tune. I never enter discussions at work about owning vs. renting, although those that see the home that my wife has created in the apartment that we rent in Victoria, less than 15 minutes walk from both of our workplaces, always seem to comment on how “lucky” we are (to which my answer is always “we planned it this way when we moved out here”).

And finally, for those who abuse Garth because your own decisions are based to the letter on what Garth writes, and then can’t seem to “forgive” him if your understanding of what he says is incorrect: Garth offers excellent advice for free on this blog, but it’s up to you to do your own research, think for yourself, make your own decisions, and then hold yourself accountable if you make a mistake.

Personally, I’ve never been happier: we are debt free, have a net worth in the six figures, and have a great home life. As I said in a previous post, I am doing what I want to do with respect to my career, in a place where I want to be, with the woman I want to be with, and we are preparing nicely for retirement.

Garth, thanks again for your blog and your advice. We’re looking forward to seeing you again when you make it out here.

#91 Ryan on 09.17.11 at 1:39 pm

#68 made me laugh out loud..

#92 45north on 09.17.11 at 1:47 pm

blasé : What are the chances that F changes the laws so that mortgages are not covered under bankruptcy?

bankruptcy laws do not change the situation very much:

“American mortgage contracts allow for default. Half of the states in this country are ‘non-recourse’. The other half are sort of ’semi-recourse.’ The bank can come after you for any shortfall, but only in a limited way. Most of the people who are deeply underwater don’t have that much anyway.’

“And the banks knew this. When they were lending $500,000 to a bus driver with $1,000 in his checking account, they knew that their loan was only guaranteed by the value of the home. If they didn’t know it, they should have. Their incompetence is not our problem.”


don’t be so blasé this ain’t no game

#93 The thing in the basement on 09.17.11 at 1:50 pm

Further to above


and then this


Still a huge part of the economy

#94 maxx on 09.17.11 at 1:55 pm

#4 Seven Stars and Orion on 09.16.11 at 10:15 pm

“In the future, tax revenue will grow to erase the mistakes of the real estate binge..”

It won’t work for decades (demographics and fundamentals, for starters). At which point will government accept that the system will only be cannibalizing itself? Answer: It likely doesn’t matter, it’s probably already too late…

#95 Live Under Your Means on 09.17.11 at 2:03 pm

OT – Having our 2nd ETS system installed Tuesday on main level. Smaller unit, but spent hours this am, again, deciding where to place it. They are not an ‘attractive’ unit in a small Living Room. We spent hours pulling wires from the basement to rewire sound system, TV, etc. Suggested to DH he could build an attractive cover, similar to those used to cover the old fashioned radiators. Will see if that’s possible. We mostly heat electrically and the rates are the 2nd highest in Canada. They’re expected to increase 20+% in the next 3 yrs. We have a wood stove downstairs, but wood has increased 100% since 2000. (Have taken note each yr.) I do put on a few logs in the fireplace upstairs when it get’s chilly around 6 pm. Move a chair 1 ft. in front of it with a glass of wine. So warm and cozy. We have about 2 full cords left & will always maintain some in case of power outages.

Should be out gardening, but lower back is really bad today. But, have 3 loads of wash on the line taking advantage of the sun and wind. Also, Saturday I love watching my cooking shows.

Have a great weekend blog dawgs.

#96 Robert Dudek on 09.17.11 at 2:05 pm

Does anybody remember when the French were paying incredible amounts of money to buy swamp land in Louisiana? Until somebody actually travelled there to have a look a this paradise. Prices collapsed, many lost their shirt, that was just before the 1789 revolution.

That is known as the Mississippi Bubble. And by “just” before the revolution, you mean 70 years before, then you are correct.

#97 Industrial Guy on 09.17.11 at 2:52 pm

Economics is completely unfair.
Thomas Carlyle didn’t refer to it as the “Dismal Science” for nothing. If Canadian switch from debt lovers to serious savers …the economy will fold like a cheap house of cards. We just don’t consume enough as a nation to support our own productive capacity. Consumption of Canadian made goods buy the USA justifies the existence of a lot of Canada’s manufacturing companies.

Trudeau warned us about our relationship with the United States. He claimed it was like like sharing a bed with an elephant ….. Well this elephant now has the economic equivalent of AIDS and they are desperate to find a cure. So far, US Government spending policies have succeeded in converting a short term disaster in to a long term nightmare which threatens both of our economies. If recent announcements play out …. a rigorously enforced “Buy America” policy could have devastating effects on employment in Southern Ontario.

James Laxer’s comments back in the 1970’s about how Canada was the world’s richest underdeveloped country are certainly ringing true today. Our foreign owned economy has shipped a major part of the engine of Middle Class jobs (income), the manufacturing sector overseas. Since our Middle Class was the cash cow which produced billions of dollars in taxes, it’s no wonder Governments are struggling at balancing budgets. But let’s not blame foreign companies exclusively for our present situation. This debt nightmare is also the creation of a Government desperate to spin success out of looming disaster. Family debt is continuing to rise because many families are desperate to pay their bills, send their kids to College and have something left when they retire. It’s not just about buying wide screen TV’s.

The Harper Government said the recession was over. All the lost jobs have been recovered. Good times will here. All we have to do is cut business taxes
The reality is …. GDP growth was driven by mountains of debt. $30 per hour jobs were replaced by $12 per hour jobs. Major factories are still closing.

The closing of Ford St Thomas just added 1,200 direct recipients to the underemployment rolls. Parts plant which feed into Ford are now firing thousands of surplus employees. Retailers and restaurants … the City of St. Thomas are now assessing how badly this will effect their revenues. This wasn’t the first disaster to hit the region. The closure of Daimler AG’s Sterling Truck added over 2,000 workers to the unemployed in 2009. Component plants along Highway 3 which fed into both Sterling and now Ford have full size trees now growing in the cracked pavement of their parking lots. One wonders how Towns like Tillsonburg cover their expenses with almost a third of their industrial buildings vacant. I suspect the new Government subsidized windmill plant in the town has provided some breathing room.

Our shining example of Canadian dominance in the technology field, Research in Motion, is now struggling for its own survival. The future of thousand of jobs in Waterloo is now up in the air.. How a possible change in ownership impacts on investments at the University of Waterloo and at the numerous small creative companies which feed in technical innovation into RIM’s engineering group is to be seen.

This will not end well is a simplification of how bad it could actually become.

#98 Nostradamus Le Mad Vlad on 09.17.11 at 2:58 pm

Further adventures of the CPC finance dept. in action. Could be that’s why this country is in such great shape!
#68 TurnerNation — Great and funny post!

#78 Nemesis — “. . . several thousand demonstrators assembling at a nearby stadium in the south-western Polish city of Wroclaw for an anti-austerity protest unions said would draw tens of thousands.”

G’day Nemesis. Not that long ago, you will recall that Poland’s-then govt. declared itself a debt-free country (don’t recall how much the deficit was), and that it was more than ready to bail out other countries, as it had a surplus of cash.

Following that, a very-convenient plane crash happened in Russia which wiped the entire govt. out, a new govt. was installed and now Poland is in austerity land again.

The only difference between Iceland, Poland and Ireland (which was also in great shape) is that Iceland’s population told their banxters and govt. to go f&$k themselves, that they weren’t going to adhere to any austerity measures and subsequently threw a few banxters in the slammer.

Easy to see who is in control of the current situation. The only thing the NWO is not in control of the the cycle change. What of bringing back the gold standard to a fixed rate, then let currencies fluctuate around that?

There wouldn’t be any money in it for the ultra-wealthy and powerful (they have no power over me or anyone who ignores the establishment anyway), but it may make the present situation a little more stable.

Global Revolution Stuff austerity right up where the sun don’t shine! US corporations and Wall St. cause unemployment, in conjunction with the present NWO. The new NWO could well be a combination of ChIndia, Mongolia and Russia; Consolidation Due to the economy, the Eurozone may as well be one country; Mtgs. Yes, Comic Ali (Iraq) is back with the mother of all mtgs.

Bahrain With Yemen, SArabia and Algeria yet to come, I forgot Bahrain and Somalia; 0:38 clip Cdn. spying, or how to stop it; Top 10 Signs GW is a fraud.

#99 Scalgary on 09.17.11 at 2:58 pm

Wow… Great post…!

I cant feel safe anymore by renting.

F should atleast raise TFSA limit $10,000/year


#100 Timing is Everything on 09.17.11 at 3:00 pm

#55 Moneta – said “Savers who complain about the low rates are just as bad as spendthrifts.”

Agreed. “‘You’ have no complaint; you are what you are and you ain’t what you ain’t'” – John Prine

Warning: Most excellent singer/song writer:



Smoking Dude Just 4 U…


#101 Silver on 09.17.11 at 3:07 pm

My mortgage payment is $1100.00 a month doubled up.
My property taxes are currently $1150 a month. I’ve gone from $5000 to $12000 in 5 years. Residential/ commercial single occupancy unit.
Every year all the “Equity” I put in my property is destroyed by my property taxes increases. The property taxes are increasing by an average of 24% a year compounded. Do the math over a 20 year term, its an eye opener. (my mortgage is $315,000)
Try and retire on that!
I’m selling before it kills me.
“B.C. Assessment” is a private for hire 3rd party “Straw Man” used by the government to raise goverment taxes without a vote on mill rate increases.
They are illegally altering the value of a “Legal Bill of Sale”, so you can be taxed at a higher level than your purchase value.
You doubt me.. ask them to guarantee and back up their assessment value. They won’t …thus their claim of value is a public fraud not backed by “Legal Documentation.

Pissed… in Vancouver

#102 Timing is Everything on 09.17.11 at 3:18 pm

Realtors…Now ‘Selling Lifestyles’ (not real estate)



#103 Observer on 09.17.11 at 3:21 pm

@ Moneta

If the nominal economy is growing at 4-5% but you’re expecting to make more, that means you are taking money away from other Canadians. A few can get away with it but the majority won’t.

Who said anything about making more than the economy is growing? Isn’t it obvious that today’s rates are BELOW that and have been for some time. Savers such as senior citizens are being ripped off plain and simple.

#104 The HOUSING CRASH IS HERE on 09.17.11 at 3:37 pm

Maxed out and broke Canadians are on brink of going bankrupt. The average Canadian debt is $40000 which does not include mortgages. WOW can you say debt bubble that’s going to explode. My wife and I have zero debt and we are included in the average. Is it any wonder stores are closing down left right and centre in the GTA as maxed out Canadians can no longer spend. Wait til the europe bomb explodes. Like EVERY single financial problme the TPTB claim to have a fix and then BOOM. This will happen in europe. Exit the stock market on any fake rally and SHORT IT. Greece bailout1 Failed and now Greece bailout 2 is failing. The ECIONOMIC CRASH of 2008 is coming back only this time governments themselves are broke. CRASH!

#105 BPOE on 09.17.11 at 3:37 pm

There’s a difference between truthful and shameful. The truth is there are houses out there getting into bidding wars. The truth which few understand on this blog is that BANKRUPTCY is your DEFINED EXIT plan. Bankruptcy is not what it used to be folks. You can still get a credit card but you must put credit on it first. Not a bad idea. An acquaintance of mine filed bankruptcy a few years ago. He was a renter so no suprise there. Within 5 years he now is a proud owner.

From what I can see, home prices have JUST STARTED heading up, so go ahead, borrow until your nose bleeds and enjoy the ride.
Once the ride comes to a stop and you are upside down on your mortgage, then just declare personal bankruptcy and get out of ALL of your mortgage debt, its as simple as that.

The examples you cite, as a realtor, are why the future is now sealed. The smartest people are leaving this asset class. Your words are shameful. — Garth

#106 Rookie57 on 09.17.11 at 3:38 pm

The Prudent vs The Reckless

It seems to me that the prudent always have to bail out the reckless… eventually. What is going on now between savers and spenders is just a continuation of this theme. The chickens always come home to roost. It just depends how fast or slow the roosting process is.. IMHO Garth’s message of staying liquid during this process is excellent. The people who stay liquid will eventually feed on the reckless. The easy credit policies of the government and banks feed the reckless and punish the prudent. IMHO this will pass and then it will be time for the prudent to shine (if they want to).


#107 BPOE on 09.17.11 at 3:44 pm

Incubus please do your homework Dent has been wrong on so many levels. Read some of his earlier books and learn

Incubus on 09.17.11 at 9:16 am
“According to Dent, the spending in the boom years has led to the biggest global real estate and credit bubble in history. He believes the worst hit will be those places where the bubble hasn’t burst yet — West Canada, Australia and China.”

“”Bubbles go back to where they started,” he noted. U.S. housing prices, he observed, have fallen 34 percent since their peak, and will drop by another 30 percent. “There’s a lot more pain coming, especially in real estate,” said Dent, who sold his home in Miami, Florida in October 2005, and doesn’t intend to buy property until the market bottoms in a few years.”


#108 Moneta on 09.17.11 at 4:12 pm

Who said anything about making more than the economy is growing? Isn’t it obvious that today’s rates are BELOW that and have been for some time. Savers such as senior citizens are being ripped off plain and simple.
I thought the economy was stalling????

And who said GDP grotwht had to perfectly coincide with the yield on your bonds?

The problem now is that since market valuations are too high, security holders need to receive returns that are lower than GDP growth for a few years until valuations get back to normal.

The (Debt+equity+entitlements)-to-GDP ratio is at an all time level.

That means that over the next few years either:

1. debt+entitlements need to get written down (government is not letting that happen)

2. or GDP grows.

If interest rates go up like savers want them to, they’re going to get some wicked capital losses on securities.

Like the Chinese proverb says… be careful what you wish for.

Government is going to do whatever it can to get GDP up. That’s going to lead to inflation and higher rates.

#109 Moneta on 09.17.11 at 4:25 pm

Savers such as senior citizens are being ripped off plain and simple.
Nonsense. A cushy retirement an good returns is not a god given right. It is something that someone can expect to get in the right economic circumstances.

Life is not fair. Some people in their 20s get sent to war and die. Others got to live theirs in the 60s and got to buy McMansions.

Because of the boomer bulge, we had 5 workers per retiree. This gave the boomers’ parents a cushy retirement. However, each boomer can expect 2.5 workers to support him and his big life. While their parents had 5 workers help them maintain their bungalows, the boomers will have 2.5 to prop up thei McMansions + cottages. Obviously, most boomers will not pass go, collect 200 and get a cushy retirement.

In fact, most boomers should net even consider retiring. The problem is that most of them look at their parents and actually think they have a right to the same thing!

If you read history books you will see that the level of comfort our seniors have enjoyed over the ast 3-4 decades is a BLIP in history and is probably coming to an end.

Sorry to burst another bubble.

#110 Moneta on 09.17.11 at 4:28 pm

It seems to me that the prudent always have to bail out the reckless… eventually
The prudent are just too happy to fund the reckless and then get pissed off when the latter can’t pay.

It’s a dance where not everyone is graceful.

#111 Moneta on 09.17.11 at 4:30 pm

The prudent are just too happy to fund the reckless and then get pissed off when the latter can’t pay.


How many here pissed at low returns and buy bank preferreds? LOL!

#112 Burnt Norton on 09.17.11 at 4:32 pm

Those posting bollocks about bankruptcy as a premeditated defined exit strategy must feel quite proud of themselves for coming up with such a clever plan. “It’s not my fault”, they might say, “the ______ (insert irresponsible government / system / [email protected] / Capital One ads on TV / parents / voices in my head) made me do it”.

Hopefully they won’t mind seeing a spineless parasite Gollum-like eunuch in the mirror every morning.

The worst kind of failure is the ironic failure of a self-assured swindler who operates under a self-imposed delusion of grandeur but ultimately lives a lonely life because everyone else knows that the emperor is actually a vulnerable child. Ultimately it’s about growing up and accepting responsibility for oneself.

I actually have a lot of empathy for these people because they suffer in silence and live very stunted lives for the most part. I’d recommend that they start changing, first by not attempting to infect others with their toxic scheming, then by coming up with a few bedrock principles to live by (honesty is a good place to start). Otherwise, you deserve yourself.

#113 Moneta on 09.17.11 at 4:33 pm


How many here pissed at low returns and buy bank preferreds? LOL!
Most savers are just as greedy as the spendthrifts…. they also expect to get a free lunch and not work. Get higher returns than what the economy returns.

The only difference is that it’s farther down the road.

#114 maximum mortgage on 09.17.11 at 4:42 pm

#10 disciple on 09.16.11 at 10:55 pm

You are so right , theUS needs Janet Jackson for Pres.

#115 Hosehead on 09.17.11 at 4:42 pm

Is it in the government interest to encourage saving? No, it’s in their interest to encourage spending. The economy is built on spending.

#116 OttawaMike on 09.17.11 at 5:00 pm

Mr Lahey,

Google is a wonderful thing:

#117 jess on 09.17.11 at 5:01 pm

tents,hotels,or the street


Is this really capitalism?

and so they should!
students suing for profit school

#118 Smoking Man on 09.17.11 at 5:05 pm

Risk vs Reward

Jack Znajmiecki a guy I sat next too over the years trying to win the elusive carbian stud jackpot at senica casino, nice guy always in nice clothes. He had a Diamond Players card which means he dropped some serious bucks. Everyone but me thought he was rich saw threw him miles away, but then I am the smoking man.

Jack goes to his regular bank hands the teller a note, she knows him and says “Excuse me” Gets the cash and goes back to the casino. LMAO


I am a true blue capitalist. A real capitalist does not let rules stop him. If I was young and broke had a record which would kill any good job prospects, and had nothing to lose I would not think twice about breaking the law so long as the risk to reward ratio was huge.

Example: I would contemplate a grow op, but a big one, One huge harvest only and use the proceeds to buy a company looking to make 2 or 3 mil. You get caught max time will ever spend 2 years.

Robbing your own bank where everyone knows you is poor risk management.

I know why Jack did it, he is broke. gov’t after him for money. Now he will get 3 meals a day and not worry about having to pay the electric bill, or rent, he is 75 and now gets free health.

Jack wanted to get caught and go out with style. Going to miss him…….

Now with Greece, Euro and event shaping up in the middle east, is buying in Vancouver prudent risk management?

#119 BrianT on 09.17.11 at 5:39 pm

#116Burnt-The fact is that there are a great many very high profile and very successful swindlers-many are actually household names and heros to the sheeple.

#120 Devore on 09.17.11 at 5:40 pm

#63 OrdinaryCitizen

I’m not sure why individuals are so opposed to “paper profits”. The richest individuals in the world hold wealth in “paper profits”. Buffett, Gates, et al. have their wealth in “paper profits”. Only the poor actually hold “cash”.

Buffet can readily convert the bulk of his wealth to currency. How many home owners can do so? Buffet’s wealth is not his debt.

#121 Smoking Man's son on 09.17.11 at 5:42 pm


#122 The thing in the basement on 09.17.11 at 5:53 pm

105 Silver – get a grip. We’ve been over this dozens of times. BC Assessment does not set tax rates. They attempt to assess at fair market value. The taxing government (in your case city of Van) then works
backwards from the budget they need/want and sets a
mil rate. Dont like it? Run for office.

I appealed my assessment a few years back. Not that I objected to the value (as I knew it was meaningless) but rather to the value relative to similar homes in my area. That’s what you have to watch for. I got a small concession.

#123 Devore on 09.17.11 at 5:55 pm

#89 Suede

In 4 real estate transactions in my family circle in the last 18 months, I’ve yet to hear of anyone turning a profit. Most barely broke even (including myself) on 4 condo’s in Vancouver.

The dirty little secret of Vancouver real estate is that condos have been sucking wind since late 2007. If you bought in 2007, you’ve been losing money ever since.

The lie of the average price and some creating presentation of figures keeps up appearances. Of course there are some hot lottery winning areas, but outside them it is cool to frigid.

#124 TurnerNation on 09.17.11 at 5:59 pm

Cat food! In the Globe & Mail.
This is mainstream, people are scared!!


““My house, fully paid off along with the (one-time) land-lease price, will not appreciate in value because I live [in an Ontario jurisdiction] where homes cannot be sold on the open market,” Marianne writes”

Will there be enough of an estate to set up a special trust for her grandson, who receives Ontario Disability Support Program (ODSP) payments? “Will I end up eating cat food in my advanced age?”

#125 Live Under Your Means on 09.17.11 at 6:01 pm

Remember the flight that crashed into the Buffalo neighbourhood?
A decade ago aircraft repairs were mostly done by the airlines flying the planes. Today, carriers are outsourcing the bulk of heavy maintenance. Should we worry? A co-production with the Investigative Reporting Workshop.
Read more: http://www.pbs.org/wgbh/pages/frontline/flying-cheaper/#ixzz1YDEPPIYQ


Forgot about that PBS report. Scary. Love PBS. Like Bush, our con govt. and the right wing Sun/NP, etc. media want to get rid of CBC (which, BTW, IMHO, has also become less centrist). Miss Don Newman.

#126 Devore on 09.17.11 at 6:06 pm

#112 Moneta

Government is going to do whatever it can to get GDP up. That’s going to lead to inflation and higher rates.

A growing GDP does not indicate a better economy. This is a favourite Keynesian fallacy. Nuts like Krugman just take it to an extreme. Fortunately, they’re not in charge of anything important.

#127 Moneta on 09.17.11 at 6:19 pm

A growing GDP does not indicate a better economy.
No but it can mean inflation… which shrinks the value of uncut entitlements.

#128 penpal on 09.17.11 at 6:25 pm

@ #52 Moneta re @ 154 MOneta (from yesterday)

I wasn’t being flippant with my response to your comment the other day.

Yes, they have conducted stress tests, but the assumptions in the model, whatever they may be, are simply inadequate and unrealistic.

If they used more aggressive assumptions, CMHC would have to or would now be applying to Finance for a “top up” of their capital base.

As the CMHC is explicitly guaranteed by the tax payer (and the board of CMHC concists of RE industry types), why would they invite an investigation of their ‘company’ by asking for a raise in the guarantee.

#129 Ben on 09.17.11 at 6:27 pm

BPOE here’s a fitting excerpt for you bubbleturds

“It’s only when the tide goes out that you learn who’s been swimming naked.”

Warren Buffett

#130 OkanaganInvestor on 09.17.11 at 6:41 pm

For those who are interested, a couple of reinvented Canadian oil and gas trusts (EGL.UN and PLT.UN) that pay 10% are available on the TSX:

“The New Canadian Energy Income Trusts

Today I bring you the new class of an old investment vehicle.

You may recognize them. They’ve been around for a long time, after all.

The old class was the perfect kind of income play for conservative, yield-hungry investors.

But alas, they became a tax burden for the Canadian government, and were disbanded (much to the chagrin of investors.)

Now, we’re back at it again… but in a different form.

It’s called the Energy Income Trust.

Trusts pay distributions to shareholders on a regular basis from the cash flow they get from their oil (or gas)-producing properties.

They trade on the Toronto Stock Exchange (TSX), and just about any investor can participate. (Note that withholding for U.S. residents is 15%, but you can apply to the I.R.S. for a foreign tax credit — which is essentially a refund. Do consult with a qualified tax advisor before investing.)

My feeling is that investor demand for these trusts are only going to increase. In a volatile market, dividend plays perform best, and I think these trusts could become huge winners for investors, providing steady payouts over the long haul.

(This is where I’m putting some of my money right now… to preserve capital — and get paid — while I wait for the market to bottom, and start a new uptrend.)

I explain the trust in more detail in my new video below, including the names and ticker symbols of two energy trusts that deliver excellent dividend streams.

Click here to watch the video. It’s short — roughly 3 minutes, but should give you a good starter course on these two exciting new dividend plays.”


If anyone has any reservations about them, I would like to hear it.

#131 penpal on 09.17.11 at 6:59 pm

@ #89 Suede

You didn’t really think that this market was being goosed for homeloaners to make money, did you.

Nah, this has been pumped to camoflage the loss in purchasing power due to virtually no growth of inflation adjusted incomes and, of course, to augment bank , construction and Re service industry incomes and increase the tax base.

The fact that the average Joe emerges from this Re shark feed with a profit is not on the agenda – merely an unintended consequence of the game.

#132 Dan in Victoria on 09.17.11 at 7:07 pm

Maxx @ 86
Let the greedy retailers and purveyors of discretionary goods squeal I say.

Yeah, I went into a big box store this morning to buy some plumbing / perimeter drain fittings.
I get to the till and the lady asks me if I would like a bag, that would be nice I said (seeing how I must have had one of everthing they stock).
They’re 5 cents each she says.
You’re kidding I said.
No 5 cents each she says.
Okay I said keep it.
This was about $125 worth of stuff.
So they loose a bunch of profit over 15 cents.
Beyond me.
Must have cost them 10 bucks to restock the shelves.
And I won’t be back.
See how much you make now Ro–

#133 Moneta on 09.17.11 at 7:08 pm

Yes, they have conducted stress tests, but the assumptions in the model, whatever they may be, are simply inadequate and unrealistic.
I agree.

I also noticed that in the last year they’ve been adding to their risk management team. Another case of cart, horse and head scratching. LOL!

#134 penpal on 09.17.11 at 7:11 pm

@ #64 OridinaryCitizen

you said “Dent is a fraud”

and what qualifies you to slander him in this manner?

your credentials or your research or???????

links, proof, qualify this statement or just STFU!

You are liable under law for what you say on a blog if it is defamatory. Plenty of legal precedent on the books and frankly, just bad form.

I am surprised Garth allowed this garbage to be posted on this site.

#135 penpal on 09.17.11 at 7:45 pm

@ # 94 CraigM

It always amazes me that Canadian people post here that their relatives and ‘friends’ consider renters to be somehow “second class citizens”.

It is incredibly rude and yet you don’t call them on it?

What kind of ‘friend’ criticizes your choices without being asked for their opinion. Not the kind of ‘friends’ that a discerning person would keep surely?

Family….well, most are dysfunctional and you don’t get to choose your family now, do you?

Ask them WHY they feel compelled to volunteer their OPINION on your lifestyle choice?

Don’t you think that perhaps they are concerned you might be right and, by inference, that their choice is the one that lacks sense?

Or could it be that they are just insecure and need that house (that the bank rents them the money to occupy) to assuage that gnawing insecurity?

Perhaps I am well-adjusted individual or just lucky that I have met with some success in life, but I just don’t feel the need to own anything for self aggrandizement. While I like to drive a very nice car and eat and dress well (all paid cash, no credit debt at all) while always saving at least half of my after tax income.

I have relatives and friends that run the gamut from just getting by to very wealthy. Not once has anybody said anything negative to me about me renting my residence. In fact, the wealthier folks I know all think it is great given my lifestyle of being single and traveling a good deal of the time. They think that I am smart for capping my fixed costs of occupancy at half or less than owning, while negating time spent on maintenance, etc.

#136 kitchener1 on 09.17.11 at 7:50 pm

#122 Smoking man

Grow op eh……

Just like the one that was operating out of the old molson factory in Barrie? for over a year, were they actually bused in illegal workers and housed them for a week?

The one were they spent upwords of a 1million dollars to upgrade the HVAC filtration system?

The only people they busted in that fiasco was the illegal workers who were in the plant when it got raided.

#137 Victoria Tea Party on 09.17.11 at 7:53 pm

#87 Ben

Very well written indeed. Top notch.

The only problem is we don’t when things financial will start to implode in a major and visible way. Pols, their incompentent economists and other assorted lick-spittles, keep getting in the way of our recovery, because they don’t want to hurt us! Well, they’re killing us!


Check out Wall Street next Monday morning when some jobless college grads plan on setting up a squatter’s camp right outside the NYSE! Betcha the cops will be there! Can’t have that camp-thang going on before the mighty altar of Empire!

In the meantime Western economies, and our so-called quality of life along with it, just keep getting chipped, chipped away. For most people that means while their incomes stagnate, or disappear through layoffs, their debts keep piling up.

And evermore folks are joining the “plastic” party, in Canada especially, bearding the cautious old tight-wad lion in his den. “Dare me, old lion. Money’s cheap! I need everything I can get! Now! And, beside, higher interest rates will arrive before Hell freezes over! Don’t be a such a party-pooping jerk you old cat!”


For those, who save and wannabe savers: We simply don’t know when the worm will turn. Meanwhile, there is nothing wrong with paying back debts , because that will lead to marked improvements in your lives!

Because it begins to SIMPLIFY your lives. Nothing wrong with simple! The fewer moving economic parts in your lives the longer you’ll live, because you’ll be materially happier!


Lets look at the auto “industry” as a metaphor for this discussion: If you were visiting a car lot, had an endless supply of loot, and suspecting what you feel about what’s coming down our fiscal/monetary pipeline, what vehicle would you buy?

That 2012 thingie over there with every conceivable computer bell and whistle, or would you go for that mint 1967 VW Bug?

I’ll take the bug. Why? Because it’s simply constructed, cheap to run and fix, AND it’s safe! Why safe? The gauge of its steel shell makes it a mini-tank compared to the aluminum foil jobs now mincing about on our streets and highways! And its spare tire in up front in the trunk.

Just rap your knuckles gently on the body of a 2012 anything and you’ll be freaked at how thin the “steel” is! That’s why they’ve got all those millions of airbags!

The modern car, therefore, is also a metaphor for our financial way of life. One accident (a bank failure) deploys all airbags, leaving nothing left over for protection should there be a secondary collision (a job loss) a few seconds later.

We are, therefore, living aboard a flimsy and fragile financial system that reflects the sunshine when it’s sunny, but at the worst possible time, and place, it leaves you pretty much schmucked and in the dark.

So, pay down the debts. One day you’ll be proven right, but don’t wait for that time. Just enjoy the benefits, in the meantime, of keeping it all simple and basic.

It works for me! Has for years. The NEW flexibility in your lives will surprise you happily.

#138 Waterloo Resident on 09.17.11 at 7:59 pm

Garth said: ( “The smartest people are leaving this asset class. ” )

My opinion: Yes, I sure do so, I sincerely hope Garth is correct !!!

Have a wonderful and happy weekend Garth !

#139 Silver on 09.17.11 at 8:01 pm

#126 the thing in the basement.
your right BC Assessment does not set tax rates, but they do provide the “Fake Legal Documents” that form the base for which you are taxed on.
BC Assessment had not even looked at my property in over 10 years.
The property assessment was based on only cheery picked properties not even in my neighborhood but rather all across town.
The local government “does not even confirm the accuracy” (city financial manager)of B.C. Assessments garbage statements and does not include all the properties that have “not sold”.
And why increase the mill rate when you can hide it under increasing assessment value tax grab. Great for the speculators..but not for those who have been or wish to be long term residents. If people had to pay an assessment based on their overpriced home value, equal and the same as long term residents based on the “bill of sale” instead of averaging against them they would get properly killed on their property tax base.
I have a car worth $5000 and you buy one worth $10000 it does not make mine worth $7500. Period. And it would make these 800 grand homes unavailable to the margin buyers (buying with low interest rates and small incomes) thereby helping to moderate the value of the market.
If the Assessment is true then back it up with a financial document of value that will stand in court like a “Bill Of Sale” as defined by the “UCC (Unified Commercial Code)”. Not a piece of garbage document like they provide.
They won’t because then you could cash it in for the difference between the purchase price and the assessment. Your assessment is a guess that’s all it has no real value except to tax. it allows them to steal from you with a fictional document.
They are real estate board feeding people’s greedy desire to believe they are worth more than they were.
No one checks the numbers. The Assessment increase’s allows them to tax you on money that you have yet not made.
Get out of your basement and read the UCC code and learn what a formal corporate legal financial document is.
They offered to reduce my taxes if I signed a document recognizing their final authority first (giving up all my rights first)…that says everything. They (BC Assessment) outright refused to sign any paper that legally backed the statement of value that I am taxed on…” because they could be held legally liable”. Their words not mine.
As for running for gov., that current den of welfare thieves is not much to my liking.

in downtown methcouver.

#140 Nostradamus Le Mad Vlad on 09.17.11 at 8:02 pm

#103 Scalgary — “F should atleast raise TFSA limit $10,000/year”

Harper said he would do that if the CPC won a majority. They won a majority, but Harper’s a liar. Don’t count on it.
The Thorn Birds Enjoy it while it lasts! 1:51 clip Nigel Farage. Funeral For A Friend (not Elton John, the EU); 1:32 clip Man drops pants in Belgium. Was it the PM? Belgium has been running far more efficiently without a govt. at the helm.

Fascism and Communism lets the rich get richer, and the poor are flushed away (chart); Nemesis This one’s 4 U (and anyone else); Credit Crisis “We obviously have two classes of “justice” in this country; one for the monied, and the other, for the rest of us.” wrh.com; Communism, FDR and the banxters; BoA dirty deals. When / where does this end? In a few years, thankfully; Escort Girls I was contemplating re-birthing as a set of traffic lights, but this sounds like a lotta fun! Jail too good for banxters and politicos? Too easy. Try the guillotine instead; Obummer Oh dear The feeding of the 5,000 stands out;

Harper “And I am proud to be a bigger whore for Israel than President Obama!” wrh.com and US and Canada will simply isolate themselves plus The NYT. Kill the m$m! China and the US — squaring off; 3:36 clip The UK must be in real bad fiscal shape for this.

3:08 clip 9-11 inside job? See the clip; Iraq The US has done an excellent job of leaving since Sadaam was executed (he wasn’t and they haven’t); Obomba and Yemen Change is good, so toss him in 2012! m$m liars Death toll in Libya so far; Crestor Heart Attacks “Yet it is still being advertised on TV!” wrh.com; Vigilance Required The DHS and TSA have (conveniently) lost some nuke materials, but can easily find you; <a href="http://www.examiner.com/law-enforcement-in-national/air-force-general-blows-whistle-on-obama-but-media-deaf?CID=examiner_alerts_articleUSAF “The alternative media are listening and reporting, and after we are past the Palestine issue, “Solargate” is gonna hit Obama just as hard as ENRON hit Bush!” wrh.com.

#141 timo on 09.17.11 at 8:15 pm



Autumn could be the 3000lb gorilla in the corner that just learned how to start the chainsaw in his hand.

#142 Mr. Lahey on 09.17.11 at 8:16 pm

#120 Ottawa Mike

Thanks for the link to the Worcester, Mass. real estate listing. Incredible to say the least. I was not referring to you in my post today but the commentator who was questioning the 20% cap rates. Thanks for the proof.

#143 neo on 09.17.11 at 11:46 pm

Between Obama’s class warfare tax the rich speech Monday to pay for the deficit, the 2 day Fed meeting and Greece and the EU trying to orchestrate an “orderly” default. This week should be very interesting for the markets and macroeconomy. Gotta love the “soft/orderly” landings our political leaders seem to think is possible. I think this is when I say…This will not end well…

#144 BPOE on 09.17.11 at 11:55 pm

If you rent you’ve been losing since 2007. A house is like a stock you gain nothing and lose nothing until you sell. Except a stock can go to zero and a house in Vancouver never will. An added bonus is you’re in the Winner’s Circle
127 Devore on 09.17.11 at 5:55 pm
#89 Suede

In 4 real estate transactions in my family circle in the last 18 months, I’ve yet to hear of anyone turning a profit. Most barely broke even (including myself) on 4 condo’s in Vancouver.

The dirty little secret of Vancouver real estate is that condos have been sucking wind since late 2007. If you bought in 2007, you’ve been losing money ever since.

#145 Nostradamus Le Mad Vlad on 09.17.11 at 11:59 pm

Donald Trump Has he moved back to a gold standard? EU Corpse It’s aaalllllliiiivvvvveeeee! But probably not for much longer; Brainwashed into buying stuff we don’t need; Link in. China — soft or hard landing? Do they keep or dump the Renmibi / Yuan? That would cause a lot of stuttering confusion in the west; Germany ready to quit EU, More 4Closures on the way and The Ant and The Grasshopper Animals switched to countries to protect their identities!

Day of Rage Gaining momentum; Elections Chavez vs. Obama in 2012.

#146 Bobby on 09.18.11 at 12:03 am

Was out to a couple of open houses here in Victoria today. Both houses were empty and it certainly wasn’t busy at either. In both open houses the realtor said bring any offer. One realtor said sellers expectations were unrealistic and that buyers were just not going to pay it. Moreover, there was a glut of listings on the market with a lot more to come.
Yes, it is going to get really ugly out there.

#147 Jimbo on 09.18.11 at 12:26 am

#48 anjing bau “your going to learn the true meaning of beta…..w/ 50% in gold stocks and Bullion…. embrace that volatilty and learn how to use options to protect yourself if thats your plan.”

Right, been there done that with my experience. I’ve gone through many gut-wrenching downturns. Each one makes me a better investor, emotionally, and has taught me to employ hedging and other techniques to hold onto profits. The gold market is inherently volatile – especially the shares.

#148 Waterloo Resident on 09.18.11 at 12:45 am

There is a reason why 5 central banks have come to the rescue of European banks and I think I just found out why.
Its because its looking more and more like the stock market is about to nose-dive BIG TIME !

ANYONE: If you are thinking of investing right now, ….. I wouldn’t. Wait until November.

Take a look at these few charts and make up your own conclusions.
The foundations seem to be crumbling quickly. ( and when the foundations crumble, so do the stock indexes too. )


those were the ‘foundations’, here are the indexes for comparison.



#149 In Van on 09.18.11 at 1:10 am

I regularly see absolutely crap homes that are selling for over a million dollars here in Van. And not just in the West Side or Point Grey, but in other less desirable areas.

How many of you have 1 million dollars in the bank? And if you do, would you spend it on this:


And if you would…. why?

#150 Thetruth on 09.18.11 at 2:50 am

Immigration is the reason why Vancouver and Toronto have the highest housing prices in the world.

Even immigrants coming under Prince Edward Island’s program come to Vancouver!!!


If you don’t see this, then you’re willfully blind!

#151 David B on 09.18.11 at 6:45 am


So y’all really knew just how many people little hold GTA held eh. So what if housing goes bust and wages dry up? A few million people only who cares? Well you know who did when he spent over $1B for a week end party. So say and do as you please but if y’all think there could be trouble ahead best to safe some cash if not jump in and buy, buy GTA RE!

#152 miketheengineer on 09.18.11 at 7:48 am

Garth et al:

Nostradamus le mad “dude” this one’s for you.

Latest Leap 20/20


More US dome and gloom.


#153 Moneta on 09.18.11 at 7:58 am

Germany Gives Geithner Stiff Finger

“There cannot be any prohibition to think” just so that the euro can be stabilized, wrote Philipp Rösler, Minister of Economics and Technology, in a commentary published on September 9 (Welt, article in German). “And the orderly default of Greece is part of that,” he added
Denkverbot (prohibition to think) is being recognized in Europe unlike in the US.

Exporting Germany (lender) is pissed about having to support deadbeats. The problem is that if they let them all sink, they won’t have many to export to for a while.

As long as you are not self-sufficient, you are part of the problem. You can not expect to enrich yourself on the back of spenders forever. Every now and then, there is a reset.

People understood this concept a long time ago, that’s why there used to be debt jubilee every 50 years.

Canadians have been spoiled for so long that they think that wealth, quality of life are a god given right and here to stay without a fight.

#154 Chuck D on 09.18.11 at 8:06 am

My sister called me yesterday excitedly to tell me that they are thinking of putting in an offer on this house in Leslieville.


I told them I thought it was really nice but maybe not suited for their lifestyle. They have three young children. It has very little closet space and no parking. She said they could live with that. I also pointed out that it’s pretty expensive for the area. (they already live around there and could probably get 650 for their house)

Some people (apparently my sister and her husband included) get pretty easily seduced by slick finishes and are willing to overlook major issues.

I never thought I would see people clamouring for a semi in Leslieville (not a place I would want to raise a family…) with no parking for 769. That would have been unthinkable a few years ago.

#155 BrianT on 09.18.11 at 8:33 am

#141Vic-Outside of China, the global economy is contracting. A debt based economy cannot thrive while the actual real economy is contracting, which is one of the reasons these issues are coming to the light at this time. The latest stat is that outside of China, global oil consumption is down about 13% over the last 6 yrs. This is unprecedented and IMO the whole premise the MSM is selling (the financial economy can thrive with a sick real economy) is B/S.

#156 penpal on 09.18.11 at 9:02 am

@ # 137 Moneta

I think the new hires in ‘risk management’ staff are to provide cover (and bodies to blame and fire) when the crap hits the fan.

Of course, the issues at CMHC are much deeper and go back almost 10 years now.

The new risk management “sacrificial lambs” should deflect sufficient criticism so that the conflicts of interest of the board and the complicit behaviour of senior staff can be exonerated with an ‘inquiry’ which will make reccomendations as to “reforming” CMHC policies.

As predictable as it is sad.

And just in time for Canadian taxpayers to start funding the losses.

It is, after all, Snowistan.

#157 Lana on 09.18.11 at 9:43 am

“Even in the midst of a recession, we have to
understand that a labour shortage looms.
Unfortunately, this is only half of the bad
news. At the same time as our population is
aging, the requirements of the labour market are

With the emergence of our knowledge
economy, the proportion of the labour force
requiring some form of education or training
beyond high school will increase dramatically.”


#158 Junius on 09.18.11 at 9:53 am

#154 thetruth,

Sigh. Are you never going to stop this blather about immigration saving Real Estate prices in Toronto and Vancouver? It is nonsense as has been demonstrated time and time again by people who have studied the issue.

First of all, immigration was not the reason prices rose. It was cheap debt.

Secondly, we have had pretty consistent immigration for decades and it has always been managed by increasing SUPPLY of homes. This is called CONSTRUCTION. Furthermore in recessionary times like these we can expect contruction prices to fall making new homes cheaper to build.

Finally, most immigrants coming to Canada are coming from places where real estate is much cheaper. Apart from a few Hamsters they won’t have the money to support the market.

A few weeks ago you said you were going to post facts with your posts. Still waiting.

#159 shawn on 09.18.11 at 10:16 am

Here’s a link to some interesting graphs by RBC on Cdn housing affordability over the last 2 decades.


#160 Min in Mission on 09.18.11 at 10:18 am

#156 miketheengineer on 09.18.11 at 7:48 am –
Thanks for that link, interesting read, perhaps a little one-sided, IMHO. But, Holy Smokes, can they use a lot of words to say “this is not going to end well”

#161 sanddancer on 09.18.11 at 10:51 am

Apparently according to this “economist” house prices in BC will rise 6.8% this year, with no signs of a housing bubble !!!!!……news 1130am are reporting this today during there buisness section.


#162 The American on 09.18.11 at 11:32 am

Here’s a fun fact. The little downtown Vancouver core, roughly 350 square blocks, has over 1,300 condos currently for sale on the market. This does not include developer hold back. This speaks for itself. That’s one of the highest concentrations of condos for sale in North America, excluding Toronto. Mind you, Manhattan is a much larger core (nearly 5 times the size, in fact) with far less inventory available. Similarly compared to Vancouver, downtown Seattle core is also roughly 350 square blocks, with a little over 300 units on the market for sale. Do the math, and its obvious that all of this is speculative buying in Vancouver, much like what happened Miami. Not ending well.

#163 The American on 09.18.11 at 11:39 am

Vancouver metro, smaller in land mass and significantly smaller in population than Seattle mind you, has over 13,000 condos and homes for sale. The entire Seattle metro has less than 3,800 condos and homes for sale. When inventory is as high as it currently is in Vancouver, there’s not stopping the slide downward.

#164 The thing in the basement on 09.18.11 at 11:47 am

143 Silver – I guess I have to repeat – get a grip. You think your property taxes are stealing from you? You dont see a need for the facilities and services the city
provides? And you should pay less than your neighbours because you bought cheaper?

Now if you have a gripe, it’s that your taxes are based on relative property values at all. I’m not convinced that’s an euitable way to do it. Why should I pay more than the
guy a few blocks away in a “BC box” with same sized family that benefits identically from those services?

And remember, if you do sell, only take a small markup from the price you paid. Just to be fair.

#165 The thing in the basement on 09.18.11 at 12:47 pm

143 Silver – I also see you’re in a residiential/commercial unit. I own a share in a mixed use building as well (the
residential use is allowed) but am zoned commercial and
taxed over 3X the rate of my principal residence. That’s over $6K/yr in small town BC. Knowing the relative costs/wages between here and Van, $12K doesnt sound
way out of line.

#166 Live Under Your Means on 09.18.11 at 12:49 pm

#136 Dan in Victoria on 09.17.11 at 7:07 pm

Stupid Store tried that a couple yrs. ago. After they lost customers to their competitor, they reverted to free bags, but they’re the the pits. There’s always a tiny hole in the bottom and if they fill them with just, e.g. 3 litres of milk, they’ll break. Some cashiers now double them, even without my asking them. I’ve a 3 bin pull out recycling system which requires ‘handles’ on bags. I’ll only use SS’s bags for paper products.

Haven’t shopped at Re for years.

#167 Metro Van Observer on 09.18.11 at 12:50 pm

Do any of the posters here see any parrallels b\w Japan’s real estate market post bubble (1989-90) and what we may experience in Canada (and what the US is likely going through).

My understanding is that ultra-low rates in Japan did little to stop the real estate deflation that ensued after the peak. Japan obviously has relatively little land…an argument always used to defend Vancouver valuations.

With interest rates expected to remain very low here for an extended period of time is it possible that our markets (especially Vancouver) will crumble under the weight of the absolute mortgage debt in and of itself, low interest rates or not?

The size of the ‘average’ mortgage on a detached Van area home is astounding at recent years’ prices. With the cost of living on everything rising (and wages typically not) interest rate hikes may not need be the trigger that begins to financially cripple households.

Debt loads in and of themselves could destroy growth.

Is Japan’s real estate experience a fair comparison?

#168 penpal on 09.18.11 at 1:08 pm

@ # 168 The American

Of course you are absolutely correct in your insightful observations.

But this is a bubble of vast proportions in Vancouver and according to ‘bubble dynamics 101’, the first casualty of major bubbles is critical thinking.

I simply console myself by picturing the smug looks of overextended Vancouverites being replaced by terror as reality asserts itself and they are left staring into the financial abyss of their creation.

Screw every last one of them.

How dare they defy the gods of reason and mathematics!

It will be the best horror show you’ve ever seen, especially if you didn’t pay the entrance fee.

Patience ….stay the course with an iron hand on the tiller.

#169 penpal on 09.18.11 at 1:15 pm

@ # 154 The Truth

Housing is unaffordable, by any reasonable metric, for the vast majority of immigrants, especially in Vancouver and Toronto.

If you can’t see that, then YOU are willfully blind.

#170 jess on 09.18.11 at 1:24 pm

129 Live Under Your Means

Do you think people would sign a waiver that stated: “if you get on this plane, and it crashes you cannot sue as you are flying at your own risk?”

… “insist they are innocent, had to first plead guilty to three counts of murder. … And yet, he made them all sign a waiver promising not to sue the state. …(cbc)

from 2004.. the lost votes of the disenfranchised

The 14th Amendment permits states to deny the vote “for participation in rebellion, or other crime.”


Florida Governor Repeals Rule That Granted Ex-Felons The Right To Vote. Republican Florida Gov.

Should the white collar criminals that neither deny or confirm be allowed to vote?

#171 CraigM on 09.18.11 at 1:26 pm

Good points, penpal: I think that you nailed it (especially wit hthe point I’ve quoted below) and I appreciate your encouragement. As I said, my parents have never had a problem with our lifestyle and after speaking myself dry for years, my in-laws are starting to get it. Next time I hear anything from my my colleagues at work, I’m going to ask instead why it’s so important to them that I buy.

Thanks again.

#139 penpal said: Or could it be that they are just insecure and need that house (that the bank rents them the money to occupy) to assuage that gnawing insecurity?

#172 OttawaMike on 09.18.11 at 1:26 pm

#136 Dan in Victoria on 09.17.11 at 7:07 pm

Your bag story really paralleled my fate this morning. Earlier this week buying gardening soil and sale plants plus a 10$ brass hose fitting. Bags were 5 cents so I said don’t worry I’ll carry it. Of course it got lost somewhere laying loose in my truck where a white plastic bag would have helped me keep track of the little devil.(And yes my ADHD sometimes flares up)

So for the sake of popular ban bags ecology movement, I just wasted more energy driving and buying another fitting today.

I agree that the plastic bag is a scourge polluting oceans and hanging in trees but I also wonder how much more food is getting spoiled and damaged since western consumers have become afraid of plastic?

Nothing is ever simple in ecology or any other science for that matter. (Remember that peak oil and climate change extremists)

#173 ExExpat on 09.18.11 at 1:38 pm

IMO the only game to play in Canadian real estate for the next few years is to take your ball and sit on the sidelines.

And good god, don’t get pulled into some MacLeans Magazine article likely pre-disposed to portray savers as examples of timid foolish Canadians who missed out on a sure thing. This guy is likely trolling for the right “examples” to meet a pre-conceived conclusion, why set yourself up for the punch line? There won’t be many positive media articles about savers until after the correction, if even then.

#174 45north on 09.18.11 at 1:39 pm

The Thing in the Basement: talking to Silver:

if you do sell, only take a small markup from the price you paid. Just to be fair.

pretty funny

#175 Observer on 09.18.11 at 1:39 pm

@ Moneta

As long as you are not self-sufficient, you are part of the problem. You can not expect to enrich yourself on the back of spenders forever. Every now and then, there is a reset.

…so that moral hazard would extend to the companies that got bailed out. Also funny how spenders are allowed to enrich themselves on cheap money (sometimes printed to deliberately devalue) at the expense of others but that is not a problem in your view. Your blatant one-sided stance is beginning to make you a suspect troll.

#176 Live Under Your Means on 09.18.11 at 1:49 pm

#105 Silver on 09.17.11 at 3:07 pm
My mortgage payment is $1100.00 a month doubled up.
My property taxes are currently $1150 a month. I’ve gone from $5000 to $12000 in 5 years. Residential/ commercial single occupancy unit.

Shoot. We bitch here in NS. The Prov did put a CAP rate on property taxes a few years ago. In April we paid $1252 of our 50 % estimated annual taxes. Granted, we’ve never had a ‘municipal tax inspector’ visit our home since we bought 21 yrs ago. Our home is still considered the lowest priced on the street. :-) We’ve done lots of upgrades which, AFAIK, we didn’t have to declare. We’ve a big lot but a neighbour (mower guy) has 2X our lot size. Our Municipality doesn’t tax homeowners based on the size of their lot.!! BIL in Laval, PQ, with smaller sq. house footage & a tiny lot, pays more than 2 or 3X what we pay in Mun. taxes. But, they do have better public transportation svcs., etc.

#177 Bottoms_Up on 09.18.11 at 1:51 pm

#169 The thing in the basement on 09.18.11 at 11:47 am
Speaking of property taxes, I emailed [email protected] regarding a significant pothole I had been driving over for the past few weeks.

In less than a week that pothole was filled in.

I gotta say it’s nice to see my tax dollars hard at work!

#178 penpal on 09.18.11 at 2:08 pm

@ # 178 ExExpat

I think that you are a clever person and even smarter for your cynicism in this case.

I agree, don’t let “…the truth that you have spoken (be) twisted by knaves to make a trap for fools…” *

* taken from the poem “If” by Rudyard Kipling

#179 Dan in Victoria on 09.18.11 at 2:10 pm

Chuck D @ 158
Hey Chuck, does your sister and husband have any construction experience?
I would suggest for peace of mind for them to have someone who understands beams / headers and point loads to inspect it.
Due diligence.

#180 penpal on 09.18.11 at 2:16 pm

@ # 136 Dan in Victoria
@ # 177 Ottawa Mike

The fact that a nickel is charged for a bag does not negate its existence.

Charging someone for the purchase of of a potentially “polluting” item does not diminish its threat to the environment.

I am sick of this crap being shoved down our throats at our inconvenience or at our expense or both!

I respect both of you more for your actions reported here today.

#181 OttawaMike on 09.18.11 at 2:21 pm

#180 Observer on 09.18.11 at 1:39 pm

I read all her posts today and couldn’t see too much flaw in Moneta’s arguments.

I just hope she is wrong.

#182 Utopia on 09.18.11 at 2:36 pm

136 Dan in Victoria

“Let the greedy retailers and purveyors of discretionary goods squeal, I say. I went into a big box store this morning to buy some plumbing fittings.
I get to the till and the lady asks me if I would like a bag.

“That would be nice” I said. “They’re 5 cents each” she says. “You’re kidding” I said. “No, 5 cents each” she says.

“Okay”, I said. Keep it. This was about $125 worth of stuff. So they lose a bunch of profit over 15 cents. Beyond me. Must have cost them 10 bucks to restock the shelves. I won’t be back.

Oh, those pesky little plastic bags. You want them free. They are no problem at all, are they? You object to paying for them because you think it is an entitlement to receive a “carrying container” with every single store purchase.

You respond by punishing the vendor and by withdrawing your purchase. No concerns that they are actually acting responsibly.

Good for you for standing up for waste and mindless consumption (sarc). I seriously doubt you ever thought beyond your own silly selfishness though.

Let me tell you a little of the damage those bags cost. Over in Egypt (why should YOU care!) those bags are blown across the vast deserts day and night.

Every time a little lost bag encounters a plant or a bush or an anthill (or anything else living that usually protrudes from the sand) they stick to it and cling on as they melt in the sun.

In the day, the sun heats the bags and magnifies the solar power thus delivering an oversize dose of warmth to the hapless victims.

The entire desert as a result is nothing but a garbage dump of random plastic bags stuck to dead and lifeless plants. It is resulting in an extinction of hardy, tough plants that were already at the very margins of survival.

But why should you care? We don’t have big deserts here (yet) and everything is about your shopping convenience and stupidity, after all, is it not?

So is it really greedy retailers that are the problem or are you just an irresponsible and selfish consumer who wants his own way come hell or high water. You want a bag, right?

You don’t give a shit about what happens after you are finished with it (like ten short minutes later).

I think I have you figured out. What a loser.

#183 Moneta on 09.18.11 at 2:37 pm

Observer on 09.18.11 at 1:39 pm
@ Moneta
Your blatant one-sided stance is beginning to make you a suspect troll
I’m a saver who has been living under my means. I used to be angry.

But anger and balme won’t fix anything. It,s just going to put oil on a fire.

At the end of the day, no matter what they take from me, I’ll always have my inner peace.

Just trying to make peolple see the other side of the coin. Not many savers have a big heart these days.

I hope you’re enjoying this beautiful Sunday, because it’s much better than any yield on my bonds!

#184 Live Under Your Means on 09.18.11 at 3:11 pm

#68 TurnerNation on 09.17.11 at 11:31 am

You are so finished. — Garth


Garth – I commend you for the time you spend writing this blog to inform us about finances & RE.

I laugh at guys like Turner Nation & their ilk.

#185 Rich Guy on 09.18.11 at 3:18 pm


I drove though Noth west Calgary on the Stoney trail yesterday.

Aside from the high prices, the houses are laughably close together. It looks disgusting to be honest and nary a tree in sight.

If the neighbour’s house burns, yours has a good chance of burning as well.

If we want to live this close together, may as well build townhouses and insist on big masonary fire blocks between units.

#186 InvestorsFriend (Shawn Allen) on 09.18.11 at 3:21 pm


There is ALWAYS plenty to worry about when you invest money in stocks. There are always some analysts predicting a stock market crash. Right now now of the monsters that are said to be lurking include:

1. Defaults by European countries causing a crisis at European banks which in turn could turn into a world wide credit crisis.

2. U.S. could ultimately default on its huge debts causing perhaps a depression.

3. U.S. could print massive amounts of money to pay off foreign dents causing massive inflation.

4. Global growth could slow to about zero or less due to aging populations in the developed countries. And it said that stocks will not offer a good return without economic growth.

5. Energy shortages could curtail growth.

I could go on moving from the possible to the absurd, world nuclear war, world-wide pandemics, end of the world, attack by aliens from outer space. There is never any shortage of things to worry about.

To be flippant, I could just point out that life is indeed risky. Meanwhile we still need to get on with living and investing.

Today, let me address a couple of specific points that “bears” have made.

A professor Gary Shilling has popularized the use of a 10-year P/E in place of the regular P/E. This is the stock price divided by the average earnings from the last 10 years. Naturally, given growth, the average earnings over 10 years tend to be lower than the most recent year’s earnings and so automatically this 10-year P/E is on average lower than the regular P/E. The idea behind the 10-year P/E/ is that it insure we get a more normalised earnings figure. Regular P/Es can appear high simply due to a temporary drop in earnings. And a regular P/E can appear attractively low based on a spike in earnings.

Most of what I have read suggest the P/E 10 is still at the higher end of the range suggesting stocks are expensive.

I calculated today the P/E 10 on the Dow Jones Industrial Average and I found it is below its historic average. That would suggest stocks are cheaper than average.

My data indicates the average PE 10 on the DOW since 1938 is 19.8 and we are sitting at 16.8. So, stocks are cheaper than average. The lowest P/E 10 was 8.9 at the end of 1981. The biggest peak by far was (surprise it was 1999) at 43.0. The second highest peak was 1965 at 26.0. (it accurately signaled stocks were over-priced). The data here would seem to suggest that on a cyclic P/E basis the stock market is cheaper than average but by far not as cheap as 1981. However, considering that the 10-year bond yield in 1981 was something like 16% and today it is 2%, an argument could be made that stocks are indeed very cheap. 

Many bears suggest that if economic growth is zero then stocks must fall. Well, maybe. But I am not convinced that is the case. In a zero growth economy, some companies still grow. Also the non-growing companies can stop investing for growth and can increase their dividends. Or dividend buy-backs may increase earnings per share. Growth in the economy does make it easier to make money in stocks. But zero growth does NOT mean that companies stop earning money.

As always there are no guarantees in the market. But on many measures stocks look cheap to me. I am not going to be scared away. But each person’s tolerance for risks varys and investors must remember that you are grown ups. Invest at your own risk.

#187 timo on 09.18.11 at 3:57 pm


“The former International Monetary Fund’s Managing Director, Dominique Strauss Kahn, Sunday said Greece is unable to pay its debt and its creditors will have to take losses on the debt they hold.

“Greece got poorer, we can say Greeks will pay on their own, but they can’t,” Strauss Kahn said in an interview on French TV channel TF1. “There is a loss and it must be taken by governments and banks,” he said.”

“Governments haven’t solved the problem, they just delayed it, and the snowball grows,” the former chief of the IMF added in his first comments since stepping down from his post.


“Hanke says Canada may get a direct impact through the devaluation of the euro relative the dollar.

But the real danger to Canada’s economy is what a Greek default does to confidence and credit, and here the Lehman example is instructive, says Paul Taylor, chief investment officer with BMO Harris Private Banking.”

It seems that all is not well. Thank god real estate in our country is on a sound footing. Now I’m off to buy some Greek bonds, the returns are to die for.. ;)

#188 Dan in Victoria on 09.18.11 at 4:20 pm

Utopia @ 187

#189 jess on 09.18.11 at 4:23 pm

I guess Jesus is tired of people misrepresenting his image!

Jesus Christ filed a lawsuit today in the New York Supreme Court against the Republican National Committee for what he is calling “egregious misrepresentation of his statements and image.” One of the attorneys representing Christ had this to say:
“For years Republicans have proclaimed their love for and loyalty to Jesus, yet their actions are highly contradictory to what Mr. Christ preached. Instead of helping the poor and the sick GOP instead punishes the poor and the sickly.
Our client isn’t telling the GOP what their agenda should be, he simply wants them to stop using his name when their actions contradict everything he stood for.
If the GOP would like to continue using his name they have to start making a significant effort to help the poor and the sick, instead of the rich, and start promoting a more peaceful agenda.”
When asked about the lawsuit, House Speaker John Boehner made the following remarks:
“Mr. Christ is entitled to his opinion, however the GOP believes that the underlying message in the Bible is that giving tax cuts to the wealthy is the true path to happiness.
I don’t know where Mr. Christ thinks the Bible says to help the poor and the sick, but that sounds awfully socialistic to me, and we are not a socialist country.”
The lawsuit goes even further than just spoken word references to Jesus. According to the suit “images that inaccurately depict Jesus Christ, who was born in Middle Eastern country, as a Caucasian man with light skin, can no longer be displayed by political officials who claim they understand the Bible.”

The Air Force, in response to an exclusive report published by Truthout earlier this week, has withdrawn materials used in a training session that relied upon Bible passages and a quote from an ex-Nazi SS officer to teach missile officers about the morals and ethics of launching nuclear weapons


#190 Dan in Victoria on 09.18.11 at 4:24 pm

Penpal @ 185
You understand.

#191 Devore on 09.18.11 at 4:27 pm

#191 InvestorsFriend

I calculated today the P/E 10 on the Dow Jones Industrial Average and I found it is below its historic average. That would suggest stocks are cheaper than average.

The last 10 years of consumerism around the world has been fueled by cheap credit. Will the next 10 years look the same, when economies flatline and credit deflates?

Common wisdom has it stocks are cheap and companies are sitting on loads of cash. Well, if stocks are so cheap, and companies have so much money, they should be buying their shares back with both hands.

You know how I knew Sino Forest was a fraud? There was no insider buying and no buybacks, even as management was claiming the company stock was unfairly punished to a fraction of its value. If that was the case, why not buy your company at an 80% discount?

#192 OttawaMike on 09.18.11 at 4:39 pm

#187 Utopia on 09.18.11 at 2:36 pm

I have also traveled the 3rd world and seen the flying of the international flag, the bag, everywhere.

Problem is our 5 cent bag charge here is not much more than a symbolic effort. western consumers mostly dispose of bags properly and they really occupy little land fill space.

I know every bit helps but as I have posted here before, I work in the environmental field and the answers are never as simple as they seem.

#193 Timing is Everything on 09.18.11 at 5:10 pm

136 Dan in Victoria – “Okay”, I said. Keep it. This was about $125 worth of stuff. So they lose a bunch of profit over 15 cents. Beyond me. Must have cost them 10 bucks to restock the shelves. I won’t be back.

Way to show ’em! How much of your own time did you waste showing ’em? You had to go to another vendor (probably across town), ‘restock’ your purchase and use more of your gasoline to do it. But, damn it! Your entitled to ‘free’ bags.

Pick your battles…..wisely.

#194 Steven Rowlandson on 09.18.11 at 5:18 pm

This is 22 years of self employment building stairs as a working man at market wage rates in the Barrie area based on personal experience.

Self Employment 1986 -2009
Supplied skilled labor to Stair Companies

Date Business income Profit( Pretax)
1986-1987 $25,809.90 $19,816.49
1987-1988 $27,341.00 $22,235.02
1988-1989 $26,416.00 $21,493.24
1989-1990 $25,580.00 $21,627.49
1990-1991 $18,326.16 $14,979.66
1991-1992 $13,559.50 $10,650.58
1992-1993 $18,281.00 $15,060.77
1993-1994 $16,494.00 $12,792.72
1994-1995 $16,113.00 $12,570.25
1995-1996 $34,781.50 $19,903.08
1997 $26,745.00 $19,092.20
1998 $29,317.50 $22,646.42
1999 $27,002.50 $18,217.56
2000 $22,842.50 $10,459.83
2001 $20,717.50 $11,451.73
2002 $20,238.50 $11,826.56
2003 $20,295.00 $11,348.16
2004 $26,138.75 $19,065.85
2005 $24,855.00 $16,516.95
2006 $26,880.00 $18,651.86
2007 $21,420.00 $11,173.60
2008 $25,102.50 $15,808.51
2009 $1,522.50 -$3,008.15

Averages $22,425.19 $15,407.84
Totals $515,779.31 $354,380.38

Now all you people who think canada is the greatest country in the world how much house, personal and family life and taxes does this kind of income pay for?
Remember some people I was working with got paid less and the clients/ employers thought they were paying too much from time to time. These numbers if they are relatively common point to financial armaggedon for real estate, public finances and population wise for demographics. These numbers are the real deal. Tomorrow I am going to consult with Employment Ontario to see if there is something to do that pays better than stair building.

#195 palebird on 09.18.11 at 6:25 pm

#187 utopia
So I see you are saving the world one little bag at a time ..hurray for you ..I have been to the sahara too and you are right, as a matter of fact any country that has a problem educating it’s masses has this plastic issue. But these large stores in this country that are charging for a bag, it is not for the environment, it is a money grab..they are doing it because they can period. Kind of reminds me of the little kiosk that was set up at YVR years ago asking for money to fix their terminal. You could tell them to pound sand back then but they got bold and guess what. Everybody does it now and you can’t say boo. What a farce. Speaking of farces what about the gst, this country existed for well over 100 years without it but here we are collecting tax for the pinheads in that joke of a capital city.And so it goes..

#196 Live Under Your Means on 09.18.11 at 6:30 pm

#183 penpal on 09.18.11 at 2:08 pm
@ # 178 ExExpat

I think that you are a clever person and even smarter for your cynicism in this case.

I agree, don’t let “…the truth that you have spoken (be) twisted by knaves to make a trap for fools…” *

* taken from the poem “If” by Rudyard Kipling


My Dad had the poem framed in our home:


If you can keep your head when all about you
Are losing theirs and blaming it on you;
If you can trust yourself when all men doubt you,
But make allowance for their doubting too:
If you can wait and not be tired by waiting,
Or, being lied about, don’t deal in lies,
Or being hated don’t give way to hating,
And yet don’t look too good, nor talk too wise;

If you can dream—and not make dreams your master;
If you can think—and not make thoughts your aim,
If you can meet with Triumph and Disaster
And treat those two impostors just the same:.
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build’em up with worn-out tools;

If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings,
And never breathe a word about your loss:
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: “Hold on!”

If you can talk with crowds and keep your virtue,
Or walk with Kings—nor lose the common touch,
If neither foes nor loving friends can hurt you,
If all men count with you, but none too much:
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it,
And—which is more—you’ll be a Man, my son!

#197 penpal on 09.18.11 at 6:46 pm

@ # 187 Utopia

Pretty silly being that harsh on Dan dude.

#198 tkid on 09.18.11 at 6:50 pm

People understood this concept a long time ago, that’s why there used to be debt jubilee every 50 years.

Now I understand you. Hey, I tell you what, I’ll vote to have the government give EVERYONE $5000. Put it towards the credit card, mortgage, trip to Paris, whatever. The only catch: those who accept the $5000 are banned from credit cards for their lifetimes and must become cash-only consumers.

Are you in?

#199 penpal on 09.18.11 at 6:57 pm

@ # 201 L U Y M

Many thanks for posting the poem in its entirety.

I wanted to do so, but don’t know how to cut and paste in my posting and, being a slow typer and it being a glorious day to run the car a bit, I did not.

Now if we can just get some people (including myself) to “man up” a little more around here……….

#200 Lana on 09.18.11 at 7:23 pm

201 Live Under Your Means on 09.18.11 at 6:30 pm

The IF poem brought back memories of Grade 5. I loved that peom. I thought about sharing this with my grandson who is in Grade 8, but wonder if he would understand it, given that they don’t teach grammar anymore. Pet peeve…well I have several regarding today’s school system.

#201 Mr. Lahey on 09.18.11 at 8:02 pm

Hey Smoking Man, I read the article on your 75 year old buddy from the casino that robbed the bank to fund his gambling. His response to the reporter’s question as to why he robbed the bank was that he needed the money. This reminded me of the bank robber Willie Sutton who when asked the same question, why he robbed banks, responded, “because that’s where the money was”. He wrote a book with that as a title. Willie never harmed a single person in all his years of robbing banks. The cops knew it was a Sutton job as soon as they arrived on the scene and nobody was injured.


#202 Waterloo Resident on 09.18.11 at 8:24 pm

#199 Steven Rowlandson

wow, I feel sorry for you, your hard work is not giving you much. My sister works as a nurse, she does home-nursing and its very easy work. With the massively aging Baby-Boomer population about to fall apart soon there will be HUGE demand for nursing type people of all sorts so look into that, it might be something you can do. About 1 / 6 nurses are men these days so don’t worry about that. And don’t worry about age either, about 1/10 graduating nurses are OVER the age of 50 so that’s okay too.