Stimulate this

Driving along Bath road about 10 minutes west of Kingston, Lori couldn’t believe her eyes. “In all my 46 years,” she says, “I have never seen a sign like this.” But there it was. Bold as a Lady Gaga bra.

“I’d noticed this McMansion on the water for sale a year ago. A very large for sale sign was placed above the wall to get everyone’s attention. It got my attention this week for sure. With a price reduction like that, I am sure the agent is passing it off as a steal of a deal. A greater fool has yet to come along. Imagine that! But it is different here, right?”

  Let’s hope so, because in some places, when you have to cut the price of your McMansion by $1,000,000, or close to 40% of the asking price, it might suggest the place was built by someone with far more money than taste. But, check it out. This spread has just as much class as exploding nipples.

Speaking of failed seductions, the Fed just choked with its the latest stimulus plan. Ben Bernanke would have been better showering in Axe body spray and rolling in personal lubricant, because the markets balked.

In case you missed it, the American central bank announced it’ll sell hundreds of billions of short-term bonds to buy longer ones. So what? It’s intended to help drop interest rates a little more and encourage borrowing, this goosing the flaccid US economy. Ben also said he’ll pump vast sums of dollars into mortgage-backed securities, so struggling homeowners can have even cheaper home loans, guaranteed for 30 years.

The response? Stocks tanked. Gold tanked. Bond yields tanked. The US dollar leapt and the loonie crashed under par. Investors scrambled into fixed income and the greenback, looking for cover.

The reason: The Fed was downright gloomy in its analysis of current conditions. No hope for improvement on the horizon for either houses or jobs. And until more Americans get back to work, there’s little hope real estate values will rebound, staving off millions of new foreclosures and billions in negative equity. This is called ‘upgrading the downside risks’. As far as investors were concerned, it all but confirmed Washington expects a recession.

Meanwhile, I hope you just got a 4% raise. No? Well, too bad, because inflation’s back. Ottawa now figures it is 3.1%, thanks to gas and the cost of KD. This means we now have rising consumer costs and a slowing economy – not good news for real estate, as people pay more to live and yet worry about the stability of their employment. It also confirms anyone with GICs, savings accounts or those hilariously-named high interest deposits  losing money by saving money. Oh yes, and you have to pay tax on 100% of the interest.

So, let’s summarize. US recession likely, recovery distant. Jobs and houses there at risk. Our biggest client laid low. Markets pissed. Canada slowing. Living costs rising. Debt swelling. Prospects dimming.

And realtors, posing as normal people, come to this blog to say housing will rock higher because financial markets are volatile? Do they actually believe people will continue to borrow to buy homes at nosebleed prices amid scary economic news just because mortgage rates are where they were six months ago? That rabid young couples will ignore the growing threats and dive into fat home loans with little or nothing down because all their little FB friends are? That people in Calgary will be saved by oil, or the next Air Ham flight will disgorge fresh horny millionaires at YVR?

Yeah, they do.

So, danger grows. And remember, it was not the gyrations on stock markets, greedy unethical bankers, loose regs or political failure that leveled America. It happened after far too many people believed the same thing at the same time, and worshiped at the same altar. Then the real estate god turned on them.

And now, the entertainment portion of this pathetic blog. Here’s Peter. He wants your advice. Be gentle.

Garth: I have been reading your blog for the last few months and absolutely love it.  I would so appreciate feedback from your viewing community and yourself.  In case you are interested in posting this for me I would appreciate it.

My wife Daniella and I moved from Toronto in 2000 to New York to have a go at working on Wall Street.  After 9/11 I put $100,000 in life savings into gold and silver when they traded at $300 and $4.00 respectively.  The bullion has been sitting in a safe in London and is worth over $600,000 today in USD.

We sat out the housing boom in the US b/c things looked pretty crazy here way overpriced.  As the boom began to turn into a bust in around 2007 we slowly deployed our savings and began investing in Real Estate.  First purchase was the condo we live in in New York paid $800,000 cash and now it’s worth $650,000 (not so good – but we LOVE this place and want to hang on to it use when we retire in about 20 years – the rent it will earn will carry all expenses).  Last year we took $300,000 of equity out of the condo and purchased a rental in a town about 1 hour away.  The total purchase price was $535,000 and it has totally held its value – we used $250,000 in mortgage financing for it.  The rental on it is very high it produces $3,600 per month which covers all expenses including the cost of both mortgages.

This year we really pulled the trigger.  Two five unit student housing in South Carolina at $240,000 a piece.  We used $60,000 downpayments for each and mortgage financing for the balance.  Again – both properties produce huge positive cash flow.  Next we bought 3 multi unit properties in another city in the south (which I cannot share b/c it’s getting hard to scoop these deals).  Each property was in the $150,000 range and each one produces around $2,000 per month revenue – easily covering all of the expenses including of course financing.

Our plan is to keep buying these income properties until Fannie Mae refuses to sponsor them.  The rule here stateside is that a family can have no more than 10 mortgages underwritten by Fannie Mae.  Right now we are up to 7 – want to purchase 3 more income properties.  The deals are sort of mind boggling in a way.  The properties that we are picking up RENOVATED for $150,000 sold for $380,000 during the height of the housing bubble.  We are going to get our US Citizenship to minimize the adverse tax consequences for Canadians owning real estate in the US.

Our plan is to move back to Toronto in 2 years or so.  I would like to sock away enough money to buy a tear down in Toronto and then start cashing in the bullion and use the proceeds to get our place fixed up.  I have recently started looking at property values in Toronto and it’s shocking to see what’s happened since we left in 2000.  I am wondering if Toronto will see price declines in the order of magnitude of some of the properties in cities that we have been investing in here in the US.

I know that there will be a reaction when your readers read my story “Whhoaa this dude is nuts – 10 mortgages !!! what’s he thinking”.  I can assure you – I am a very conservative sort.  We waited until we saw the beginnings of the collapse in real estate here before we began buying.  I have a good income since I am a Wall Street survivor.  We make over $400,000 per year and I’ve had the same job living in the same place for 10 years so banks are happy to lend to us.

I need to know what to do with the Toronto plan.  How long do we wait.  My ideal property is a $500,000 fixer upper detached home in a nice area of Toronto with excellent schools – I am told that nothing like this exists.  As mentioned we have over $500,000 worth of bullion – I would cash it in to renovate.  I am told that $400,000 can raise the dead in terms of renovating a place.  When I tell my Toronto friends that I would like to pick up a $500,000 fixer upper in the Beaches (which I understand you have now renamed The Beach – terrible rename)… they laugh at me.  I am told that I can only find the home I am looking for by paying at least $1mil.

I would appreciate any advice here – do you think my plan to move back in 2 to 3 years will coincide with a slide in Toronto home pricing?  By how much?  I am willing to wait it out and sit tight.  Ideally I would like to invest like a vulture in Toronto in the same way I am doing down here in the US.

I LOVE YOUR BLOG
Peter (and Daniella)

279 comments ↓

#1 not 1st on 09.21.11 at 9:41 pm

This story isn’t even worth writing a comment. This guys goose is cooked. He has way to much leverage and no cash flow and is betting on capital gains. The U.S. housing market is going to go on a 2nd leg down because there is no recovery from structural unemployment, massive sovereign debt and a banking sector that is 100% insolvent without the grace of the american taxpayer.

Forget your toronto plan. You will be lucky to survive the next couple years in the U.S. housing market, but of course, you are one of the reasons the economy tanked in the first place.

#2 Observer on 09.21.11 at 9:52 pm

Meanwhile, I hope you just got a 4% raise. No? Well, too bad, because inflation’s back. Ottawa now figures it is 3.1%, thanks to gas and the cost of KD. This means we now have rising consumer costs and a slowing economy – not good news for real estate, as people pay more to live and yet worry about the stability of their employment. It also confirms anyone with GICs, savings accounts or those hilariously-named high interest deposits  losing money by saving money. Oh yes, and you have to pay tax on 100% of the interest.

Yup…stealing from the prudent….where’s that magazine article I’m waiting for?

#3 HouseBuster on 09.21.11 at 9:52 pm

Here’s some advice Peter – Go F yourself!

#4 The Original Dave on 09.21.11 at 9:52 pm

wow, guys that make $400,000 think like this….where did I go wrong?

#5 from kits on 09.21.11 at 9:56 pm

SMART MAN

1. This guy has it figured out. Buys gold and silver when nobody else was and thought real estate in the US was overpriced which it was. US stock market has basically been flat since 2000. Not a bad return for simply buying and holding…..!

2. US real estate – may have been early on his buying as I think the US is in a Japan like zombie trance and will go down for years to come. If he wants cash flow and doesn’t need to sell for 15 – 20 years who cares! get another 3 mortgages dude! The metrics actually make sense in the US

3. I don’t know why you are asking Garth, he knows his stuff but so do you, isn’t it obvious Canadian housing is overpriced. Use your instincts man, you appear to have some good ones! Hang on to your gold and silver, look at the tool Bernake, central bankers are running out of options, guess what that means! more devaluation of the dollar with printing….might take another 5 -10 years to develop but sh*t you waited since 2000 for your gold and silver

#6 a fan on 09.21.11 at 9:56 pm

Checked out MLS. It says: “Built as a totally custom dream home, this is a unique opportunity for someone with exquisite taste and appreciation of property.” Bwahahaha! Om my word… Mr. Turner, thanks for that, and your blog.

#7 Pete in Barrie on 09.21.11 at 9:58 pm

Garth said, “Do they actually believe people will continue to borrow to buy homes at nosebleed prices amid scary economic news just because mortgage rates are where they were six months ago? That rabid young couples will ignore the growing threats and dive into fat home loans with little or nothing down because all their little FB friends are?”

Yeah they do, and the problem is they are right. Most young people have no clue about economic news. A young person gets a somewhat stable job (at least in their opinion) and they are immediately out searching for a house and getting a pre-approved.

I wonder how many 20 something readers you have, Garth.

#8 Chris L. on 09.21.11 at 9:59 pm

That’s pretty scary right there. Sounds like either they will win big or lose big! Ha!

#9 Devore on 09.21.11 at 10:02 pm

In case you missed it, the American central bank announced it’ll sell hundreds of billions of short-term bonds to buy longer ones. So what? It’s intended to help drop interest rates a little more and encourage borrowing, this goosing the flaccid US economy.

So what? Will lowering long interest rates a 1/4 or even 1/2 a percent change anything? It’s already nearly free money. Half of zero is still zero.

People aren’t not borrowing because money is too expensive, banks aren’t lending because it’s too risky. They’d rather keep their cash with the Fed, at 0.1%. Better than losing it all.

#10 Dan in Victoria on 09.21.11 at 10:02 pm

Nice series of lessons Garth.

#11 Hovering on 09.21.11 at 10:02 pm

aaargh

my eyes !

too tacky. colours clashing. i think i saw a zebra striped chair..

#12 Toon Town Boomer on 09.21.11 at 10:03 pm

I can’t believe these types of comments.
“My ideal property is a $500,000 fixer upper detached home.” A $500,000 dollar fixer upper, no wonder the housing economy is what it is.

#13 sol on 09.21.11 at 10:05 pm

go to hell

#14 Jon B on 09.21.11 at 10:06 pm

This guy is a dreamer and a gambler all rolled up into one.

#15 Calgarygirl on 09.21.11 at 10:09 pm

Buy a Calgary dump, get beer.

http://www.calgaryherald.com/business/Beer+being+offered+incentive+Calgary+home+purchase/5438277/story.html

#16 Smoking Man on 09.21.11 at 10:09 pm

Pays to be a Basterd……..

Lord of the flys………
The psychology of humanity and how the world works is all in that great book.

John Tory got booted out cause he is a wimp, Garth got the boot cause he was unwilling to blow a kiss to Hosni Harpers ring.

You can not be the head of the mafia unless you are willing to kill the slightest threat; You can’t be the head of state unless you are just as bad but a little more discreet.

Basterds always finish first, if you want respect treat people like sh!t, you want to get walked on, follow the rules and be polite.

Now if everyone was a Basterd the world would not function very well hence the invention of public education where the unwitting are taught to obey and serve the basterd. First he/she is the teacher, then the boss.

The Basterd is not smart. Instinctively the only thing he knows is the weak will follow the strongest.

It cracks me up when people discover building 7 truth, or the truth behind the money system and who runs it, they get mad, they go to protest, make signs. O un fair The Bad Basterds……..

The Smoking Man analyzes, plots and plans always finding the best way to exploit either the Basterd or Peasants to him the are Neanderthals.

I come off unthreatening, funny, appear to be dumb and likable and someone the Peasants and the Bustards always want to help…

It’s a gift my life story would be amazing on paper.

Now if I only when to school I might have the discipline to write a book. But then f-y as in the highlander there can be only one Smoking Man.

#17 Robert Dudek on 09.21.11 at 10:10 pm

400K a year job income should see him through covering any further losses in his US real estate. He mentioned all the properties have cash flow to cover the costs of the properties.

I think in 2-3 years, 600K will be enough to buy the Toronto fixer he’s looking for.

This guy seems to have his act together, after all he picked the right time to buy bullion.

#18 Dan on 09.21.11 at 10:10 pm

Hey SmokingMan what’s your take on the market and how much of a drop do you see. The guys from moneyandmarkets see a huge drop with one guy calling for a DOW 7000. Once again Garth Great post on your blog again. I really look forward to your daily thoughts.

#19 Peter Jr. on 09.21.11 at 10:12 pm

Dear Garth.
My goal is to have 10 children by 10 different baby daddies by 2015. I would appreciate your advice and that of your readers.
Peter Jr.

#20 InvestorsFriend (Shawn Allen) on 09.21.11 at 10:12 pm

SERIOUSLY THOUGH…

I just can’t figure out how anyone can get by on less than a $ million per year. This guy is only making $400k working on Wall Street in New York. Say it isn’t so! (That’s gotta be before bonus, right?)

#21 Tre on 09.21.11 at 10:16 pm

Hey Garth, get that crystal ball out. Of course you are a psychic that can answer all of Peter’s questions. LMAOL.

#22 2deep on 09.21.11 at 10:18 pm

Greed.

#23 Tre on 09.21.11 at 10:21 pm

Garth the only thing that Bath Road McMansion is missing is a bowling alley.

#24 Cookie Monster on 09.21.11 at 10:23 pm

I have to agree with not 1st.

You have a household income of $400k and work on Wall St. and you’re asking us what to do, so your wife makes $350k, she’s a keeper!

Good move on the Au and Ag, I would hang on to it, i think it has a ways to go yet. In case you haven’t noticed, or maybe working on Wall St. has insulated you from financial reality, but the world is on the precipice of armageddon, the next and final shoe to drop is the USD.

I think you’re going to get creamed on your US properties and best wait at least 3-5 years before buying in lala land, Tdot.

#25 E-Town on 09.21.11 at 10:24 pm

You’re gonna love this one….
It Begins!!!

http://www.edmontonjournal.com/business/Beer+being+offered+incentive+Calgary+home+purchase/5438277/story.html

#26 Peter on 09.21.11 at 10:24 pm

Each rental property produces enough income to cover all expenses including mortgage and property management fees. The rental properties are for long term income. No capital gains expectations were built into my business cases.

#27 Mark on 09.21.11 at 10:25 pm

Watch for those rents to come a’crashing down to earth once the interest rates start rising again.

#28 Cookie Monster on 09.21.11 at 10:27 pm

Correction, with the collapse of the USD your debts will be wiped out by inflation, so loading up on low interest fixed rate US mortgage debt is smart. I think you’ve made a good move. So maybe you do make $350k.

#29 Smoking Man on 09.21.11 at 10:28 pm

#4 Dan on 09.21.11 at 10:10 pm

Read my post from yesterday, but hey I will do it againg.

Ok its tails………..SHORT LIKE A MO_FO X as much margin you can get…………….

Garth pushes balance…….Usally I agree/ Like saying ok everyone on the titanic move to the other side to level the ship.

Where can I buy a gloc. cause I work on bay street and I know peausent want a trophy head…

Dudes Im in IT. Im a peasant too…….No………..

#30 Tre on 09.21.11 at 10:31 pm

Peter smart moves, you are an astute investor. Just be wary of Toronto, though.

#31 Victoria on 09.21.11 at 10:32 pm

That how reminds me of something from Scar Face.

#32 Reader down under on 09.21.11 at 10:34 pm

I call BS, this story is too good to be true.

If it is true, this couple should be applauded. Cash flow positive properties are the way to do it. My only advice – diversify. A six bagger means it is high time to lock in some profit, start cashing out most of that bullion slowly and invest it in a balanced, income generating portfolio while you wait for the Toronto market to come to its senses. But do hang on to a small portion of it, you never know when the world might move to a gold standard, crazier things have happened. You can afford such speculation, unlike most.

“not 1st”, you need to understand what “cash flow positive” means. This couple is going to be living it up all the way through their early retirement.

#33 bigrider on 09.21.11 at 10:46 pm

Garth I am surprised that you are not as scared as most given what is transpiring in the U.S and markets globally. What I mean is a 60/40 equity to fixed income portfolio mix that you advocate seems quite aggressive even for those who are not so risk averse.

And a 5% weighting to gold and silver bullion only? Really thats it?

Seems to me you believe the current swoon is not telegraphing something more ominous. Hope you’re right.

The world’s not ending. Relax. — Garth

#34 vyw on 09.21.11 at 10:47 pm

Looks like positive cash flow on rental housing – that’s excellent.

Best to rent in Toronto though. The price = 15 times annual rent rule applies here too.

The stock market is already down 20% and with our index weighted in commodities, it may fall another 20-30%. This will freeze home sales and then prices will start to fall. It remains to be seen if BoC will crash the rates again – they shouldn’t but you never know – and this will trigger a bear rally. Prices eventually correct, only Govts always interfere to keep the party going.

#35 bigrider on 09.21.11 at 10:49 pm

One more thing Garth, no one has asked you this I don’t think and I understand it may be a combination of both ,but do you give more credence to keynesian economics or austrian?

Wasn’t Von Mises the motherly one in The Sound of Music? — Garth

#36 wetcoaster on 09.21.11 at 10:50 pm

Peter needs a kick in the nuts.

#37 nonplused on 09.21.11 at 10:54 pm

Yikes! That girl has big eyes.

If I get you right, Garth, the McMansion is now listed for about $1.4 million? If they throw in the boat and the pool table I might bite. I have nicer furniture already though. $1.4 mil buys something nice in Calgary, but not that nice.

Peter,

Why would you want to move to Toronto? Toronto sucks. Better be a huge raise in it for you.

Nice call on the gold but don’t forget its taxable when you sell it so you won’t have $600,000 to renovate, more like $400,000.

I think you might have been a bit early into the US real estate market but hey. You can use the gold profits to tide you over if there is another leg down so I don’t think you have that much risk overall. However, I cannot believe the US government is actually guaranteeing loans on investment properties. That’s madness! Their madness though, not yours. If this works out for you, you could be a very rich man in about 20 years. Better odds than a lottery ticket, that’s for sure.

If I were in your spot I would become a US citizen and stay put. The only thing TO has on New York is that Ontario doesn’t understand they are broke yet, but they will soon.

And don’t forget, mmmm, rent “work outs” with college girls. Yum. Toronto is definitely not for you. Think like Garth and have them detail your Harley when they fall behind.

#38 Victoria on 09.21.11 at 10:56 pm

I mean that house reminds me of Scar Face. I bet the guy was a trader on Bay Street.

#39 bigrider on 09.21.11 at 10:56 pm

#33 Garth to Bigrider responds-“I’m cool the world isn’t ending. Thanks for asking”

Fine but seems to me bond market has been signaling deflation for a while now. I am surprised that if you are so bearish on housing prices, a hard asset, you are not as bearish on stocks, arguably an asset class deeply susceptible to deflationary forces as well.

Unless you feel we get inflation near term ,in which case stocks should hold up.

#40 Grampa Hindsight on 09.21.11 at 10:58 pm

Peter, you dont need any advice, its sounds like your doing fine without us. In fact Im proud of you and its a pleasure to read. The only thing I would advise is keep all your gold and silver.

#41 bigrider on 09.21.11 at 10:59 pm

#35 Garth to Bigrider -” wasn’t von mises the motherly one in the sound of music”

Sorry, I have never watched that movie and I don’t think that if I had I would be smart enough to figure out what you just said anyway..LOL

Can I get 12th grade edumacation answer please?

#42 Cookie Monster on 09.21.11 at 11:01 pm

bigrider, Garth’s a Garthesian!
Big mistake, calling ‘Keynesian economics’ economics is like calling religion science. When it’s record has been wrong since inception it’s called BS, or government econ.

Truth in economic theory is what is taught by the Austrian school of thinking, since it’s track record is suburb, Austrian economics is apodictic.

ap·o·dic·tic
   [ap-uh-dik-tik] Show IPA
adjective
1.
incontestable because of having been demonstrated or proved to be demonstrable.
2.
Logic . (of a proposition) necessarily true or logically certain.

#43 Abitibi Doug on 09.21.11 at 11:04 pm

In today’s (Sept. 21) Globe and Mail, Business Section there’s an article that predicts U.S. home prices will stay depressed for years to come, calling it a lost decade. However, that’s irrelevant because it’s different here in Canada. That makes sense, doesn’t it?

#44 Mean Gene on 09.21.11 at 11:06 pm

Peter and Daniella’s plan makes me dizzy.

#45 Soylent Green is People on 09.21.11 at 11:09 pm

My GOD that was some ugly house. Who lives there anyway? ..

.

.
.
.
.
.

.
.

#46 clem on 09.21.11 at 11:11 pm

ballsy real estate moves. you won’t have any trouble finding a place in toronto. best of luck with the income properties.

#47 Jan Etter on 09.21.11 at 11:12 pm

Peter, I contemplated weighing in with my two cents on your situation, but my reality is so far from yours I’m in no position to give you advice.

BTW, some long-standing locals might be offended by your assertion that “The Beach” is the bastardization, rather than the other way around:
http://en.wikipedia.org/wiki/The_Beaches

Re Bath, I have never seen so much money obviously spent on decorating a house to be so incredibly fugly.

#48 Smart Blonde on 09.21.11 at 11:14 pm

I’m sure you are thinking he is way too invested in Real Estate, which maybe he is! Having said that, things are really different in the states for the residents. He is definitely gambling, but one of the big problems in the states is that many people have defaulted on their mortgages and therefore, if they have gone into foreclosure cannot get a mortgage for five years. If they were fortunate enough to get rid of their home in a short sale, then they can get a mortgage after only 2 years. So in the mean time, the rental pools are small. We just spent three weeks in Scottsdale, Arizona looking at real estate and I can tell you that it is really hard for the locals. My sister-in-law has bought 4 places in Scottsdale, around the $100000 mark, and they are rented out completely to locals that can’t get mortgages. We learned a lot from talking to the locals, our realtor and many realtors at open house. One realtor told us, they love Canadians! I guess we are helping them out, not just the realtors, but also putting roofs over the locals heads. Anyhow, my advise to Peter is wait! I’d guess that Toronto prices will be down a lot by 2014. We have been waiting to buy a vacation home in Scottsdale since last April, and the prices are down another 15%. We still aren’t in a panic, slow and steady wins the race.

#49 April on 09.21.11 at 11:17 pm

Garth, or anyone, are you familiar with the the Bank of Montreal Monthly Income Fund which was recently suggested to a relative of mine and who is about to invest in it?

Only for people who need income. — Garth

#50 nonplused on 09.21.11 at 11:19 pm

Peter I forgot,

Are these mortgages fixed or variable? QE1, QE light, QE2, and now operation twist aren’t all that much different than what the ECB was doing for Greece (and Spain and Portugal et. al.) right before Greek bonds went from 5% to 100%. You are exposed to the same systemic risk as everyone else if the mortgages are variable. Most likely nothing happens. If something does happen, you are done. But that’s just my background as a risk manager talking. The VaR on your portfolio is probably pretty low, lower than your liquid reserves in gold, but VaR is only as good as the last settle. 75 day rolling volatility calcs and all that. Put a shock in of 2% or more and see what happens.

That’s why traders and exchanges make such an effort to see that 2% days are rare and 5% days nearly unheard of. Start putting the volatility associated with 5% days through the risk engine and see what happens to your volumetric limits. Kaboom! Risk managers will be shutting down the book all over the country.

In the early years of Garth’s blog I used to talk about how the risk management systems banks, hedge funds, and trading floors all over the nation were IMHO useless because only the last 75 days trading or so were used to calculate the volatility numbers to feed in to the system, and in illiquid markets those numbers (the settles) were highly manipulated by the boys with big positions. I don’t think anybody understood what I was on about, not even Garth ever snipped at me, but I think you might understand.

And that’s why banksters would go before congress and say “well, the probability of what happened happening was so low it should only be expected in every 100 times the age of the universe!” First error, extrapolating the model to infinity. Second error, assuming the last 75 days of trading gives a good insight into infinite time horizons. Stress test baby, stress test. But not like a banker. The bankers mark to model even when they stress test.

#51 Romeo Jordan on 09.21.11 at 11:24 pm

“the world’s not ending. Relax”

well put Garth. In fact, the world economy is currently growing at 4% per year, slower than normal but not the end of the world as we know it.

The gas stations and Tim Hortons will both be open for business tomorrow morning.

Get a handle on things folks. Some are you are worse than that flake Junius.

xoxox
Romeo Jordan

#52 Devil's Advocate on 09.21.11 at 11:28 pm

It will take some pretty compelling argument, the likes of which I have not yet heard, to convince me that this time it is anything different than any time before. Just as there are those who say it’s the same here or there as anywhere else, so too is this time just the same as it was any time or place before.

Each economic cycle shares at least one common characteristic; the period of capitulation is commensurate with that of the period of exuberance which preceded it. This has been so with every economic bubble since that of Dutch tulip mania in the early 1600s.

Given this single historically repeating phenomena and the absence of anything that defies it’s most likely continuation, I can only logically believe that this period of contraction will have bottomed out sometime in late 2013 or early 2014. And that’s really is not all that long away if you think about it.

Care to try convince me otherwise?

#53 Makaya on 09.21.11 at 11:40 pm

Replacing liquid investments by illiquid ones. Smart move.

#54 Devil's Advocate on 09.21.11 at 11:46 pm

These are normal times.

The wild ride up was not normal, nor was the gut wrenching drop we had to know was inevitably about to follow. That was a period of learning.

This is a period of putting those lessons to work; building, fixing, and improving. This is a period of reparation and there is no better time for us to be optimistic than when we are setting about fixing things.

#55 JP on 09.21.11 at 11:48 pm

I find Peter to be quite well positioned with his high yield properties. He also bought after the bust, which is a very good move.

Maybe he should take time to pay down debt instead of adding more debt.

In a few years, if most of you are expecting a crash in canadian properties, I think Peter is well positioned to capitalise on that buying opportunity.

Don’t hate investors guys, if he can make it, good on him. But he has the ammo to play with.

#56 nonplused on 09.21.11 at 11:50 pm

And PPS, this is a general comment but it follows from my VaR discussion for Peter,

Most banks are one missed bailout away from total failure. Why? Mark to model and “instructions” from regulators. See, here is what happened. In 2008, after the crash, those banks who survived and had been bailed out were told to improve their capital provisions. One way to do this was to shed risky assets and buy government bonds. Why? Well, the model that both the regulators and the banks were using was “governments don’t default”. Therefore if you assumed worst case you could hold the bond to maturity there was no risk of a loss, only that there might be an opportunity cost if interest rates rise. But you would get all your money back with interest, even if the interest was low. Zero risk.

But I do not know where the boomers came up with this utterly unproved idea. Preposterous idea. The idea is worse than the world being flat and resting on the back of a tortoise for anyone who would either read history or remember the news. But reading history or remembering the news is not the forte of the boomers. They grew up thinking life was a big party in the back of a van with drugs and girls who would do cool things to get drugs and by extrapolation it always would be.

In reality all governments default in one way or another, and no government debt has ever been paid off. The history is so strong on this point that we should assume no government debt will ever be paid off. Even the US government has defaulted 3 times. Remember the Continental? Of course not. You don’t read history and aren’t interested in it. But Google can present a primer in no time, if you are interested, but you aren’t so you won’t type it in. For the 2 of you who are, “not worth a continental” will get you there.

Government debt in the first world is now at a point where it must be defaulted. There is no choice. As Peter Schiff is fond of saying, we are not going to raise taxes to pay back the Chinese, because they cannot vote. They were idiots to lend us the money, and corrupt to boot. They bought deindustrialization in the west through bribe loans to a government that cannot pay them back. The whole thing was sin. Lending to a government is always immoral. But borrowing by a government is likewise immoral. The government of the time isn’t going to pay any money back, they just hope some descendant will. Well, the descendant won’t. All of the debt will default. All of it. It’s the only moral solution. Bothe the borrower and the lender were hoping to exploit some other party, namely the next generation and those that follow. It is a sin and the next generation has a moral right to say FU!.

#57 Scalgary on 09.21.11 at 11:54 pm

Peter

Can you check what LIQUIDITY means?

You need $100k+ and minimum of 2years if situation warrants you to do so?

I don’t believe you…

#58 Joseph [Original] on 09.21.11 at 11:58 pm

Ronald Reagan #2 is coming and may replicate what Reagan did to the US economy. Whatever you may think of this guy, this is a great ad.

http://www.youtube.com/watch?v=8EL5Atp_vF0

#59 Randis on 09.22.11 at 12:05 am

Wall Street survivor? You sell donuts at a corner smoke joint? …

#60 Devil's Advocate on 09.22.11 at 12:06 am

#27Mark on 09.21.11 at 10:25 pm

Watch for those rents to come a’crashing down to earth once the interest rates start rising again.

How do you figure?

#61 Davey Boy on 09.22.11 at 12:07 am

Re: Big Rider’s post yesterday regarding pre-numps.
Not a lawyer but involved currently in seperation fiasco with common law spouse. Firstly laws vary from province to province. I was told lawyers can punch holes through pre-numps, nothings cut and dry, she’s coming after an personal injury settlement that is supposed to be untouchable so protect yourself… Similar to the real estate market in a sense, do your homework but be very aware of the risks( marriages have a huge failure rate) As I stated before get married and buy real estate in this market as you can be crowned “the greatest fool”… You’ve been warned!

#62 Dave on 09.22.11 at 12:08 am

Enjoy reading your blog & advice Mr. Turner.

@-Peter guy- You’re full of S***. Did you missed your food stamp benefits this month ? LOL

#63 Alberta Ed on 09.22.11 at 12:15 am

Hmmm… why is this guy asking for advice? Something smells…

#64 Patz on 09.22.11 at 12:16 am

That place is so garish the only place I could hang out without upchucking is on the nice wood–floored deck with the simple chairs and flowers. Might get a bit cool mid–December tho’.

#65 BZLDAL on 09.22.11 at 12:17 am

“I wonder how many 20 something readers you have, Garth.”

Turned 20 this week, been reading for 2 full years now. Every. Single. Day. Got the book, too… just waiting for the t-shirts.

Not alone, either. Three older sisters (22-28) and two of their bfs have heard me out on my Greater Fool rants and passed along to their friends. Buuuttt… it’s going to take more than that to save the generation.

#66 Nostradamus Le Mad Vlad on 09.22.11 at 12:20 am


#5 from kits — “SMART MAN” — Agreed.

Seems to be well sorted out. Don’t care for the mtgs., but if incoming continues to cover the outgoing they will be fine.

Suggest waiting to the latter part of the decade before buying, then vultch. As for inflation, the figures come from StatsCan or someone similar. With food and necessities going up, the real figure could be 7-10%.
*
#33 bigrider — “Seems to me you believe the current swoon is not telegraphing something more ominous.” — See first link, 19th Nervous Breakdown.

“Wasn’t Von Mises the motherly one in The Sound of Music? — Garth” — No, that was Bill Hayley and The Comets c. 1951.
*
19th Nervous Breakdown Is the good ship Wall St. about to blow? Zero rates. Helping, hindering or what; 4:49 clip Remember the US$100 mln. in criminal credit transfers just prior to when the towers fell? 7:04 clip America Falls One, and 6:33 clip America Falls Two; 1:11 clip Build-A-Burger questions asked. Forget the answers, they’re from robots; 0:32 clip Obummer — Skyrocketing energy costs and Obummer Two If funding for the Smart Grid has been cut, yet coal plants are being shut down does that indicate Smart Meters are going to be used anyway? Another reason not to be a debt slave; Homeless One of the consequences of a marital split.

Links in Yo yo time in stocks, dollar and gold; Economic Alliance China and Russia strengthening ties; Fluoride Takes the pain away from having a govt. that doesn’t know what it’s doing.

Northern Pass One, then the 14:51 clip Part 2 of Eminent Domain, or how govts. seal land from people. Does the NAU – SPP have anything to do with this? Here is Number Three. “(*PSNH = The same ‘utility company’ involved in the Northern Pass Project . http://www.psnh.com/EnergyProjects/The-Northern-Pass.aspx )”; Money ain’t the only thing to be concerned with; Libya What the paid-for and controlled western m$m doesn’t say; Charade Actually, it’s oil, water and gold, which NATO has already taken for itself; Worshipping a decadent, decaying demagogue; Breaking Wind in the Solar System Just what we need — more gas!

#67 debtified on 09.22.11 at 12:21 am

HAHA! Now, that’s entertainment! Good one, Garth! You know your audience well.

Ditto to #3 HouseBuster.

#68 BPOE on 09.22.11 at 12:25 am

Here’s the real news folks. Todays news from the FED is great for Gold, terrible for the US dollar and FANTASTIC for VANCOOOUVER. Watch and learn

#69 domain on 09.22.11 at 12:25 am

#35 bigrider

Austrian economics cleary doesn’t work. Just ask any Keynesian who knows no alternative.

It will take an economic collapse and a new generation (not baby boomers) to try something that hasn’t been tried before; Austrian Economic principals in NA.

But hey, if you keep trying harder after you fail at sports or academics, it shows character. When you keep trying the same thing in economics and central planning, it shows you are a central banker.

#70 BPOE on 09.22.11 at 12:27 am

The American and Junius cue cricket sounds. Wow did those 2 dudes get it wrong

#71 Just a Tech on 09.22.11 at 12:29 am

To be honest, I like the underdog stories better! 7 mortgages and 400k in income? Give me a break, go on a vacation.

I’m still learning, but it seems like gold is his hail mary pass to finance a house and reno in a couple years which could be a bad idea. Seems like everything is working out as long as the gears turn smoothly. Timing could burn him though. If gold goes down, something happens to income in one of his properties, or he buys a T.O house at the wrong time (if there is one), a job loss or a combination . It looks like he could handle a shock, but at the same time hes not diversified that well and a little overleveraged IMO. If multiple challenges arise it could be a problem.

When will prices drop? who knows, I have better success timing cars and punches.

Whats the right answer Garth? This could convince more people that they should buy a house or two.

#72 Lookoutbelow on 09.22.11 at 12:47 am

Garth, terrific blog. Here I am homeless in Vancouver but debt free. Have you noticed that the Minister of Immigration has “capped” the number of immigrants that will be allowed into Canada. The Investor category is now 700 (3200 last year) and the Skilled category is now 10000 (last year over 48000 came here). These caps are in effect until July 1, 2012.

I didn’t see a rationale for this, it was a Ministerial Order but could this be linked to the ever higher real estate costs being driven largely by the Mainland Chinese, at least in Lotusland, among others?

#73 Bill Gable on 09.22.11 at 12:49 am

It’s something about too many years watching HGTV, that have obviously caused deep seated – “something fornothing-itis”, for a lot of dim folks.
Mr. Turner probably had to take the Hog for a run after this post.
Just speechless.

#74 Blacksheep on 09.22.11 at 12:56 am

Bigrider #33,

“And a 5% weighting to gold and silver bullion only? Really thats it?”

BR,
No, No, you misunderstood, the correct ratio is 5% CASH and 95% bullion.

Diversification is dead, I figure, win big or loose big.

Pete, good call on the gold buy back in 2001. I believe
we are nowhere near a top, with cglobal events unfolding. I cannot think of another asset class I would rather be holding right now.

take care
Blacksheep

#75 billnbarb on 09.22.11 at 1:03 am

Pah a mere 1 million off. Here on wonderful deluded Vancouver Island we can beat that. Check this one http://www.realtor.ca/propertyDetails.aspx?propertyId=10199483&PidKey=1493540482

Originally 13.5 million but now reduced by 5.1 million to $8,400,000. Strangely still unsold!

Bill and Barb

#76 palebird on 09.22.11 at 1:08 am

Heh heh this is good. $1,000.00 in beer what the f??? is this world coming to. This party is just about over ha ha. The mansion well if someone gave it to me free and clear and paid the taxes and utilities I could not live there..it is not possible to get drunk enough to deal with that kind of idiocy..I would have to pitch a tent in the back yard as the “terrace” looks like the only liveable space.

#77 Smell The Coffee on 09.22.11 at 1:13 am

If the FED just committed to borrow short and pay long by 300 billion plus they don’t have, then they have taken their financial play book from Lehman Brothers. Its now Twist in the wind time.

‘The Bernank’ just pulled a Dick Fuld. Leverage a 100 to 1 on debt versus assets and hope no one notices. Starve Mainstreet and paper over Wall Street losses with engineered gains. Its all air. Keep the Congressional and Presidential dog & pony show going wit policy flatulence.

Bernie Madoff the patron saint of ponzi schemes will be the official face on new ‘red backs’ replacing the old greenbacks of George Washington. Trust in God will be stretched to ‘Trust in gold.”

Its all over. The US is bankrupt.

#78 ALbertaBoy on 09.22.11 at 1:13 am

Lots of huge discounts in Edmont here starting to move things too since the market is softening big-time! $100,000 off for this House that was worth $359,000 4 years ago at this time… FORECLOSURE! http://www.dreamhomesedmonton.com/MyHomeDtl.asp?lstPages=1&HomeID=1229955&p=1000

#79 Tim on 09.22.11 at 1:30 am

“some places, when you have to cut the price of your McMansion by $1,000,000, or close to 40% of the asking price, it might suggest the place was built by someone with far more money than taste.”

Stop talking about the west side of Vancouver!

#80 smartalox on 09.22.11 at 1:37 am

It may be all those years of engineering school, but isn’t von Mises’ yield the stress at which a material becomes irreparably damaged and starts to buckle? What does this have to do with economics?

Oh wait, I think I answered my own question.

#81 Karl on 09.22.11 at 1:39 am

I’ll go ahead and make the prediction now: This next crash will be worse than 2008 and we’ll measure from SPX 1370, which makes the minimum downside target under 600. And no, this time the markets won’t recover with more “hopium” and fraud – that card has already been played which means that pension funds and annuities across the globe are about to go up in smoke, exactly as I’ve been warning about for years now. Enjoy, folks.

And you have been wrong. — Garth

#82 Off-Gridder on 09.22.11 at 1:41 am

And I was told that as a truck driver I was overpaid. Pfft…Better hope your income stays stable and the rents continue to cover the expenses. And if those two factors ever decline at the same time? Why not focus on paying the mortgages off with your income before investing further? While you have the income to do so?

#83 Coho on 09.22.11 at 1:44 am

Gee, government is “worried” about unemployment. Big corporations get the breaks while the screws are turned to small businesses which generate most of the jobs…and mostly likely LOCAL JOBS.

Just like making rented money cheap by lowering interest rates to historic lows and then “worrying” about people going into too much debt, governments are trying to create jobs after opening the door for corporations to move good paying local jobs overseas to exploit cheap labour.
That is akin to your “friend” beating you within an inch of your life and visiting you in the hospital offering you a half wilted rose and a packet of band-aids to make things right. It’s too little, too late, disingenuous, and lame.

By and large, it’s the Americans, Canadians, British, and Australians which are by far the cheapest SOB’s on internet job boards. Most are after that fifty cent to five dollar per our labour to fill tech job postings, and no need to pay any benefits to boot, which alone can add up to $5 per hour in Canada/USA. How nice. Let’s cheer for corporate profits seeing as we’re direct beneficiaries of them. NOT. We’ve been shoved on the sidelines. Cheap goods don’t make up for lost jobs. Multinationals corporations sucking on the teet of $2 per hour labour must taste mighty good.

Mainland Europe, however (Germany, Norway, Netherlands etc) tends to pay decent local wages. Even Bangladesh pays $8 to $10 per hour, which is probably a generous local wage rate, although combined, they only post about 5 percent of all the tech jobs.

To hear about job outsourcing when you haven’t been affected yet is one thing. To see it is yet another. It’s disgusting to witness the amount of greed out there.

#84 Waterloo Resident on 09.22.11 at 1:57 am

Positive cash flow on each rental unit is a great thing, but what happens if the underlying price of each rental unit falls by ANOTHER 30%, what then? Now many years (decades) will he have to wait until his ‘positive cash flow’ pays him back all the money that he has lost from his investments falling in value? He doesn’t seem to be thinking of that does he?

#85 Waterloo Resident on 09.22.11 at 2:00 am

#7 ; Pete in Barrie: Yes, you are 100% correct there !!!

#86 Popeye the sailor man on 09.22.11 at 2:13 am

The house is expensive and out of my league but there is much I like about it, and colors can be changed easily. I think I’ll wait for another 1,000,000 price reduction before making an offer thou.

http://homesite.obeo.com/viewer/default.aspx?tourid=615637&locale=en-CA

#87 Tim on 09.22.11 at 2:16 am

Occupy Wall Street:

http://www.youtube.com/watch?v=jYaA-34c-vI&feature=youtu.be

Garth,
Why don’t you do a post on this? Or are you going to pussy out and ignore it like the mainstream media?

Total non-event. — Garth

#88 Betty Danin on 09.22.11 at 2:21 am

I heard from some people today that the federal government is thinking of cutting the Canadian corporate tax rate by another 10% points and reducing the dividend tax credit by 10% points given to investors who receive Canadian dividends like banks,insurance companies etc. Basically shifting the tax burden from corporations to individual investors through mutual funds, preferred shares etc. This is in order to give more money to corporations to invest in capital equipment to improve productivity.

News to me, and highly unlikely. — Garth

#89 Deliverator on 09.22.11 at 2:34 am

Pete has it figured out… except for the Canadian market.

My best guess is he will have to wait 5 years for anything approaching the kind of drop he is looking for. My advice is that he wait as long as it takes until he sees something that makes sense.

#90 munch on 09.22.11 at 2:40 am

Canada can’t play rugby, but thanks for trying anyway – you’re good sports!

The world may not be ending, Garth, but it doesn’t have to end for it to be hell on earth, not so?

South Africa plays Namibia in half hour’s time

South Africa to win by 60 points {plonks cash down on table} any takers?

Regards Munch

#91 rsen on 09.22.11 at 3:26 am

Lots of jealous people wish they were Peter…

#92 Dorothy on 09.22.11 at 3:35 am

I agree with #32 when he says this guy is full of BS. Anyone who works on Wall Street and has the kind of investments this character claims to have, would hardly be asking anonymous bloggers for investment advice.

That said, it’s characters who behave and have behaved the way this guy CLAIMS to behave who caused most of the current financial mess in the first place. Residential real estate should be viewed as a roof over your head and NOT as an investment.

#93 Tim on 09.22.11 at 3:56 am

The exact question was: “I am wondering if Toronto will see price declines in the order of magnitude of some of the properties in cities that we have been investing in here in the US.”

And I think the answer is “probably not”. I’m guessing that you are investing in some of the worst-hit areas of the US, where there were nasty feedback loops with foreclosures and declining regional economics. Toronto home prices are likely overpriced, but it’s hard to imagine that same feedback loop kicking in (but have a look at Vancouver if you want comparable-order magnitude price declines…certainly still not as attractive as say Detroit, but getting warmer).

Anyways, for $600k, provided you’re willing to give up any one of a) easy access to transit, b) good neighbourhood, or c) good house, then you I suspect odds are in your favour. Since you mention The Beach(es), it sounds like you’re willing to give up #a. So I think the odds are plausible, but to be honest, given your investing history, I’d rather take advice from you than the other way around…

Giving-up item #b can save a lot of money, but most people (oddly) aren’t interested. It’s amazing how much a neighbourhood can (potentially) improve and gentrify over 5 to 10 years, though.

Personally, I feel the Beach benefits a bit simply due to cachet, rather than tangible benefits, but that’s just me. You give no indication of the property lot size or exact location you want. Those details can change the answer from $1m to half of that, quite quickly. MLS lists some nice (by my standards) houses for <$700k in the beaches right now; it doesn't take too much imagination to see that going to $600k or even $550k.

FWIW, the local media usually cite the amount of overpricage as being around 20% to 25%. I suppose you can argue that if the local media quote that number, then perhaps the real number is double that … but it doesn't "feel" right (if homes really are 40% to 50% overpriced in Toronto, then I and a lot of other people could pay cash for a much nicer home than I think I deserve).

You don't mention non-real-estate and non-bullion holdings, but from your list, you must be around $600 to $700 real estate equity and $600 gold. That's 50% gold. I don't care how smart you are, but if it really is around 50% gold, you might consider diversifying…. Especially if you plan to buy CAD housing, it may make sense to start slowly converting some of that into CAD. Keep in mind CAD/USD can be a bit volatile (I claim no insight into fair fx rates…). Your income is linked to Wall St., so I can understand avoiding stocks (ie, for diversification), but I'm sure there's some way of diversifying the gold while remaining uncorrelated to your employment income.

#94 MB on 09.22.11 at 5:13 am

god, peter you’re so smart. do you really need the advice of this blog?

#95 Pyra on 09.22.11 at 5:28 am

Nice little cottage, too bad Kingston’s such a long commute for those of us on the Wet Coast.

But hey, if they drop it to 200K and promise to leave me that leopard print rug, I’ll take it.

#96 C on 09.22.11 at 5:32 am

Peter the braggart said:

“100,000 in life savings into gold and silver when they traded at $300 and $4.00 respectively.”
“7 Mortages”
“I would like to invest like a vulture in Toronto in the same way I am doing down here in the US.”
“We make over $400,000 per year ”
“Next we bought 3 multi unit properties in another city in the south (which I cannot share b/c it’s getting hard to scoop these deals). ”

Brag much?

What a loser.

#97 Jody on 09.22.11 at 5:46 am

Dear Peter,

I don’t care if you are a wall street survivor making $3,000,000 a year, you’re still a nut for carrying that much debt. Get rid of your debt, all of it. And rental income, in case you haven’t noticed, your country is in a depression. You can count on rents being halved within the next year or two, then come back swinging your pecker telling us how you “have it covered.” And your gold is only worth that much if you can sell it and realize your profits, not that I’d be selling gold anytime soon. I think your Nukin Futz.

#98 Jody on 09.22.11 at 5:51 am

“One more thing Garth, no one has asked you this I don’t think and I understand it may be a combination of both ,but do you give more credence to keynesian economics or austrian?”

I think Garth puts creedence in human emotion and how it runs things, not in the theories of a bunch of long dead office jockey douche bags. Ron Paul 2012!

#99 Mark on 09.22.11 at 6:27 am

This guy is either a fake or an idiot. Why should we have to give advice to someone earning $400,000 per year with multiple income-earning investments? Seriously, whats next, Oprah and Bill Gates asking for advice? This guy needs to live off his salary and save and invest its leftovers. That’ll do him just fine.
And the part where he seeks our advice but is so discreet about where his one investment property is in the south (because he wants to keep the amazing deals all to himself), well, get a life!

#100 Groovin123 on 09.22.11 at 6:30 am

I think you should’ve left the gold and silver in the vault… nevermind the real-estate porn.

#101 David B on 09.22.11 at 7:03 am

Faring Iceholes ……. best they move to Bollywood and make a movie … better still buy the above home at full price fully furnished ….. yeah that’s it.

#102 Peter on 09.22.11 at 7:16 am

Yikes tough crowd!!!!! But I am getting some nuggets here. My dad was my sounding board in the past. He died recently. I miss him to pieces. I don’t trust most financial advisors and I think they have their blinders on.

Not every investment has worked my way my codo is down over 20% and there is a beach property (land) I bought in panama in 2008 $350,000 cash and I’ll be lucky to get $200000 for it today!!

The mortgages I am taking on are 30 year fixed rate debt so I am locked in generally at 4.8% for 30 years. So yes it would be my dream for the USA to blow up it’s currency and inflate it’s way out of all debts

Since you asked I have roughly $400,000 in 401(k) retirement money. It’s in short term treasuries and you got it 25% gold mining stocks. One account is in a self directed IRA and intended to buy more income real estate when I am done with the financed deals

$80000 in rrsps

Why am I asking you for advice? I didn’t get to where I am by knowing it all. I take and listen to advice wherever I can get it. Good advice is hard to find

By the way $400,000 is indeed low for the work that I have been doing which is one of the reasons I have survived some of my colleagues make much more

#103 timo on 09.22.11 at 7:18 am

http://money.cnn.com/2011/09/22/pf/health_insurance_costs/index.htm?source=yahoo_hosted

Employee health care benefits are expected to increase 5.4% next year

http://www.arabianmoney.net/gold-silver/2011/09/22/dollar-strengthens-euro-pound-weaken-as-eurozone-crisis-comes-to-a-boiling-point/

What is very clear this time is the reason for the move. The eurozone crisis is coming to a boiling point. We are not hearing all the bad news. The banks are about as transparent as a brick wall. Actually that is the problem because they can therefore not trust each other and stop trading among themselves. That is what is happening or not happening and we are being kept in the dark as far as possible.

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

ugly, ugly stock markets………….

#104 Karl on 09.22.11 at 7:34 am

“And you have been wrong. — Garth”

Have I? We’ll see when this bloodbath is over… Then prove it.

#105 T.O. Bubble Boy on 09.22.11 at 7:36 am

My ideal property is a $500,000 fixer upper detached home in a nice area of Toronto with excellent schools – I am told that nothing like this exists.

Here are your choices:
A) 2-storey detached just outside of Forest Hill

B) Bungalow near Lawrence Park

C) Former triplex? in Islington village

Commission, please.

#106 Sky on 09.22.11 at 7:36 am

@ rsen … ” Lots of jealous people wish they were Peter…”

So does Peter.

#107 bigrider on 09.22.11 at 7:43 am

Garth, if we get a market crash in next few weeks or months that takes indexes below March of 2009 lows, please do not shut down this blog.

We financial asset buyers will all need like shoulders to share our misery and cry on.

No need for tears with a balanced portfolio. — Garth

#108 Moneta on 09.22.11 at 7:48 am

I need to know what to do with the Toronto plan. How long do we wait
——-
You don’t need us man. Follow your nose. You’re way ahead of our curve. LOL!

#109 T.O. Bubble Boy on 09.22.11 at 7:50 am

WOW: USD suddenly $1.03 CDN???
(jumped 2.5 cents overnight)

http://www.cnbc.com/id/15839178

GOLD is down $55 (-3%)
SILVER is down $2.50 (-6%)

Hope you all held some USD Bonds — the only safe haven since yesterday.

(so much for the Gold Bugs)

#110 Moneta on 09.22.11 at 7:51 am

Oh… forgot to mention… he plans on changing citizenship hats when when he feels like it. Not sure CRA and IRS will pick the same dates.

#111 Moneta on 09.22.11 at 8:01 am

Watch for those rents to come a’crashing down to earth once the interest rates start rising again.
——
Not just the rates. Inventory is still not hitting the market. Watch what happens when it finally does.

#112 Junius on 09.22.11 at 8:12 am

#70 BPOE,

Cue cricket sounds? I frequently travel for business which is why my posts have been down. Unlike you I have a real job that takes up my time. However I have been watching you and your Re brethren such as Thetruth and Waterloo Resident spew your usual sales pitches while sitting at empty open houses.

When you travel you gain a greater perspective on just how crazy prices are in Vancouver. You can also gauge at how slow our economy here is. Not good. Has me worried.

The American and I are correct. The Vancouver market is cooked. It is over. Nothing the Fed or our gov’t can do now.

#113 Ret on 09.22.11 at 8:15 am

“The rule here stateside is that a family can have no more than 10 mortgages underwritten by Fannie Mae.”

How many mortgages will CMHC let an individual get insurance on in Canada? Some of the slumlords around McMaster in Hamilton are running more than 10 properties for sure.

Is CMHC’s mandate to also backstop mortgages for slumlords to set illegal and dangerous student rooms, duplexes etc.?

Just wondering.

#114 T.O. Bubble Boy on 09.22.11 at 8:28 am

Is there a correlation here?

Trump to Expand Brand in China

Chinese RE stocks plunge

#115 Dom_Now_in_Zürich on 09.22.11 at 8:28 am

Peter,

given my opinion on the price of gold in 2 years..I think you are going to be late on the draw and you should be liquidating your bullion now…..in 2 years Gold is just as likely to be at 1300 as it is 2000 so pat yourself on the back for making a good pick but now you can stop being so prideful as it is a deadly sin and could surprise..

I think you are probably 3-4 years too early on “vulching” in the Beach as it is one of the highest demand areas and given its commute to the core well placed to hold its value longer than the burbs…

Mark my words your gold will be worth 30% less in 2-3 years just when you want to use it

my 2 cents..

#116 Junius on 09.22.11 at 8:34 am

#72 LoooutBelow,

Sssshhhhhh! Don’t tell thetruth and BPOE that immigration levels have been lowered in those categories. You will awaken them from their fantasy dreams.

And yes, the caps are related to both the HAM storming into Canada and concerns about Canadian unemployment in general.

#117 Junius on 09.22.11 at 8:43 am

#72 Lookoutbelow,

Here is a good little article on why the gov’t is prudent in stemming the tide of HAM money coming into Canada. Combine the current commodity bubble with the Real Estate Bubble in China and you have a very dangerous situation. When these 2 bubbles crash the Chinese investing in Vancouver and elsewhere could pull out there money quickly.

http://www.commodityonline.com/news/China-housing-bubble-in-Canada-could-create-the-next-financial-crash-42479-3-1.html

#118 Junius on 09.22.11 at 8:46 am

Re: Commodity Bubble

I posted that there is a large commodity bubble in the world. Here is a great article supporting that opinion:

http://www.economonitor.com/lrwray/2011/09/22/the-biggest-bubble-of-all-time-c

#119 bigrider on 09.22.11 at 8:55 am

“No need for tears with a balanced portfolio” -Garth to Bigrider #107.

I think your threshold for pain might be larger than most everyone.

I can tell you that if indexes get down to March 2009 lows then most people with balanced portfolios like yours will be reeling in agony.

Then they would be fools. — Garth

#120 maxx on 09.22.11 at 8:56 am

#19-

Poetic…in a glass shard up the nose sort of way. Very well put!!!!

#121 bill c on 09.22.11 at 8:57 am

Well its here. The bubble has burst. I hope your happy Garth now that the Gloom has arrived. Trust me you will feel it like everyone. our investments you have been preaching have also burst. There io safe haven now except a mattress.

Au contraire. Bonds are up. REITs are still chugging away. No change to fat preferred dividends. Enjoy your mattress. — Garth

#122 maxx on 09.22.11 at 8:57 am

#23 Tre on 09.21.11 at 10:21 pm

…with resin versions of the Elgin marbles lining the walls!

#123 rosie on 09.22.11 at 8:59 am

Gold is not tanking. In Cdn. $ it’s down $1.70. Keep your eyes on all the numbers boys and girls.

Gold is off $72.70, or 4% this morning in US$. The C$ has slid 2.34% against the American dollar. I would take little comfort valuing PMs in a declining currency. This is a global move into security, and gold isn’t it. — Garth

#124 Tom from Mississauga on 09.22.11 at 8:59 am

Smart dude Peter. Wait till real estate can actually be cash flow positive before getting in. I know lots of junior landlords that are negative cash flow and yet believe they are a genius. This story I’m printing off to keep. Too bad for some commenters that are too envious to take good suggestions.

#125 Smoking Man on 09.22.11 at 9:12 am

Rule 48 Again?

Garth you sure the world is not coming to an end?

In other words NYSE might suspend trading cause the floor just fell out.

Ca Ching for me on my short call

#126 timo on 09.22.11 at 9:12 am

You can manipulate the market so long before recessions hit prices. Today it seems that commodities and oil are being told that people are not in the mood for high prices. It sure is interesting about the parabolic rise in the Canadian dollar vs the US dollar. Could it be that the world is running around yelling fire and hiding money on rumour?

Watch for the 12:00 pm announcement that all is well and then markets will recover. After all it is only manipulations that control ponzi wall-street now.

I now am starting to believe that wall street is systemically rigged and has lost touch with main street.

watch your money and stay out of debt..

#127 Chris no longer in England on 09.22.11 at 9:16 am

Well I liked the balcony and the patio. How much if I only buy the outside?

#128 Junius on 09.22.11 at 9:19 am

#52 Devil’s Advocate,

You said, “Given this single historically repeating phenomena and the absence of anything that defies it’s most likely continuation, I can only logically believe that this period of contraction will have bottomed out sometime in late 2013 or early 2014. And that’s really is not all that long away if you think about it.

Care to try convince me otherwise?”

Assuming that your are correct about the correlation – and that is a big assumption in this current world economy – you have not properly calculated the period of exuberance. In housing it runs back at least 10 years. In the creation of debt to spur consumption almost 30 years.

You would be closer if you picked the number as 2023 or 2024. Now factor in demographic changes and it could be longer.

#129 45north on 09.22.11 at 9:27 am

Sky: @ rsen … ” Lots of jealous people wish they were Peter…”

So does Peter.

pretty funny

#130 Junius on 09.22.11 at 9:28 am

#54 Devil’s Advocate,

You said, “These are normal times.”

C’mon. You are smarter than this. There is nothing normal about these times.

The only 2 comparable times are the Recession of the 1880s and the crash of and depression of the 1930s.

However this time we have much more politically dysfunctional United States, no leadership from Europe and a heavy reliance on emerging markets for economic growth. We have financial markets that are tightly intertwined, over leverage and run primarily on mathematical algorithms. We have unprecedented debt at all levels of gov’t and with consumers.

Add in an unsustainable global population, climate change, peak oil and a long list of challenges from globalization and you have the modern world.

The only thing “normal” are the amount of people playing the “extend and pretend” game calling this normal.

Or am I missing something.

#131 The American on 09.22.11 at 9:41 am

At #68: 16thBPOE, you are a real crack up. You need to, once again, get your story straight. As for the news from the Fed, the CAD has dropped like a brick against the USD in the past 24 hours. As of 6:18 a.m. PST this morning, the CAD is at $1.035 – a reversal of fortune for the CAD in an incredibly short period of time. In fact, most all major currencies, including the Euro and Pound, have dropped significantly against the USD in the past couple days in light of the Fed’s news. The Fed’s news essentially states the economic recovery is going to take longer than originally anticipated. People will put their funds in a reserve currency because of it…and they obviously are.

The only crickets I heard chirping are when I posted some very, VERY disturbing statistics a few days ago. In fact, you were nowhere to be heard/found once I posted them. Let me recap for you. You must have been out getting your head checked at your shrink, and you must missed it.

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 of which we know is at 40%+ right now. This speaks for itself as it is a pathetically high amount of inventory to have available. Simply economics dictates supply/demand will always triumph.

That’s one of the highest concentrations of condos for sale in North America, excluding Toronto. Mind you, even Manhattan is a significantly larger core than Vancouver or Toronto (nearly 5 times the size, in fact) with far less actual inventory available. Eh hem, the island of Manhattan has less than 1,000 units available – that’s a TRUE testament of supply/demand. Similarly compared to Vancouver, downtown Seattle core is also roughly 350 square blocks (Seattle is long and narrow against the waterfront, where Vancouver is more circular), with only 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.

Vancouver metro, much smaller in land mass and significantly smaller in population than Seattle mind you, has over 13,000 condos and homes for sale. The 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 no stopping the slide downward. Yeah, it isn’t going to end too well for you, 16thBPOE.

#132 GregW, Oakville on 09.22.11 at 9:53 am

Hi #66 Nostra, if your in town…(I just got this email)
Hi Folks:
Whether you live in Hamilton, Halton or anywhere this is important to you!

Now is the time to help out with the water fluoridation issue. WE REALLY NEED HELP! Three years ago the Halton Health and Social Services Committee made a recommendation to end water fluoridation in Halton. It was stalled until Health Canada completed their report (July 2011) which just predictably reaffirms their position to fluoridate. The report will be presented at the Halton Health and Social Services Committee Meeting, Tuesday September 27th. I will be presenting the TRUTH about ignored science in Canada. This meeting will have a huge impact on any decisions made in Hamilton. Please just show up at this meeting and sit quietly in the council chambers. We need numbers to show support for our side.

Tuesday September 27th Council Chambers
9:30 AM at Halton Regional Centre 1151 Bronte Road
Oakville, Ontario, Canada, L6M 3L1

Be early. Bring others. Pass this message on. Thanks
Gratefull for all assistance.

Cindy Mayor
(Thanks Garth)

You’re welcome. But this is not a fluoride blog. — Garth

#133 Daisy Mae on 09.22.11 at 9:58 am

Alberta Ed on 09.22.11 at 12:15 am “Hmmm… why is this guy asking for advice? Something smells…”

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

What Peter is doing is very scary — what is he thinking?

#134 Daisy Mae on 09.22.11 at 10:16 am

Is this guy for real? I’m beginning to wonder…. LOL

#135 The American on 09.22.11 at 10:21 am

That house would be perfect if only it had some marble columns in the kitchen and a disco ball in the billiard room.

#136 Blacksheep on 09.22.11 at 10:27 am

“Gold is off $72.70, or 4% this morning in US$. The C$ has slid 2.34% against the American dollar. I would take little comfort valuing PMs in a declining currency. This is a global move into security, and gold isn’t it. — Garth”
———————————————————
Gold down, often equals, US dollar up.

Like you’ve said so many times, WE/I live, using fiat dollars and mine happen to be Canadian :)

Gold in Can. $ 1786.67 down-0.97%
TSX comp. `11558 down-3.32%

take care
Blacksheep

#137 Devil's Advocate on 09.22.11 at 10:29 am

If you think you can, you are probably right and if you think you can’t you will likely find you are right then too.

If you believe these are bad times you will probably experience failure. On the other hand, if you think these are times of opportunity you will probably find such opportunity.

Junis

2003 is when real estate prices started to rise markedly. I remember it very clearly as, in Kelowna, we were dealing with the consequence of the fires (shortage of trades, shortage of rentals etc.) at the same time. This is not to say there wasn’t any upward movement prior to that. There was but it was negligible.

As we head into a bubble the economy begins ramping up slowly at first and then goes parabolic. It is mirrored on the way down. We are in a levelling off phase on the way back down which is to say we are probably through the worst of it.

I wasn’t saying we are headed toward a renewed period of exuberance. I was saying we are in a period of reparation and that is something to be optimistic about.

The entire address of Sir Winston Churchill at the Oxford commencement exercises; “Never give up!” and then after a short silence before walking off the stage he rose to his toes and repeated Never give up!”. He then reached for his hat and cigar, steadied himself with his cane and left the platform. His commencement address was finished.

#138 The American on 09.22.11 at 10:30 am

At #58: Joseph, that “ad” is more like a movie trailer. Typical Rick Perry b.s. My favorite line in the ad is the one that shows how many Americans are living below the poverty line. Perhaps Rick Perry would like to point out that his state of Texas (he’s the Governor there) has one of the highest concentrations of people living below the poverty line in the U.S. The guy is a total fraud and crook.

#139 Daisy Mae on 09.22.11 at 10:33 am

bill c on 09.22.11 at 8:57 am “Well its here. The bubble has burst. I hope your happy Garth now that the Gloom has arrived…”

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

Why would this bubble burst make Garth ‘happy’?

#140 The American on 09.22.11 at 10:35 am

By the way, this story is total B.S. FNMA maxes out at 7 mortgages – not 10. Anyone who was actually in the business as Peter would like to claim, would already know they’re maxed out on their FNMA-backed mortgages. Also, I don’t really appreciate people playing the nationality card only to make a buck. What a lying loser. Oh, nobody would trade NYC for Toronto… well, maybe only a few.

#141 Hammer1 on 09.22.11 at 10:38 am

That Europe, it blowed up real good !! (coming soon to a theatre near you)

#142 brainsail on 09.22.11 at 10:41 am

Peter, you need to hire a US/Canada tax expert.

“We are going to get our US Citizenship to minimize the adverse tax consequences for Canadians owning real estate in the US.”

Canada is one of the few countries in the world to levy income tax on worldwide income based on residential ties, rather than citizenship. Residential ties include:

– a home in Canada;
– a spouse, common-law partner, or dependents living in Canada;
– personal property in Canada such as a car, house or furniture; and
– other social ties such as a Canadian driver’s licence, Canadian bank accounts or credit cards, or health insurance

#143 bigrider on 09.22.11 at 10:42 am

Garth the world is a mess yet you tell us not to worry about financial markets. The solutions being implemented by various politicians and central bankers worldwide do not seem to solving the problems that exist.

I would be curious if you believe that there is a solution to the global problems, what that would be.

I for one would like to see you write an entry in your blog tommorrow entitled something along the lines of “If I had omnipotent power here is how I would fix policy globally’

#144 Dad on 09.22.11 at 10:42 am

My name is Peter, I put on my Robe and Wizard Hat.

#145 kc on 09.22.11 at 10:46 am

#112 Junius on 09.22.11 at 8:12 am

“The American and I are correct. The Vancouver market is cooked. It is over. Nothing the Fed or our gov’t can do now.”

#131 The American on 09.22.11 at 9:41 am

“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 of which we know is at 40%+ right now.”

I am surprised that till now not a person has made the connection to this “global Vancouver” news report last night about how they are trying to spin the “off a cliff” sales in Squamish (a small community roughly half way between Vancouver and Whistler) They planned on building 200 more houses but all work has stopped due to the HST… somehow I doubt that the HST has anything to do with the fact that the bubble has burst in the outlaying areas and people have awoken to the facts.

http://www.globaltvbc.com/video/house+construction+chill/video.html?v=2139421610#stories/video

#146 Timing is Everything on 09.22.11 at 10:51 am

#133 Daisy Mae

I smell a rat. Spun yarn.

#147 kc on 09.22.11 at 10:52 am

137 Devil’s Advocate on 09.22.11 at 10:29 am

The entire address of Sir Winston Churchill at the Oxford commencement exercises; “Never give up!” and then after a short silence before walking off the stage he rose to his toes and repeated Never give up!”

Fast forward into the late 70’s and “Supertramp” records “fool’s overture.”

#148 Robert James on 09.22.11 at 10:55 am

My guess is that Peter is a Donald “comb over” Trump wannabe that is getting his arse handed to him as we speak and thinks that by posting BS like this might somehow make him feel better.. Am I envious ?? None what-so-ever !!! LOL

#149 mousey on 09.22.11 at 10:59 am

That House!
Yes, garish on steroids – eye scorching tackiness. But, in the end I liked it because it screamed, “I don’t care what the designeer says…I want it that way” and I admire that strength. You would definitely want this person in the trenches with you – as long as he wasn’t allowed to decorate it. We have a similar “Casa Excesso” in our neighbourhood and its copper roof and all copper eaves and down drains sparkle in the sun in the summer and are a beacon of humour when the christmas lights go up.

#150 Aussie Roy on 09.22.11 at 11:05 am

Devil’s Advocate on 09.21.11 at 11:28 pm It will take some pretty compelling argument, the likes of which I have not yet heard, to convince me that this time it is anything different than any time before. Just as there are those who say it’s the same here or there as anywhere else, so too is this time just the same as it was any time or place before.

Each economic cycle shares at least one common characteristic; the period of capitulation is commensurate with that of the period of exuberance which preceded it. This has been so with every economic bubble since that of Dutch tulip mania in the early 1600s.

Given this single historically repeating phenomena and the absence of anything that defies it’s most likely continuation, I can only logically believe that this period of contraction will have bottomed out sometime in late 2013 or early 2014. And that’s really is not all that long away if you think about it.

Care to try convince me otherwise?

……………………………………………………………………

The problem with above is to presume there is a time frame for a correction rather than prices falling to an affordable level. The correction will end when prices return to value, not just on some date because you want them to.

Not only the bigger the bubble the bigger the bust but history shows the longer the run up in prices the slower they are to come back down, noticed how bubbles seem to be symetrical?.

Of course there is always the possibility that with govt interference any revision to the mean could be seriously drawn out over many years. Japan housing?.

DA you might do better trying to determine when prices and values first seperated (income v house prices) and see how many years this market has been overheated. My guess is once prices start to fall it will take a similar time to remove the excesses as it did to create them.

#151 cliffard on 09.22.11 at 11:10 am

Peter says thanks for the nuggets and #16 smoking man the main requirement to be head of the mafia is to be inbred

#152 Aussie Roy on 09.22.11 at 11:15 am

Aussie Update

Aussie Govt now largest buyer of Australian RMBS.

http://www.aofm.gov.au/content/notices/02_2011.asp

An Australian Housing and Urban Research Institute study warns that the share of today’s Gen Ys still paying off a mortgage in retirement will more than triple by the middle of the century.

Only 2.5 per cent will be mortgage-free and almost nine in 10 will find themselves on low incomes, threatening their capacity to make repayments and cover the costs of living.

Just five years ago, about 40 per cent of over-65-year-olds owned their homes, outnumbering the 26.5 per cent paying off their home loans.

http://www.news.com.au/money/property/elderly-australians-heading-to-housing-struggle-street/story-e6frfmd0-1226141804861#ixzz1Yh6VAnTq

How about 2,000,000 discount and still cant sell.

Millionaire Mark McIvor’s wife in tears as Gold Coast home passed in $2m below value at auction

http://www.news.com.au/money/property/millionaire-mark-mcivors-wife-in-tears-as-gold-coast-home-passed-in-2m-below-value-at-auction/story-e6frfmd0-1226141438195#ixzz1Yh6koq16

IT takes more than eight times the average annual income to buy an average Sydney home, according to a report by a housing action group.

http://www.news.com.au/money/property/call-to-make-housing-more-affordable/story-e6frfmd0-1226140934090#ixzz1Yh73GkKC

CALGARY — Two MLS homes for sale in Calgary are offering a unique incentive for prospective buyers.

Beer.

The sellers of homes in Hidden Valley and Coventry Hills, both listed by realtor Robyn Moser of MaxWell South Star Realty, are offering to leave $1,000 in beer behind to the buyers.

http://www.edmontonjournal.com/business/Beer+being+offered+incentive+Calgary+home+purchase/5438277/story.html

On how a Chinese property bubble will play out:

“I think that will be the surprise going into this year, and into 2012 – that it is not so strong. The property market is hitting the wall right now and things are decelerating. The CEO of Komatsu said last week that he is having trouble getting paid for his excavator sales in China. Developers are being squeezed. They’re turning to the black market for lending, this shadow banking system that is growing by leaps and bounds like everything in China.

http://globaleconomicanalysis.blogspot.com/2011/09/misleading-indicators-chinas-growth.html

The real effects of debt – BIS

Abstract:

At moderate levels, debt improves welfare and enhances growth. But high levels can be damaging. When does debt go from good to bad? We address this question using a new dataset that includes the level of government, non-financial corporate and household debt in 18 OECD countries from 1980 to 2010.

Our results support the view that, beyond a certain level, debt is a drag on growth. For government debt, the threshold is around 85% of GDP. The immediate implication is that countries with high debt must act quickly and decisively to address their fiscal problems. The longer-term lesson is that, to build the fiscal buffer required to address extraordinary events, governments should keep debt well below the estimated thresholds.

Our examination of other types of debt yields similar conclusions. When corporate debt goes beyond 90% of GDP, it becomes a drag on growth. And for household debt, we report a threshold around 85% of GDP, although the impact is very imprecisely estimated.

http://www.bis.org/publ/work352.htm

#153 disciple on 09.22.11 at 11:16 am

On the topic of jobs:

We all know these are harder to come by, and will soon became scarcer still. If your leaders know that higher employment will sustain and rescue any flagging economy, why then have they allowed the excessive outsourcing and elimination of these over the last couple decades? Of course, I will be accused of being a conspiratorial nut by pointing out that all of this was intentional.

But let me present it to you from another vantage point, one that is perhaps closer to where you can fathom the deep, sinister logic behind the intentional elimination of jobs, and hence, the intentional long-term downgrade of the western economies.

Technology and automation of industry could have wiped out all forms of manual labour, including white-collar paper-pushing work many decades ago. Heck, even market trading is done automatically by Big Finance robots. Do you actually think that BIG CORPORATIONS need you for anything else other than consumption? The very word origin of “consumption” connotes violence, plunder, mayhem, and outright theft.

You may counter, that perhaps the objective is your enslavement through physical labour or monetary entanglement via taxes, insurance, putting food on the table, etc…but let me inform you that this is NOT the objective at all, it is just a collateral benefit.

No, the REAL purpose of continuing to provide “jobs” for the masses, is the elimination of SELF. The purpose is for you to lose your SELF-HOOD, your spirit, your soul, your very essence of being. It is a PSYCHIC dictatorship more than a hidden economic one.

This is why “Thank you” has to live in his own basement past the age of thirty with plans of family way off in the unseen distance. Why countless others are always looking for good “jobs” when there really aren’t any. Why those who have been “fattened up” with the mental drug of having a “good” job, become pigs for the mental slaughter when your leaders “reduce costs”, in need of the latest LSD-fluoride derivative chemical compound coming out of Big Pharma.

No, my friends, you must realize that virtually ALL of the “jobs” that people do could have been automated already through simple technologies. But they weren’t for the reasons I outlined above.

Stop chasing money, an abstract accounting concept. It can’t be caught, for it doesn’t exist, it’s physical attribute of manifestation is currency, which itself describes something that is in the process of moving and will not be here tomorrow. It is a game designed with the intention for you to lose your self-hood, your very soul. Moby Dick.

Simply stop playing the game. Create your own jobs, your own occupations, your own methods, your own game. Fulfill your destinies, that divine spark is within you for this purpose.

#154 brainsail on 09.22.11 at 11:21 am

#140 The American

Did Fannie Mae make a recent change to the maximum number of loans?

“In early 2008, Fannie Mae & Freddie Mac announced that they were effectively limiting the number of loans that a single investor could have on real estate to 4.
In 2009, under pressure from both the private sector and government regulators trying to deal with the recession, Fannie Mae increased that limit back up to 10, although it imposed some serious restrictions on investors who fall into the 5-10 property category.”

http://ethicalhomes.com/630/fannie-increases-limits-on-investor-mortgages

#155 Junius on 09.22.11 at 11:33 am

#137 Devil’s Advocate,

You confuse reality with pessimism. It is all this silly cheerleading is part of what has got us in all this trouble. People are either putting faith in the free market and god or reading books like “The Secret” and thinking that positive thought will solve everything.

I believe in being positive and optimistic but it needs to be tempered by reality. Unrealistic optimism is just naivety with a smile on your face.

#156 Peter on 09.22.11 at 11:33 am

Thank you Brainsail. I have in fact retained the services of a Canadian / USA tax expert – both a cross border tax lawyer and also a Canada / US accountant. Back in 2008 I had applied for my US citizenship and last minute pulled the plug. I reapplied this year because since I have been here for a while (greater than 8 years with a Greencard) – the implications of surrenduring a Greencard are the same as surrenduring a US Citizenship. So basically there is nothing to lose in getting a US Citizenship but ther are tax and estate advantages that actually work to my favor. As to re-entering Canada I will in fact be agreeing to be taxed on my worldwide income – so every bit of income including that on my USA Rental properties will go into my Canadian and Ontario tax returns. However the tax treaty between USA and Canada is very solid and the credits for taxes paid in USA and also vice verse work out so that it really won’t be much if at all any additional taxes net net. The disadvantage for me is if I ever decided to move to a tax haven (a la Panama) – then you are MUCH MUCH better off being Canadian only and not American because you can easily severe all ties. I did think this one through thanks for the suggestion.

To “The American” – I’m not sure what your reference to 7 mortgages is. After 4 mortgages I was stopped from getting further financing from BofA and Citi – I also tried Wells and no luck. But a private mortgage lender (I am using Prime Lending) was able (for a fee) to get more 30 year fixed rate loans. The rate has been higher in addition to the upfront fee. I am told I can go to 10 which is what I have heard from many different sources see:

http://themortgagereports.com/283/fannie-mae-4-property-maximum-lifted-up-to-10-properties-allowed-for-real-estate-investors

I really do consider myself fortunate to be able to take advantage of this opportunity and I don’t take such good fortune for granted. I guess I come off sounding very greedy. Really not the case. I am just a good ole boy from Toronto working as hard as I can in a difficult environment to provide as best I can for my family. My interest in dealing with you folks is to gain insights on my strategy for returning to Toronto.

I don’t see the problem with applying for a US Citizenship. Through the new expat rules the IRS is tying me up real good even though I am not a US Citizen – so I’m just going the extra step and getting the US Citizenship anyhow. If USA and Canada went to war I would surrender my US Citizenship.

#157 David B on 09.22.11 at 11:43 am

Let’s all just come down to earth for a moment …. take a real deep breath … Y’all ready, Greece, yes ladies and gentlemen … Greece and the Euro …. this is perhaps the biggest game in the financial history of the modern world.

Complex to be sure, let them sink setting the stagefor a possible contagion? bail them out setting up an easy out for Portugal, Spain and Ireland? Create a new Europe of States? Scrap the Euro setting up a global depression with an anticipated $7 Trillion lose in Europe’s economy just for starter’s?

You see ladies and gentlemen they got into this mess the same way America got into Iraq … no exit plan in place and we now know it will cost the USA close to $3 Trillion when the dust settles with no clear future in sight.

So for those who think Greece and Europe are miles away and that Canada now has a supper hero leading us backed by the Canadian shield are just fine best think again.

And ….. just when America with all the talent and the very best of money brains the world has ever known, has decided to fight (words & money) in the halls of Washington rather than work as a Great American Team.

Note: the world will not end, money will be lost but much more will be made so educate yourself and mind your pennies ….. a older person once told me:

“A bargin is only a bargin if it is something you need not what you want”

PS: Garth just some thoughts if you want to delete fine with me. The world really is bigger than Canada and the new global economy effects everyone.

#158 John Reid on 09.22.11 at 11:46 am

Below is my reply to a government email that follows.

Mr Ed Fast, MP

That was the biggest load of horse shit I have ever seen. In short, jobs go to Honduras and Canadian people can invest in the companies that go there. This will make Honduras rich with Canadian money. I completely oppose this type of treason.

On Thu, Sep 22, 2011 at 10:26 AM, wrote:

Mr. John Reid
c.c.: [email protected]

Dear Mr. Reid:

The office of the Prime Minister has forwarded to me your email of
August 16, 2011, concerning the Canada-Honduras Free Trade Agreement.

Prime Minister Harper’s visit to Honduras on August 12, 2011,
accompanied by Foreign Affairs Minister John Baird, Minister of State
(Americas) Diane Ablonczy and myself, demonstrated Canada’s desire to
lend support to its hemispheric neighbour. During the visit, the Prime
Minister and President Lobo announced the conclusion of negotiations on
a Canada-Honduras free trade agreement (FTA) and side agreements on
labour and environmental cooperation. The Prime Minister commended
President Lobo’s efforts to improve the human-rights situation in his
country and noted that economic prosperity, through enhanced
international trade, is one of the best ways to bring a country out of
poverty and reduce human-rights violations. The Prime Minister also
announced Canadian support to increase food security in Honduras, and
support to address regional security challenges.

Canada has an ambitious bilateral trade agenda to enhance opportunities
for Canadian exporters and investors. Free-trade agreements open new
markets and create opportunities for Canadian businesses, which helps to
grow our economy for the benefit of all Canadians. Once ratified and in
force, I expect that the FTA will open up new opportunities for Canadian
businesses in Honduras by removing barriers to trade and investment.

Canada’s commercial engagement in Central America is quite active, and
our efforts have yielded great results, both for ourselves and for our
regional partners. The Government of Canada will keep advancing Canadian
trade interests and pursuing opportunities in the Americas and around
the world to open up new markets for Canadian businesses and investors.

We will also work closely with Canadian businesses and investors to help
them capitalize on the many opportunities in international markets.

Thank you for taking the time to write and express your concerns.

Sincerely,

The Honourable Ed Fast, P.C., M.P.
Minister of International Trade and
Minister for the Asia-Pacific Gateway

#159 realitybytes on 09.22.11 at 11:52 am

#144 ….classic

I was great, you loved it.

#160 Peter on 09.22.11 at 11:54 am

This experience is making me want to make a salute to the Honourable Garth. I didn’t expect the amount of abuse that would be thrown my way and I have a new found appreciation for The Honourable Garth and his service to the community (and for how much he has to put up with). I first heard him when I was a teenager in the late 80’s. At the time he was strongly in favor of buying R/E for the long term hold. (His book out at the time stood for the same). I save every penny and bought my first place years later 1994. Dumb luck in a way that I couldn’t afford a place til 1994 b/c the R/E market took quite a dip in the intervening years. But he had dam good advice then – and I think he has dam good advice now. I too held a balanced portfolio (until very recently). I really don’t like what I’m seeing globally and earlier in September decided to camp out in mainly treasuries. This may end up being the wrong move – but when I feel a bit more comfortable I am going back to the balanced portfolio.

Thank you Mr. Honourable Garth Turner.

#161 Mr. Lahey on 09.22.11 at 12:12 pm

#138 The American

Right on with your comments about Rick Perry.

As to Peter and his tale of real estate, it seems rather silly to be asking for advice when he is enroute to buying 10 properties in the US of A. Have you been reading this blog for any length of time Peter? Except for the few real estate shills that post, everyone, our fearless leader foremost, is calling for a real estate melt. It also appears rather incongruous that someone working in the hub of finance on Wall Street, making $400k a year would be asking for advice on this blog (not that there are not many well informed opinions shed on a daily basis in this great forum). You work amongst the movers and shakers of finance. Have you asked any of your colleagues what they think will happen?

#162 X on 09.22.11 at 12:14 pm

re #121 – Everything just went on sale and you are panicing. Dollar Cost average down. Buy more.

I will worry when companies start cutting dividends, b/c of poor economic prospects, until then, enjoy the sale.

#163 jess on 09.22.11 at 12:16 pm

vultures wait until canadian dollar falls

#164 Marcus on 09.22.11 at 12:28 pm

Peter, I did the same thing in 2007. liquidated all paper assets and went 90% silver and 10% gold. Have several cash flow properties in the USA and will expand into BC in 2-3 years I figure. The only thing I would add is that you may want to consider expanding into the Asian theatre or a place like Prague if that is to your liking. Diversification outside the North American block is a must. The economic and banking world will be very very different in 5-10 years. Check out a blog called http://www.sovereignman.com/

#165 disciple on 09.22.11 at 12:32 pm

On the topic of media:

Word etymology is that of a carrier of spiritual messages. The writing on the wall was meant for the king of Babylon informing him of the loss of his rule to the empire of “MEDIA” (Medes or Persians).

The media is the message. Get it? The purpose is mind control. Sorry, there’s no getting away from it.

#166 Sandra on 09.22.11 at 12:35 pm

Hi Peter,

Tough crown indeed. :) If I were you, I would wait as the Beaches has been overpriced for much too long with very few signs of a plateau. I’d give it another 2 years or so until there’s a significant drop in prices.

As for your retirement plan, kudos on the multiple properties. You state that you’re conservative, but you must have nerves of steel. You didn’t mention any savings/emergency funds…or did I miss it? If not, make this a priority because if things sink lower in the US, it sounds like you’d be dipping into your 401K/RRSPs to make up any cash flow difference.

Good luck!

#167 Cato on 09.22.11 at 12:50 pm

Peter – not a bad strategy. Need to factor in the pain lower level gov’ts are feeling in the US. Its a safe bet state & local gov’t will be demanding more of the rental pie as time goes on, especially in the Carolinas. I imagine we’ll see hefty tax increases on investment properties. They aren’t going to go after voting homeowners to make up for the shortfalls, they’ll be targeting investors. Liquidity is still king, I’d keep my powder dry.

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

Interesting day. I guess its not surprising the Fed ratcheted up the political theatre – the tea party republicans have been taking pot shots at the Fed for years chipping away its credibility. The democrats are probably the only friend Bernanke has at the moment. You can bet the language of the announcement yest. was carefully chosen and resulting panic is no accident.

Politics in the US is about money. Obama needs to show wallstreet what a tea party led world might look like and ensure financial interests get onboard the Hope & Change wagon like they did in ’08. Once wallstreet is back onboard we’ll see an abrubt change in language coming out of the Fed, along with massive stimulus measures aimed at job creation.

Last thing the US wants is the world hiding out in the safety of treasuries. The country needs a weak currency, it needs capital taking risk & creating jobs. The Fed still has powerful tools at its disposal, once conditions are politically ripe I think we’ll see the big stick come out & beat the tar out of safe havens, chasing capital back into risk. Until then I’ll continue to watch the carnage from the cheap seats as a spectator & not a participant.

#168 jwkimba on 09.22.11 at 12:52 pm

I moved from 1 west st, manahttan to Toronto. My only advice to Peter is FOR THE LOVE OF GOD MAN DONT MOVE UP HERE. Seriously. There is more culture and life in your local Gristede’s than in this one stop light (King and bay) town.

And if you have any ties to Canada, you should have been paying canada taxes all the time. There are no ‘tax advantages’ of being a citizen compaed to non/resident visa holder that I know of. Something is off there…be careful.

#169 spaceman on 09.22.11 at 12:55 pm

Well Peter, investing in American Real Estate at these prices, I would call contrarian investing, held for the long term I would say you have a good chance to make capital gain. But in the mean time, cash flow is king, and even Garth is buying rental property (apartments if I am not mistaken)

Sell your gold now, its plummetting with the market, can’t explain why, it just is.

Look at properties in small citys like Trail, Williams Lake, Kelowna, the rents are similar to to Victoria, but way cheaper. A 3BR in Williams Lake is $200K and rents for 1300 a month. A 3BDR in Victoria is $399K and rents for 1600 a month. Do the math… rent covers mortgage and costs (closing, taxes, repair, etc) you have positive cash flow.

#170 Cookie Monster on 09.22.11 at 1:06 pm

#83 Coho on 09.22.11 at 1:44 am
Nice rant.
Question, when you go shopping do you go to stores with high prices or do you prefer buying at stores with low prices.

Purchase of labor is the same, low prices are preferred. It’s not greed, its just business.

Why don’t you start a business and compete with those greedy bastards, you can pay big wages, benefits and become a saint. good luck.

#171 Chuchu on 09.22.11 at 1:15 pm

Hello there, first time post.

Follow Garth writing for a few years now and enjoy it most of the time, Thanks.
I have to say that Peter story hits close to home. Family is on a similar situation, different state.
For the past 5-6 years, I have notice more and more Canadians becoming very successful business entrepreneurs in the US.
What gets me is why would you move back to Canada?
Interesting…

#172 Devore on 09.22.11 at 1:18 pm

Gold is off $72.70, or 4% this morning in US$. The C$ has slid 2.34% against the American dollar.

Works the other way too. Anything you have that is denominated in USD just went up 2.34% :)

#173 Dark Wettler on 09.22.11 at 1:19 pm

‘One more thing Garth, no one has asked you this I don’t think and I understand it may be a combination of both ,but do you give more credence to keynesian economics or austrian?’

100% Keynes. I’m surprised that you would even ask.

I favour economic policy, democratically determined, of the greatest benefit to the most people. Labels are for losers. — Garth

#174 Moneta on 09.22.11 at 1:25 pm

I really do consider myself fortunate to be able to take advantage of this opportunity and I don’t take such good fortune for granted. I guess I come off sounding very greedy. Really not the case. I am just a good ole boy from Toronto working as hard as I can in a difficult environment to provide as best I can for my family. My interest in dealing with you folks is to gain insights on my strategy for returning to Toronto.
———
You really are living on another planet.

#175 Cookie Monster on 09.22.11 at 1:27 pm

The mortgages I am taking on are 30 year fixed rate debt so I am locked in generally at 4.8% for 30 years. So yes it would be my dream for the USA to blow up it’s currency and inflate it’s way out of all debts
——
Since the government controls the money supply and you have a lot of debt so you’re in the same boat as the gov. and all the banks who wrote mortgages during the much higher price era of 2002 to 2007. I think they will act in theirs and your best interest. Also rents will rise too with inflation. Deflation is out of the question, it’s unthinkable, policies are for 2% inflation, truth is closer to 10%, they’re lying and conniving in your favor.

What do you do for 400k? I have a buddy who manages IT who makes about 140k, I’m trying to get work as an engineer at 130k. But my buddy says he know guys who come in on contracts who get anywhere from 1-2k per day, for six months to a year at a time. Unreal money.

#176 dddd on 09.22.11 at 1:29 pm

dow back to lows of day under 11.7

more to come , what say you smoking man? cashed in those shorts yet? i feel tomorrow will be down too – greece bites it over the wknd?

#177 Peter on 09.22.11 at 1:39 pm

Thanks Marcus – I have one property in Panama – that’s my “o/s of North America” trade. I love the US for rental b/c in certain cities they have a really good turn key property management industry. It’s very sophisticated and gives me the piece of mind of not having to be a landlord.

Sandra I do have some back up retirement money (mentioned) hope to never have to use it – but I do see the possibility. My units are never all rented out. There are always one or two tenants not paying their rent. There are risks to this. One point to make though is that low income rental demand is huge right now. People who previously were in homes that they could not afford need a place to live. It’s a national phenomenon right now.

Cato – brilliant post. Yes some states are super aggressive on the taxes. My SC properties at $240,000 per piece have Nonresident property taxes of a staggering $6,000 per year each. Definitely something to watch for. I do think though that the state as a whole reaches a “puke point” where if they are too high it chokes off investment in the state. Remember the states collect income tax on your rentals so the municipalities can’t get too aggressive – or so I imagine.

JWKIMBA – I hear you. I love NY – but I have no family at all here. Also my $400,000 per year which everyone seems so focused on – is seriously at risk. My company isn’t doing so well and I give myself 2 more years at this job before I need to move on. I need to get back to Toronto. I see myself returning one day which is why I won’t sell my condo. Owning it will be my excuse to come back every year or so.

#178 BrianT on 09.22.11 at 1:44 pm

#167Cato-The reality is that the real economy of the USA is far too small at this point to support the weight of the government and financial sector-just the fact that Bernanke has been elevated to the position of sole responsibility for economic policy should clue you in.

#179 Brad Mitchell in Calgary on 09.22.11 at 1:48 pm

Once again blocking comments that are valid and not offensive to anyone, only that they disagree with your agenda… what a cowardly hypocrite you are. Despicable.

This is not a gold blog. Do I need to use crayons? — Garth

#180 BrianT on 09.22.11 at 1:55 pm

The pieces are coming together for a hike from Carney-weak dollar, high CPI numbers.

#181 Cookie Monster on 09.22.11 at 1:56 pm

#143 bigrider on 09.22.11 at 10:42 am
Excellent question, and the answer is, a smart and wise person would know they do not know THE answer to that question, and the right answer is ‘Individual Freedom’. The general answer is to let individuals choose what they want to spend their money on and with who and when in their own best interest and value judgements according to their needs during every second of every minute of every day.

This is why government should privatize all services as much as possible so that business people can provide competitive goods and services that the market is willing to pay for.

When government expropriates money from society to provide services they cut off the natural economics feedback loops and signals provided by the market. Errors in investment and wrong headed spending can go on infinitive without market feedback and competition.

In a free market, profit means a business is doing something good and doing it efficiently, and people are patronizing their goods/services, extended losses means they are doing something wrong or inefficiently or unwanted. Market feedback is essential in closing the loop in economics. Governments are open loop systems.

I’m and EE engineer, trust me, I know my loops.

#182 Peter on 09.22.11 at 1:58 pm

Spaceman
Since I bought my gold and silver bullion there have been a zillion times when I really wanted to sell it – the sell off in 2008 really killed my spirits – I think bullion has been my best investment ever because it is so darn illiquid that it protects you from yourself and forces you to really hang on. This is one of the reasons I like positive cash flow income properties. The closing costs in the US are so huge – and the investment so illiquid that you just end up holding for the long term whatever 1 or 2 year trends come your way. I don’t have the discipline to set up an investment plan and not look at it for a year. I do hold gold mining shares and have over very lengthy periods but even those get me nervous from time to time and I have been guilty of trimming them down in a panic at the wrong time. I am seriously considering the big decision to sell the gold and silver. I bought them from listening to Jim Puplava http://www.financialsense.com – back in 2002 he said gold would hit 2000 and ounce and silver $50. When silver hit $49 a while ago I began to get really fidgity. Who knows when the right time to sell is. My gut tells me that Europe will soon throw in the towel and the ECB will begin to print massively – I feel it in my bones !!! That event will trigger a rush into gold and I could easily believe that we could glide by $3000. I get to rub elbows with a lot of hedge fund types. I market asset management services to ultra HNW individuals in the US. I recently heard James Dinan of York Capital speak. After his presentation the really good stuff was discussed by him in the hallway. He said he recently attended a HBS reunion. The folks he went to B school with were all talking about whether buying physical made sense and where they should be storing it. This is not a first for me to hear. A lot of Wall Street movers have made allocations to gold that I know of. The broker who originally sold me my PM told me that he is getting calls from names that were too famous to mention. He said he was taking tickets for $1mil at a time for bullion directly shipped to their homes. He is an well respected Smith Barney commodities broker who has been in the business for many years and wouldn’t make this stuff up. When I bought from him he was one of two brokers on the American Gold Council website and he told me that back in those days and even when gold crossed $500 his phone never rang.

Truth be told – I really hope that gold crashes because it will be a sign that the powers that be have figured out how to dig their way out of this mess. It would mean brighter times for all and good investment gains to be had in the markets. Unfortunately I just don’t see this happening.

I will sell my gold and silver but only in exchange for property that I can hang my coat in – sleep in and raise children in – not for anything else.

#183 dddd on 09.22.11 at 2:01 pm

correction: dow under 10.7

#184 Cookie Monster on 09.22.11 at 2:05 pm

#143 bigrider on 09.22.11 at 10:42 am
Further, the next extremely important item which is the lifeblood of all economics, is money. Money is a unit of account, measure of value, store of value and medium of exchange. It’s a tool. Like time has seconds in a minute and days in a year that never change, money must be relatively fixed and stable.

Also, the cost of money should also be a market function, such that when there’s lots of savings, interest rates drop to encourage borrowing and investing in production for consumption. When savings are low, interest rate will rise to encourage savings and reduce consumption.

#185 Junius on 09.22.11 at 2:08 pm

#181 Cookie Monster,

Once again you confuse free markets with competitive markets. You need to learn the difference.

Free markets is where everyone gets screwed by the Robber Barons and Banksters like we have now. Competitive markets are where businesses need to make better products or services to win consumers purchases.

It does not surprise me that you are an Engineer and know your loops.

#186 Cookie Monster on 09.22.11 at 2:09 pm

#143 bigrider on 09.22.11 at 10:42 am
Also, inflation is expansion of money. Printing. Which in essence steals its value from the existing supply of money. Inflation is a wealth transfer from savers to debtors. It’s immoral. Sound money is moral money and gold is sound money so gold backed money is moral.

#187 Novice on 09.22.11 at 2:09 pm

Windsor or London for investment property?
Couple of weeks ago someone suggested Windsor as a good place to invest. What are your thoughts now??

#188 bill on 09.22.11 at 2:14 pm

why are you buying real-estate in the us? your early.
you havent sold any pm’s and bought some energy stocks?
and you want to go to toronto? seriously??
I have a bridge for sale here in B.C. You seem like a nice guy and I need a little cash to buy some stuff so I could be persuaded to sell it to you for cheap .cash up front if you dont mind ,I hate checks.

#189 Peter on 09.22.11 at 2:32 pm

jwkimba
And if you have any ties to Canada, you should have been paying canada taxes all the time. There are no ‘tax advantages’ of being a citizen compaed to non/resident visa holder that I know of. Something is off there…be careful.

Deloitte walked me through the process in 2000 – I severed all ties to Canada even handed in my OHIP card – haven’t filed a Canadian tax return since then. Tax advantage to a Canadian becoming a US Citizen. 1. Estate planning – when a Canadian dies holding US property he/she is subject to estate taxes. There is a $5mil exemption that you can generally claim but if you are not a US Taxpayer or US Citizen then there is a tricky formula that gets applied and you basically get screwed and need to pay estate taxes. There are lots of tricky complicated ways to try to avoid it – all have their pros and cons I can walk you through it. The easiest solution is just become a US Citizen and you get the full $5mil exemption (no estate taxes on the first $5mil of your worldwide estate period end of story). 2. If you have a non US citizen as a spouse – then upon death your estate does not transfer tax free in a spousal transfer. If you and your spouse are US Citizens then there is a tax free rollover 3. If you are not a US Citizen or US Resident tax payer then you must file W8 for back up withholding. This is a severe pain in the ass – so much nicer to file a W9 as a US citizen and life is easier 4. If you are a US Citizen or a US Resident (a greencard holder who lives in the USA) then you are eligable for US Medicare upon turning 65 years of age this entitles you to the state sanctioned program for medical care and prescription drug benefits. Since the USA is a bankrupt nation – not sure to what degree this is going to be a benefit – suffice to say I want to claim yankee status when I am 65 buy a good medigap policy to tie me over to medicare and not be scared shitless whenever I need to visit a doctor in the USA when I am traveling there in winter time when I am 70. There are a few other tax benefits to claming US Citizenship if you intend to move to Canada but you get the drift.

#190 Bill Gable on 09.22.11 at 2:44 pm

One of my EX friends has 5 mortgages – no savings, addiction to credit cards and Piaget and Land Rovers – and he is so cash poor he can’t buy a cup of coffee.
ALL properties are HELOC’d and he is “living on it”.

When he asked me for advice – I pointed him here and suggested a chat with Mr. Turner if needed.

He took a look at the blog and basically said that anyone who doesn’t use leverage is a fool.

I tried gently to say “works on the way up – and kills on the way down”.

He basically told me that we dawgs are losers and hasn’t spoken to me since.

How many more folks like this dude and the aforementioned Peter?

So many people could use Mr. Turner’s advice and yet they hear and read what they want to believe.

It’s called Hubris – and in this market = DEATH.

#191 not 1st on 09.22.11 at 2:47 pm

Peter, you are nearly on your 3rd strike. You followed whatever advice that told you to get 10 mortgages and lever yourself up beyond all imagination. Next you are here looking for advice on this blog when its record is shady at best. The long term facts on real estate may be true, but this blog totally ignores the current facts on the grounds regarding sovereign debt, shadow banking system and insovent institutions and advices people to take their capital gains and bury it into a ponzi scheme.

There will be another Lehmen type event right around the corner regardless of what this blog hopes will happen and it will be worse than 2008. You are totally exposed.

#192 Koolaid Drinker on 09.22.11 at 2:53 pm

I think he is up here to gloat.. not to ask for advice. Look at me.. I make $400K a year and I have $600K in bullion and I can afford a $500K fixer upper.. and I have 10 properties renting out to make me money… blah blah.. [email protected] @ff!!!!!!

#193 bigrider on 09.22.11 at 3:15 pm

There is not much to say about a market like this other than I am starting to give credence to the whole Mayan calendar thing and the end of the world in 2012..LOL

Nothing wrong with losing 1% a year to some arbitrary inflation figure so long as your money is earning 2% in a GIC. Assuming you believe in reported inflation at all.

Your 4% dividend on even the most bluest of bluechip still has you slightly down on the year.

11 years of secular bear market and still no merciful end in sight.

The secular bear market is bull. — Garth

#194 Smoking Man on 09.22.11 at 3:16 pm

#176 dddd on 09.22.11 at 1:29 pm

Leaving them on, lots of room since my entry point

Back in 2008 had a huge short on Wachoiva, rode it down a long way, then the new guy who took over put in a Million of his own $$$$$ So I unloaded huge profit, but had I waited a bit more, I got out at 6.00 few days after my exit it went down to 5 cents..

Live and learn

Short all the way, what is going to make this market come alive. Nothing!!!!!!!!!!!!!!!!!!!!!!

#195 wetcoaster on 09.22.11 at 3:20 pm

Lots of jealous people wish they were Peter…

Sure, owning a ficticious house of cards then asking for advice. Sounds like total BS.

#196 Pat on 09.22.11 at 3:29 pm

This blog seems to attract personal finance exhibitionists.

#197 Abitibi Doug on 09.22.11 at 3:32 pm

Why would anyone in their right mind invest in real estate anywhere in Canada (with the exception of a few cheap places like Windsor, Ontario) when stocks, or mutual funds that invest in them, are on sale now? It looks like the Boxing Week sales came 3 months early this year!

#198 new_era on 09.22.11 at 3:34 pm

Better Re-finance your mortgages to payoff for all your short position in this declining market.

Just like housing, there is no need to rush back in the markets. Wait tile the Greek Crisis, settles (which will be an eventual default).

I would say around Mid october, start getting back into the market using an average cost plan.

Diversify with defensive companies that can weather a recession for several years. More government intravention means a longer recession. If government got out of the way, things will take a quick hit and the ecomony will start getting on it feet with 6 months.

But we know Obama will not let that happen so expect a lost decade in “CHANGED” USA….

#199 Robert Dudek on 09.22.11 at 3:45 pm

Hedge funds are liquidating their long gold and silver positions because they are among the few positions that are in profit. That’s what happens when there is a sharp sell off – the quality gets sold along with everything else.

Fantastic buying opportunity for gold and silver right now.

How stupid do you have to be to write-off gold after such a small correction.

#200 Nostradamus Le Mad Vlad on 09.22.11 at 3:47 pm

#132 GregW, Oakville — G’day Greg. Our feds. are dumbing us down now, using plenty of sources to do it.

Harper was right. We won’t even know where we are living anymore. The CPC have won.

#153 disciple — “. . . the intentional elimination of jobs, and hence, the intentional long-term downgrade of the western economies.”

Of all days, today in the KDC there are two articles on the same page — “Joblessness becoming permanent”, Richard Gwyn, TorStar and “No work for British youth”, Julian Bloomfield, deputy leader of the Green Party of B.C.

Both of these columnists are correct, but what they don’t take into account is the cyclical changes, from race to race. The west is done, doesn’t matter what anyone says or does about it.

Of course, with no work for British and Euro youth, and joblessness becoming permanent here, constant wars in the MEast is it any wonder that riots are happening, sometimes spontaneously?

It appears no one has given any forethought to the next few months and thereafter.

#157 David B — Excellent post.

#201 Shane on 09.22.11 at 3:50 pm

Garth, Is USA going into a deppression?

Shane

No. — Garth

#202 Future Expatriate on 09.22.11 at 3:57 pm

They’ll have to take another couple of million off just to erase that ridiculous nausea-creating decor from the minds of any potential buyers. They might have a chance selling it if they tore everything out and painted everything white (like idiot realtors tell everyone else to do).

#203 Moneta on 09.22.11 at 3:59 pm

Operation twist.

Hmmm.. you’ve got to wonder if our leaders aren’t doing on purpose to make public pension plans so underfunded that it will give them the opportunity to cut benefits and entitlements.

#204 timo on 09.22.11 at 3:59 pm

http://www.bloomberg.com/news/2011-08-27/lagarde-urges-mandatory-recapitalization-of-eu-banks-to-avert-contagion.html

Lagarde called for “decisions on future consolidation — involving both revenue and expenditure.” She also called for more aggressive policies on housing to halt “the downward spiral of foreclosures, falling house prices and deteriorating household spending.” These could include reducing principal payments for homeowners or helping them refinance mortgages at lower interest rates”

what a gong show! You can refinance all you want but if your budgets are cutting back the public will do the same and you will go nowhere in a hurry……….

#205 Devil's Advocate on 09.22.11 at 3:59 pm

#155Junius on 09.22.11 at 11:33 am

#137 Devil’s Advocate,

You confuse reality with pessimism. It is all this silly cheerleading is part of what has got us in all this trouble. People are either putting faith in the free market and god or reading books like “The Secret” and thinking that positive thought will solve everything.

I believe in being positive and optimistic but it needs to be tempered by reality. Unrealistic optimism is just naivety with a smile on your face.

I don’t want to be drawn into a debate. I am here occasionally to post a contrarian point of view that some might want to consider.

That being said my old friend Junius; I can’t say I disagree with you but do get a vibe that you think my positive outlook is more a consequence of naivety than reality. I do think I do have a pretty good grasp of the realities.

Whatever works for you Junius just as whatever works for me. Guess the question is how’s your approach working for you? If you were to ask that of me… I’m doin’ just fine, thank you very much. Hopefully you can – honestly – say the same.

What do they say…? “90% of what you worry about never comes to fruition.”? Worrying is a waste of time. Better to do something proactive and constructive with your time.

#206 Victoria Tea Party on 09.22.11 at 4:00 pm

WALL STREET ADDS MORE NOTCHES TO ITS VICTIMS’ BELT

Just because this gun-ho gunsligner from Wall Street is a tool of the trade does not make him some visionary financial rocket scientist.

Crash and burn will be the next event for this yuppie couple. Unless they clear out of town and live with some genetically-dubious Crackers in the Florida bush, a stinky old dumpster in downtown Manhattan beckons.

Following that “down-scaling in real estate” adventure, we can all look foward to their next big idea, a book on how to yuppie-furnish a dumpster with miniature left-overs and a hand-cranked lattee maker. Might I suggest a title? How about “From Ten to Zip in One Easy Trip”.

Timing is everything and, boy-oh-boy, timing could not have been more wrong for this couple. Speaking of timing, Karl Denninger’s site is full of “I told you so’s..” today. Typical is the following:

“Welcome my friends to the collapse of 2011.

Remember the mantra that “consumers have delevered” which has been run over the last two years as an incessant bark from the media, attempting to goad you, the consumer, into more spending and more consumption to “lift the economy.”

This claim has been a lie and a fraud…See, cash is indeed at high levels. But debt has gone higher, and yet nobody mentions the liability side. As an example non-financial business credit stands at $11.02 trillion, just barely down from the 2008 high of $11.15 trillion – and nearly a clean double from the year 2000 level of $6.21 trillion.

There’s been no material “de-levering” at all.”

OUR SO-CALLED FUTURE

We’re all now aware that Thursday’s been a bitch on world markets. Even at a cloistered IMF meeting in Washington DC today, the mood was described as being “pretty grim,” according to a BBC TV news reporter on the scene.

Those who brought us 2008, still don’t have a clue. They’ve made things even worse since then, and now the Piper is pounding on our doors.

Like the autumn of 2008, markets seem destined for some sort of free-fall event for some period of time yet.

I’m wondering what will stop the falls except for a few days of bargain hunting amongst the wreckage of dashed hopes and dreams of former investors everywhere. Even gold and other “safe” commodities have been whacked, something Garth has warned about repeatedly, since market panics such as these take no prisoners.

This is Doomerville for the next while or so. But unlike 2008, there cannot be any more stimulus or QEs. We’re pretty much done.

Our only macroeconomic hope is that the next several years will see a quick and brutal de-leveraging process that will have similar impacts on today’s people such as the Great Depression had on our ancestors.

Only this deleverage will be longer and worse, because we can’t afford another world war to bail us out!

Can we?

#207 Tony on 09.22.11 at 4:01 pm

I think his gold will go back to less than what he payed for it. I think gold will eventually drop back to the U.S. 200 dollar an ounce level in the next 6 or 7 years. The properties he bought in America probably are a good idea. Toronto should see about a 35 percent price reduction in the next 5 years.

#208 The American on 09.22.11 at 4:09 pm

All, I meant to state FNMA backs up to 4, not 7, mortgages. TYPO. The point remains the same that the letter Garth received is pure B.S. Anyone in this business of buying investment properties would already know that FNMA will only back 4. The writer is claiming they max out at 10. B.S.!!!

#209 Coho on 09.22.11 at 4:26 pm

Cookie Monster,

You call predatory exploitative practices “just business” and I call it evil. It can be argued that war is a business as well.

And of course we often hear the phrase, “don’ t take it personally, it’s just business”. We’ve become so cold and detached…..

#210 Bill Gable on 09.22.11 at 4:30 pm

Comforting headline of the day:

GLOBAL MELTDOWN: INVESTORS DUMPING EVERYTHING

http://tinyurl.com/5tzkofc

#211 Echo on 09.22.11 at 4:31 pm

#107:
“No need for tears with a balanced portfolio. — Garth”

Ah, the “Garth Special” : )

#212 jess on 09.22.11 at 4:34 pm

decline in innovation due to patent trolls
http://www.bgr.com/2011/09/21/patent-trolls-cost-tech-companies-500-billion-kill-innovation/

#213 City Slicker on 09.22.11 at 4:38 pm

The Canadian $ is weakening by the minute, maybe the others are starting to figure out Canada is not bulletproof. We could be next on the housing crash list!

#214 Cookie Monster on 09.22.11 at 4:41 pm

#185 Junius on 09.22.11 at 2:08 pm

#181 Cookie Monster,

Once again you confuse free markets with competitive markets. You need to learn the difference.

Free markets is where everyone gets screwed by the Robber Barons and Banksters like we have now. Competitive markets are where businesses need to make better products or services to win consumers purchases.
——
Free markets are competitive markets.
No, a free market is not where everyone gets screwed by ‘robber barons and banking thieves’, those are government condoned protected markets where the criminals and fraudsters are being protected by government, who are in bed with government, we have to many non-free market entities currently benefiting from government protections and privileges.

I want government drastically shrunk and banned from economic activity. I hate voting for idiot politicians to get things that matter to me versus things that matter to others. I want them out of it. I want freedom and competition in markets. It’s the solution to our problems.

#215 jen on 09.22.11 at 4:42 pm

The self description, by Peter, as ‘conservative’ sure sounds familiar.

Oh yeah. Every day, I see Bay Street insiders on TV talking about ‘conservative’ lending standards at Canadian banks.

The logic is simple. We need to accept that everyone is ‘conservative’ with taking loans and giving out loans. We need to be less cynical and start showing more respect to our lending institutions here and elsewhere- who would never extend credit to high risk gamblers.

#216 GregW, Oakville on 09.22.11 at 4:50 pm

Hi Garth, The BBC TV news coverage/talk show about the world economy today from ~12 to 1pm, in the IMF building in Washington, live, I believe. Was interesting but not what I would paraphrase as being totally reassuring. (I looked a bit for a link to a rebroadcast of the show but I’ve given up. Maybe someone else saw it and has a link?)
Some stuff was talked about that wasn’t all doom and gloom. But most of it I found potentially unsettling. I can’t imagine it help keep the stock market up at all today?

#217 Roland on 09.22.11 at 4:55 pm

Pete is doing fine, borrowing free fiat money to scoop up lots distressed real assets. Then charge the proles rent.

It’s part of the bigger story, of how society splits apart. The underwater types get eaten up by the Petes, and the whole shebang from start to finish is expedited by Chopper Ben and his banker cadres.

Better still, from Pete’s point of view, is that the social and political consequences should take at least a couple more generations to catch up.

It’s only his grandchildren who will suffer from the physical liquidation of the bourgeoisie as a class…

#218 Echo on 09.22.11 at 4:55 pm

#121:

Au contraire. Bonds are up. REITs are still chugging away. No change to fat preferred dividends. Enjoy your mattress. — Garth”

LOL, thanks. : )
Wow, if only people here were listening, and then trying to educate their friends in return. What a concept. Actually acting on it. Don’t people realize that this advice is never free, is usually only known by the wealthy, and the Banks are praying that you don’t find out? Answer: NO. And they don’t care either. C’est la vie. Such is the way of the herd.

#219 Onthesidelines on 09.22.11 at 4:57 pm

Pasted from Karl #81

“I’ll go ahead and make the prediction now: This next crash will be worse than 2008 and we’ll measure from SPX 1370, which makes the minimum downside target under 600. And no, this time the markets won’t recover with more “hopium” and fraud – that card has already been played which means that pension funds and annuities across the globe are about to go up in smoke, exactly as I’ve been warning about for years now. Enjoy, folks.

And you have been wrong. — Garth”

So have you, Garth. Both on interest rates and on the timing and pace of the downturn in RE, not to mention the spectacular rise in PM. Seems to me there is a fairly good argument to be made that everything since Leman has been a dead cat bounce and the real shit is about to hit the fan bigtime.

The middle class is hollowed out and barely hanging on almost everywhere you look in the world. Where is corporate profit going to come from? Let’s see how you like those prefered dividends when they come with a 75% haircut in share value.

You just lost 100% of your creds. — Garth

#220 Echo on 09.22.11 at 5:00 pm

#123:
“Gold is off $72.70, or 4% this morning in US$. The C$ has slid 2.34% against the American dollar. I would take little comfort valuing PMs in a declining currency. This is a global move into security, and gold isn’t it. — Garth”

And again. Now that’s golden.

#221 Echo on 09.22.11 at 5:03 pm

#125: Smoking Man

The valiant may get old… but it’s got a Slant 6.
; )

#222 Live Under Your Means on 09.22.11 at 5:07 pm

Sorry if my post is a bit long.

#91 dddd on 09.21.11 at 10:56 am
#74 Live Under Your Means on 09.21.11 at 9:38 am
We had a smaller Steffes’ ETS installed yesterday upstairs. So far it has costed us about $8K

We paid cash for all & expect our ROI will be 4 years.

——————————————————-
as a mech eng i often an very skeptical of many of these systems…

8k over 48 months is 167/month clear SAVINGS
unless you are spending over 500/month on hydro EVERY month i highly doubt you will come close this level of savings

my parents (in ns) paid dearly for a heat pump and storage etc., 20k, in their new house and when i ask if there power bills have gone down they say “a little, i think”

remove heating and power bills are 50-90/mo for a house in van (5 comp always on,big tv etc) – no nat gas for you bluenosers? – tip fing a tree cutter guy who needs to unload wood and heat is free

………….

From yesterday’s post.

I was wrong. DH says it cost us about $7,300. including a new electrical panel

A full cord of wood in 2000 was $145. In July 2010 it was $240. so we didn’t buy any. Still have a couple of cords for emergency . We used to buy 2/3 full cords each yr. to feed our wood stove in the basement. Lots of work involved and messy. We’ve a damp climate as do you. Our home is electrically heated. Can’t get nat. gas here unless everyone on the street agrees to it and pays upfront costs – not gonna happen. Even with the ETS downstairs, the dampness around 4-5 pm would go through my bones so I’d put logs on the F’place on the main level to cut the chill/dampness. I really feel the cold/dampness even though I wear warm clothing.

DH has friends who installed ETS systems and have reduced their electric costs. BTW, you do have to change your lifestyle. We run the dishwasher & do laundry during off peak hours. I do lots of cooking during weekends and holidays and freeze them. Also do laundry on weekends (cold wash) and during the summer hang my clothes on the line (which I always did). I retired in 2001.

You may be a mechanical engineer but, DH studied for 4 yrs in France in Industrial Mechanical Maintenance. Worked all over Europe, Africa & Quebec. Also helped Mec. Engineering students from Dalhousie University and students in high school with their competitions. He took a 52 week course in robotics at Nova Scotia Institute of Technology & another 48 or 52 week course at Atlantic Computer Institute. He’s an IT supervisor of the 2 largest schools and all of their feeder schools in the HRM. Has created programs that will save the School Board many $$$. in the future. Top boss yesterday told all IT people to use DH’s Excell spreadsheat to account for time and mileage. It was much better than the top guy had created. Plus, my hubby owns 2 old BMW bikes and has a website that attracts thousands around the world.

I don’t think we need your advice.

#223 Echo on 09.22.11 at 5:12 pm

#173:
“I favour economic policy, democratically determined, of the greatest benefit to the most people. Labels are for losers. — Garth”

Brilliant!

Sorry Garth, I am just inspired to celebrate you today, you’re spittin’ out some doozies. People be listenin’ please !
: )

#224 Chumbawumba on 09.22.11 at 5:24 pm

@Koolaid Drinker #192

Jealous much? Seems like this forum is full of only a few types of people:

1) Twenty-something know-it-alls who think they’ve seen it all, and are brilliant visionary oracles who can foresee the future. (about 80% of the posters)
2) Jealous, insecure, dumb [email protected] like yourself who try to make themselves feel better by accusing those in better standing that they have some alterior motive, like gloating about their income. Please.. look at Peter’s postings, he’s not BS’ing, he has decent grammar (unlike 90%+ of the nitwits on here), and obviously is just looking for advice. If you want to feel better about yourself, go hang out at a soup kitchen. Maybe then YOU’LL be the one told to [email protected] @ff because your welfare check will be bigger than that of the other hobos’ (15% of people on this forum)
3) People who are open minded and can accept other peoples’ point(s) of view, even when they don’t align with their own. Who’s right? Real estate and economic armageddon, or a short blip of economic malaise? Conservative or Liberal? Miracle Whip or Mayonnaise? Let’s not attack everyone who thinks differently than us. There’s more to learn by listening than by yelling. (an unfortunately low 5% or less of those posting comments here).

Although I find this blog amusing and the commenters hilarious, I think there are too many of you in category #1 and #2 – let’s hope you don’t represent society as a whole, though somehow I doubt it..

#225 bigrider on 09.22.11 at 5:25 pm

Just out ” Scotiabank sees low probability of housing bubble’

The world is completely falling apart but for some f*&^%ing reason which defies any logic or sensibility Canadian housing is cruising along just fine.

I am so F*&^ing frustrated and annoyed I could Sh%t on the next G-d-damn piece of granite I see.

#226 Paul Harder on 09.22.11 at 5:29 pm

Toronto RE market “just steaming ahead” according to this absurd article in the NY Times

“Canada weathered the crisis when other countries had more difficulty” hmm, this implies “the crisis” is behind us??

http://nyti.ms/nFYHud

#227 jess on 09.22.11 at 5:31 pm

Why do Banking Regulators bother to Conduct Faux Stress Tests?

AIG, 3 big Icelandic banks ,Lehman passed stress tests

http://neweconomicperspectives.blogspot.com/2011/09/why-do-banking-regulators-bother-to.html#more

#228 bigrider on 09.22.11 at 5:38 pm

I gotta give you some credit smoking man, you seem to have a crystal ball that works.

I humbly ask for your near term guidance. What do you see for equity markets near term and longer term say a year out? and ,

T.O real estate. Prices up or down next year?

#229 Daystar on 09.22.11 at 5:59 pm

#193Smoking Man on 09.22.11 at 3:16 pm

What would make this market come alive? Try greed combined with a bonifide oversold market. I think we have more to fall but valuations are pretty sweet by the end of the month I would think to pick and choose the winners from the losers and ride them to profit.

#230 Mr. Plow on 09.22.11 at 6:07 pm

Came back to the blog when I heard that Calgary Rip Off posted again saying he had bought a house.

I know how a lot of you like anecdotal evidence…

Lost a great long term tenant, they are moving out at the end of October, posted an ad on kijiji in Edmonton for $100 more a month than what I was renting before…

4 showings in the first week, looks like I may have a tough decision on my hands in terms of who I should rent to. I have 5 more weeks to decide.

#231 Cookie Monster on 09.22.11 at 6:08 pm

Now Europe is breaking the laws of physics instead of just economics.

Scientists in shock after ‘breaking speed of light’

A fundamental pillar of physics – that nothing can go faster than the speed of light – appears to be smashed by an oddball subatomic particle that has apparently made a giant end run around Albert Einstein’s theories.

CERN says a neutrino beam fired from a particle accelerator near Geneva to a lab 454 miles (730 kilometres) away in Italy travelled 60 nanoseconds faster than the speed of light. Scientists calculated the margin of error at just 10 nanoseconds, making the difference statistically significant. But given the enormous implications of the find, they still spent months checking and rechecking their results to make sure there was no flaws in the experiment.

http://www.theglobeandmail.com/news/technology/science/scientists-in-shock-after-breaking-speed-of-light/article2176328/

#232 Devore on 09.22.11 at 6:33 pm

#228 Mr. Plow

4 showings in the first week, looks like I may have a tough decision on my hands in terms of who I should rent to. I have 5 more weeks to decide.

To make a decision, you must first have options. Just sayin. Good luck. For now, sounds like you’re counting your chickens a little early.

#233 Junius on 09.22.11 at 6:40 pm

#213 Cookie Monster,

More tea party drivel. History says otherwise. You are being manipulated again.

#234 Cookie Monster on 09.22.11 at 6:44 pm

#208 Coho on 09.22.11 at 4:26 pm

Cookie Monster,

You call predatory exploitative practices “just business” and I call it evil. It can be argued that war is a business as well.

And of course we often hear the phrase, “don’ t take it personally, it’s just business”. We’ve become so cold and detached…..
——
I agree with you on the above. I don’t condone war except for defense only and I don’t condone fraud or any crime by business, individual or government. But you were calling businesses who sought low cost labour cheap greedy SOBs, and my point was that they are just acting to get the best prices to meet their needs to remain competitive.

If our tax system and wasteful socialized public services and pensions and our wonderful unions hadn’t driven prices for labour through the roof, we’d still have jobs here. Don’t blame businesses for saving themselves.

#235 49 on 09.22.11 at 6:44 pm

If the $C keeps dropping as it has been, and the flavour of the moment is to rush into $USD, would there not be a selling pressure on Canadian bonds, especially those in the hands of foreign owners?
Anyone want to weigh in on the implication for Canadian interest rates, assuming that the govt doesn’t prop up demand by buying its own bonds?

#236 Cookie Monster on 09.22.11 at 6:55 pm

I favour economic policy, democratically determined, of the greatest benefit to the most people. Labels are for losers. — Garth
—-
Spoken like a true politician. The greater good indeed.
Reminds me of two coyotes and sheep voting over what to have for dinner.

Maybe this will help coho understand why businesses (sheep) leave socialist democracies (wolves) like Canada.

#237 ballingsford on 09.22.11 at 7:01 pm

Peter seems like a narcissist. Agree with an earlier poster who thinks he needs a kick in the nuts!

Why not spend some of your money on a charity that you care for instead of trying to make yourself look huge!

#238 Nostradamus Le Mad Vlad on 09.22.11 at 7:15 pm


#205 Victoria Tea Party — “Only this deleverage will be longer and worse, because we can’t afford another world war to bail us out! Can we?” — Think again.

Look at the reception Ahmenajine got at the UN today, when he said 9-11 was ‘curious’. The Yanks and a few others walked out, because they know TROTW is onto that fairytale. It was an inside job, plain and simple.

#223 bigrider — That’s putting it mildly!
*
Thought For The Day! (wrh.com)

“An economist is an expert who will know tomorrow why the things predicted yesterday didn’t happen today.” – Laurence J. Peter
*
Major Dump Time to buy in, Garth? and CC This would really screw Al Gorgo’s GW false theories up. 1815 was the last time this ‘cano blew its top, and killed 71K people. If it does blow, winter will be mighty cold, as the sun would be blocked out. See how everything is co-ordinated? Satellite Will this hit the volcano just mentioned? Holy Mackerel Someone pulled the plug. Recall the second half of 2011, when TSHTF? That time is now; 1930s style meltdown, or greater; China The US keeps shooting itself in the foot.

5:12 clip US Taxpayers will be thrilled: “How about $16.2 million towards a museum in Las Vegas dedicated to the mob.”; Geithner Stating the obvious; Countrywide Hiding the fraudsters; 7:48 clip 1981 film Rollover, about a global financial collapse; Hong Kong “An economic indicator you cannot spin away!” wrh.com; Morgan Stanley “Not Good News For Morgan Stanley…” (last link); How Stimulus killed Japan, and probably us, too; Land Of The Free Poverty in young families in the US (and elsewhere).

Turkey First para. is excellent; 9:54 clip For those who would like to see it, this is the video the US military didn’t want publicly shown; Link in Top ten armies in the world; Linux excluded Naughty Bill Gates; CIA is becoming classified.

Northern Pass “The ‘land grab’ ISN’T the predominant factor ? To me , this isn’t a typical ‘stop the project opposition’ , because the northern pass project want’s to IMPORT energy from another country . period . That’s a worst case NAFTA scenario , and a blatant globalization maneuver . IT’S NOT JUST ABOUT THE FOLKS IN NH , it is however a brazen first step , in what’s in store for everybody else in the USA .”; US acting all upset about nothing, and 3:13 clip Ahmadinejitters by any other name; Fukushima Fallout reached California waters; Google If they were to show a map of Israel, they would also reveal where their nukes are (Dimona).

#239 Moneta on 09.22.11 at 7:19 pm

Chumbawumba on 09.22.11 at 5:24 pm
————–
Maybe his strategy will work wonders but honestly, when someone comes here and tells us that he needs 10 properties to feed his kids when he is making 400K and tries to convince us that he is conservative, just an average Joe, he’s looking for trouble.

From my persepctive, a pro would not be asking for the type of advice he is looking for on this site. But then again, maybe I am totally oblivious to his true goal.

#240 Daystar on 09.22.11 at 7:26 pm

Hi Peter and Daniella!

Apologies for having to wade through those not so thought out negative comments to get to yours truly, losers do frequent this site (some of them sore at that). They are merely venting towards those who have the income and courage to gamble a little and invest in something at a time when no one really wants it or can’t buy it if they wanted to, so they vent and sadly, without much class or thought put into it so I shall pray for these poor unfortunate fools who berate those who have simply because they have apparently (so imaginative, and I really did pray! I spent a good 10 seconds worth of sincerity on the subject so all should be well now, God’s all over it :).

Congradulations on your increased valuations with gold and silver! I would caution however, that gold and silver is now something that most ordinary folks want (should be a major tell to sell). The investors motto is buy low, sell high and gold is high so what gives? Can’t take profit? Today should be a warning for you both as gold dropped $62 bucks and silver was off by 9%. Remember, its not profit until you actually sell it and take the profit so… take it!

What, you hesitate? You think it will rise more? Only greeders hang out for that extra 10%. Lets examine with logic instead of emotion shall we? When you bought gold & silver, it was cheap. Low. Gold inflated 580% since then and its now at 1742.50 (yeah, you shed 20% today). Do you think gold will be 5.8 x 1742.50 or over $10,000 an ounce 10 years from now? Really? You both believe history will repeat with gold? It likely will. Gold was worth 1,000 an ounce back in the 70’s and retreated to $300 an ounce for 20 years. Its more likely to see gold worth $500 an ounce than it is to see it worth $10,000 an ounce, don’t cha think?

Still hesitating? Gold has been driven up higher because of the sovereign currency risks driven by public debt levels escalating in the western world and the fall of the U.S. dollar along with escalating debt has been the big reason for gold’s ascent but don’t think that gold will continue to climb forever because it can’t and won’t.

This thing called QE3 where the feds buy long term bonds and MBS’s with short term bonds, how much do they lose on the point spread with a few hundred billion anyone got a pen? It ain’t enough pissed away for the sake of low rates to send a nation like the U.S. into bankrupcy. Again, I’ll speak plain.

If the U.S. congress at any point raises taxes on the rich to middle income taxed levels, public deficits shrink substantially. If the U.S. congress shrinks spending like there is no tomarrow particularly in defense, debt levels come down, down, down and what does this do for gold? If, by chance, we see raised taxes on the rich/corporations combined with dramatic cuts in spending and a plausible consumption tax like a GST, its over for gold for decades to come. And finally, lets just mull over what happens if gridlocked american politics does nothing but accumilate more debt and the dollar crashes… what happens? Try the U.S. economy booms as a result of being currency competitive once again and gold falls like a stone regardless of what happens to the dollar (ah, think in terms of 10 years or more readers, lets stretch it out a little). Sorry to those who think 10,000 an ounce gold is in the picture, ain’t gonna happen so take profit, its what smart investors do.

And the Toronto market… I see big troubles ahead for Canada til’ 2013 and by that time, higher interest rates will have recessed Canada’s economy from real estate alone while the rest of the western world plays catchup. Canada needs to pay for its “borrowed” sins and it will so to think that Canada’s largest city will go through chronic recessions unscathed…

Things change, Peter n’ Daniella. Y’know? I like your U.S. real estate plays and hope they work for you and wish you the best in your successes, so long as you both know that money/success isn’t everything. There is much more to life than monetary gain/status as I hope you are both well aware. After all, its only perception. Speaking of awareness, “only the humbled are truly aware of the needs of others”. Our limited perspectives are so blinding…

I don’t like your want to become U.S. citizens just because its economically convenient. I would prefer it if you both understand that the difference between Canada and the U.S. is defined by the systems that govern and are chosen by its people, its far more than the geography or people as people are essentially the same wherever we go. Until Harper, we had different ways of doing things here, not that we should take pride in it to a fault but we did have different ways, different approaches, different ideologies and they served us, for better or worse and gave the world alternatives to the U.S. model which I believe, especially when it came to foreign policies, were needed to offer balance. Canada will find its path again as nations always grow tired of leaders who wallow in their own self created economic recessions (i.e.Harper, its far too predictable) and offer a Canadian made perspective once again. Honor your roots, is all I ask and I’ve taken far too much of our valued readers time, have a great weekend!

#241 US-CITIZENSHIP on 09.22.11 at 7:34 pm

ARE YOU KIDDING ME?
DO NOT GET YOUR US CITIZENSHIP!
Have you heard of FBARS? OVDI?
They can fine you huge amounts for having accounts in Canada for being a dual citizen. Or at least the US will try.

You have to be insane to voluntarily get US Citizenship when people would give thousands to get rid of it just to avoid the tax consequences and all that.

Its your ass.
I have no comment on your “investing in real estate”

#242 Onemorething on 09.22.11 at 7:35 pm

Come on Munch, CANADA CAN PLAY RUGBY!

Not nearly as well as the top tier teams including the Boks but they are now sitting 11th in IRB standings scratching on door of 6 nations Italy in 10th.

Canadian however are top 3 in the world in property bubbles along with China and AUS!

#243 ballingsford on 09.22.11 at 7:40 pm

Hi Garth,

Shit is happening, where should I invest?

#244 Moneta on 09.22.11 at 7:51 pm

US-CITIZENSHIP on 09.22.11 at 7:34 pm
ARE YOU KIDDING ME?
DO NOT GET YOUR US CITIZENSHIP
———-
Doesn’t returning to Canada negate the severing of the ties with Canada ?

#245 Smoking Man on 09.22.11 at 8:01 pm

#228 bigrider on 09.22.11 at 5:38 pm

Re Equity wait and watch how the market reacts to news, if it moves up a bit on good news and falls a lot on bad news stay short. When the median his gang busters on bad new and then you see a few big spikes when it shouldn’t reverse and go all in long. I did it at the end of Feb in 2009. Got out in a big way after flash crash, knew it was computers trading not people. Hell I build em.

As far as real estate, If Dalton gets elected I will be a bull on real estate, tells me the tax Tax farm slaves are a lot dumber than I thought, and if market goes negative it won’t take much to convince the idiots that real estate is good bet. If he loses, then look out.

#246 Smoking Man on 09.22.11 at 8:05 pm

#228 bigrider on 09.22.11 at 5:38 pm

One more thing

Thinking of building (actually almost done) a new algo, that hits 200 blog sites and spreads false rumors, that trigger other computers to react in a certain way, while I have already made my bets.

Talking to layers right now, but I might be ok to turn on the switch.. It’s on the line…

#247 Smoking Man on 09.22.11 at 8:14 pm

#229 Daystar on 09.22.11 at 5:59 pm

Sure valuations are good, but when I hear traders who have been in the business for 20 years who have done nothing but make money, say wtf is going on…….

Should tell you something, in fact two days ago their where some huge sellers of short term bonds…..Insider trading, connected to the US fed for dam sure……………

Remember this, for every one person trading equities there are 3 computers you compete with.

If I decide to unleash the basterd rumor algo I am going to make a tone on PHD’s get fired…..I might end up illioner this a B, or in Jail?

#248 Peter on 09.22.11 at 8:38 pm

Daystar – thank you for such nice prose. I was at the base of the twin towers when the plains struck. My current condo overlooks the new WTC which now eclipses the buildings around it. I have been here for 12 years 1/2 of my adult life. I have have grown attached to this country and it is meaningful. I was avoiding becoming a citizen b/c of tax reasons – not the other way around. At this point there is no longer a tax advantage to me living in this country but remaining an immigrant only – so it makes sense and is the right thing for me. I will admit – I am a tad bit attached to money. It comes from being raised by parents who themselves were subjected to abject poverty and drilled into me from the age of 3 how important it was to accumulate wealth. I have done my share of contributing to the community and plan to do a lot more in future.

Re “US Citizenship” – I have been filing my FBARS now for 11 years – it really isn’t a big deal – the ones who fear these things are people who have made their millions in the US then take it offshore and lie and cheat about their income. I have no problem paying taxes to the IRS and CRA.

And by the way I indeed was quite shocked by the abuse hurled at me for putting my name in the bin for advice. At the end of the day I wanted to know when the right time to step into Toronto was. I am getting a general sense that it is 2 to 3 years from now. If I need to move there sooner (to care for my loved one who has recently been diagnosed with a terminal illness) I get the sense I should be renting.

As for the Gold. Thank you for the feedback – wasn’t looking for any on this point I am grateful for the perspectives.

I mentioned the details of investing for rentals b/c the great Garth has so much experience in this area he is a giant – I thought the community that followed his blog would be able to tell me something I did not know – offer me a perspective on things.

I have been hanging with extremely rich people for a long time now. My $400,000 which people love attacking me on is drinking money for these people. My good friend who does work that is very similar to my own has not made less than $2mil in any given year over the last 6 years. I guess I lost a bit of perspective and did not realize how large an amount this would seem to others to be. If you want to live comfortably in NYC with a family of 2 – private schools and medical copays in the mix – you will not do so comfortably with less than $250,000 per year. It really isn’t such a big deal.

I don’t mind the obscenities – it’s providing me with some perspective on how my fellow Canadians are thinking these days when they can speak with anonymity. I contribute to very many blogs and rarely if ever do I see such disgrace. It really is troubling to me to see the crowd that the great Garth has in tow – probably depressing for him to sometimes. Hon Garth – you haven’t chimed in on this – would love your thoughts.

A word of caution to anyone who wants feedback on their investment / or non-investment ideas in Canadian real estate. Unless you are suffering some type of financial hardship – this is not the blog for you!!

#249 Cookie Monster on 09.22.11 at 8:46 pm

I can see it now, Smoking Man gets arrested along with accomplice, guilty by association, Garth Turner. Front page news splashed across all the Canadian media, it’s the perfect cover Harper’s been waiting for to shut down this pathetic free speech forum blog.

Saw on the news last night that Hosni Harper’s dream of a police state is one bill closer, he’s clamping down on marijuana grow-ops, minimum sentences, expanded prisons, more coppers and stiffer sentences for children.

Don’t worry guys, we’ll organize a jail break for you, when you hear AC/DC coming, you’ll know you’ll be free soon.

#250 Regan on 09.22.11 at 8:47 pm

I think talk to a lawyer about setting up a corporation before getting a U.S. citizenship, esp. if you’re not planning to stay there. You’ve got income and the brains to apply it well, all your income properties sounds just like what a REIT would buy that Garth tells us to bundle with our ETFs on the stock market. Hopefully, your rents are affordable and you won’t get stuck with cash flow issues. In terms of Toronto, latest reports say the fall market is already softening and more is to come. If you’re not moving for 2 years, don’t buy in advance. Buy it when you need it, but don’t discount renting some fancy houses that can be had for less than a mortgage. try viewit.ca and mls.ca rentals. I’m looking in Riverdale and I can rent for $2500 what I’d have to buy for $700K…

#251 Tim on 09.22.11 at 8:50 pm

It took me a while to figure-out what bothered me with your plan Peter, but I think this is it.

The RE cycle is somewhere in the range of 20 years long. TO is overpriced. Will it go higher? Probably not (imho). But, who would’ve thought Vancouver would reach the level of overpricing that it has reached. Will home prices in real terms correct sometime within the next 10 years? Ya, I think they will return to historical norms. Will it go from peak to trough within two years? Seems pretty unlikely.

If you want to buy your TO home in two years, go for it. But realize that real estate will still probably be overpriced. Maybe more so, maybe less so, than it is now. But fairly priced? Probably not, imho.

But sometimes paying a price above intrinsic value, or “fair”, is still worth the cost to the buyer.

It might be easier to swallow if you think of it as a hidden transfer payment tax from one generation to another.

There is no real estate cycle. — Garth

#252 anjing bau on 09.22.11 at 8:51 pm

Hey SmoKING mon…look at ECA on a monthly……Is that your idea of a batman pattern… It looks like a giant HNS which measures to zero…..

Would you guys like a room. Can we watch? — Garth

#253 Regan on 09.22.11 at 8:57 pm

Also, is it just me or does the sensible thing to do is PAY OFF DEBT. I’m meeting with my bank next week when my 5 yr mortgage comes up for renewal to transfer it to a HELOC and pay it off in the next 2 years while the rates are still cheap. Rather than wait for the doomsday when the rates rise and everything crumbles, if you’ve got debt pay it down while you still can.

#254 Smoking Man on 09.22.11 at 9:02 pm

#252 Peter on 09.22.11 at 8:38 pm

Ok Peter credibility check?

Controlled Demolition Yes or No?

#255 Smoking Man on 09.22.11 at 9:07 pm

#253 Cookie Monster on 09.22.11 at 8:46 pm

I can get away with it Im insane. :)

#256 anjing bau on 09.22.11 at 9:21 pm

Cycles exist in everything from lunar/ weather/ crops/ business/ economics / life/ planets…..

how can you say there is no real estae cycle… oh wait its your blog I forgot…. your ENTITLED – so boomer like – to your view

I gather that comments means you are younger than me. That explains much. — Garth

#257 Smoking Man on 09.22.11 at 9:54 pm

#260 anjing bau on 09.22.11 at 9:21 pm

I work in Cap markets field, I work with traders that abuse the sh!t out of IT staff, (not me I’m a god on bay street)
It’s almost a game, who can be the biggest alpha male in front of peers.

They are their not because they are smart or use the right acronyms.

They are there because they went to the right schools, where the best memorize and regurgitate zombies in the class got noticed, or pops had connections……….

Talk like a human so people will understand you, talking in trade talk only highlights your insecurity.

I Do like you.

#258 allister on 09.22.11 at 10:01 pm

Pete – You shouldn’t be asking us losers for advice. You should ring up the Donald. He has experience at carrying lots of mortgages in a downtrend. I think he would say borrow so much that youre too big to fail.

What you doin playin with RE anyway. Can’t you turn your money into big time payolla on Wall Street – I mean youre on this inside. Forget the rules about inside trading and front running – nobodys been caught in years.

#259 Sky on 09.22.11 at 10:20 pm

Garth promised us entertainment and he delivered in spades.

Peter, you’re taking the vitriol far too personally – “A word of caution to anyone who wants feedback on their investment / or non-investment ideas in Canadian real estate. Unless you are suffering some type of financial hardship – this is not the blog for you!! ”

What did you expect would happen, Peter? When the peasants were starving, Marie Antoinette’s ‘ Let them eat cake’ moment didn’t go over too well either.

The fact that you’re pulling in big bucks working for what many perceive as the Heart of Darkness ( Wall Street) is like rubbing yellow snow into the faces of your former fellow Canucks – many of whom are watching their friends and family struggle to just get through the day.

Curious- when you say -“My current condo overlooks the new WTC which now eclipses the buildings around it. ” You mean WTC 7, right?

Much more interesting- and ominous- is the seven story hole in the ground where the Twin Towers once stood. Ten years later, and after throwing 70 some billion at it, Bloomberg has pledged that by 2018 that hole will grow itself a set of towers.

What’s going on here? In a decade’s time China puts in the 3 Gorges Dam and a bunch of other modern infrastructure but the USA can’t manage to erect a couple of skyscrapers? Could it be that the skilled American construction workers are too busy elsewhere? Yeah, they’re busy alright- collecting their unemployment or welfare cheques.

The 911 attacks were a warning – they told us what would unfold on a global economic scale.

The 7 story hole in the ground is another kind of warning. Learn to read the signs people.

#260 Peter on 09.22.11 at 10:47 pm

Allister
99% of wall street folks are cut from the same cloth. They all jump on the same trend. It’s unimaginable to me how wall steer can manage to suck in the most brilliant minds that in another era would have been researching important scientific breakthroughs but instead are hear caught up in the latest financial engineering. Despite being smart, they concentrate their time and energy on the problem in front of their faces. If it is not possible to look it up as a bloomberg ticker they are lost. I am not as technically smart as the analysts but I laugh at their notions of what a good investment is. Today I have reviewed with so many of them the numbers on distressed rental properties – how you can buy a $145000 property that generates $2000 rentals today (same building would have brought in much more 3 years ago) show them rental demand stats. Show them how Obama’s stimulus has opened Fannie up to underwrite 10 mortgages per person – they say “wow” but cannot get themselves to jump on a plane and go look at properties not todays trend! Not their idea of an investment. I get the same blank stares as when I showed them the huge gap btw demand and supply for silver 9 years ago and asked them to imagine what would happen if even just a handful of institutional buyers took some silver off the comex as an investment.

My interest right now is Toronto. I am a bit disappointed with the lack of depth of insight from these posts. Honestly everyone just got so caught up in attacking me nobody gave a crap about the challenge I posed. It suggests to me a level of antipathy. If a decline was near I think people would be more geared to offering some suggestions and insights on how to play the trend. I think everyone has given up and thrown their hands in the air – resolved themselves to the notion that the bubble will not burst so in the meantime let’s just play smart ass.

Just got my hands on Garth’s latest book. Not the easiest to pick up here in the USA to boot my copy is filled w highlighting! I hope the Hon Garth has something to say on the topic I am looking to explore

Good night all. I hope to never meet most of you!

#261 Peter on 09.22.11 at 10:59 pm

Sky
I get back to TO 6 x a year. Canadians aren’t humble and polite anymore vrhe tables have turned. They have become the obnoxious and arrogant ones and Americans are eating humble pie. My nieces friends are all partying just like the 20 something’s here did in the height of the housing bubble Sprry I don’t see much struge going on in TO. Just a lot of people living beyond their means in an orgy of debt (not debt that finances investment like I am talking about). I mean debt to buy a Mercedes that wasn’t needed and a home that is way beyond ones means

#262 Blacksheep on 09.22.11 at 11:36 pm

Daystar:

“If the U.S. congress at any point raises taxes on the rich to middle income taxed levels, public deficits shrink substantially. If the U.S. congress shrinks spending like there is no tomarrow particularly in defense, debt levels come down, down, down and what does this do for gold? If, by chance, we see raised taxes on the rich/corporations combined with dramatic cuts in spending and a plausible consumption tax like a GST, its over for gold for decades to come. And finally, lets just mull over what happens if gridlocked american politics does nothing but accumilate more debt and the dollar crashes… what happens? Try the U.S. economy booms as a result of being currency competitive once again and gold falls like a stone regardless of what happens to the dollar (ah, think in terms of 10 years or more readers, lets stretch it out a little). Sorry to those who think 10,000 an ounce gold is in the picture, ain’t gonna happen so take profit, its what smart investors do.”
———————————————————
Five paragraphs on the folly of gold investment?

Dude, you sound like the Ned Flanders of economics, preaching fantastical possibilities, warning from the pulpit, about the evil that is, GOLD.

Sell,Buy, ignore, whatever floats yer boat.
Just adding my two cents.

take care
Blacksheep

#263 Bruce on 09.23.11 at 5:49 am

“You just lost 100% of your creds. — Garth”

Garth, with all due respect, you’re starting to talk in circles here–one day you predict gloom–the next you predict good times ahead–then back to gloom again. Mark Carney is starting to look and sound more credible here–and I can’t stand him even. So which is it, then? Self-promotion for your new book, or are you too working on the “inside”?

To repeat: the economy will be tough, but it’s entirely possible to avoid the fate awaiting most people. It’s in your hands. — Garth

#264 Moneta on 09.23.11 at 6:24 am

My interest right now is Toronto. I am a bit disappointed with the lack of depth of insight from these posts. Honestly everyone just got so caught up in attacking me nobody gave a crap about the challenge I posed. It suggests to me a level of antipathy
——
If you don’t understand what just happened, you need to work on people skills.

#265 Moneta on 09.23.11 at 6:40 am

If you don’t understand what just happened, you need to work on people skills.
———-
A lot of people on this blog have gone through a tough time and feel like they are being taken by Wall Street and bankers in general. Many on this blog are also looking for some form of closure on the real estate frenzy and you are just pouring oil on the fire.

To get information on the Toronto market there was absolutely no need for you to share your income and portfolio details. All you had to do was participate in the conversation and ask more pointed questions about Toronto.

Good luck.

#266 Bruce on 09.23.11 at 7:05 am

“To repeat: the economy will be tough, but it’s entirely possible to avoid the fate awaiting most people. It’s in your hands.”

This is where I have a fundamental disagreement with your outlook. It’s *NOT* in my hands at all–but the hands of a select few who are really calling the shots and pulling the strings here. My buddy at work said it best: The collapse is now ASSURED. It was destruction by design, basically. Capiche?

I’m close to giving up here. The biases I wrote about above are too much for this crowd to overcome. Good luck. — Garth

#267 Sky on 09.23.11 at 7:40 am

Peter- Down Boy ! To be fair, there were plenty of polite and reasoned responses to your challenge. Your statement -“everyone just got so caught up in attacking me nobody gave a crap about the challenge I posed.”- is simply not true.

You can focus on the negative and stay pissed. That’s your choice. But when you say that you’re “a bit disappointed with the lack of depth of insight from these posts.” then that says more about YOU than it says about the posters who took the time to thoughtfully reply to you.

This attitude smacks of elitism and it goes a long way to explaining why you don’t see the struggling Canadians that are everywhere.

If you do not close your eyes, you’ll find them checking out your groceries, serving your restaurant meals, making up your hotel bed, repairing your vehicle,or driving the trucks that deliver our food supply.

You’ll see the struggle in the sore backs and fallen arches of the workers pounding the concrete floors of the big box stores. You’ll see the struggle in the tired eyes of a mother who comes home exhausted at the end of her workday but still manages to find something inside herself to give to her family. You’ll find it in the disappointed faces of the young, saddled with student debt, who were promised the moon and given green cheese instead.

Granted – there are plenty of debt-ridden fiddlers
while Rome burns. But try not to blame the fiddlers too much. From birth on, we’ve been fed a steady IV drip of false advertising,lies and patriotism. Drip, drip, drip. Breaking this conditioning isn’t the easiest thing.

Once you yank out the IV line, an entirely different world unfolds before your eyes. But who am I to preach ?

It wasn’t that long ago that I was struck deaf by the Star Spangled Banner myself, in solidarity with America after 911. I bought all the lies. Hook ,line and sinker. ‘ America isn’t hated for the bad she’s done in the world- She’s hated for the good.’ Thank you, Ayn Rand, for that one.

So, I have some atoning to do myself. Here’s a small start : The latest batch of Wikileaks diplomatic cables reveals how the USA saw Jean Cretien as an obstacle to their war in Iraq.

At the time, I despised Cretien for not rushing down to Ground Zero. What a fool I was. How many innocent Canadian lives did Cretien save by keeping Canada out of the Iraq war?

Jean Cretien – my apologies. Merci and thank you for being a mensch.

#268 Peter on 09.23.11 at 7:52 am

Moneta,

I guess the problem is that I didn’t realize just how full of crap and ill informed girls like you are. Canadian’s taken by Wall Street???? Every other meeting I go to some American is bringing out the highlights of how well Canada has faired in this turmoil. I read the blog. It’s about how bubbly the real estate market is in Canada and how Canada may face the same problems that the US has.

Sorry I don’t buy it. People looking for advice on this blog provide the basics of the means at their disposal and their goal. I followed to the T what others did.

I think Garth has a largely Moronic following unfortunately.

You said it included you. — Garth

#269 Moroneta on 09.23.11 at 9:37 am

This blog goes far beyond real estate. We also learn a lot about ourselves.

Peace out.

#270 Sky on 09.23.11 at 9:37 am

Post # 268…Peter to Moneta

And the mask comes off.

Or did it? It’s hard to reconcile the Peter who said this : “I would so appreciate feedback from your viewing community and yourself. ” with the Peter who now calls Garth’s followers morons .

Question for you Moneta – I’m a newbie here. Mind telling me what Peter meant when he said ” girls like you.” ? Just woman’s curiosity here. BTW – Your responses to Peter were excellent – very insightful.

#271 Moneta on 09.23.11 at 10:57 am

Question for you Moneta – I’m a newbie here. Mind telling me what Peter meant when he said ” girls like you.” ?
———

I have no idea what he meant and I won’t even speculate.

#272 Peter on 09.23.11 at 11:07 am

I lived through the greatest housing collapse you could possibly imagine. I lost quite a bit but kept some powder dry. Now I am stepping into the wasteland and taking advantage of the opportunities that present themselves here in the USA.

Does this not resonate with the readers of this blog? Isn’t Garth’s purpose to provide you with some insights and protection – to realize that Toronto and other cities are going through the exact same dynamic right now as we communicate with each other.

I was under the impression that the followers on this blog were a cut above the crowd in terms of undertanding better than the average person what the big picture is. I can find nobody on the internet that is clearly outlining the situation as well as Garth is doing so. So I wanted feedback on the plan that I had and specifically how it impacts Toronto.

Instead what I am realizing is the most (not all) of the community really are a bunch of pissed of people who would rather attack me for the success that I have had in navigating through the real estate implosing and coming out potentially ahead.

I said “largely” morons – and I stick by that.

I feel I have a lot to contribute to the concepts here but I really would rather not. I don’t want to have to get overly concerned about offending people and using “people skills” to insure I don’t upset anyone.

Don’t tell me about elitism – that’s a pile of crap – my first job was roling ice cream cones – nobody handed me my law degree or my MBA – I got those myself and if you have a problem with an someone from an immigrant working class family becoming successful … let’s not go there.

#273 Tim on 09.23.11 at 11:08 am

Peter, you sound in large part like you’re grumpy that nobody told you want you wanted to hear, ie: “in two years, Beach(es) RE prices will drop by the same amount as the US home prices”. You’re delusional if you think Toronto can achieve in two years what the US took five years to accomplish. When you didn’t hear what you wanted to hear, you accused people of resorting to antipathy … which is not entirely untrue, but your comment about “how well Canada has faired” is just a bizarre response. Canada may have faired better than the US, but income inequality here is still far higher than 20 years ago, and far far higher than countries such as Germany. Incidentally, you may find it interesting to note typical German financial sector salaries, too…

I say this without much malice, since in relative terms, I’m also quite overpaid. Of course, like you, I feel underpaid and I deserve more. But that doesn’t change the hard numbers. Don’t be surprised if people perceive it as a bit greedy when you try to score a quick (two years == quick, in my books) steal on a second house (you said you will be keeping your NY condo, so that means two homes, plus the investment properties … most random people can’t afford a home in both TO and NY…).

#274 Peter on 09.23.11 at 11:36 am

Tim,

I don’t have any issues with your posting. Let me quote the back cover of “Money Road” which I endorse by the way “Millions are now making life-changing mistakes. Do’t be one of them. Get on the Money Road.”

Here is a thought for others – when you find someone contributing to the blog who provides you with an example of how it is done – and looks for help to understand your local marketplace – in response it’s a great idea to tell him to F**k off, call him a liar, and do your best to attribute the worst human qualities on him greed, elitism and whatever other shit you can come up with (even if you know squat about him or her). Steer clear of discussion on the topic of Canada’s bubble real estate and how you can avoid pitfalls ahead and actually come out ahead (that’s terrible elitist money making stuff).

The end result …

#275 Moneta on 09.23.11 at 12:09 pm

Peter,

Come on. You told us you were coming back to Canada to vultch us and then you try to convince us you are good ol’ down to earth Canadian boy.

Make all the money you want, just call a spade a spade.

#276 Koolaid Drinker on 09.23.11 at 12:51 pm

#224 Chumbawumba on 09.22.11 at 5:24 pm .

And there is a type #4 like yourself known as the “mushroom”. Because you keeping yourself in the dark and take any bullsh!t that feed to you.

#277 Peter on 09.23.11 at 2:02 pm

Moneta,

I was promising myself that I was so pissed off that I was truly done with this blog – I thought I would have one last look before I closed the book on it altogether.

Might I say that I really like your last comment. It made me chuckle – I hope this ends it.

Dearest Moneta – I promise truly and sincerely I will not vultch you. When I buy my home in Toronto – it will probably be from a Canadian bank (which I completely disassociate myself from) that has done the vultching already. I will be the good guy that wipes the grafitti off the walls and builds a swing set on the front lawn that all of the kids in the neighborhood will be allowed to play on. This is what I am doing today (literally I paid $100 to get grafitti taken off a wall) – and I am pitching in $300 per month to get some slides and monkey bars set up – replacing the crackheads needles with childrens sand boxes.

Actually – I truly hope that neighborhoods do not get as devastated up there as they have gotten down here in some parts.

#278 Eileen on 09.23.11 at 5:05 pm

wow. All I can say is, Peter, you must have 1) a very good tax accountant who can navigate both Canadian and US tax laws, and all the multifamily dwellings you own

and 2) you must have various property managers to manage the various multifamily rental dwellings you own.

I am not surprised by the angry or “passionate” responses Peter is getting. There is a reason why Garth was saying, “be gentle on him.”

The only advice I have for Peter is … don’t air your wealth to people who may not have the same amount of wealth as you. Same idealistic philosophy means squat.

It’s called the little green monster… lt’s not pleasant to observe or interact with. And no one enjoys being the recipient of jealousy. And I suspect, Peter, you have unfortunately drawn this negative attention on yourself. I am sure you did not mean to do it… but I guess the silver lining is that it’s an anonymous online community?

#279 echo on 09.23.11 at 5:43 pm

#278 Eileen:

“It’s called the little green monster… lt’s not pleasant to observe or interact with. And no one enjoys being the recipient of jealousy.”

To that I say that there’s no excuse for supposed adults acting like children whether it’s regarding envy, jealousy, ignorance, or just plain bad manners.

Many people on here need to grow up.
Actually, many need to shut up. (not meaning you Eileen, to be clear)