Brain food

Interesting conversations this week, as stocks, oil, commodities and gold plunged. A few of the people I talked to are salivating at the prospect of buying assets cheap, so they can ride them back up. But most people are freaked. No wonder. When guys like F warn this could turn into 2008 all over again (he’s wrong), it gets people hyper.

And this is when two brain things happen.

Actually, besides pecking away at this pathetic blog lately, and calming people down, I’ve been doing a lot of thinking about brain stuff. Most of us suck as investors. We sell on days like these, yet buy stuff when it’s never been more expensive. People take growth for granted and melt when things stumble. Like lust, greed makes us aggressive, reckless and prickish. But fear turns us into irrational morons. There must be rules we can follow to avoid the disasters and losses both bring.

That’s what the new book is about. It’s the investment advice which actually changes everything. More on that soon.

Back to the two brain things that explain at least half of the comments on this site. The first mistake people make (always, always) is to assume that what’s happening how will happen in the future. So, delusional people in Vancouver think house prices will rise forever, until God buys them out. Reason and experience tell us this is wacko talk. That market’s ripe for a correction which will shock most people. But try to say that on the Seabus or the Skytrain. You’ll be wedgied.

This mistake also leads investors to think that falling stock markets (or oil, or copper, or bond yields) will continue to fall into the future. That convinces them small losses will inevitably get bigger. That hard times will turn into desperate ones. That dark forces (automated trading or government manipulation) guarantee tomorrow will be like today, only worse.

This is called recency. It makes us ignore reason. So we chase profits and flee losses. We buy high and sell low.

The second mistake comes when, like over the past few months, things go down. Instead of seeing it as inevitable, temporary, or an opportunity, most people flip out. They succumb to fear in a far different way than to greed. Fear’s worse.

Apparently there’s research to prove people are twice as motivated to avoid a loss than they are to make a gain. This explains why, when inflation is 3% and you are taxed on interest, that Canadians hold tens of billions in GICs and savings accounts paying 1% or (at best) 2%. They know this makes no sense. They know they’re falling behind. They know they’ll likely run out of money if they continue. But fears makes them migrate into the orange guy’s shorts.

This is called loss aversion. It’s why we’re headed for a mother of a retirement crisis. And, of course, women are most at risk.

The combination of these two biases is fatal for investors. It helps explain why 70% of us own a house, why people sell mutual funds or stocks when they hit bottom, why we enter bidding wars for real estate, sit on dead money in equity or savings and why we ignore the greatest risk of all, which is running out of money. It explains why so many 30-somethings are screwed right now and why house-heavy Boomers are a demographic time bomb.

If only people could break out of their mental cages and do the rational thing, the outcome would be vastly better.

And that brings me to Jazz. She did.

Some days ago I printed Jasmine’s letter – a 50ish woman with a house in Mississauga, a failure-to-launch kid and a don’t-hassle-me-woman husband. Here it is again.

Dear Garth: I can’t tell you how riveted I’ve been to your blog since I happened on it by accident (thankfully). I’ve been combing through your blog entries and your book, as fast as I can looking for a similar situation to mine. So far without luck.

House purchased 18years ago for 260K. If sold today, likely 650K. We have a 300K HELOC with 140K outstanding with non-investments and, truth be told, were renos, and we pay interest only at prime. The whole Purpose was to invest, however we were so paranoid about trusting someone with our money, we never got started. Yes, I know, stupid. Three kids 21,14,&10 (with oldest son failure to launch)

I would sell in a heartbeat however hubby afraid of renting (unheard of) and kids displaced. Husband’s income 90k , I’m a stay at home mom. My husband wants me to present him a case study.  Can you help me win? Regards, Jasmine

And I did. Sell the house, retire the debt, harvest the gain and invest half a million in income-producing stuff. My advice:

“If the whole amount were invested in a collection of bank preferred shares (but you should have more diversification) – with fixed dividend payments and proven market stability – you’d have an income of about $2,200 a month. Add in what you now shell out for property tax, insurance, maintenance and HELOC repayments, and you can probably rent a better house, and still have $500,000 in liquid wealth.

If a recession arrives, shedding jobs and opportunities, if the local real estate market turns illiquid or a mess of confused Boomers like you realize they need income more than they need a house, you dodged that bullet. Remember, the last time properties plopped in the GTA it took 15 years for them to recover. And you’re not 30 anymore. Houses are not retirement plans. At some point, almost everybody needs to cash out. You can wait until you have no choice, and risk being vultched. Or you can deal now, and find a greater fool.

One more thing. Rent a smaller house. Launch the kid.”

Last night I got this:

Dear Garth: Just wanted to thank you for the “save” you’ve provided for my family situation. As a result of you posting my “case study”, my husband reluctantly agreed to sell the house.

I’m happy (thrilled) to say we sold in 5 days from listing and close December 14th. My husband is now out of sorts as I now must decide which investment vehicles to put the money. And the onus is on me to make the most out of it.  We sold at 98% of listing.

He still gets annoyed when he finds me on your blog reading every morning as he doesn’t think the economy will get as bad as I do (and he’s with a big automotive parts corporation).

P.S. We are launching the kid!

Praise be. Two more souls saved. And one pissed-off child. My work here is done.

170 comments ↓

#1 Malik on 09.22.11 at 10:06 pm

First.
So many houses are in now, but every thing is sold within two weeks here in Mississauga

#2 Smoking Man on 09.22.11 at 10:14 pm

I would love to launch my kids but, brought them up as hockey players……It would not end well for me……

#3 Robert Dudek on 09.22.11 at 10:18 pm

Garth, please don’t get a swelled head from this, but, this is some of your very best work. As they say in French, felicitations.

If only you could see the bright side of owning some gold and silver funds like CEF or PHYS, my work here would be done.

#4 Jimbo on 09.22.11 at 10:24 pm

Today gold was down 1.8% priced in US$. But the US$ was up 1.8% against the Canadian dollar. So in today’s big meltdown, gold’s price was unchanged in Canadian dollars.

This is what happened in the crash of 2008 as well. Gold held up when priced in Canadian dollars while most other investments fell significantly.

Too bad you bought it in US$. — Garth

#5 Smoking Man on 09.22.11 at 10:29 pm

How is this for brain food

CERN discovered that neutrinos travel faster than light, I have been preaching that for years. I always said e=mc2 is BS. The speed of light is not top speed. Imaginations have no speed limits.

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

The PHD’s say that galaxies are moving away from each other pushed away by invisible dark matter that they can’t prove. Ba hahahahahaha Idiots…

Remember who told you this kids.

In reality what is going on is universal shrinkage, mass bleeding off energy getting sucked into the black hole at the center of every galaxy, atoms are losing mass, so within each Galaxies atoms and the distance between are shrinking giving off the elusion from an observers point of view that that they are moving away from each other. Gravity explained. As the black holes get more mass the gravity increases drawing them closer to each other but at a slower rate of universal shrinkage, eventually the black holes become one, and shrink down to the size of an atom, you know what happens next. A Big Bang Ya baby.

Now do I write a scientific paper on that, I can’t spell worth a sh!t man, I have no formal education, grade 3 writing skills the only thing I have is posts all over the web in profiles and blogs by the Smoking Man, that one day when it is finally proven, some one out there will discover that I was first to the plate. Then they will discover my firkin accurate predictions on just about everything and say who is, or was this guy.

I don’t want to be famous just yet. Still like the ladies of the night, discretion rocks.

If fact it’s got to suck to be famous, its like being in prison…..Can’t do Sh!t Poor Garth.

I really am a genius, if I could only find a cure for erectile dysfunction that won’t make my heart explode?

The Basterd Rumour Generator App, f-n diabolical. I love life and yes I had wine tonight….

#6 Alliston on 09.22.11 at 10:30 pm

New book? spill :-)

It’s coming after Christmas. I’d hate to spoil the holidays. — Garth

#7 Bear on 09.22.11 at 10:32 pm

Greetings Garth, found you on beforeitsnews recently after wondering where you went (didn’t really look) when your columns seemed to fall off my radar in the local Black press… anyhow, apparently you influenced me enough back in the day that I took similar action to what you recommended in this story to the lady from Mississauga. I’m in Victoria, married, no kids, realized I didn’t need a big house (or mortgage) after splurging on a nice acreage just north of town at the top of its market in July 07. Stayed for 3 years and commuted the dreaded Malahat. Bit the bullet and sold. Lost about 50K to get out but am back in Vic proper now with nice affordable rental, am selfemployed, semi retired, liquid and lovin it. My McMansion was costing me over 4K per month after taxes and commuting. I’ve cut that by 60% so the 50K loss doesn’t sting as bad. I read headlines like today’s crash and tomorrow’s burn and think… too bad so sad and so avoidable if you’ve been paying attention. Wish all the readers here well. You’ve been warned enough times now.
cheers
Bear

PS, you’re on my homepage tabs now

#8 Mr. Lee on 09.22.11 at 10:33 pm

Get out of debt, plain and simple. The reason these corrections seem as harsh as they are is that some where on this journey of aquisition we convinced ourselves that debt financing would go on forever. The reality is now set in and my hope is that we can proceed from this a bit more savy and a bit more prudent.

Dare to dream.

#9 Island girl on 09.22.11 at 10:36 pm

Made me smile. Totally agree on the savings account garbage. Checked out my orange savings account and it advertises 1.5%, which is sorely pathetic. Cutting our overhead right now and getting debt free as quickly as we can.

Just can’t decide if I should move my peasely little mutual fund away from slow growth at the bank to join hubby’s retirement investments with his financial planner, who happens to be family but very very good at his job.

#10 Keeping the Faith on 09.22.11 at 10:39 pm

one pissed off child now = one grateful, thankful adult later in life.
If parents stuck to this rule and taught their kids delayed gratification and practiced it themselves, our society would be a better place.

The alternative: one coddled kid now = one dependent mal-adjusted adult that still acts like a kid and has an entitlement attitude that never goes away in adulthood.

I would love for the government to somehow make it mandatory for parents to pass a “parenting exam”, like a drivers test for a car or a building permit for a house, before they can have children. Not practical and contravenes many human dignity rights laws somewhere I’m sure.
But if there was a “parents test” the first question would need to be on delaying gratification and learning to say no to their children.
A coddled society we are raising.
By the way, congrats Jasmine.
Your life just took a turn for the better.

#11 Keeping the Faith on 09.22.11 at 10:41 pm

By the way, count me in for a pre-order on the book!
Love the blog, love the books!

#12 Lucky Renter on 09.22.11 at 10:43 pm

I live in Mississauga Malik and houses are not selling that fast. There are so many “for sale “ signs and nothing is being sold. Me and my wife visited many properties in Port Credit area that have been on the market for more than 6 months, because they are overvalued and there is shortage of greater fools.

#13 HouseBuster on 09.22.11 at 10:44 pm

Garth… This helped me out once or twice with investing.

I was on the GO train within walking distance of Union station and the train stopped due to some engine problems. I had to wait and wait. 15mins, 30 mins… I was getting impatient… 45 mins

I could not take it any longer. I was plotting on how to get off the train and walk the rest of the way.

2 mins later the train started moving.

When your emotions are at a peak then things will soon turn for the better.

#14 Jon B on 09.22.11 at 10:45 pm

Ah the future. Nobody knows. Lots think they do. I call them financial product sales people and they want me “invested”. Their take is a sure thing, mine, not so much. Why do people flee the market on days like today? I think the feeling of being out of control of your own money is in the top ten reasons. Being burned another one. Investing in equities is gambling. Giving someone your investment cash in hopes of getting rich is the stuff of lottery commercials.
“If only people could break out of their mental cages and do the rational thing, the outcome would be vastly better.” Like stop worrying about their portfolio and redirect that energy and enthusiasm into running a successful business or getting a higher paying job? But hang on a minute – those ideas might take a bit of effort. The casino is quick and easy.

#15 rainbird on 09.22.11 at 10:45 pm

On Global TV today they reported booming sales at the Olympic Village condos and in Surrey. All Chinese buyer – all condos sold out. There is no end to the Real Estate boom in Vancouver. What’s up with that?

#16 OttawaMike on 09.22.11 at 10:46 pm

I’m tripping around east block Europe on a bit of an adventure holiday.
Oddly enough most of the locals here in Romania are not watching the markets or the Euro crisis.
The EU could never trust them with the Euro so they are only probationary members of the club with their Lei currency.
Possibly a good thing for them.

Although the financial crisis of 08 hit them harder than other Eurozone nations, I still am witnessing a mini gold rush by the multinationals to set up manufacturing to take advantage of cheap wages and sell these people the consumer lifestyle.

This is an example of where the profits will continue to come from for large corps. Eastern Europe, Africa and parts of Asia will continue to provide the new consumers to replace the financially and demographically tapped out western consumer.

Read more about it here

#17 Timing is Everything on 09.22.11 at 10:51 pm

It’s coming after Christmas. I’d hate to spoil the holidays. — Garth

I thought you cancelled Christmas.

#18 Andrew on 09.22.11 at 10:55 pm

Watching my investments shrink this week. I’m not going anywhere with them though. Wish I had some extra cash to throw into the market, but I guess I learned my lesson about maintaining a cash reserve for buying during a firesale. Thanks for the advice Garth!

#19 T.O. Bubble Boy on 09.22.11 at 10:58 pm

If F is warning that this could turn into 2008 all over again, does that mean he’s actually predicting that we won’t be in a recession? (like his famous statement from August 2008 that Canada would not have a recession)

Since the election season is over, I guess he feels comfortable giving bad news once in a while – maybe he’ll set mortgage rules at 25% down and 25-yr amortizations just for fun.

#20 Soylent Green is People on 09.22.11 at 11:03 pm

It’s so nice to hear someone bucking the trend and doing what’s best for their family. Nice story.

#21 Soylent Green is People on 09.22.11 at 11:04 pm

Facts don’t cure misinformation and make the neocon further entrenched in their kool-aid right-wing beliefs in order to preserve fragile ego. So how to counteract this?

I can understand nobody wants to admit they have been conned by the neocons.


http://www.learningandteaching.info/learning/dissonance.htm

Cognitive dissonance is a discomfort caused by holding conflicting ideas simultaneously. The theory of cognitive dissonance proposes that people have a motivational drive to reduce dissonance. Dissonance is also reduced by justifying, blaming, and denying.

People are biased to think of their choices as correct, despite any contrary evidence. This bias gives dissonance theory its predictive power, shedding light on otherwise puzzling irrational and destructive behavior.

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

… research has shown the more effort and time invested in a decision or the forming of a belief, the larger the potential dissonance created if mismatching evidence is discovered.

http://enhancingmylife.blogspot.com/2011/01/overcoming-cognitive-dissonance.html

When we make decisions, we associate with that decision and that makes it very hard to unwind bad business moves. Changing our mind actually causes regret, which causes the firing of negative neurotransmitters (I call it “pain in the brain”). As a result, once we make a decision, it is very hard for the brain to unwind it.

http://blogs.hbr.org/stibel/2008/07/ceos-and-cognitive-dissonance.html

And, what is worse, it seems our brains reward us – rather like a drug addict getting their fix – when we rationalize away any information we ‘don’t want to hear’. We feel really good when we have successfully convinced ourselves ‘it ain’t so!’.

http://www.uncommon-knowledge.co.uk/articles/stop-lying.html

And, what is worse, it seems our brains reward us – rather like a drug addict getting their fix – when we rationalize away any information we ‘don’t want to hear’. We feel really good when we have successfully convinced ourselves ‘it ain’t so!’.

Westen and colleagues conducted a study using magnetic resonance imaging (MRI) scans on the brains of staunch Democrats and staunch Republicans in the USA. The MRIs showed the emotional areas of participants’ brains lit up when they read articles suggesting their favored politician was dishonest. So far, so much what you would expect. But get this!

There was a decrease in activity in the parts of the brain that deal with reasoning when they read this damning information. So part of reducing the discomfort of cognitive dissonance may be to think less.

The researchers in Westen’s study found all the participants appeared to find ways of ignoring any negative information relating to their favored politician, thus allowing themselves to hold on to their previous beliefs. When their emotional response eventually overcame the reasoning, it stimulated the brain’s reward system – similar to what happens to drug addicts when they get their fix.

We often assume from our incessant information gathering and analysis human beings are truth-seeking creatures, but much evidence indicates maintaining our emotional stability is much more important to us than sharpening up our perceptions of reality. ‘It may be true – but I don’t believe it!’ Especially when it comes to our romantic partners, as it happens.

If we experience cognitive dissonance over some issue, we seek to escape it in myriad ways. We believe things (or not) because to think otherwise may be too emotionally de-stabilizing. The conscious mind is employed by the unconscious mind to justify our behavior, so that our self-concepts don’t have to change too radically. No one likes to be wrong.

So what are we to make of all this? How are we to uncover truth when it seems that people who genuinely believe they are being honest are really deceiving themselves? When one part of the mind doesn’t know what the other is doing? What’s more, the ‘self-esteem industry’ may have actually encouraged our already strong natural propensity to seek relief from cognitive dissonance through rationalization. If the main imperative is to feel good about yourself at all costs (because you are ‘worth it’), any behavior which indicates your character really could do with a bit more work would be likely to rouse intolerable tension – and you would be that much keener to justify yourself rather than deal with it.

Cognitive dissonance is essentially a matter of commitment to the choices one has made, and the ongoing need to satisfactorily justify that commitment, even in the face of convincing but conflicting evidence.

http://www.uncommon-knowledge.co.uk/articles/stop-lying.html

I haven’t seen much about the treatment of cognitive dissonance. However, my recollection is that cognitive dissonance is strongest when people believe they acted out of their own free will and cognitive dissonance is weaker when they believe they acted due to incentives or coercion. This makes it sound as though one could weaken cognitive dissonance by helping the individual understand the forces that impelled them to act.

#22 Smoking Man on 09.22.11 at 11:10 pm

#19 T.O. Bubble Boy on 09.22.11 at 10:58 pm

F is a goof he dosen’t know sh!t, so is Hosni……..
To drunk to really say something cool, other than my wife just read the thing about the hookers……

She is on floor laughing her guts…she knows softy.

#23 InvestorsFriend (Shawn Allen) on 09.22.11 at 11:13 pm

WARREN BUFFETT AGREES WITH GARTH…

Garth says:

The first mistake people make (always, always) is to assume that what’s happening now will happen in the future.

Warren Buffett has said much the same thing many times. For example from his 2001 Fortune Magazine article (a follow up to a late 1999 article where he said the market was over-valued)

Warren Buffett said:

“People are habitually guided by the rear-view mirror and, for the most part, by the vistas immediately behind them.”

For the full Buffett article see:

http://money.cnn.com/magazines/fortune/fortune_archive/2001/12/10/314691/

So, Garth is in the best of company with his brain analysis here.

(See Garth, I DO still love you… well at least sometimes…)

#24 Jimbo on 09.22.11 at 11:14 pm

#4… Too bad you bought it in US$. — Garth

That comment, of course, makes no sense. Living in Canada my income is in Canadian dollars, my expenses are in Canadian dollars, and I measure my net worth in Canadian dollars. When I wrote cheques to average into gold bullion over the years, they were in Canadian dollars.

#25 sam on 09.22.11 at 11:16 pm

http://thedependent.ca/numbers/thats-a-lot-of-bus-benches/

According to the British Columbia Real Estate Association, there are approximately 20,500 commercial and residential real estate agents and brokers licensed in B.C. With the current provincial population hovering around 4.5-million, that’s one for every 226 people.

Just thought it was interesting, way too many reactors.

#26 Timing is Everything on 09.22.11 at 11:20 pm

#16 OttawaMike

My colleague left for Romania on Sunday…He’s a pretty sharp dude. Will be interesting to hear what he has to say when he gets back. Have fun…be safe.

——————————————————–

Garth, three souls saved. Did you get your wings?

#27 nonplused on 09.22.11 at 11:26 pm

Decent post Garth, and interesting subject but it has been covered to some degree before. However I will probably spring for the $20 bucks and get your take on it because it is a great subject.

I’ve made several attempts to get a computer to trade based on a more mathematical approach, going all the way back to 2002 using technical trading strategies and an optimization routine.. Turns out almost any approach worked really well until 2008, when they all quit except one. It seems “technical indicators” get caught up in the same emotions as the markets.

The one model I have that still seems to be working is pretty complicated. Its basic strategy is “buy low in a strong sector on the turn, sell high, use a trailing stop.” It’s actually a lot more complicated than that because the decisions are optimized using a back test, but let’s not get into it. It was totally in cash before the crash of 2008 got away on it, and now is holding mostly miners, agricultural companies, and believe it or not Apple.

But every other strategy I tired using some combination of moving averages, trailing stops, stochastic indicators, trend lines, what have you, all got eaten alive by the crash, although they were working great until then.

I built my models once I found out you could scrape the internet for stock prices a generation ago (starting in 2000 and off and on since then), but nowadays lots of internet sites have tools where you can build and back test these sorts of models fairly easily. They don’t work. Or I should say they all work until 2008 comes along. Even for computers, “Genius is defined as a rising stock market.”

#28 Rural Rick on 09.22.11 at 11:33 pm

I am with you Smoking Man something about red shifted galaxies never scanned right.

#29 Abitibi Doug on 09.22.11 at 11:33 pm

From what I see, Garth, you’re telling us this is the time to take advantage of the fire sale and increase exposure to equities. Time to turn those orange guy’s shorts inside out, shake out any remaining money from the pockets, and put it into the markets. Buy low (now), sell high (when stocks go up again, as they do in the long run). What’s so hard about that idea?

#30 JohnnyBravo on 09.22.11 at 11:34 pm

This is obvious. Whatever happens, it won’t be “2008” for the simple reason that we’ve “been there, done that.” That experience was recent enough that steps have, and are, being taken to avoid a repeat (at any cost).

But, Garth, at the core of this entire global debacle is, as you pointed out yesterday, too much debt. Both private and public.

(And fraud; let’s not forget the fraud. And the corruptions; let’s not forget the corruption, either.)

It’s what is causing Greece to sink to the bottom of the Aegean, Rome to decline again, the run on French Banks, and Canadians to have launched home values to somewhere just beyond Alpha Centauri. It’s not dark matter pushing homes further away; it’s debt.

In order to recover (really recover), the debts will have to be paid somehow (repaid, forgiven, or defaulted), but someone is going to have to pay. So far, we the people are paying for it with devalued currency, but events in Europe, America and China may be entering the next phase of this hot potato game, and things are getting “interesting” again.

I told many friends back in ’08 to not underestimate the guile of the Americans, who still have the monetary, fiscal, and military firepower,––and the savvy––to offload their problems on others. They may not survive intact, but they could very well be the “ultimo hombre.”

See the markets today? As soon as The Beard from the Fed takes away the pacifier, the market throws a fit. That’s control. The kind no one should have.

It took about 30 or 40 years to create this problem and max out our collective credit card. But we’ve reached our limit. If this were the good ‘ol days when we in the West didn’t have to share the resources of planet Earth with those upstarts in Asia and other parts most of us never cared about before, then recovery would be easier. But while we are paying down/defaulting on our debts we also have to pay more for stuff because someone in China wants some too.

This is not over. Not by a long shot. Turing Japanese? Maybe. Think Col. Saito of Camp 16 between Bangkok and Rangoon.

#31 timo on 09.22.11 at 11:36 pm

great one again Garth,

#25, sam,

it almost sounds like the waiters are giving real estate advice now so it is defiantly time to cut and run.

http://www.cnbc.com/id/44632796

The Korea Composite Stock Price Index (KOSPI) [.KS11 1721.91 -78.64 (-4.37%) ] was down 4.54 percent at 1,718.82 points after dropping to 1,717.77 points, the lowest level seen in a month

They better bring out the shock and awe because the markets are still heading down. Ben fire up the helicopter we need the napalm.

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

#32 mofo on 09.22.11 at 11:42 pm

#4 Today gold was down 1.8% priced in US$. But the US$ was up 1.8% against the Canadian dollar. So in today’s big meltdown, gold’s price was unchanged in Canadian dollars.

This is what happened in the crash of 2008 as well. Gold held up when priced in Canadian dollars while most other investments fell significantly.

Too bad you bought it in US$. — Garth

——————-

It’s priced in USD, but Canadians buy with CAD. They just have to convert the USD returns back to CAD.

#33 Kilby on 09.23.11 at 12:01 am

#21…Wheeeeeeeeeew…..

#34 Bruce on 09.23.11 at 12:05 am

“guys like F warn this could turn into 2008 all over again (he’s wrong), it gets people hyper.”

“That’s what the new book is about. It’s the investment advice which actually changes everything. More on that soon.”…

Now I get it. There won’t be another 2008 because GARTH said so–furthermore he tells you WHY in his NEW book…

Thanks, Garth. My suspicions have now been confirmed. Think I’ll stick with Karl Denninger and Gerald Celente instead.

In 2008 corporate profits were brutalized. Today they’re at record levels. In 2008 the LIBOR spiked. Today it is flat. In 2008 there was a credit crisis. Today we are awash in liquidity. I could go on, but sounds like you don’t care. — Garth

#35 JohnnyBravo on 09.23.11 at 12:09 am

Regarding recency. I call it the “extrapolation bias.” People tend to extrapolate the latest trend when predicting the future.

This is why, when it comes to forecasting, the opinions of many of the “market watchers” (economists, analysts, money managers) on, say, Bay Street’s PR Channel (a.k.a. BNN) are worth about as much as the paper that BOC Notes are printed on. When asked to forecast a trend, most will rely on the extrapolation bias. Not because they are stupid. Because it’s the safe bet. It’s the one most will make. So if they are wrong, they are all wrong together.

It takes guts to take an honest, informed, objective look at the markets and make an unbiased call––whatever it may be––and stick to it until your intel tells you otherwise. You will not always be correct or timely, but at least your opinion has value. That’s why people follow Garth Turner.

#36 Nostradamus Le Mad Vlad on 09.23.11 at 12:10 am


Brain Food? Is there anybody in there? Sardines, salmon, KFC Original Recipe, Tim Horton’s and liquor. All top notch fuels to assist one’s Earl Gray matter!

“. . . until God buys them out. Reason and experience tell us this is wacko talk. You’ll be wedgied.” God and wedgied in the same para.? Check the link (Thursday’s Dilbert). Sure hope you haven’t converted to the Dark Side Of The Moon!

Good on Jazz that hubs took a different perspective, and they unloaded their wealth trap. Debt free, nice monthly income to boot, which should cover the cost of rent.
*
#5 Smoking Man — “Imaginations have no speed limits.”
— and —
#8 Mr. Lee — “Dare to dream.”

Put those two together — Imagination has no limits and Dare to dream — one doesn’t need brain food. Great posts!
*
Asian Markets diving; and Global conditions going ballistic; Slashing Prices for xmas. Isn’t the economy just chipper right now? Uhh, maybe not; It’s the govt.’s fault; 1:42 clip JPM drops credit card delinquents. Would this be tied up with the copper and silver stuff they have? Bernanke’s Bloodbath Has to be a reason why he set this in motion earlier than expected; Cash, not gold “The central bankers and their minions are deliberately causing a Depression.”

WW3 or Great Depression? Eight reasons why a depression is better; BoE QE 7.3.5; Euro The great Euro swindle; Divas The world is expecting to take a flying lizard leap off a springboard, then head somewhere; Ten Thousand Jobs left Maine for China; Ten Million more mortgages set to default. Is anyone keeping tabs on commercial RE? Sweatshops are supposed to be in the Third World. I guess that includes NAmerica; Warren Buffett Another POV.

4:08 clip Japan to give radiated food to third world countries; Power Lines Put ’em underground, or bring in Smart Meters? Which is cheaper? Monsanto Now moving on to super insects; Fracking in the UK Huge gas find under Lancashire; Pope Al of the Goracle The one who invented the ‘net and CC brings something new, and This isn’t much better.

Refresher How one million pounds of organic food can be grown on three acres; China’s Clout Apparently, they’re a lot stronger than previously thought; Saudi Arabia Seems as if the case against SArabia and 9-11 is starting to crumble; Bahrain Curious as to why Obama left Bahrain out of his speech. Could be the US is causing too much trouble there, before heading into Iran.

#37 Kilt on 09.23.11 at 12:11 am

You should get a good certified financial advisor. Don’t invest yourself, not unless you are very disciplined. And judging from the Heloc experience, you probably are not.

Kilt.

#38 timo on 09.23.11 at 12:24 am

http://www.bbc.co.uk/news/business-15030405

The G20 countries have said they will take “all necessary actions to preserve the stability of banking systems and financial markets”.

Of course you will, and it will fall on the backs of the middle class and poor. If you think I’m waiting on your plan to tax the upper 20% tax bracket at a proper rate your mistaken. You just cannot bite the hand that feeds you.

#39 The thing in the basement on 09.23.11 at 12:24 am

5 Smokin’ – sorry to hear you suffer from shrinkage

Jazz – good work. Congrats.

#40 not 1st on 09.23.11 at 12:32 am

You really needed $140k in renos on that house? What was wrong with doing one or two projects a year and paying cash? Bad move. With a 300k HELOC at prime, you could have invested that in conjunction with a margin account and generated enough to pay your primary mortgage AND stay in your house. People have no idea how to lever up a HELOC and a margin investing account to bring in some real income without ever worrying about selling.

And while on the sibject, this launching of kids into a brutal market is stupid. They will just go into big time debt. Better that they get educated and a first stable job living at home first and save some cash. Heck, I predict we are going to eventually have 3 generations living under most roofs in the near future.

#41 Patz on 09.23.11 at 1:00 am

I’ve always thought one should be kind to the runt of the litter. But when they, like F, start spouting off all self–righteous like then it’s time to snip off another few inches. F was saying how Euro leaders need to “show some courage.” Yes, um and that would be what? Oh I know a reenactment of the Charge of the Light Brigade. And then he allowed as how the Greeks (aka world’s current fav whipping boy) must start adhering to the austerity laid out for them. Yup that’ll save us PDQ!

I’ve got a better idea. How about 6 bikers from the Coquitlam chapter of the Hell’s Angels catch F in the alley and lay a little austerity on him. Of course I don’t really mean it. Just was mulling over a script idea, calling it: F You F.

#42 Waterloo Resident on 09.23.11 at 1:02 am

I was listening to my neighbours talking to each other. My neighbour rents a house just like I do. I heard her talkin to the other neighbour about how summer is over now and how there’s ‘no more camping’. Then she talked about how her and Ben have just found a house they want to buy, here in Waterloo, for only $427,000. She says ‘Its beautiful !’

Funny thing is; the stock market crashed today but the neighbour nextdoor who works as a cashier in a grocery store, along with her husband who works part-time as a small-engine repair mechanic are now buying a $427,000 house because they “think they’ve waited long enough” and “its really appealing, you just got to see it to believe it.”

I’m flabergasted ! I’m not sure if its me who’s the idiot for not jumping into the water and buying a $800,000 3-bedroom house here in Waterloo, or if she’s the fool who will soon be underwater.
After all, if the world-wide economy is going back into a recession, and many of us will soon be facing reduced hours at work, then where is there going to come all this money to support the housing prices that we see today?

It seems that all of the renters around me are buying homes and I’m one of the only ones still renting !!!
What gives?

I asked a friend of mine if he was worried that the Canadian housing market might crash 10% one day, he almost chosed when I asked him that. He told me that “NO WAY, CANADA IS DIFFERENT, WE DON’T GO DOWN LIKE AMERICA DOES… NEVER !!! ” He got so angry at me for even suggesting that Canadian home prices might go down one day !

#43 debtified on 09.23.11 at 1:02 am

I like hearing stories like Jazz’s. They restore my faith on our society.

Garth, please don’t take this the wrong way… I am just wondering if you ever sold any of your stockholdings to avoid the current turmoil. I am sure you saw this coming. Isn’t there merit on taking shelter to avoid impending tumultuous times – just like why you have a bunker?

I understand that a lot of companies are fundamentally and financially sound and will weather the storm but, as what is pretty obvious, that doesn’t really matter these days. The market can take a good company down with it.

I had been selling gradually in the last several months and I am glad I did because my holdings would have been down around 20% by now. As I sold I made several comments here about, just like real estate, the equity market will suffer a broad decline; that buying a stock is just as perilous as buying a house.

You did warn us, your avid readers, on several occasions about the impending risks to the economy and all of their implications but I don’t think you ever advised us to sell stocks – unlike what you say about real estate. Isn’t avoiding loses just as important as getting paid dividends and rising stock prices? You can always buy in at a more opportune time when your capital is kept intact. Any comments?

Thanks.

P.S. I am slowly and cautiously buying again starting tomorrow. There are some really good values to be had these days. But the real shopping spree for me will happen after Europe capitulates.

#44 debtified on 09.23.11 at 1:10 am

Note: I did keep my “gambling account” active to keep things interested while sitting on the sidelines. Hey Smokin’ Man, I am thinking of doubling down on my YLO bet. What do you think? Heard any rumours lately?

#45 Vancity911 on 09.23.11 at 1:29 am

“It’s the investment advice which actually changes everything.” – You sound like Steve Jobs these days!

#46 Marnic on 09.23.11 at 1:35 am

Garth, I can’t help feeling you’re a little complacent with your assertions that we’re not revisiting 2008.

1. The entire western world is awash with unrepayable debt;

2. The banking system is horribly exposed to towering levels of the sovereign debt of insolvent, soon-to-be-bankrupt countries;

3. There is no sign of the only thing that can genuinely halt the slide, i.e. massive economic growth, not even on the distant horizon;

and, perhaps the most depressing thing of all…

4. Look who’s in charge of it all.

#47 Corban on 09.23.11 at 1:40 am

Smoking man is lying about being drunk or he’s using a spell checker tonight…i’m not sure which. 2nd post and post #5 was damned near perfect. I dunno what’s going on but i think I prefer the nonsensical bs.

#48 Waterloo Resident on 09.23.11 at 1:46 am

My advice: LAUNCH THE WIFE !
My thinking: she’s worried about her ‘failure to launch’ kid, yet she’s a stay-at-home mom? Those died along with the dinosaurs. Wake up and smell the roses; EVERYONE works these days! So the husband now needs to wake his wife up to the new reality and that is ‘either get a job or hit the road’, simple as that.

Lazy wife.

#49 Kate on 09.23.11 at 1:56 am

Poor child. Kicked out because of you practicality, Garth.

#50 Makaya on 09.23.11 at 1:56 am

Predictions for what’s coming soon. The world is not ending, but it will be different… I highly recommend to read the full article (link below). These guys have been pretty accurate for 6 years now in their predictions!

“(…)
The fourth quarter 2011 marks the end of two key examples of the world before the crisis

The implosive fusion of the fourth quarter will thus directly result from the encounter between two new realities that contradict two basic conditions of existence of the world before the crisis:

. one, born in Europe, consists of now rejecting the idea that private financial operators, of which Wall Street and the City are the embodiment par excellence, are not fully responsible for the risks they take. Yet for decades, this was the prevailing idea that fueled the tremendous growth of the financial economy: “Heads I win, tails you bail me out”. Even the existence of large Western banks and insurance companies has become intrinsically linked to this certainty. The balance sheets of major players on Wall Street and the City (and of many large Euroland and Japanese banks) are unable to withstand this tremendous paradigm shift (29).

. the other, generated in the United States, is the proven end of the US engine of global growth (30) against a background of the country’s complete political paralysis which, de facto, will end 2011 as Greece ended 2009: the world discovering little by little that the country has a debt it can no longer support, that its creditors are unwilling to lend, and its economy is unable to cope with significant austerity without plunging into a deep depression (31). In some ways, the analogy can be taken further: just as the EU and the banks, from 1982 to 2009, lent freely to Greece … and without pressing for accounts, over the same period, the world has lent freely to the United States believing its leaders’ promises about the state of the economy and the country’s finances. And in both cases, the money has been wasted in real estate booms with no future, in extravagant crony politics (in the US cronyism is Wall Street, the oil industry, health service providers) and in unproductive military spending. And in both cases, everyone discovers that in a few quarters you can’t fix decades of recklessness.

The politico-financial « perfect storm » of November 2011

So, in November 2011 the United States will brace itself for a politico-financial “perfect storm” that will make the summer problems look like a slight sea breeze. The six elements of the future crisis have already come together (32):

. the “super committee” (33) responsible for deciding budget cuts on which there was no agreement this summer will prove incapable of resolving the tensions between the two parties (34)

. the automatic budget cuts required to be made in the absence of agreement will result in a major political crisis in Washington and increasing tensions, especially with the military and the recipients of social benefits. At the same time, this “automatic function” (a real abdication of decision-making authority by Congress and the United States Presidency) will generate major disturbances in the functioning of the state system.

. the other major rating agencies will join S&P in downgrading the US credit rating and diversification out of US Treasury Bonds will accelerate, in the knowledge that the United States now depends primarily on short-term financing (35).

. the inability of the Fed to do anything but talk and manipulate stock markets or gasoline prices in the United States (36), now makes any last-minute “rescue” impossible.

. over the next three months the US public deficit will increase dramatically as tax revenues are now already in the process of collapsing under the impact of the relapse into recession (37). In other words the increased debt ceiling voted in a few weeks ago will be reached well before the November 2012 elections (38)… and this is information that will spread like wildfire in the fourth quarter of 2011 … reinforcing all investors’ fears to see the United States follow Euroland’s example over Greece and force its creditors to take heavy losses.

. Barack Obama’s new plan in the fight against unemployment will have no significant effect. On the one hand, it’s not up to the challenge and, for this reason, can’t rally the country’s energies; and on the other, it will be cut to pieces by the Republicans who will only keep the tax cuts… The only result of which will be to increase the country’s debt even more (39).

So for LEAP/E2020, it’s a combination of all these elements at the end of 2011 that will trigger this major financial shock … a kind of final shock thrusting the planet out of the world before the crisis for good. But the world after is still to be built because many futures are possible, beginning 2012. As Franck Biancheri anticipated in his book, the period 2012-2016 forms an historical crossroads. One must try not to mistake the path (40)! ”

Full article here: http://www.leap2020.eu/GEAB-N-57-is-available-Global-systemic-crisis-Fourth-quarter-2011-Implosive-fusion-of-global-financial-assets_a7640.html

See what I mean? Fear rules. It’s the easy way to get attention. — Garth

#51 Onthesidelines on 09.23.11 at 2:16 am

Quoting Garth from above: “This mistake also leads investors to think that falling stock markets (or oil, or copper, or bond yields) will continue to fall into the future. ”

Got one word for you, buddy: NIKKEI

38,915 on Dec 29, 1989…… 8, 560 today ( 21 years later) No doubt the 40 something investors who stuck it out, now in their mid-sixties will be much relieved that there’s still hope for them….LOL

Nobody holds an index for 21 years. What a hollow comment. — Garth

#52 Deby't Dark Embrace on 09.23.11 at 2:24 am

I rearranged my entire portfolio during the last crash in 08/09. It was luck and timing, a bit of common sense and a bit of nerve. I got absolutely super deals at rock bottom prices on stuff that I will hold forever because they will never be that cheap again.

#53 Jay Currie on 09.23.11 at 2:45 am

#15 Perhaps the HAMs discovered that there was rebar in the concrete unlike at home.

#54 Dorothy on 09.23.11 at 3:37 am

Given that governments usually try to gloss over economic bad news, I have to wonder what the thinking is behind the latest round of doom and gloom stuff coming out of the mouths of H & F. It seems to me they can only make a bad situation worse saying some of the stuff they’ve been saying, and I can’t help wondering what they’re up to?
In my immediate social circle things aren’t all that bad at the moment. My spouse has a good paying job, as do both my adult kids, and while real estate here Okanagan) isn’t moving as fast as it did in the past, and prices have definitely fallen a bit, there hasn’t been the predicted crash.
The stock market is a bit scary for anyone currently invested, but as I cashed out in 2009 I’m not too worried at this point. I didn’t sell when it was low, I sat and sweated it out till prices rose enough for me to get out with a small profit, but the stomach churning I experienced while waiting for the turn around convinced me I haven’t got the right personality for dabbling in stocks. So I’m afraid that apart from a few mutual funds, most of my RRSP money is now in GIC’s. I know Garth is right when he says that’s not the wisest way to invest, but until this current market volatility passes I just can’t bring myself to get back into stocks (not even preferred ones).
I don’t see my house as an investment (never have), and it’s mortgage free, so the way I figure it if we do end up in another recession at least I’ll have a roof over my head. I doubt I could sell and rent and still live as cheaply as I currently do. Besides which, there’s not much point selling if all I’m going to do with the money is buy GIC’s making 3%.
So, even though I think much of what Garth says makes a lot of sense, I’m not convinced it makes sense for me personally. Consequently, this is one baby boomer who is going to stay in my own home, and keep most of my RRSP’s in GIC’s (at least for now).
Once things settle down a bit, I may get a little more adventurous. But right now I don’t think anyone, not even Garth, can accurately predict what’s going to happen. We’re in uncharted territory, and it could be many years before we’re able to see how things turn out. And with only 5 years to go until retirement, I have to be very careful about the moves I make.

#55 PKS on 09.23.11 at 3:39 am

Garth, usually I agree with, well, everything you write. But I gotta take issue with your dismissal of the “failure to launch” kid, as if it’s just a case of some kid being too lazy to get out of his own way.

Let me paraphrase Douglas Coupland and sugest that most baby boomers like you tend to think that your material success just grows naturally out of your own “awesome-ness”, hard work, and other virtues, but the truth is, most of you, had you been born after 1966, would be homeless people now.

Marshall McLuhan predicted, back in the 60s, that jobs as he knew them, would eventually be obsolete.

My father got recruited by Dow Chemical with his Bsc, straight out of school. My mom got recruited with a (wait for it) _journalism_ degree by the wall street journal the summer after graduation. No years of waiting tables or washing dishes til you find a “job in your field” for them.

Whereas, in my generation (I was born in 1974) things were… different. When I worked as a line cook back in Halifax, one of our waiters had an architecture degree, and one of the other line cooks had an electrical engineering degree. There just weren’t any jobs no matter how good your education was.

OK, I know, I know, people say “move out of that economic backwater!”, but how long do you think it’ll take for the same economic leprosy to spread to Toronto or Vancouver? With a >95 cent dollar, the film and software industries in vancouver are going the way of the cod fishery back east.

There’s a problem with youth unemployment. And it’s not just because there’s too many 20-somethings with M.A.’s in “social anthropology” or “underwater basket-weaving”. If we don’t address it, who’s gonna pay for your medicare and everything else in 15 years?

You’d have a point if you did not spoil the argument with ageism. — Garth

#56 SafetyBear on 09.23.11 at 5:03 am

I can’t say I’m really panicked about making the wrong investments Garth since I don’t have any. Between the downturn and crappy exchange rates in Australia chomping 30% off our household income and spending a huge chunk of our life savings on IVF (The very best investment I could make and I don’t care what anyone says ) All this talk about bonds this and gold the other or balanced portfolio is a zillion years away from the financial reality in this house (that we rent of course). Sure, I’m just another schmuck who’ll work until he’s 90 or dead and keep the world turning for other creeps. But it’s not so bad.

#57 Harlee on 09.23.11 at 5:42 am

Someone a long time ago said: “The only thing we have to fear,is fear itself.”
And it’s true! I’ve had all types of up and downs in my life but the times I’ve found myself really screwed was when I gave into the gnawing fear in my belly and did something stupid. That includes relationships,financial decisions and everything in-between. ‘Panic’ is the real four letter word (even tho it has 5 letters…) and should be fought like the plague.
Someone yesterday wrote about Churchill’s speech: “Never give up.” I like that too.

#58 I'm stupid on 09.23.11 at 6:12 am

Hi all can anyone help me out.

In the event of personal bankruptcy, can creditors take lira?

Also can someone leverage their lira?

Thanks

#59 I'm stupid on 09.23.11 at 6:17 am

It’s coming after Christmas. I’d hate to spoil the holidays. — Garth

If you release before holidays, you could also add the grinch to the list of accusations on your resume.

#60 House on 09.23.11 at 6:40 am

Yes people are so stupid about their investment decisions. Not like the investment geniuses who all bought US Dollars yesterday for the safety trade. A dollar that has lost 35% in the last ten years and the Federal Reserve wants to drive as close to zero as it’s interest rate.

#61 David B on 09.23.11 at 6:55 am

Praise be. Two more souls saved. And one pissed-off child. My work here is done.

…………Indeed!

good luck looking forward Jazz …. Strike up the band!

#62 Cow Man on 09.23.11 at 6:58 am

Amigos:

#4 Jimbo is right on the mark. Not that I am a gold bug however what we do hold BMG Bullion was up today even with precious metals in the tank. BMG 30% Gold, 30% silver, 30% platinum. Just saying have a look. Gold goes down so does the CND. Garth, BMG Bullion Fund is priced in CDN dollars. :)

#63 In the Maritimes on 09.23.11 at 7:19 am

Using yesterday as a starting date the S&P/TSX Composite index returns are:

YTD -13.99%
1YR -4.95%
5YR -0.16%

All negative.
Source: http://www.google.ca/finance

GIC’s easily beat the index.

Just sayin’

So don’t buy the index. Simple. — Garth

#64 T.O. Bubble Boy on 09.23.11 at 7:20 am

#48 House on 09.23.11 at 6:40 am Yes people are so stupid about their investment decisions. Not like the investment geniuses who all bought US Dollars yesterday for the safety trade. A dollar that has lost 35% in the last ten years and the Federal Reserve wants to drive as close to zero as it’s interest rate.

House – you prove Garth’s point about emotion and timing… you’re insulting the people who bought $USD yesterday, yet if you’d bought $USD when the Loonie was up near $1.06 (late July), you’d have almost a 10% gain in 1-2 months just for holding cash (and an even bigger gain if you held your USD in Bonds).

#65 Rudolf on 09.23.11 at 7:21 am

After another unpredicted tumble I am even more convinced that stock exchanges are nothing more than legalized gambling houses where institutional or professional investors are being allowed to gamble with other peoples money to line their own pockets. The odds controlled by rumours and assumptions – but certainly not by fundamentals – are certainly not in favour of small or novice investors who rely on advice from self-appointed “Experts” who are motivated to collect commission for each advice or transaction.

Gambling in the stock market – particularly in volatile economic times – seems not very smart for novice investors with only limited funds. The thought that an European banking crisis, or irresponsible actions by governments in Greece, Spain or Portugal can affect my investments in Canada, gives certainly reason to suggest that it is perhaps wiser to keep one’s savings under the mattress until the global financial uncertainties have stabilized.

#66 John on 09.23.11 at 7:23 am

As my investments were about to recover from the 2008 massacre they took yet another dump in the last few months. So not only am I losing money because of this market volatility but inflation is taking its toll and I’m running out of excuses for the wifey. I broke down and told her last night that she was right all along, that we should have stuffed our money into our own house instead of piling more money into the hands of a landlord. Guess what we’ll be doing today? Yup, we’ll be looking to buy a house!

Might as well be consistent. — Garth

#67 T.O. Bubble Boy on 09.23.11 at 7:42 am

Another positive sign for the U.S. — they will see a population spike in about 9-10 months thanks to this:
recall on birth control pills.

#68 TurnerNation on 09.23.11 at 7:42 am

Yep even the Toronto condo realtors(r) are touching on the “C” word.

(The condos in this video are Tridel’s Icon building on Wellington St. W in Toronto).

http://www.torontorealtyblog.com/2011/09/can-this-property-withstand-a-market-correction/

“If and when we see a market correction, it is this type of property that I wouldn’t want to be stuck holding and trying to sell to a buyer seeking “value” when there is value everywhere…”

#69 TurnerNation on 09.23.11 at 7:47 am

The Metalheads are quiet these days. Silver imploding as we speak, last 32-33.
Risky risky commodities.

#70 Conflicted Pumper on 09.23.11 at 7:49 am

The vast majority who took your advice in the last 2 years, believing this printed money and sovereign debt fueled rally was real, are likely down or break even.

TSX is now back to post-meltdown levels first seen in September 2009. That is 7 months past the bottom, when sheeple started to believe in the Ponzi again. The term “Green Shoots” was all the rage back then.

I’m not predicting anything, I’m just stating a fact.

You state a myth. Equity exposure is only one part of a balanced portfolio. Why do so few people on this blog get the concept of diversification? — Garth

#71 worried realtors on 09.23.11 at 8:00 am

why do out of work realtors feel the need to post on this blog. Its obvious in the GTA that very little is selling and from what insiders are saying falling prices and sales continue to worsen. The stock market crash is making a bad situation worse from what they say. Its looking yo be a nasty housing crash.

#72 timo on 09.23.11 at 8:23 am

http://www.theglobeandmail.com/report-on-business/international-news/european/austerity-slowdown-push-europe-nearer-recession/article2175599/

A widely-followed survey of purchasing managers indicated the private sector is retreating for the first time since the 17-country euro zone emerged from recession in the autumn of 2009. The slowdown in business and manufacturing activity in Germany, Europe’s largest economy and the prime sponsor of the sovereign bailout programs, was acute.

http://www.euroeconomics.eu.com/surveys.htm#ifo_business_climate

The charts are not happy campers.

#73 timo on 09.23.11 at 8:32 am

email is going nuts this morning…..looks like the the rumour mill is in full swing.

http://www.cnbc.com/id/44636925

Two Greek newspapers said on Friday Venizelos outlined options to lawmakers, also including a disorderly default or the implementation of a second bailout package agreed between Greece, the European Union and the International Monetary Fund in July.

#74 disciple on 09.23.11 at 8:42 am

“At some point, almost everybody needs to cash out.” – How enlightening this one statement is. Although you can’t take it with you, but at the same time, you have to have enough until you pass on. Very easy to overlook this long-term philosophy.

#75 Aussie Roy on 09.23.11 at 8:44 am

Aussie Update

GENERATION Y is leading a savings charge by anxious Australians who are so worried about their financial future they are squirrelling away a buffer to protect against hard times.

In the three years to 2009, savings by Australians aged 15 to 29 soared by more than 10 per cent compared with a 4 per cent rise for those aged 45 to 59

http://www.news.com.au/money/money-matters/no-splashing-cash-for-australias-generation-y/story-e6frfmd9-1226144256609#ixzz1YmLxmv7z

“Despite talk of overseas investment into the Australian property market, local buyers appear unconcerned,” according to recent research, RAMS said in a statement.

http://www.news.com.au/money/property/australian-home-buyers-not-worried-by-foreign-investors/story-e6frfmd0-1226144613397#ixzz1YmMAtsW7

NEW laws are set to ban negative equity debts and force greater information disclosure for reverse mortgages in a bid to clean up Australia’s $3 billion equity release industry.

http://www.news.com.au/money/property/australian-home-equity-law-changes/story-e6frfmd0-1226144267910#ixzz1YmMJecKM

Dozens of welfare and community sector organisations are getting together to pressure the Federal Government to do more to reduce housing costs in Australia.

http://www.abc.net.au/am/content/2011/s3320417.htm

IT is possible for households to save too much money, although that’s not the situation in Australia at the moment, says a reserve bank official.

http://www.news.com.au/money/investing/possible-to-save-too-much-rba-says/story-e6frfmdr-1226143671722#ixzz1YmMdpqZX

#76 brainsail on 09.23.11 at 8:53 am

“7 Spelling and Grammar Errors that Make You Look Dumb”

http://work.lifegoesstrong.com/7-spelling-and-grammar-errors-make-you-look-dumb?utm_source=OB_work&obref=obnetwork

#77 househornyhousewife on 09.23.11 at 8:57 am

Garth,

That was indeed good advice for this family, although it may cause some “rough seas” within the couple (hopefully only for a while, until the husband begins to see the results and realizes it was for the best).

Child ?! What child ? At 21 years of age, that guy is almost ready to retire for heaven’s sake. Personally, I would have charged him rent and added this to the family income. At any rate, you gotta be cruel to be kind and that poor kid was wasting his life living in the basement. He will also be “out of sorts” for a while until he finds himself and realizes how wonderful it is to do your own thing in life.

You are so right about women taking the biggest risk in terms of running out of money … so so right. Many of us are not even thinking about it right now and this is a BIG mistake. A lot of women are looking at at least 20 years of life after retirement and many women are living even longer .. that’s a heck of a long time (not that I’m complaining or anything .. this is OK with me).

It is precisely because of this that I still think that pensionizing a percentage of your investments is the best way to go (not necessarily in annuities but more so in these new Guaranteed Life Withdrawal Benefit type plans for example, so that your investment still belongs to you if you should need it). This guarantees that you will have a payment starting at a certain age and for the rest of your natural life. It is security that I am willing to pay for. Of course I would never pensionize everything I save because one needs some serious growth potential investments I should think.

Oh and in terms of brain thinking, in my case I am not selling my investments because the market is down (this would be just plain stupid) BUT I am starting to get truly pissed off because for the past years the investments have been rising and falling so that they are essentially remaining the same. I am sick of financial people telling me that we are at the end of the crisis and that things will start to go up soon so to hang on (I am but how long can they keep this bullshit up anyway ?). If this continues, by retirement I will have only the principal that I was able to put aside and my money will not have been working too hard for me. This is what has my panties in an uproar .. the idea that I have only just recouped my losses and that the next 10-15 years will consist only of slow growth. This really sucks. When do we savers begin to get some good returns ?

HHHW

#78 bigrider on 09.23.11 at 8:59 am

It goes on and on Garth.

Talking heads on BNN repeatedly this morning posted various charts related to housing and debt levels, incomes etc. etc.

Conclusion: No housing bubble in Canada that they can see.

#79 Tony on 09.23.11 at 9:02 am

#1 Malik on 09.22.11 at 10:06 pm

The greatest fools on Earth not just in Canada live in Mississagua and Brampton. To the people who just bought there they’ll just love living on the street when the banks foreclose.

#80 Tom from Mississauga on 09.23.11 at 9:05 am

So Garth I guess you’re the cat in the picture?

#81 Herb on 09.23.11 at 9:07 am

– this government is cynical, contemptuous, and intellectually bankrupt –

– Dan Gardner, with the reasoning for this “assertion” at

http://www.ottawacitizen.com/technology/crime+debate+without+facts+arguments/5445915/story.html#ixzz1YmQkpbZJ

Kind of says it all, and why the way ahead will be twisted and painful.

#82 pbrasseur on 09.23.11 at 9:09 am

“That’s what the new book is about. It’s the investment advice which actually changes everything.” – Garth

This is quite true, so many investors just follow trends like sheeps and in the end they get burned.

It happened in housing and I strongly believe it will happend again to the millions who are seeking “safety” by going too much in savings accounts, GICs or government bonds.

But it’s tough to be a good investor and stick to a plan when medias are trumpetting armaggeddon…

I’ve been trying to be a good investor and did learn a lot along the way, especially since 2008…

It takes patience, a lot of it and most of all an understanding of why patience is required.

This is the only thing you need to understand: In the end (and that can take a long time) only things which have real value will rise.

Can’t wait for that new book!

#83 Tom from Mississauga on 09.23.11 at 9:41 am

Funny thing with the recency. My unhedged U.S equity index I’m still up from the beginning of last week. Index up 5.4% last week down 7.2% this week but made on 2.7% on CAD. I’m still up .9% over 2 weeks. If I had forgotten the middle period I would be panicking when in fact I’m still up. Maybe repost your negative corelation articles for readers suffering from recency. Thanks for the post Garth!

#84 disciple on 09.23.11 at 9:43 am

We are surrounded by “smiling” depressives. The shadow of our souls is the sum of all that we detest about ourselves. We project this shadow on others, in order to deflect the blame. How can you blame your leaders, when you are the one who put them in power? Maggots and microbes only appear on dead flesh. We are like that dead flesh. The maggots and microbes are just doing their jobs, fulfilling their purpose!

It’s time to take back control of your own minds. We will do anything and everything else except face our true selves. Exhibit A: Smoking Man. The ego has taken over our psyches, but it is like merely the housekeeper in the house of our home (mind). The owner has been away. Go home to yourselves, put that ego in its rightful place. Your real rulers know full well how to manipulate the ego, it’s an exact science to them. We know very little about our real enemies, but they know us very well…

Your true self, your seat of consciousness is not the ego. The ego saved you from those dark moments of your life, when your soul needed to leave for a while, and the ego took over as housekeeper of your mind. The aim of your enemy is to maintain that separation between you and your mind (enter Lady Gaga) to unseat your consciousness and place the ego as the ruler of your mind, which can then be manipulated quite easily.

Garth, I am offering a scientific explanation for what you observe in the markets. Fear and greed are tools of the ego alone. In the 70’s, the pure sciences ran aground theoretically because they had no knowledge of “consciousness” as a “field” vector. The birth of the new pure sciences is now recognizing this reality.

What I am revealing here is very dangerous. Teachers are synonymous with anger. True teaching produces anger, but there are different types of anger. There is the wrong kind and then there is the right kind. If teaching does not produce anger, it contains no truth.

So, if you guys hate me, I understand, but that hatred is misplaced.

#85 Smoking Man on 09.23.11 at 9:47 am

#44 debtified on 09.23.11 at 1:10 am

YLO not yet, but you notice in Toronto papers they have full page adds looking for web developers.

They must have something good coming down the pipe.
Will post when Im in again

#86 disciple on 09.23.11 at 10:00 am

More Brain Food:

The Father of Anarchism, Michael Bakunin, spent the better portion of his life rotting in Czarist jails until his teeth rotted out. One of his imprisonments was being chained to a wall in total darkness for 18 years. As soon as he got out, he started writing again, against autocracy, and said that he would take a thousand Czars before accepting one Marx. You see, he understood the true nature of Marxism as just another form of dictatorship. Although chained, he was self-informed and FREE.

The hand that crushes the tyrant’s head, rises to take his place instead. The enemy is not the problem. You are. True civilized progress is not material, it is spiritual. Do not lose yourselves, while you observe every familiar institution collapsing around you.

#87 Smoking Man on 09.23.11 at 10:06 am

#84 disciple on 09.23.11 at 9:43 am

EGO

I don’t know brother, but your ego is right up there with mine…..Talk about calling the pot black

#88 Kilby on 09.23.11 at 10:07 am

# 54, Dorothy

Where is the 3% GIC? Must be long term…

Real estate in the Okanagan looks pretty bleak right now.

Penticton has 828 residential listings and 14 sales in the last 7 days with 12 of them less than $385K

Summerland has 408 listings with 9 new sales completing in the last week with 7 of them less than $375.

Slow hardly describes these sales figures….

#89 Mr Buyer on 09.23.11 at 10:16 am

#55 PKS…You have a valid point and it hinges on agism in that we boomers had it all and refuse to aknowledge how much we wasted and how little we left for those that follow.

#90 Blacksheep on 09.23.11 at 10:32 am

“The Metalheads are quiet these days. Silver imploding as we speak, last 32-33.
Risky risky commodities”
———————————————————
A favorite quote,

“Never forget, Only dead fish swim with the stream”

It’s almost time to replace silver sold at higher $.
Garth’s correct, on his buy when other are selling.

take care
Blacksheep

#91 Kilby on 09.23.11 at 10:58 am

#89 Mr Buyer.

Not all of us “Boomers” had it all, some of us had to work hard and long without wasting everything. Quite often contributors on this site portray everybody in this cohort as Yacht/SUV/Cottage/Granite and Stainless fools that fly to the Mexican Riviera on out credit cards every winter and have no savings to support ourselves as we get older and plan on sucking younger generations dry as we age. While that may be true for some it is certainly not for a lot of us. The majority of my friends are not rich but have saved, invested, helped our children with their educations and can support a good lifestyle without costing anybody else anything. Many of us have always been in the medium wage earner categories and always contribute a high tax rate all our lives with few write offs.

#92 O.R. on 09.23.11 at 10:59 am

This is a good day for sure.

I’ve always been intrigued by Smoking Man’s grand guignol verbiage. I am not an economist… So his conspiracy theories were sometimes attractive to me, his financial posturing was benign and there was an interesting thought here and there, buried in the misspelled rambling.

And then today happened.

He finally threaded on a turf I’m knowledgeable in (namely science and astrophysics in particular). I’m almost sad, because it was a nice notion to entertain that some eccentric & slightly deluded commenter could sometimes hold a fleeting sliver of truth. This being said, I can now only infer that everything he says in other fields has as much value as his comment from today…

Oh well, it was good fun. The guy was interesting enough to grab my attention and have me read him for a while. That’s certainly something…

Carouse on my friend!

#93 Brad Mitchell in Calgary on 09.23.11 at 11:01 am

In 2008 corporate profits were brutalized. Today they’re at record levels. In 2008 the LIBOR spiked. Today it is flat. In 2008 there was a credit crisis. Today we are awash in liquidity. I could go on, but sounds like you don’t care. — Garth

The markets are a leading indicator. Today’s corporate profits do not matter, especially since they are inflated because of excess consumer debt, not rising consumer incomes. That debt must be dealt with…
Corporate profits will consequently suffer.
And the markets reflect that sentiment today.
A financial “advisor” should understand that markets are a leading indicator.

As opposed to comments on this blog, you mean… — Garth

#94 vreaa on 09.23.11 at 11:44 am

Provincial Government Policies Will Not Save Vancouver From A Housing Crash

“Our province is a place of relative calm and stability, but we are surrounded in almost every corner of the world by economic turmoil” – BC Premier Christy Clark

“We’re caught up in a very challenging global economic situation. We are in for a rough time and the provincial government can’t fix that.” – Jock Finlayson, economist for the Business Council of B.C.

The world is experiencing deflationary effects that are the result of forces related to the deleveraging of excessive debt. BC has thus far largely remained blissfully removed, by virtue of having kept the speculative mania in RE going, by ongoing debt-fueled consumption, and by importing money. We can’t see how local RE related activity can insulate us for much longer. BC will, unfortunately, be swept up in the wave. This will occur regardless of local policy; the forces are simply too great for relatively minor ‘in house’ adjustments to alter the course of much larger external forces. This decade, a Real Estate bear market will be Vancouver’s defining social and economic event. – vreaa

http://wp.me/pcq1o-2Y5

#95 Niels Bohr on 09.23.11 at 12:07 pm

#92 OR

Glad to see someone else on this blog thinks like I do in regards to the loveable Smoking Man.

#96 The InvestorsFriend on 09.23.11 at 12:17 pm

Number 63 In the maritimes says:

GIC’s easily beat the index (year to date and past year)

… So buy GICs last year and short the market last year.

Fantasy is great, does it work in your love life too? Do you get all the hot babes in your retroative dreams?

Did you not get Garth’s point that it is dumb to think the markets will do in he next year what they did the last year?

#97 Observer on 09.23.11 at 12:21 pm

#55 PKS – Couldn’t agree more about the baby boom generation. Unlimited employment opportunities. Companies recruiting (even competing for)people just out of high school or post secondatry education. Jobs offering great wages, benefits & security. The greatest generational appreciation of property value in the history of the world. Super low house price to income ratios. If you failed financially as a boomer – it would take alot of effort. Basic fail safe plan – Let one of the recruiters employ you, buy a house , sit back & enjoy. These opportunities do not exist anymore.

#98 Big D on 09.23.11 at 12:25 pm

Smoking Man,

I find your character quite amusing. We’ve seen you overly push the Lawnmower Man thing and pull back (you’re all over the map inconsistent with your dyslexia).

You write in the style of a modern Mark Twain with a massive ego. I find your fictional musings very entertaining. I’m not sure if I like or dislike the character you’ve created but I guess that’s a sign of pretty good writer. I’m particularly impressed with the “software engineer who can’t spell routine.” That’s awesome! Everyone knows computers love typos, etc.

Keep it up. You’re amusing many of us, I’m sure!

#99 Gandhi on 09.23.11 at 12:26 pm

#84 Disciple

Nice to know someone else on this blog reads the Bhagavad Gita.

#100 Rt Honorable S Harper on 09.23.11 at 12:34 pm

Quoting Garth from above: “This mistake also leads investors to think that falling stock markets (or oil, or copper, or bond yields) will continue to fall into the future. ”

Got one word for you, buddy: NIKKEI

38,915 on Dec 29, 1989…… 8, 560 today ( 21 years later) No doubt the 40 something investors who stuck it out, now in their mid-sixties will be much relieved that there’s still hope for them….LOL

Nobody holds an index for 21 years. What a hollow comment. — Garth

you are on crack Garth,
Sincerely, Steve
ps: you are still fired

#101 jess on 09.23.11 at 12:52 pm

Rainbird

http://factsanddetails.com/china.php?itemid=1708&catid=8&subcatid=49

The term “naked official” was selected as one of China’s top 10 buzzwords of 2009 by Chinese linguists.

.. “Naked officials” is a term used to describe cadres who stash money and relatives overseas, and when the law begins to catch up with them they flee China ,“naked” with just the shirts on their back. One such official, Yang Xianghong from Wenzhou, complained of back pain and went to France, where his daughter was staying, to get treatment, or so he said. He never returned. It was not revealed how much money he took but he was kicked out of the party and charged with “seriously damaging the party’s image and the country’s reputation.”

http://www.chinadaily.com.cn/china/2010-02/24/content_9492278.htm
Govt wants a better view of ‘naked officials’
By Xie Yu (China Daily)
=
very interesting book by Joe Studwell’s , Asian Godfathers

jow studwell
http://www.ft.com/cms/s/0/401cffde-a46d-11d9-9778-00000e2511c8.html#axzz1Yn2s8gqk

#102 wtf????? on 09.23.11 at 12:53 pm

The money printing machinery is pumping out paper like theres no tomorrow. This can’t end well. My predictions:

1) Higher gold price before year end

2) Oil prices above $90

3) Palestinian statehood issue is a powder keg with the fuse lit.

You ain’t seen nothing yet from the fear mongers.

http://www.federalreserve.gov/releases/h6/current/default.htm

Prognosis based on macro facts outside the current headlines. The recent sell off is a gift for commodity investors who continue to accumulate. I buy specific issues that pay dividends. Pappy says ‘price only matters when you buy or sell’. This is a great time for taking accumulative positions through your DRIP programs.

#103 blase on 09.23.11 at 12:54 pm

Garth,

Two things; first, there are hundreds of properties in Windsor, Ontario going for $100,000. Would it be a good idea to go buy one with 20% (then no CMHC right?) and have the renters pay the mortgage? Or does the plethora of listings indicate a problem.

Second, what is your take on becoming a franchisee? I’m considering a company with low overhead, $50-100,000 to buy in, and good track record. In general, any feeling on franchises?

#104 Devore on 09.23.11 at 12:59 pm

David Cameron speaks in Canada. For a politician, I’m kinda impressed.

#105 Waterloo Resident on 09.23.11 at 12:59 pm

Funny thing; I remember a few weeks about Garth was talking about how stocks are ‘dirt cheap’ because earnings was rising and stock prices would rise and rise as dividends continued to rise, something about holding a “balanced portfolio”. Yes, I guess if you hold half bonds and half stocks then the stock half went down while the bonds half went up, but from what I can see the stock half has gone down quite a lot but the bonds half has gone up only just a little bit.

for example, lets look at XIU.TO (stocks) vs XBB.TO (bonds), for the past 3 months:

http://stockcharts.com/h-sc/ui?s=XIU.TO&p=D&yr=0&mn=3&dy=0&id=p42499962902

http://stockcharts.com/h-sc/ui?s=XBB.TO&p=D&yr=0&mn=3&dy=0&id=p85820693711

from these two charts you can see that stocks (XIU) has fallen from 18.5 to 16.4, a 11% loss

and bonds (XBB) has risen from 30 to 31.25, a 4% gain.

So, combine these together and you still get a loss of 7%, not all that great in my books.

From what I can see, its better to become a stock market timer and buy low and sell high. Now while you at it maybe you can somehow turn lead into gold too, its almost that difficult to do such a thing.

I’ve been working on stock market timing using wave-form graphs, something that NOBODY has even thought about before and so far it seems to work pretty good but it only works for the DOW, nothing else. right now I would not buy any stocks for at least the next 4 days, things look like they will bounce around the bottom for a little while longer.

You don’t remember too well. I did not say “stocks are ‘dirt cheap’ because earnings was rising and stock prices would rise and rise as dividends continued to rise.” Nor would I. But corporate profits are robust and equities are trading at multiples well below historic averages, suggesting there is increased value today. As for a balance of equities and bonds, using two ETFs is hardly balance. Stick to your day job. — Garth

#106 Dorothy on 09.23.11 at 1:08 pm

Response to #88 Kilby
If you shop around you can get 3.5% on a 5 year non-cashable compound interest GIC today, which isn’t great but sure beats stuffing money under a mattress. And as all of my GIC’s are within RRSP’s they’re tax sheltered which, for now, is good enough for me.
I was a basket case back in 2008 when I saw all my stock market investments lose 75% of their value, and I continued to be a basket case during the period of watching and waiting for it to turn around so that I could sell and get out without losing my shirt.
I bought a few more equities when the market reached bottom which, combined with patiently waiting for those I already owned to appreciate again, resulted in my getting out with a small profit in 2009 (particularly once you factored in the amount I’d made in dividends over the years). However, even though I did manage to get in and out of the stock market unscathed, the stress I went through relative to the small profit I made simply wasn’t worth it. So, while I concede that stock market investing works well for some, it isn’t a good place to invest for worrywarts like me. Particularly if you’re within 5 years of retirement, as I am.
I think that young people (under 45) with a bit of money to invest, may be wise to buy some dividend paying stocks when the market is down, and then sit on them for a few years (if that’s as long as it takes), collect the dividends in the meantime, and then sell for a capital gain when the market stabilizes. But for anyone my age, they could die before the market turns around sufficiently for them to get out with a profit (unless they’re a darn good day trader, which the majority of us most definitely are not).
The key is that any money you choose to invest has to be money you can do without for a few years, because it would be a disaster if you were forced to sell when the market was down. You have to be able to afford to leave the money where it is until things improve. If you can’t afford to do that, then you shouldn’t buy into the stock market.
As for house prices, I said in my first post that I don’t consider my home to be an investment. It’s merely a roof over my head. And as its mortgage free, I can continue to live in it for less annual outlay than if I were renting. So the amount I could get for it when I sell is irrelevant to me at the moment. But if I were to decide to sell anyway and then rent, not only would I be paying more per month to live, but I also would only be getting around 3% return on my money at current interest rates, which is at or below inflation (depending on whose numbers you listen to). So for me, selling in order to rent and invest wouldn’t be a wise move.
Anyone who was foolish enough to buy some sort of a McMansion with little or no down payment is going to be screwed when interest rates eventually rise, and they WILL eventually rise, although it appears it may take a couple of years. So they should use this intervening period to either pay down a heck of a lot of what they owe on their mortgage, or sell now and get the heck out from under all that debt before they lose their shirt. People should never have been allowed to buy houses with little or no money down in the first place.

#107 disciple on 09.23.11 at 1:31 pm

Smoking Man on 09.23.11 at 10:06 am
#84 disciple on 09.23.11 at 9:43 am

EGO

I don’t know brother, but your ego is right up there with
mine…..Talk about calling the pot black
—–
I love you too. Hey, I enjoyed your theory of gravitation. Kind of makes sense. Better than the fairy tales they cook up for us anyway. Can you do an analysis of my theory that photons are actually slowed down “thought” particles. I’m going to soon reveal to our readers what DNA really is…stay tuned…

#108 timo on 09.23.11 at 1:31 pm

man oh man is metal on the way down
What a bloodbath.

– 12% silver

Now that is the mother of all corrections. I can just hear the kicking and screaming and the pleading with the traders to sell! sell! SELL!

Come on markets, we just need oil and commodities to drop another 10% by Christmas and then the recovery can begin. Lower prices will bring on public spending.

#109 disciple on 09.23.11 at 1:39 pm

#99 Gandhi…the Gita was merely a pop song in its day, just like Christian Hymns were once bawdy shop parlor songs. Interesting how our perception of HOLY DOCTRINE can be so easily changed.

My source material is much, much older than that…the human psyche itself. Every thing emanates from this one source, including our conception of God. What you think, you are. The problem we have currently is that WE ARE the missing link between apes and humans.

#110 Ben on 09.23.11 at 1:40 pm

AGQ – a silver ETF has just fallen off a cliff. This thing makes $5 moves in seconds.

52 week $382.00
Today… well this second it’s $114.00

Just watch for entertainment!

#111 Jack on 09.23.11 at 1:54 pm

SIGH… realtors still pumping…

http://www.youtube.com/watch?v=5fV3AGgBIWY

No mention of the downside risk though.. what a surprise…

#112 dddd on 09.23.11 at 2:11 pm

looks like dow found a floor

gold at -85 maybe time for a boucne

van sfh still selling because of inelastic supply – even the crappy overpriced leaky cold noisy oly village is selling out and there are 5 very large projects going now on its doorstep

#113 Junius on 09.23.11 at 2:13 pm

#104 Devore,

Thanks for posting.

It is good to finally see some reality coming from some politicians. It was refreshing to see one admit that this is a debt crisis and not a business cycle recession. I can count on one hand (not using my thumb) how many times I have heard that from someone with a political office.

I hope the “extend and pretend” period is coming to an end although I still wonder about the folks down South with an election year coming.

#114 City Slicker on 09.23.11 at 2:17 pm

Garth was right about the double top in gold all along. Gold from $1913 to now $1650.
Hope he’ll be right about housing too!

#115 Cookie Monster on 09.23.11 at 2:17 pm

#267 Sky on 09.23.11 at 7:40 am
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.
—-
Sky from yesterday. I’m familiar with Ayn Rand’s assertion of the certain types of people, socialists or religious haters, who hate the good and successful for being the good and successful, but the blow-back of 911 was in fact retaliation for the US’s repressive foreign policy and settlement on religious territories.

Even Ron Paul recognizes the cause of 911 as being due to their own foreign policy actions and it’s not surprising really when their corporate military interests are in causing conflicts, not avoiding them. There’s no money in peace when you’re in the business of war.

I love Ayn Rand, so I want to make sure here ideas are properly espoused. There’s enough trouble defending her ideas when properly conveyed, we don’t need any extra battles to stretch them beyond where they were not meant to apply.

PS, overall, nice rebut to Peter. Moneta too.

#116 Smoking Man on 09.23.11 at 2:42 pm

#92 O.R. on 09.23.11 at 10:59 am

Prove my theory wrong, alto you may be a bonified rocket scientist. I want you to really think about this. Expanding Universe vs Universal shrinkage. It’s the same thing. Different view point

When it hits and you get it, you will go holly sh!t….

#117 Davey Boy on 09.23.11 at 2:46 pm

Looks like gold is losing it’s lustre… Guess Garth can sit back and smile…I guess you can’t say he didn’t warn you, enjoy the ride down!

#118 Moneta on 09.23.11 at 2:48 pm

The majority of my friends are not rich but have saved, invested, helped our children with their educations and can support a good lifestyle without costing anybody else anything. Many of us have always been in the medium wage earner categories and always contribute a high tax rate all our lives with few write offs.
———–
I just had that conversation with my mom this morning and she had the same arguments.

The thing is that yes a large number of boomers have been responsible but still not enough. They saved using old rules of thumb based on a population pyramid and not considering there would be a baby bust following them and aboomer bulge in it.

Most boomers should have never gone bigger than a bungalow. So most conservative boomers should have probably scrimped and saved even more than they already did!

#119 Smoking Man on 09.23.11 at 2:49 pm

#98 Big D on 09.23.11 at 12:25 pm

so ya think it’s an act huh….

123.339122.677123.118122.970122.677122.885123.032123.068122.677122.897122.970123.118122.909122.885123.068122.897122.885122.677122.970123.118122.958122.677123.019122.958122.677122.885123.032123.068122.677122.848122.946122.909122.983123.081

Go to my website
http://www.keysme.org

download my text incription software.

Paste the above keys into the app, use the default PIN 12345

Then click read keys.

500 bucks to anyone that can crack or hack my algo

#120 Cookie Monster on 09.23.11 at 2:49 pm

#92 O.R. on 09.23.11 at 10:59 am
Come on now, everybody knows Einstein was nothing but a shill for the church and a mental midget who couldn’t tie his own shoes. No wait, that’s Steven Hawking.
I know, bad joke.

#121 Moneta on 09.23.11 at 2:52 pm

T.O. Bubble Boy on 09.22.11 at 10:58 pm
If F is warning that this could turn into 2008 all over again, does that mean he’s actually predicting that we won’t be in a recession? (like his famous statement from August 2008 that Canada would not have a recession
———-
He’s probably preparing us for a big fat reason why they need to cut public pensions.

#122 Blacksheep on 09.23.11 at 3:01 pm

“How can you blame your leaders, when you are the one who put them in power?”
———————————————————-
We ARE to blame, do to our complacent belief that our vote can actually change anything.

We have been programed from birth via the repeaters that are the system.

The programing runs deep.

The gun is the enemy.

take care
Blacksheep

#123 betamax on 09.23.11 at 3:09 pm

#54 Dorothy: “they can only make a bad situation worse saying some of the stuff they’ve been saying, and I can’t help wondering what they’re up to?”

They know it’s going to get a lot worse soon regardless of what they say, so they’re saying it now so they don’t look clueless later.

“there hasn’t been the predicted crash”

Yet.

“with only 5 years to go until retirement, I have to be very careful about the moves I make”

Absolutely. Be conservative. Better to lose 1-2% a year via inflation than 20-30% in this market.

#124 betamax on 09.23.11 at 3:11 pm

#92 O.R.: “I can now only infer that everything he says in other fields has as much value as his comment from today…”

Yep.

#125 Wills on 09.23.11 at 3:12 pm

David Cameron can suck it. So can Dear Leader.

See PMs today? whoah. people are crazy, flying away from real security into imagined security. But it’s all a game and we don’t control any of the players. Let’s face it.. TPTB are having fun pushing people into corners and then capitalizing on their fear. It’s sport to them.

Gold will rebound but the obvious question is ‘where is the bottom?’ Real estate will NOT rebound. Why would it and how can it? Stocks.. a total crap shoot. Even safe havens are up for grabs and manipulation by those who can conduct thousands of trades per second.

#126 Cookie Monster on 09.23.11 at 3:17 pm

#99 Gandhi on 09.23.11 at 12:26 pm

#84 Disciple

Nice to know someone else on this blog reads the Bhagavad Gita.
—–
I studied it too, but didn’t see the connection in Disciples interesting expose’. I really loved it’s teachings when I first learned it, but don’t much anymore. The only thing I still much hold true is the line;
God says, “Time am I, world destroying and growing mature, engaged here in subduing the world”. The cycle of creation, preservation and destruction.

And of course the highest goal in life is knowledge and understanding. Devotion to wisdom to reach Brahmin, to know god or become one with god. Problem is it means one has to believe in god, so I lean more agnostic than atheist.

Overall, out of any religion I’ve looked at, the only one I find extremely interesting an plausible or tolerable, is Hindu base on the Gita.

#127 bigrider on 09.23.11 at 3:20 pm

What a ridiculously dangerous and volatile world we live in. Two days ago you could have bought gold and silver stocks like silver wheaton/goldcorp as they were approaching there 52 week highs, smooth sailing it appeared and then BAM you are down today close to 20% over same two days.

Garth has one thing right, risk abounds. How do you invest in anything with that kind of volatility everywhere?

Our major banks are down some 20%-25% from their 52 week highs ?? Really 20%-25%??

#128 Westernman on 09.23.11 at 3:22 pm

[email protected] #18
No,no Andrew – throw ALL your money in ” The Market ” … it’s all on the up and up. You can’t lose! Don’t forget the lotto tickets… buy lots and lots of those too!

#129 Jess Livermore on 09.23.11 at 3:38 pm

Hey Moneta, your comments to Wall Street Pete were spot on the money (yesterday #265). Wall Street Pete came sauntering into this forum filled with braggadocio as he listed his income and properties which had no relevance to his eventual question which was where the Toronto market was headed. Then, oblivious to his own arrogant manner he denounced the contributors to this blog as largely morons.

#130 Young Old fart on 09.23.11 at 3:39 pm

#3Robert Dudek on 09.22.11 at 10:18 pm
Garth, please don’t get a swelled head from this, but, this is some of your very best work. As they say in French, felicitations.

If only you could see the bright side of owning some gold and silver funds like CEF or PHYS, my work here would be done.

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

Really? How’s that gold working out for you today?

I sold some at 1700, thought I was to early but will start buying again when it drops much lower….

#131 Burnt Norton on 09.23.11 at 3:42 pm

#55 PKS on 09.23.11 at 3:39 am

What a load of BS. As a Gen X’er increasingly forced to deal with lazy incompetent entitled Millenials, it is clear to me that lack of opportunity is not the issue. Just the other day a company I hired to help with a few things around the house sent over a couple of college students. That morning I got a call from one of them saying that they couldn’t find parking outside my house so what should he do? WTF? Park down the street and walk up to the house, dufus. I don’t know about you all but this is typical of 18-25 year olds in many service encounters I have these days.

Seems to me the problem is in part due to their wallowing in self pity, as exemplified by the content of your post.

#132 bigrider on 09.23.11 at 3:53 pm

Garth you said yesterday that the “secular bear market is bull” as a response to me after I said that we have been in a secular bear market for about 11 years.

How can you say that’s bull? S&P, MSCI, DOW all lower than where they were, more or less, 11 years ago.

#133 Moneta on 09.23.11 at 4:24 pm

#128Jess Livermore on 09.23.11 at 3:38 pm
—–
Thanks but I actually feel like an eel. Note to self: reread some Dale Carnegie books.

#134 Drake on 09.23.11 at 4:49 pm

The renting plan works well if you live in Toronto or Vancouver, not so well in smaller cities and towns. We’ve been in the same location for three years, there’s really been nothing even close to rent since in the same range…we lucked out three years ago, but its far from what we’d have if we bought. Though to be far, you recently agreed that if one lives in the Windsor area, buying is a reasonable option. We’re now looking.

#135 Onthesidelines on 09.23.11 at 4:58 pm

Garth’s reply to my NIKKEI post: “Nobody holds an index for 21 years. What a hollow comment. — Garth”

The point being there was a lot of money lost over those 21 years on dead cat bounces with bad bets on false bottoms.

And don’t kid yourself, it’s just betting. A casino where one greater fool bets against another in the zero sum game that we call the stockmarket is a sick model for wealth creation in a society.

Without capital markets we’d be cooking over fires. — Garth

#136 Brad Mitchell in Calgary on 09.23.11 at 4:58 pm

Garth was right about the double top in gold all along. Gold from $1913 to now $1650.
Hope he’ll be right about housing too!

Funny how this blog let’s an anti-gold remark like that through, but when we try to post a pro-gold remark, he huffs and puffs and yells “this is not a gold blog” assuming he even lets the comment through at all, which is rare.
Anyway, since I’m responding to your words, there should be no reason to block this one. So I will say again… for the gold bashers, you might want to check out the 5yr chart before declaring anyone right or wrong on this one. Best looking chart I’ve seen in many many years, even with the recent (healthy) pullback…

OH, and I repeat, housing will be just fine in Calgary. Toronto and Vancouver… maybe not so much.

#137 OttawaMike on 09.23.11 at 5:12 pm

# 26 Timing is Everything,

Thanks, I am in Serbia today and will swing to Slovania in about 4 days eventually heading back to Transylvania Romania.
Stopped in a small Serb farming village for a beer. Was asked by the proprietor where I was from. After telling him Canadian, I was received as a hero with food and drinks on the house. We have uncle in Kitchener!

The wrong answer would have been American since they dropped 2 bombs on their village in the 90’s. No free drinks for Americans, I assume.
The only condition to my comp was to promise to return soon. I discretely slipped some Euros under the ashtray before I left the happy establishment.

Garth,
Thanks for not spiking my post and holding me down and having your congenial blog dogs kick me in the nuts ;>)
_______________________

Smoking Man,
How are those shorts looking on you?
I bailed yesterday on double vxx since I’m on euro time and can’t keep on top of the markets in NA.

I for one, enjoy your posts, you’re right up there with this site’s owner on my must read list.

#138 crazed and a little confused on 09.23.11 at 5:16 pm

hi garth,

recently attended a finance class lecture and the professor is big on real estate. he mentioned the best investments out of school is to get TFSA, RRSP and real estate once you leave school

not exactly safe when you career is just starting you have no money and the interest rates are historically low.

good luck… yeah I one of those mature students taking a class to upgrade myself

#139 neo on 09.23.11 at 5:29 pm

#113City Slicker on 09.23.11 at 2:17 pm
Garth was right about the double top in gold all along. Gold from $1913 to now $1650.
Hope he’ll be right about housing too!

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

You do realize the Dow was down 7% this week and relatively globally that was a good return for the week. That’s what this move in Gold was all about. Fear and margin calls. You guys make me laugh. You say Gold is a fear trade and when the market has it’s worse week since Oct. 2008 and there is fear and Gold goes way down, like it did in 2008, and not way up like your fear trade would suggest, you have to come up with some other double top conclusion. If we see Gold drop 30% because the baby is being thrown out with the bath water like in 2008. You will have much bigger concerns. That and just like in 2008 when it went from 1000 to 700 and then doubled in a couple years thereafter. The same will happen here regardless of where it’s pullback stops. Governments will print. We all know this. Until they stop raising the money money supply agressively, Gold will continue its long term trend up. There are many moving parts here.

PS – Garth will be right about housing. He just focused too much on interest rates being the ultimate cataylst and missed the fact that we would be heading back into a global recession that would bring about the fall he was looking for. Coincedentally we saw that as well in 2008 when Gold dropped 30% and housing began declining in October.

#140 Cookie Monster on 09.23.11 at 5:31 pm

Garth was right about the double top in gold all along. Gold from $1913 to now $1650.
Hope he’ll be right about housing too!
——
Anyone who thinks gold is done is only fooling themselves. It’s like blaming an anchor that’s wedged into the rocks on the sea floor for all the turbulence in the ship above during a hurricane storm. Gold isn’t ‘doing anything’, fiat money (USD) is sloshing around violently.

And how does that logic differ for stock values? — Garth

#141 Young Old fart on 09.23.11 at 5:32 pm

#127bigrider on 09.23.11 at 3:20 pm
What a ridiculously dangerous and volatile world we live in.
Our major banks are down some 20%-25% from their 52 week highs ?? Really 20%-25%??
===================================

Hmmmm, I hold bank preferreds BMO, CIBC, RY and I justed checked and one is down a penny…another up 0.08 cents…

Which bank stocks YOU holding????

#142 brainsail on 09.23.11 at 5:32 pm

#128 Jess Livermore

I ditto your comments. Today, I am questioning my reading comprehension skills, because I got hung up on the unnecessary information that Peter gave us before the real question which was about about timing the Toronto real estate market. As a result, we got a novel length of details concerning his perfect planning.

I think this was another lesson that Garth tossed at us, and I thank him for that. I can’t imagine some of the other BS emails that he gets every day.

#143 Bill Gable on 09.23.11 at 5:37 pm

Olympic Village sold out?

The buyers must be auditioning for the lead or The Who`s Tommy”- dumb, blind and are proving that there might be a new disease extant – BPOE, paralytic poising?

#144 Bill Gable on 09.23.11 at 5:39 pm

Addenda: I meant poisoning. Sorry, was in a sword fight with a Mortgage Broker when I posted. DOH!

#145 Living in AB on 09.23.11 at 5:42 pm

Crap, I plan on going to US only once this year and it has to be when the dollar tanks. Now it will cost me an extra 30 bucks just so I can gamble in Vegas.

#146 bigrider on 09.23.11 at 5:56 pm

#140 Youngoldfart

None. I am an oldyoungfart.

Grinding out 4% a year for past 3 years. Good for you,glad your happy.

I am quite happy with my holdings in Front street and Sprott(quite a bit better than your bank preferred’s) although not for the faint of heart or the bank dividend share humpers.

Before you reply, different strokes for different folks, that’s all.

#147 Nostradamus Le Mad Vlad on 09.23.11 at 6:18 pm


#55 PKS — “Marshall McLuhan predicted, back in the 60s, that jobs as he knew them, would eventually be obsolete.”

I can relate to that. The composing room where I did a five-year apprenticeship at a newspaper closed down in the early ’90s, and at the Kelowna Daily Courier, the comp. room is almost gone — Evolution, new technology, etc.

Dinosaurs like us boomers aren’t much use anymore!

#58 I’m stupid — “In the event of personal bankruptcy, can creditors take lira? Sure can — shares of Bre-X, Nortel and Dome Petroleum will cover it nicely, but this will give you a better idea. Cheers!

#35 JohnnyBravo, #69 TurnerNation, #90 Blacksheep, #102 wtf?????, #108 timo, #110 Ben, #112 dddd, #117 Davey Boy, #125 Wills and #140 Cookie Monster — Another forecast. Remember, forecasts are like sloppy wet farts — rarely deliver and hardly accurate! — Not Yer Average Weather Forecast But it’s still a forecast. /\ “You ain’t seen nothing yet from the fear mongers.” a.k.a. the m$m. Ignore them, don’t buy their propaganda BS then they will run away.

#81 Herb — Well pointed out and great link.
*
As I was zooming along CERN’s new highway earlier this morning, traveling faster than the speed of light, I passed myself on five occasions and stopped at two different points at the same time to re-point the two HAARPs (US and Chinese) so they will ultimately destroy themselves.

Traveling was first-class, ‘tho. One day you will all experience it for yourselves!

#148 jess on 09.23.11 at 6:21 pm

Shawn
Buffet : “Culture, more than rule books, determines how an organization behaves.”

sallomon saga
http://dealbook.nytimes.com/2008/09/24/warren-buffett-and-the-salomon-saga/

non-prosecution agreement with the Department of Justice over its dealings with AIG
http://www.gibsondunn.com/publications/Documents/GenRe.pdf

james river James River lawsuit
announced the sudden resignation of his heir apparent, David Sokol

http://retheauditors.com/2011/09/02/the-berkshire-hathaway-corporate-governance-performance/

so too big to police?
July of 2010:Mr Buffet

“Culture, more than rule books, determines how an organization behaves.”Somebody is doing something today at Berkshire that you and I would be unhappy about if we knew of it. …That’s inevitable: We now employ more than 250,000 people

#149 Young Old fart on 09.23.11 at 6:38 pm

146bigrider on 09.23.11 at 5:56 pm
….not for the faint of heart or the bank dividend share humpers…..

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

No worries, I ain’t humping. They are but a small part of the portfolio. I was just saying not all banks are down 25%…….

#150 rainbird on 09.23.11 at 6:40 pm

To 137 – ottawaMike

For your information – the Americans are the ‘HEROS’ and always will be.

#151 Gandhi on 09.23.11 at 6:49 pm

#109 Disciple “We are the missing link between apes and humans”. Are you sure you stated that properly? I think it was Benjamin Disraeli who said, “this is no place to stop, half way between apes and angels”.

#152 Nemesis on 09.23.11 at 6:53 pm

“Without capital markets we’d be cooking over fires.” – Hon. GT

Well. Speaking strictly for myself – I rather enjoy BBQ.

In fact, it’s SpicyWings tonight…

With secret herbs and spices from the Okanagan.

PS – not those ‘herbs’.

#153 Gandhi on 09.23.11 at 6:55 pm

#126 Cookie Monster

My comment was tongue in cheek but I appreciate your feedback. The Gita did produce Gandhi after all.

#154 BrianT on 09.23.11 at 7:00 pm

#127Big-These aren’t your granddaddy’s equity markets. The stat I read was that the average holding time for a share on the US markets is now ONE MINUTE. So much for all the talk about Buffett and Graham principles.

#155 BrianT on 09.23.11 at 7:05 pm

#135Garth-That is exactly his point-without proper control of these guys we risk having them burn the entire house down and then we will be “cooking with fires” as you put it. This is the appropriate bumper sticker http://www.zerohedge.com/contributed/curb-your-bankers

#156 Smoking Man on 09.23.11 at 7:09 pm

#137 OttawaMike on 09.23.11 at 5:12 pm

Glad you had a good time in Serbia…………

Nikola Tesla
Ancesetory Tree makes his great gramps my great great great great gramps…..
That was dads side,

Moms side way back to King Leonidas.
In fact my moms dad was a shipping tycon in greece, guess where onassis learned the shipping business….

But off course I’m making it all up….

#157 TurnerNation on 09.23.11 at 7:19 pm

Peoples’ problem is they want to be different, better, than others.

During rush hour on Bay St. or Burrard St. you will find the pavement littered with Porsche Carerras and Cayannes. So common now.

(I laugh at anyone paying 1500/mo on lease + parking + gas + insurance for a car that spends 10 hrs overnight in the driveway and 8 hours/day in the underground parking lot).

So, in order to stand out you lease a Audi R8.
But the next day what pulls up beside you but a Maserati.
Out car-ed already.
Time for a Bugatti? OK.
Then a Lamborghini drives by – what trumps this?
Maybe a Maclearn supercar?

A vehicle arms-race of sorts.

#158 Cookie Monster on 09.23.11 at 7:26 pm

And how does that logic differ for stock values? — Garth
—-
If you accept that gold is money, then the difference is a stock is ownership of a business that has already transformed a substantial amount of its money (debt+equity) into property, plant, equipment, raw materials and inventory. A businesses ability to function is subject to the economic enviroment. A successful business is better to own over the long run since it’s productive and generates wealth. I personally am fully invested in businesses, I own no gold.

The point is, the price of gold is measured in USD, when the price of gold changes it’s not due to a change in gold, gold doesn’t change, it just is, the price change is due to the changes in the USD supply/outlook and whatever changes it may encompass.

During periods of low interest rate currency inflation, both gold and stocks are better to own than currency or debt denominated in inflating currency.

If I held any bonds in any currency, today would be a great day to offload all of them 100% and get into gold or gold stocks to ride out the storm. I wouldn’t worry about the nominal return so much as being safe and preserving my purchasing power, which is also likely to continue to improve over the coming years holding PMs.

I wouldn’t sleep well owning fiat currency debt these days.

Gold is not money. It’s metal, not currency. — Garth

#159 Nostradamus Le Mad Vlad on 09.23.11 at 7:51 pm


Any Spare Clothes for the emperor? So now, the world is unofficially in a bear-bull which doesn’t know what way to turn. That’s helpful; New Census Data Oh dear; 4:38 clip World, meet rece / depression; 1:57 clip Angel Food Ministries closing after 17 years.

Garth may disagree, but even the French Revolution started somewhere; BoA Patently stoopid on sheeple’s emotions (fear and greed); CNN wants this 4:49 clip banned. Wonder why? US layoffs up in August; 5:58 clip Morgan Stanley’s Barton Biggs says there might be one or two problems in finance; IMF and World Bank Not sure whether to laugh or barf; Foreign Tax Getting cozy between the US – Canada.

FF time “. . . full-scale emergency exercise scheduled to take place in numerous locations in the Denver metro area on Friday, September 23, 2011.”; Good Cop Opening up about 9-11 soon; Sneaky US using drones to wiggle its way into another continent; Class Warfare and only the bankers win; Dick Cheney When he speaks in Vancouver, someone should ask him who ordered the USAF to stand down for about an hour on Sept. 11; The m$m My bet is any realistic person doesn’t trust them, esp. after Sadaam’s nookes were never found; 10:49 clip Ashamed of living in a NATO country. Not surprised. Libya has never done anything to Canada, nor anyone else.

Missing Moon Rock found in Bill Clinton’s pants; Uganda GW taken too far; Gardasil “The time has come to ask if the HPV vaccine is actually a covert population control measure.” wrh.com; Psychology It’s a chore; 9:54 clip Libyan updates.

0:29 clip disciple, cookie monster and a few others, you might like this. Remember — the mind is nothing more than an adequate to good servant. When we move on from here, we retain all the memories of this life; Obummer the Reaper Hypocrisy at its’ finest.

#160 Cookie Monster on 09.23.11 at 8:05 pm

Gold is not money. It’s metal, not currency. — Garth

I thought you might say that.
True, today it is not being used as currency, but that is our own doing, or undoing, so to speak. Whether it is currently being used as currency does not affect that it is still money. It can be converted into any currency anywhere in the world at the drop of a hat. It’s not like you’re selling a 1978 VW beetle, there’s always a market for it. It’s fungible.

#161 TurnerNation on 09.23.11 at 8:42 pm

Cap rate 8% they say? I wonder if this a legal four plex.

http://www.realtor.ca/propertyDetails.aspx?propertyId=10961121&PidKey=821429312

#162 Sky on 09.23.11 at 8:46 pm

@ Nostradamus : Are you a fan of Robert A. Monroe ? If so, there’s someone you may want to meet.

@OttawaMike- Tesla’s ashes are stored in a golden orb in Serbia. Maybe give us a report if you get to the Tesla Museum?

@ Cookie Monster – I’ll get back to you on Ayn Rand. She had some good ideas….but as person- that’s a different story. Have you heard of Gnosticism ( not to be confused with agnosticism)? Gnostics believe in a God of divine love and compassion, obviously NOT the god of this hellish world which they believe is under the control of the Demiurge ( false/imposter god). So these are – ” Jesus- Yes. God – No. ” people.

The Cathars were Gnostics, wiped out in the Albigensian Crusade.

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

http://www.gnosticliberationfront.com/What%20is%20a%20Gnostic.htm

( The biblical quotes on the above site don’t come from the edited version of the bible- they come from the Gnostic gospels that the church has branded as heresy.)

#163 Cookie Monster on 09.23.11 at 9:35 pm

Sky, I’m not religious and don’t subscribe to any dogma, except I do find some of the Indian philosophy in the Bhagavad Gita agreeable to me, which is the basis for Hinduism and Buddhism, and I basically agree with Einstein’s concept of god, in that, if there is a god, it’s not a personal god or a physical embodiment, but possible an ether or energy or time itself. Natural science and quantum physics in particular is so weird and hard to comprehend I don’t rule anything out. I find deja vu a very interesting phenomenon and wonder if there is some subconscious connection to time-space ether or god. Who knows? Not me.

I don’t think we live in hell on earth, I use to at times, but now I just try and make the best of it. It ain’t so bad, beats the alternative, I say.

#164 The Emperor's Clothes on 09.23.11 at 9:47 pm

Jasmine ! Excellent ! Well done.

#165 BrianT on 09.23.11 at 11:11 pm

#163Cookie-The theory is that deja vu occurs because your mind has already seen the situation, dialogue, ect. moments before it actually occurs. It usually happens when you are actually paying attention to whatever is happening in your life at the time.

#166 Sky on 09.24.11 at 4:17 am

Hey, Cookie Monster : – ) The comments today have really jumped the track. But since we’re flying under the radar here ( bottom of this thread), with Garth’s indulgence , let’s talk a little metaphysics.

If you think deja vu (already seen) is cool then you’ll love deja reve ( already dreamed or precognitive dreaming). Deja reve is more of a gift/curse but anyone can and should learn to lucid dream.

Lucid dreams are those dreams in which you “wake-up”, so to speak, because you are in fact still sleeping. But as you’re dreaming, you become conscious and totally aware that what you’re experiencing is in fact a dream….and then…you can change the dream !

Lucid dreams can be amazing and as I’ve said they are an acquired skill. If you don’t already lucid dream…then what are you waiting for ?

Time :

The great Russian abstract mathematician and philosopher P.D.Ouspensky( late 1800s-early 1900s) had this to say : ” The mystery of existence before birth and after death, if there is such existence, is the mystery of time. And ‘time’ guards its secrets better than many people think.”

Pick up a copy of Ouspensky’s – A New Model of the Universe. That’s MY bible.

Ouspensky is a beautiful writer. He takes extremely difficult quantum physic’s concepts and presents them so clearly that lay people can understand. It takes genius to do that.

Keep in mind that Ouspensky understood, back in the 1920s, that quantum physics was the future ( I don’t think it had a name back then, so he simply referred to it as New Physics).He also critiqued Einstein’s Theory of Relativity and pointed out the errors in it.

Ouspensky, like Tesla, has been shoved down the memory hole by academia and the PTB. Don’t miss out on reading him, Cookie Monster. You won’t be disappointed.

Unfortunately, rather early in his career, Ouspensky tangled up with the ‘ mad uncle in the attic’ ( Gurjieff). Gurdjieff convinced Ouspensky that he (Gurdjieff) was the repository of untold mystical knowledge. I think there were drugs involved in this con job. Anyway, G ran what was essentially a cult and sucked Ouspensky into writing G’s books for him. We’ll never know what we missed out on had Ouspensky kept to his own path, rather than subserving his genius to G.

Eventually Ouspensky did break with Gurdjieff but it always amazes me how time and again true geniuses are sucked into some vortex or another by con men. It’s their innocence, I suppose. Tesla was another one who got badly taken advantage of.

Ouspensky spent the last days of his life in London, drinking heavily ( he was Russian ,after all), and being driven around the streets of London in the back seat of a car with his beloved cats beside him, trying to remember…remember…remember.

You see, there’s a chapter in his book on Eternal Recurrence. This is a concept that’s far more frightening than mere reincarnation. You’ll have to read the book to see how remember…remember…fits into this.

Take care and happy lucid dreaming.

#167 neo on 09.24.11 at 6:50 am

There has been a lot of market noise this week. But the one thing pointing to a global recession more than anything else and even Garth has to agree with this is the 17% drop in copper. Whenever we see this kind of plunge in the world’s industrial growth metal, we know something nasty is coming. In real terms, given the amount of copper China has been using the past several years, it is most likely suggesting that their housing bubble is about to crack. China is the key to the sustainability of the global recovery aka muddling along. If they go from 9% to 6 or 7% growth we will start to see the deflationary cycle governments worldwide have been attemping to stave off. As an aside, margin calls were raised again on Gold last night which was part of the reason for the $100 drop. This is great news. Why? The problem wih all global markets right now is price discovery. Between leveraged ETF’s and 50:1 leveraged Euro banks and Fed manipulation of the yield curve. Price discovery of almost every asset is difficult to impossible and highly volatile. The same can be said for paper Gold (GLD). However, the more they increase margins the closer we get to true price discovery because theoritically if they get to 100%, we get to 1:1. Driving out speculators in Gold is ironically going to backfire because fundamentally the distortions will be removed and there will be nothing left to drive the price down. That is what we need right now in all asset classes. The is a growing disconnect between the real production economy and the paper leveraged/derivative/HFT one.

#168 TurnerNation on 09.24.11 at 8:45 am

100 Rt Honorable S Harper on 09.23.11 at 12:34 pm

Alert! This is not of the real harper’s postings. A shock, I know. The giveaway is HonoUrable is spelled missing a Canadian ‘U’.

We all know the real harper posts as BPOE, just to annoy Garth.

#169 miketheengineer on 09.24.11 at 9:11 am

Garth:

What fantastic news!
Gold dropped by how much?
Incredible!
The buying opportunity of life time.
Garth man, I can hardly wait to take all the money in my bank account and invest it in gold bullion.
The feel of gold!
The smell of gold!
All the sexy babes I could attract with a wad of gold!
I can hardly wait to call the broker and get me all I can.

Gimmee Gold…all the gold.

What a deal!

OH…I forgot to ask you Garth

How much gold will my $10 bucks get me?

Hopefully a whole vault full of gold!….oh and those babes…I just can’t wait!

Gold…. Gimmie more Gold…Yippie…!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

#170 Cookie Monster on 09.24.11 at 1:32 pm

BrianT, Regarding deja vu, that makes sense. I had a lot more long duration experiences of deja vu when I was younger and as I’ve gotten older I find them much shorter and fleeting, where you think you’re going to have a deja vu and then you don’t. I could see that being a simple explanation and fits with my experience, it’s just the mind’s anticipation of events.

Sky, thanks for that info, I pulled the book up on Amazon and will take a look at it. I like books where the author has sorted out the science and put it into easier terms. I used to have lucid dreams when I was younger, sometimes involving naked women, so I wish I could have more of those again, maybe that’s could be a selling point for the book.