Obsession

As Bandit made a deposit on his lawn (I had a bag), my neighbour told me about his new house. “Bought a shack,” he said. I looked at his German muscle SUV and the wife’s exotic sports car and seriously doubted it. “In Florida. Cost a hundred and fifty. An 89-year-old guy died and I picked it up in an estate sale.” Turns out this is in south Florida, not far from Miami, and where the average house goes for $203,383.

So now my neighbour joins a burgeoning army of people – many of them Canadians – who have decided Florida is just too tempting-tasty to ignore. In fact it’s shocking but true: of the 43,200 condo units created and sold in south Florida since 2003, for example, only 13% are owned by people who actually live there. An astonishing 87% have been snapped up by investors.

And no wonder. Prices have just fallen another 7.6% in Florida from a year ago (not as bad as Nevada and Arizona, both down over 12%). One of the hottest housing markets on the continent (and the world) five years ago, the declines have been numbing – up to 70% in some overbuilt locations.

But this is even more quizzical when you contrast what’s happened there with our own mental market. Look at this:

Apparently the deputy chief economist at BMO Nesbitt Burns has discovered the jaw-dropping reality this pathetic blog has been pointing out for the last two years. Canadian houses now cost 200% of those in the States.

But, of course, most Americans are glorified Oakies, living on food stamps, unemployed and dreaming of glory days playing hand-me-down tuba in the high school marching band, right? Sadly, that’s what too many of us think, being the provincial snots that we’ve evolved into.

In fact the Canadian average family income is $63,800 (two or more people). The average US family earns $63,091 – virtually the same. Of that income, the typical family in Ontario hands over 31.15% in federal and provincial income taxes, not counting 13% sales taxes, health taxes and user fees. In Florida the average family making the average income would pay federal income tax of 25%. The state income tax rate is zero, and the sales tax is 7%.

We have 7.2% unemployed. They have 9.1% without a job. Are you getting my drift? Sure, people without employer health plans or government coverage pay health premiums. But then, American families get to deduct all their mortgage interest from taxable income – even their property taxes. Oh yeah, and 4% mortgage rates are locked in for 30 years. No rate roulette.

Most astonishing, the average US home costs $173,000. The average Canadian house (says CREA) costs $349,916. In Toronto it’s $454,194, and in zany Vancouver, $625,578. This, says BMO economist Doug Porter, “is not sustainable.” Adds the economics department at GreaterFool: “Duh.”

Porter figures there are three things that need to happen to narrow the bizarre gap. The loonie collapses (ain’t gonna happen). US prices recover (also a non-starter for at least half a decade). Or Canadian prices tumble (bingo). After all, logic dictates that in the US, with more than 300 million people, there’s a greater likelihood market forces have set real estate values at a more correct level than in Canada, with a tenth the people, more regionality and, of course,  Global TV.

And unless you are willfully blind, which pretty much includes Vancouver, it’s not hard to see the economic straits we’re in have already leveled real estate excesses in most of the western world. Canada increasingly stands alone as a weird place where seven in 10 families have a house and yet four in ten can’t pay their monthly bills. Anyone who believes this anomaly represents normal carries that secret Re/Max tat on their inner thigh.

But, I hear them cry, isn’t there a premium justified for living in the best country on earth?

Maybe there is, if we are. But what should it be? Ten per cent? Fifty? Is there an economic reason why the average Canadian is now paying 52% of pre-tax income to support a house (even with a 25% down payment), when Americans making the same shell out half?

Of course not. It’s hormones. Strip search the average Canadian and you’ll find a little ‘Royal LePage’ sign where their privates should be. We’re obsessed.

And it’s out of obsession that bubbles are born, and booms become busts.

By the way, my neighbour’s a smart guy. With very soft grass.

173 comments ↓

#1 Smoking Man on 09.29.11 at 9:09 pm

Obsession I got one for you…..This blog

I have fans here, be it just a few. I am always compelled to shock and flip it around to make you all think, and sometimes entertain you. Garth probably thinks I’m an ass hole, who cares his voice sounds like a girl.

I have developed writers block, don’t want to regurgitate and spin the same old crap with just flipping words around.

Be you buggers have cost me some money, it’s a religion to me to never fall in love with a hand or opinion or an investment bet.

I’m am so Bi polar example:

I flip flop all the time. Obviously a gig in politics for me would not work. But that’s when I am in my zone. That’s when I make the most money. I react sharply and quickly to changes in the game with big bets. The little voice in my head is never wrong until a few months ago.

Few months ago I told all of you about my bet on YLO, knew it was dumb, even said it when I posted, but a big wheel from TD trade floor was all the rage with it. Drunk out of his mind at the Duke of Devon says it’s a take over target, bla bla bla.

I swallowed big time I was drunk too, made the bet on my black berry. But lucky for me my gut would not let me put more than 10k on that looser.

When they cut the dividend first time I would normally reverse and do a triple short. But no not me…I was so obsessed with proving to you bubble heads on this pathetic blog that I am never wrong. Like an idiot I hung on all the way to the basement……….

See how you guys got to me…..My ego and my wine induced obsession to this pathetic blog (Garths Words) cost me some time with high quality ladies of the night.

Good news is I never make the same mistake twice………

#2 T.O. Bubble Boy on 09.29.11 at 9:09 pm

isn’t there a premium justified for living in the best country on earth?

My answer to that is yes.

However, that premium should exclude these 2 properties listed today:
1) Tear-down North Toronto bungalow (staring straight at a No Frills parking lot) for $699k!
2) Small, but not quite a tear-down bungalow in Leaside for $899k!!!

#3 blase on 09.29.11 at 9:09 pm

Garth, average income can be misleading. What’s the median income of America vs. Canada?

#4 Christine on 09.29.11 at 9:14 pm

Thanks Garth, love the pic too – that picture is worth a 1000 words (the graph too).

#5 Keeping the Faith on 09.29.11 at 9:15 pm

Stevenson = Loser Real Estate Pumper
bababooey

#6 vatoDETH on 09.29.11 at 9:15 pm

“But real estate never goes down!”

I was told this by people when the US RE Market first started to collapse. I pointed out what was happening down south. This freaked them out a it, but I was informed that Alberta was going to boom until at least 2018!!!

2018??? How did people know this exact arbitrary year? Well, the Calgary Herald said so! Yes, there is no doubt that Alberta will do well in the future, but let’s keep things in perspective here… The province is no longer running a surplus either.

http://www.cbc.ca/news/canada/edmonton/story/2011/02/24/edmonton-alberta-budget.html

#7 HouseBuster on 09.29.11 at 9:16 pm

CRASH!!!

#8 Steevo on 09.29.11 at 9:18 pm

Garth – can I please have a position in the economics department? All I want is the title – Manager, Greater Fool Economics. (and $200k per year)

#9 Seven Stars and Orion on 09.29.11 at 9:21 pm

My wife and I are decently well-travelled, and I’m not referring to Mexican or Caribbean all-inclusives. Canada is a great place, but there are a lot of great places. I cannot fathom the attitude that there is a premium to being a Canadian consumer. I can understand high sodium in processed foods in Canada because a lot of folks live at the nether regions of the supply chain (shelf-life). Basic shelter at factors of 3, 4, 5, and more of average family incomes? We’re so hooped, and so few seem to recognize it. Perhaps many do, and want to party like it’s 1999.

#10 Big Al New on 09.29.11 at 9:21 pm

Oh I couldn’t resist.

http://toronto.en.craigslist.ca/tor/reb/2600007105.html

#11 sam.i.am on 09.29.11 at 9:23 pm

It’d be nice to see can avg vs us avg, or median vs median. Not sure what to make of avg vs median in the graph.

#12 vatoDETH on 09.29.11 at 9:23 pm

The article I posted was old! Here is a more current article, projecting a $1.3 billion deficit for this year.

http://www2.macleans.ca/2011/09/13/wanted-one-premier/

#13 TurnerNation on 09.29.11 at 9:27 pm

Looking foward to a Bandit Q&A session.

#14 vatoDETH on 09.29.11 at 9:27 pm

Does anyone have a link showing what the projected Provincial Budgets are shaping up for the 2011-2012 year? And the may as well look at the Federal too?

#15 Smoking Man on 09.29.11 at 9:28 pm

#10 Big Al New on 09.29.11 at 9:21 pm

NICE :)

#16 stats police on 09.29.11 at 9:35 pm

Just wondering…that graph compares MEDIAN US prices with AVERAGE canadian prices…why the inconsistency? Seems like someone is playing with statistics to make a point more drastic than it really is.

Talk to BMO. It obviously deemed it statistically insignificant, unlike you. — Garth

#17 Signpost in the bushes on 09.29.11 at 9:38 pm

Nobody cares how much money you make or lose inside your TFSA. You can place only $5,000 of new money inside the account each year. If you lose it all, your problem. If you double your money, nice. But you cannot replace losses with new money. If you make a withdrawal of original funds in one year, they can be replaced – but not until the next year. In other words, in 2012 the amount you can have deposited in total cannot exceed $20,000 over four years, regardless of investment gains or losses. Shame on the bank. — Garth

From Pages 96-97 of Gordon Pape’s “The Ultimate TFSA Guide”

“Let’s assume you invest a total of $10,000. You select the stocks carefully and buy when prices are relatively cheap. If the scenario plays out as predicted, by the end of the second year, your TFSA stands a good chance of doubling in value. You now have $20,000 in the plan. You decide to sell the stocks and withdraw the cash to use for the down payment on a rental property. There are no capital gains taxes to pay.
In the next year, your contribution room will increase to $25,000—the $5000 basic entitlement plus the $20,000 you withdrew.”

I hope this helps some readers.

#18 InvestorsFriend (Shawn Allen) on 09.29.11 at 9:49 pm

For retired Canadians with money, it’s the opportunity of a lifetime to buy a house in Florida or other southern U.S. locales.

Best scenario might be to sell the house in Canada and move to the U.S. in retirement.

Obviously one has to look into the health insurance costs. Some people may find it best to live in the United States only 6 months of the year and maintain health coverage in Canada.

Yeah, maybe U.S. house prices will decline a bit more yet. But it is indisputable that they are at bargain levels. The smart seniors with an interest in this are already acting.

Garth, what you are waiting for?, they DO have internet there. You like cold or something?

Decades from retiring, dude. — Garth

#19 Mr. Lee on 09.29.11 at 9:49 pm

Another point to ponder is that 70% of our trade is with one customer….the USA. As they appear to be headed for a double dip, we will not escape. But alas, I know….it is still different here. For some unexplained reason our housing market can defy the rules of physics and continue to propel to new heights. Well, that is at least what Global and the CREA would have us believe.

#20 Habbit on 09.29.11 at 9:59 pm

The graph says it all. The canadian familly income is lower than I thought. Our house is paid for and our income is 110K. We put away 20-25K per year. Have an 86 grand marquis and 2005 corolla no debts. We live well and consider ourselves fortunate to both have decent jobs. I don’t know how families do it on 61K pre tax income. Debt and more debt I guess. Scary stuff. I agree 100% housing prices must go down. Many good folk are going to get creamed. It’s criminal what is going on letting people hang themselves.I’ve turned some young folk at work and in the familly on to this blog but sadly most of em’ think I’m nuts. Our modest bungalow would sell here in regina for about 300K! In Regina! We paid 65K in 87. Price went to 80K by 05. With an interest rate of 3% the average familly would barely afford it. At 8% this can’t end well. Thanks to Garth we have a HELOC that we will use only for some of the advise in the book and here. You rock Garth. Thanks for all you do.

#21 Harlee on 09.29.11 at 10:00 pm

Boys will be boys… whether at 6 or 86 (or my age) :-)

That graph is dramatic. Thank you for displaying it on your site. Canada + USA = Complete Opposites.

#22 Mean Gene on 09.29.11 at 10:02 pm

Ham recall widened over listeria contamination

http://www.vancouversun.com/health/recall+widened+over+listeria+contamination/5476585/story.html

My attempt at humour :-)

#23 Timing is Everything on 09.29.11 at 10:06 pm

“Is there an economic reason why….” – Garth

No. But does it matter…to me? Not really. There will be consequences of this sort or that. Insulate and isolate from this fallout. Look at the opportunities coming. It’s not like you haven’t seen it coming …for the last 6 years or so. Just another progression. Oh ya, this is not the ‘end of times.’
Fall is here, time to get the kindling ready.

“Alright folks, just make yourselves at home. Have a sno-cone and enjoy the show.”

http://www.youtube.com/watch?v=CGssb5YKaNM

http://www.youtube.com/watch?v=CGssb5YKaNM

#24 Timing is Everything on 09.29.11 at 10:10 pm

Sorry for the double link… I wanted this live version sent with my last post. Cheers.

http://www.youtube.com/watch?v=RcDyHFO7YD4&feature=related

#25 Stevenson on 09.29.11 at 10:16 pm

Why is Canada real estate expensive? Or is it? I don’t find places like Wawa, ON expensive. Usually items are expensive for a reason. Look at Diamonds, the scarcity is artificially controlled but yet people still by them.

This is what you get for saving and being prudent.

http://canadabubble.com/bubble-watch/2235-whats-the-use-of-saving-money.html

That article was based in part on readers of this blog. Try to keep up, MLS Boy. — Garth

#26 Fiat Freddy on 09.29.11 at 10:17 pm

For all the metalheads that frequent this blog. This will get all of you salivating. China has launched gold vending machines. Coming soon to a mall near you…

http://www.google.com/hostednews/afp/article/ALeqM5hx1rHdN57T5TXJEWnbT6O5zlU3VA?docId=CNG.f4c0cf19383379475a875952cf853bc5.3b1

#27 rentin on 09.29.11 at 10:22 pm

Garth isn’t playing fair. First he trashes BMO:

“Apparently the deputy chief economist at BMO Nesbitt Burns has discovered the jaw-dropping reality this pathetic blog has been pointing out for the last two years.”

And then figures they are math professors:

“Talk to BMO. It obviously deemed it statistically insignificant, unlike you. — Garth”

Pick a side Garth.

I will: Your point is correct, that crappy chart from BMO sucks. Man up.

I said I agree with BMO. Glad those economists have seen the light. — Garth

#28 Not going to buy into this bubble on 09.29.11 at 10:22 pm

Was going to make a huge mistake and buy into Canadian bubble but thanks to a friend and Garths blog I will hold off until a 30-50% correction happens. Why doesn’t the media or realtors tell you this cold hard fact that the average home in the US is 50% less? The average between Canada and the US was always within a few thousand dollars apart so without any doubt Canada is in a monster housing bubble. Realtors and the media they pay off have no shame in misleading the public. Keep on spearding the truth Garth. No wonder realtors post non-stop on this blog…..they want to fight the truth.

#29 Worried realtors on 09.29.11 at 10:29 pm

Stevenson #25 is just one of many out of work worried realtors who fears the current housing crash getting worse. The facts are getting out that Canada is in a monster housing bubble never seen before. Canadians are maxed out on debt and many can not make their monthly payments. Once Greece defaults Canada housing will crash faster then 2008. Remeber Canada crash 15% in 3-4 months. Realtor Stevenson has much to worry about. Spread the word around people and Good job garth.

#30 Pawn Store Paul on 09.29.11 at 10:36 pm

If per household incomes are virtually identical and Americans in Florida for example pay lower taxes, what accounts for the difference in house prices? One big difference is the fact that the credit taps were turned off after 2008 in the US of A and in Canada, the credit taps were put on steroids. The credit taps have to be shut down in Canada as they were in the US for Canada to experience the same precipitous drop in house prices. As long as credit keeps flowing, house prices will continue their high wire act.

#31 JohnnyBravo on 09.29.11 at 10:54 pm

Meltdown, a documentary about the global financial collapse, ala “Inside Job”, “The Warning” et al, offered online in four parts:

http://english.aljazeera.net/programmes/meltdown/2011/09/2011914105518615434.html

#32 Led on 09.29.11 at 10:59 pm

I have been around the world, and no one loves their real estate like Canadians. it’s up there with hockey.

We seem to think that living in a cold climate is the best place in the world. we are delusional. we think our shit don’t stink. I wish I was American.

#33 JohnnyBravo on 09.29.11 at 11:01 pm

Just think what a shock the house price chart in Garth’s post would be to someone who was in a coma for the last five years and woke up today.

#34 Randis on 09.29.11 at 11:02 pm

#17 Signpost

Garth is right, Gordon Pape is wrong.

Go check out CRA

#35 Beach Girl on 09.29.11 at 11:02 pm

Dear Garth

How do you know that 4 out of 10 people cannot pay their bills? Who monitors this information, very curious.

Also, you should pick up after Bandit. I myself take the dog out at night. When the doggy poop spies have gone to bed. I don’t much like my neighbours anyway. You gonna DNA my dog.

And recycle this. The archaelogists of the future will have less to work on. I am contributing.

Also, it is not my responsibility to save the planet, as I might only be here another 20 years. I don’t deal with pressure like that.

Unrelated, but kinda sad. I am renting out a beautiful 1/2 house. Woman calls, she is crying, her husband and her have sold their 3 bedroom house, he has lost his job (got a package, and will go on EI after that). Their house closes November 3. But they have a monster dog, 2 cats, no children. They don’t want to sign a lease. I never do that. Then you can get “F”. Have done this along time.

Still, hard times all around it seems.

#36 Ozy - I Realized on 09.29.11 at 11:09 pm

Realized why US/Canada are so different in terms of RE

Garth, we can’t compare apples with pears.

The States have far more inhabitable land year long, while we crowd in expensive big cities (due to government overhead on building industry, etc). Even if you’d like to pay much less for home, there are no other 100+ cities with competitive employment to move to. Bottom Line!

You barely have 2 major cities in a province, and only a few spread-around provinces. The government, banks, builders, etc have masterfully cornered the housing market and there is no way out, at least until a disruptive technology or trend arises (e.g. change in sheeple psychology, e.g. stop taking the BS and move to the States)

Comment on this FOLKS!

#37 Nostradamus Le Mad Vlad on 09.29.11 at 11:11 pm


“Canadian houses now cost 200% of those in the States. This, says BMO economist Doug Porter, “is not sustainable.” Adds the economics department at GreaterFool: “Duh.” — Apropos that the second response is far more intelligent than the first! Plus, it’s an adnoun.

“And it’s out of obsession that bubbles are born, and booms become busts. With very soft grass.” — Tulip mania on soft grass? Sounds as solid as Richmond in a ‘quake.
*
#161 Timing is Everything on 09.29.11 at 8:42 pm — The headline:

THE PSYCHOPATH – The Mask of Sanity

Does that line ever sum up Harper beautifully! Here is one more for the scrapbook.

#9 Seven Stars and Orion — “. . . to party like it’s 1999.” — Like this? Good call!
*
Fukushima fire, and Hydrovolcanic ‘quakes.

Chronic Deflation Masses of charts; Beginnings Economic bad times just beginning; Bubble Economies Im- or Exploding? Wot’s the dif? UBS, 10 year silver prices and other stuff; Cleveland Poverty there; Wild Fire Money junkies are scared, as the protests are increasing, such as here and Boston; Rebellion It’s happening in a lot of places.

Monster Mash I prefer mashed potatoes.

Turkey Escorting aid boats to Gaza; WH The facade on the exterior doesn’t reveal the inner; Fast and Furious “Fast and Furious is NOT the new Watergate. It is the new “Iran Contra”, with guns going south and drugs coming north and US officials getting rich on the corruption.” wrh.com; al-CIAda Truth will never be suppressed; Iran Guess everyone’s getting ready for the shoot-out at the OK Corral.

#38 jed on 09.29.11 at 11:11 pm

Best place on earth????
“place”-A particular position or point in space. try being an ex-pat long enought to get past the emotional attachment to Canada and you will see that Canada includes: a large red-neck population, rascism, lack of ego and thus strong anti-American rhetoric, over costly and under performing health care, incredibly petty and unreliable bureaucracy (and idiosyncratic), unjustifiably high taxes (would’t mind paying more if we got what we paid for), and the list goes on…It was an acident of brith for many of us, as it is around the world. There are pretty good places across this globe and egocentrism does not work anymore.

#39 smartalox on 09.29.11 at 11:13 pm

@stats police, when the sample size is as large as the number of underwater mortgages in the US, the values tend toward the normal distribution. Therefore, the median IS the mean. Mean is another word for average, by the way.

#40 Jody on 09.29.11 at 11:13 pm

“isn’t there a premium justified for living in the best country on earth?”

The best country on earth? I can’t stand that kind if innane talk. No, we pay more because we are stupid idiots that swallow that kind of jingoistic crap. Plus, we are a bunch of pussies. Take Bombardier for example, gets tax dollars buy the oil tanker load because they are “French,” then sells their wares in the US cheaper than they do in Canada. What do we do about it? Nothing. That is why we pay more for everything. Tax me, I’m Canadian.

#41 Beach Girl on 09.29.11 at 11:15 pm

Don’t give that RETARD David Suzuki, my e-mail address.

#42 45north on 09.29.11 at 11:17 pm

that’s what too many of us think, being the provincial snots that we’ve evolved into.

pretty funny

Worried realtors: Once Greece defaults Canada housing will crash faster then 2008.

from what I read Greece has defaulted and the European powers are just slow to announce it

I still think Canadian real estate is going down hard, September sales numbers should be out soon.

#43 City Slicker on 09.29.11 at 11:23 pm

Most astonishing, the average US home costs $173,000. The average Canadian house (says CREA) costs $349,916. In Toronto it’s $454,194, and in zany Vancouver, $625,578.
———————————————————–
Garth I thought the avg home in Toronto is $700Kish and
$1 million in Vancouver, no?

Those are SFH prices. The numbers I quoted are for all properties. — Garth

#44 AKatz-Oaville on 09.29.11 at 11:38 pm

These tiny GTA condos smaller than hotel rooms:

http://www.moneyville.ca/article/1060068–these-tiny-gta-condos-smaller-than-hotel-rooms

#45 45north on 09.29.11 at 11:50 pm

we ourselves have made quite a series of promises:

interest rates will not go up in the face of Greek, Italian, Portuguese financial collapse

since interest rates will not go up, housing prices will not go down

since housing prices will not go down, unemployment will not go up

I don’t believe it.

#46 Wild Side on 09.30.11 at 12:08 am

Garth, know that you have mentioned this several times on your blog, but it was quite ironic speaking to a small group of co-workers today. One of the employees of my company said, “I wish that I had bought a home 9 years ago when I started with the company”.

I didn’t say anything, but one of our senior managers jumped in and started saying, “I wouldn’t be buying anytime soon” and then proceeded to tell us that his good friend is one the biggest mortgage brokers in the Oakville/Mississauga area.

He simply said that his friend has said that 95% of the mortgages that he has done in the past couple of years have been refinancings and generally, these are people in the their Mid 50’s with a couple SUV’s in the driveway and homes worth $500,000-$600,000. Nothing extravagent, but he said that these homes are financed to the 9’s with little or no equity left.

It’s just a matter of time Garth as you have been saying for some time, but I truly feel that once the fall begins here in Canada it could very easily be as bad as the U.S., but it will take 5-10 years.

#47 Tim on 09.30.11 at 12:15 am

The official rate in the US may be around 9 percent, but it is much higher if you count the underemployed, part timers, or people who have given up. There system doesn’t count the people who haven’t worked for a long period of time.

#48 a prairie dawg on 09.30.11 at 12:21 am

@ #1 Smoking Man

Good news is I never make the same mistake twice………

– – –

So, no second dates?

“Bazinga!”

#49 JohnnyBravo on 09.30.11 at 12:27 am

Oh, Smoking Man, how could you? YLO? Unsustainable debt. Unsustainable dividend. Outmoded business model. Will have to totally re-invent itself just to survive (contrast to, say, an IBM that always seems to manage to grasp and lead the next big thing). What were you thinking, Man? I warned the bottom feeders to stay away from this one.

Want to take a flyer? And I mean a flyer. I’d try RIM for three potential reasons:
1) possible takeover: yes possible, but… could be complicated; may still be too pricey; Mike and Jim are stubborn; the whole “Canadian” thing
2) volatility: e.g. recently shot up about 50% in just a few days
3) You never know: RIM is still a real, profitable business with a good brand, lots of cash (unless they’re lying), valuable patent portfolio, QNX has potential, best encryption in the business (did you notice India had no beef with the iPhone?). If the board announced they were replacing Mike and Jim with a Steve Jobs avatar the stock would double almost instantly.

Caveat speculor.

#50 penpal on 09.30.11 at 12:30 am

@ # 1 Smoking Man

A “player” wouldn’t even mention a $ 10 K ‘bet’ that lost even it’s total value it is so insignificant.

And to you, the guy with the self professed 8 figure net worth?

Hanging out with old deadbeat shop lifter / fences that have to rob banks for a casino bankroll?

Taking investment tips from drunk Bay Street ‘traders’.

Hooking up with ‘ladies of the night’ and bragging about it on a blog that your ‘wife’ reads?

Getting ‘high’ or ‘drunk’ and posting.

One minute dyslexic and impared, the next writing “bon mots” with absolute clarity.

That’s some great ‘life’ you have there dude.

Yeah buddy you must be real shooter.

And to those gullible fools on this blog that eat this crap up – give your heads a shake.

I think Garth is not just being self deprecating when he refers to this as a “pathetic blog”.

#51 Nostradamus Le Mad Vlad on 09.30.11 at 1:02 am


Globalists Set the controls for Deep Space 38, and launch the rocket! Yuan New global currency? Umm, not just yet — the time isn’t right; Russia New oil and gas find in Arctic; College Education and 5:09 clip Walk off during a TV interview; Reckless Let the debtor nations sink, and start again; Argentina At least the President got it right.

Sun is waking, albeit slowly; Curioser and curioser, said Alice. True, or a frame-up? Obomba US$3.4 bln. for Smart Meters; BP and Transocean Is this the right room for an argument? Flu jabs Some docs and nurses don’t want it; Brainwashing UK children to learn about the EUSSR; Infighting How not to fix global news events; Bio-war Second phase in Afro-Asia; Switzerland quits nuke power; 4:53 clip Obummer, just like Japan’s PM, is out of his depth; Border Security Didn’t Obummer and Harpo do away with the border a few months ago? Siege Strange-looking mao of the drug cartels, yet the US is pondering a new border here?

#52 smartalox on 09.30.11 at 1:08 am

Ruh-roh! BBC online is squawking tonight about stocks plunging in China after US department of Justice says they’re launching fraud investigations. Could this be the beginning of something big?

#53 penpal on 09.30.11 at 1:52 am

@ # 18

Do you have ANY idea of what is involved in the purchase and sale of real property in the US of A these days.

You might not be so cavalier with your advice and I’m not sure, but I think our host does not own there (he has outlined the pitfalls in earlier posts I believe).

#54 Kimberly on 09.30.11 at 1:59 am

But what if it really IS different here? I have given up on the idea of ever buying a place in Vancouver. Properties just keep going up and up with no sign of stopping. My friend says that Canada’s property has been way undervalued for so long and that all of these huge increases are just us ‘catching-up’ and being up in the world-class property realm where we belong. I hear those kinds of comments all the time in Vancouver. sigh.

#55 Bobby on 09.30.11 at 2:02 am

I’ve been to a number of open houses here in Victoria quite recently. No, they are not busy and yes, the realtors are looking rather concerned. Each said we’re open to offers, in fact one said any offer.
The landscape here is littered with For Sale signs with many stating reduced or new price.
It is going to get ugly out there!

#56 poco on 09.30.11 at 2:14 am

#163 Stevenson (from last post)–i see you’re popular tonight
______________________________________________
your post—-
Didn’t bother reading your whole post after your first few lines. I couldn’t help it. You have a few pages of properties selling for less what they sold for in 2008? That’s how you have come to your conclusion that the sky is falling? So now you not only got confirmation bias but selective reading too? No I can’t see the future and I remain neutral. Its amazing how you think your opinion trumps the global factors that influence macro economics. Garth was right the greater fool is the fool that follows. In this case you are following the voices and information you would “like” to hear.
______________________________________________

That i must say, was a classic retort—–

-“i’m not going to read the rest of your post because it may cloud my judgement on how i feel about the housing market in Canada”—classic, just classic—how old are you? 12
Remember, i was responding to your post #146–you wrote it –go back and read it

i guess we all see how you come to some of your conclusions–i’ll read a couple of lines and make up the rest !!!!
you spout off without any facts to back up your claims as do most other realtors trying to keep this market pumped up–but it ain’t working for you is it ? Majority now know where we’re headed–down– down– down

my conclusions of when, where, and how fast my particular market was falling was not realized from thin air—it was done with a lot of research and the help of 3 friends/relatives–(realtors as a matter of fact)-so i guess you might say the mls exchange did most of the work–but you know all about that now, don’t you

don’t have to do much research anymore (500 emails a week is a bit much)-new listings –sales –price changes –was easy to keep track of –you know how it’s done—
when you find 45 listings per week for 10 weeks (condos)underwater in a relatively small area –i think it was safe to say this market ain’t too healthy

the greater fool is the fool who follows—great line –who is the one who bought into this market–your family member ????? or was that just one of those little white lies the realtors tell us to keep the party going ????

ps: that was a feeble attempt of “trying to stick it to me” if that was your intent
i sense a bit of jealousy in your posts to me—funny eh–you an owner and me a renter–go figure
pps:–check your inner thigh before you go to bed tonight—you might get it if you read more than the first couple of lines of Garths post—
the post might be scary stuff for you, but for many others on here, we know what’s coming

#57 poco on 09.30.11 at 2:18 am

Stevenson
one last item–i agree with you that there is no housing bubble–how can there be when it is already deflating !!!!

#58 not 1st on 09.30.11 at 2:21 am

When climate change, war, disease and overpopulation grip this planet during the next 50-100 years, Canada is going to look like BPOE for certain.

#59 Ghost of Tom Joad on 09.30.11 at 2:26 am

http://www.youtube.com/watch?v=siXG53YpNsk&feature=player_embedded

Robert Kiyosaki said last year who runs the world….go to 2:25 min — hilarious how Robert laughs when asked about Obama.

#60 MB on 09.30.11 at 3:06 am

But Garth, isn’t the US market experiencing such a dramatic decrease in R/E prices, relative to Canada, partly due to the excesses of Ninja loans, credit default swaps and fanie mae/freddie mac? Yes there is a bubble in Canada, but it hit the fan big time in the US

#61 I'm stupid on 09.30.11 at 6:20 am

#17 sign post in the bushes

Firstly, thanks for the post. What I wanted to know to when I asked about the TFSA account was losses. More specifically in the event of total loss. I understand the gains part.

I can almost assure you that the guide has no mention of losses. If it does please post.

Thanks

#62 Rudolf on 09.30.11 at 6:31 am

In 1976 – when I was young and naive – I bought a bungalow on one of the side canals off the Intra Costal Waterway in Lauderdale-by-the-Sea to tie up my boat.
I assumd at that time that Canadian citizens had the right to reside in the US for six months out of each year. I was surprised when I was lectured by one snooty US border guard that this was certainly not the case. He informed me that it was only a privilege, and that it was actually up to him to let me cross the border for an extended stay in the US. I sold the property before I returned to Canada that season, and have never entered the US again.

#63 David B on 09.30.11 at 7:03 am

Good overview but health care costs in the USA is very complex and yes political to say the least. For those who want to retire and live in Florida there are a host of reasons to be well aware of health care rules.

Check this one out just for starters.
http://www.smartmoney.com/spend/family-money/buying-private-health-insurance-14819/

++++++++++++++++++++++

#64 ScottyD on 09.30.11 at 7:15 am

@ #10 Big Al, I am from Aus so not sure who those two are, my guess is the “Global TV” hawkers that Garth speaks of so often. Big thumbs up, love it!!!

Smokin Man, I think you have more than one fan on this demented blog… keep at it man, I love your work.

Scotty

#65 Ben on 09.30.11 at 7:17 am

The real estate junkies are out in hords defending this one. “Best place on earth” ya right. lol

#66 Susan from London area on 09.30.11 at 7:25 am

So Garth when you say your neighbour is smart was that referring to his great buy in Florida? I myself have been wanting to check out the goldcoast I grew up wintering there as my parents were snowbirds near West Palm. My Cottages close at the end of this month I thought I might be able to find a great deal and sit on it for a few years use it and get away from the harsh Canadian winters. So again why is your neighbour smart, it can’t be his soft grass?

#67 Stu Gatz on 09.30.11 at 7:27 am

#50 penpal

Your analysis of Smoking Man is right on the money. Glad to see others pick up on all the clues in his posts that give him away. Your final comment is spot on as well.

#68 penpal on 09.30.11 at 7:27 am

@ #61 MB

You must be new around here.

Go back and read some previous threads where these points are covered at length.

Essentially we have the same risk adjusted borrowing problems in Canada, just with different names for the players (see # 46 Wild Side’s posting on this very thread for anecdotal evidence.

Don’t be so naive (or obtuse) about the situation.

It’s so Canadian of you.

#69 bigrider on 09.30.11 at 7:44 am

#32 Led- You are right ,no one anywhere as obsessed with RE as Canadians are. Reason : Lots of Asian , Russian and don’t forget the ultimate RE humpers, Italian immigrants.

We need a real ‘ cleansing’ of this mentality. I wish I could get the proverbial firemans hose out, insert and open the flow of water.

But alas, until financial markets stabilize and actually come out of the secular bear market they have been in since 2000, the housing obsession will continue unabated.

#70 Sky on 09.30.11 at 7:57 am

@ Beach Girl # 35 :

” I myself take the dog out at night. When the doggy poop spies have gone to bed. I don’t much like my neighbours anyway. You gonna DNA my dog.”

Europe and the Homeland are ahead of the dog poop DNA game. Coming soon to Canada, no doubt.

http://gizmodo.com/5816599/fascist-florida-condos-draconian-dog-shit-dna-policy-sparks-canine-conflict

http://www.dutchdailynews.com/dog-poop-dna/

http://www.upi.com/Odd_News/2011/06/26/DNA-used-to-ensure-dog-poop-cleanup/UPI-29781309139955/

http://uk.reuters.com/article/2008/09/16/uk-israel-dogs-idUKLG37942520080916

#71 cliffard on 09.30.11 at 8:00 am

#50 penpal smoking man is not a player he’s a god on wall street

#72 allister on 09.30.11 at 8:04 am

#18

My parents owned a Florida property from 1978 until 2005 for a winter haven. They have been renting in Florida and Texas since.

Dad says that he was a idiot for owning down there. Property taxes. building maintenance, lawn services, hurricane insurance and oh yeh – liability insurance for the US law suits, termites, air conditioner repairs and so on. Then youre stuck in one locale, don’t get to see other beautiful places.

He’s figured out he broke even at best, worried alot when he wasn’t there, and now rents for less than owning.

#73 bigrider on 09.30.11 at 8:19 am

Garth, if we re-test market lows made in March of 2009 on all major indexes in the next few months, you can forget about trying to convince anyone in this country, blog or otherwise, on the merits of financial assets.

Just saying.

We are in the grizzly bear mother of all bear markets.

People are welcome to wait to invest, until there is more risk and rising prices. That would be most Canadian, as you embody. — Garth

#74 bigrider on 09.30.11 at 8:34 am

http://www.moneyville.ca/article/1060580–housing-a-healthy-haven-for-canadians

Al Sinclair, the prominent load mouth realtor on CP24 with house hump queen Anne Romer, feels that “because of the battered and whipsawing stock market ,it is time to bet on “bricks and mortar” .He has purchased a condo in Florida for 480k that sold in 2004 for 875K.

So, the guy before him who bought in 2004, was it time for him to bet on ‘bricks and mortar’.

This guy Sinclair ALWAYS says it’s a good time to bet on bricks and mortar. Constantly bashes the stock market.

When are A-holes like this guy finally going to be wrong.

#75 Aussie Roy on 09.30.11 at 8:36 am

Aussie Update

House prices are falling but rents are rising, so home owners win?, only those who cant do the math.
I suppose -3% on 500k price is ok when you get +3% on 15k annual rent.

http://afr.com/rw/2009-2014/AFR/2011/09/30/Photos/db5d0ebe-eb04-11e0-a6db-abb2c1b5de7c_rpdata.pdf

Sydney is surrounded by the mortgage belt equivalent of a ring of fire, as what seems to be Australia’s own version of the euphemistically named sub-prime lending crisis emerges in specific regions.

http://news.domain.com.au/domain/real-estate-news/suburbs-in-ring-of-fire-feeling-the-heat-20110929-1kxzy.html

Australias largest mining state, its booming?…

Homes in five WA regions among nation’s worst rate of negative equity

http://news.domain.com.au/domain/real-estate-news/homes-in-five-wa-regions-among-nations-worst-rate-of-negative-equity-20110929-1kxzv.html

We want to open the credit taps, but those silly greaterfools wont borrow.

Smith says banks are also trying to kick-start the first-home buyer market, which according to RateCity research is down $11 billion compared with 12 months ago.

http://www.propertyobserver.com.au/mortgages/cashed-up-banks-will-continue-to-cut-fixed-rate-mortgages-ratecity

Auction results still below 50%

http://www.myrp.com.au//showNews.do?id=498

Days on market is a strong indicator of how the private treaty sales market is performing.

And the most recent statistics certainly show how the capital city markets are performing away from the auction rooms.

Things have slowed down as the details for the August month show.

http://www.propertyobserver.com.au/residential/clouds-over-most-capitals-as-property-slow-to-sell-apm/2011093051752?source=flicker3

Australian home values fell 3.2 percent in the year to August, with the top end of the market seeing steep declines, according to the RP Data-Rismark Home Hedonic Index.

Prices across Australia’s eight capital cities fell a seasonally adjusted 1.4 percent in the three months to Aug. 30 and 0.4 percent during the month, RP Data and Rismark International, which compile the index, said in an e-mailed report. Values in the most expensive 20 percent of suburbs slid 5.5 percent over the year, compared with a 2.9 percent decline in the lowest 20 percent and 3.1 percent in the middle 60 percent, it showed.

http://www.macrobusiness.com.au/2011/09/rpdatas-august-data/

#76 T.O. Bubble Boy on 09.30.11 at 9:00 am

I can see why everyone wants to move here… gold is everywhere! We’ve got the Harper con-men demanding gold on their business cards (and removal of the word “CANADA”):

http://www.theglobeandmail.com/news/politics/baird-demands-gold-drops-canada-from-foreign-affairs-business-card/article2185969/

500+ comments — all negative. I guess Baird wasn’t democratically voted to his current post based on the overwhelming shame people feel when he’s representing the country.

How come B.C. can vote out the HST, and Toronto can vote to save various city programs, but we can’t vote to dump this type of self-serving clown at the curb?

#77 Stevenson on 09.30.11 at 9:01 am

Some of these posts are really quite entertaining. As month’s go by people are still wondering why the RE still hasn’t crashed to the pits yet. Remember crash and not seasonally adjust. Then they select the news they like to remember and if someone comes up with support explaining how the RE market is fine they ignore it.

Well I am sure people would not mind wishing and waiting. This seems very similar to religions to the return of….. the jedi?

#78 pbrasseur on 09.30.11 at 9:03 am

Amazing graph, Canadian prices went from from 25% below to more than 100% above US prices in less than 10 years.

Even if US prices rose by 40% (yeah right…) Canadian prices would still have to decline by 30% to meet them…

This is totally nuts!!!!

Worse part is we loose either way.

Tumbling prices means a recession.

Steady prices means a growing burden on Canadian household that will hurt investment and productivity prospects for years. A time bomd that gets bigger and bigger.

#79 Rod Serling on 09.30.11 at 9:06 am

Canadian real estate has entered another dimension, a dimension not only of sight and sound but out of mind. Canadian real estate is now entering the Twilight Zone.

#80 timo on 09.30.11 at 9:07 am

http://blogs.wsj.com/source/2009/12/14/tullett-prebon-to-help-brokers-escape-bonus-tax/

The firm, led by City heavyweight Terry Smith, said it “will seek to facilitate, where possible and appropriate, relocation to the company’s other offices around the world which will have more certain taxation regimes”.

good luck raising taxes on the rich, they just relocate their mailing address…

http://www.businessweek.com/news/2011-09-29/italy-sells-10-77-billion-in-bonds-as-borrowing-costs-rise.html

“Today’s auction was not strong at all,” Annalisa Piazza, a fixed-income strategist at Newedge Group SA in London, wrote in a note to investors. “Market participants don’t seem to bet on a solid recovery” in Europe’s peripheral economies “any time soon.”

What ? The casino is not attracting the same interest as before. Invent a new game to keep up the charade.

#81 City Slicker on 09.30.11 at 9:09 am

So now my neighbour joins a burgeoning army of people – many of them Canadians – who have decided Florida is just too tempting-tasty to ignore. In fact it’s shocking but true: of the 43,200 condo units created and sold in south Florida since 2003, for example, only 13% are owned by people who actually live there. An astonishing 87% have been snapped up by investors.

———————————————————-
I wonder who will be snapping up our properties after the crash since the Americans will still be tapped out, oh and think there are only igloos as homes here.

#82 Professor Stu Gatz on 09.30.11 at 9:15 am

#74 Big Rider

Al Sinclair obviously never graduated from logic 101. If it is always a good time to buy bricks and mortar then try to explain this to the condo buyer in Florida in 2004 and the rest of the US that has seen a real estate meltdown. His non sequitar is obviously going over the heads of the gullible sheeple who listen to him. Where is Garth when these clowns air their illogical views?

#83 timo on 09.30.11 at 9:18 am

http://www.bloomberg.com/news/2011-09-30/u-s-august-personal-income-and-spending-text-.html

Are we in recession yet? With numbers like these home prices are going down.

http://www.dtnprogressivefarmer.com/dtnag/common/link.do;jsessionid=B5FF893DCAEF3332EE6B3B70A64AFF65.agfreejvm1?symbolicName=/free/news/template1&vendorReference=cdc37f49-a12b-4710-8d92-f41326abfc58

“Friday’s Quarterly Stocks report should be viewed as bearish for corn with the 1.128 bb well above the pre-report average of 964 mb, above the high end of the range of 1.05 mb, and well above USDA’s September Supply and Demand estimate of 920 mb,” said DTN Analyst John Sanow. “This year’s report feels a bit like deja vu given USDA found 300 extra bushels last year at the same time, with most pointing to new-crop bushels finding their way on to the old-crop ledger.”

watch the corn in the field….

#84 timo on 09.30.11 at 9:22 am

http://www.businesscycle.com/reports_indexes/reportsummarydetails/1091

“A new recession isn’t simply a statistical event. It’s a vicious cycle that, once started, must run its course. Under certain circumstances, a drop in sales, for instance, lowers production, which results in declining employment and income, which in turn weakens sales further, all the while spreading like wildfire from industry to industry, region to region, and indicator to indicator. That’s what a recession is all about. ”

Another call that we are in recession. You can put lipstick on the pig to fool sheep for so long.

#85 Devil's Advocate on 09.30.11 at 9:41 am

The bottom line, after cruising at high altitudes for most of the past decade, Canada’s housing market is on track for a soft landing in the year ahead, though turbulent global economic skies could make for a bumpy ride” BMO Focus September 30, 2011

Sounds about as expected and not nearly so bad as many profess. Home sales “steady” and a “soft landing” maybe a bit of a “bumpy ride”. But no “Crash”.

#86 leopotato on 09.30.11 at 9:45 am

My sister’s realtor just told her she can’t sell her house because she has a cat. (This is not an unneutered male spraying all over the place). This realtor is a riot. She only takes clients by referral. She only has two house listings at the moment. She can’t sell my sister’s house because there is a cat in the house. Huh? At least half the home sellers own cats. The only other house she has for sale is the 1975 PNE “price” house. What is a “price” home? With her attitude she is going to be living in her BMW and working at Micky D’s soon! House has been for sale since June 9 up on the hill behind Coquitlam Centre mall. The cat wasn’t a problem until the realtor ran out of excuses. No granite, no stainless and the original brown shag carpeting. Needs at least 60k in updates. It’s simply priced way too high. I am very worried. Her future retirement depends on the house selling.

#87 45north on 09.30.11 at 10:06 am

Poco: I think your message is:

the tri cities area (BC) has been declining since the spring of 2010

when you find 45 listings per week for 10 weeks (condos)underwater in a relatively small area –i think it was safe to say this market ain’t too healthy

I’m convinced, well let’s say swayed

Sky: Europe and the Homeland are ahead of the dog poop DNA game. Coming soon to Canada, no doubt.

no doubt

#88 Steven Rowlandson on 09.30.11 at 10:09 am

In both cases the price of canadian and american homes are much to high. There is much inflation and stupidity relative to a working mans annual pay to be wiped away. Its along way down to realistic price levels.

#89 Peter on 09.30.11 at 10:24 am

Hello Garth – Peter here from NYC – Now you are talking my language ! I think you see what I am seeing and posted about a few blogs back. Prices in the US are rediculously low in some parts. Fannie’s new guidelines since the crash require 25% down. This has closed the mortgage market to most of the population apparently. Here is a great idea for a business venture. Partner Canadian investors who have 25% to invest – with Americans who don’t have the downpayment – but do have a US Credit Score and US 1099 (T4). This enables the US Bank to issue a mortgage (the 30 year fixed rate mortgage that never gets adjusted upwards IS THE BEST DEAL on the planet). There are only two countries that offer it USA and Denmark. I have a general rule that I am noticing in investment properties down south. For every $100,000 in cost you can expect $1,000 in monthly rental. So $300,000 invested in Atlanta, the Carolinas, Florida and other southern parts – will run you $3,000 per month in gross rental. That’s a starting point – I see (and am jumping on) much better deals. These generally have no condo or HOA fees. I can’t find anything comparable in Canada.

#90 Smokie is a fraud on 09.30.11 at 10:29 am

#50 penpal on 09.30.11 at 12:30 am
#68 Stu Gatz on 09.30.11 at 7:27 am

Lol – so true.. Smokie is likely a 20-something life flunkie with an investment habit and a need for attention. I’ll give him props for creativity, but seriously – this guy’s full of it through and through. I challenge you to find me a single 8-figure net worth individual who can’t properly capitalize, punctuate, or, for that matter, even spell. His ‘fans’ on here are just as delusional as he is. This blog would be a helluva lot better if it was moderated, sorted, and peer ranked like most other good blogs out there. Pathetic indeed.. Though definitely entertaining – and in the end, I suppose that justifies its existence. It’s the only reason I come here after all – the truly insightful and unbiased comments are typically ignored. Fear not, those of you who post them – they are definitely read and valued, but obviously not as fun to respond to as something as ludicrous as Smokie’s misc ramblings.

#91 timo on 09.30.11 at 10:29 am

http://www.vanityfair.com/business/features/2011/11/michael-lewis-201111

Michael Lewis goes where the buck literally stops—the local level, where the likes of San Jose mayor Chuck Reed and Vallejo fire chief Paige Meyer are trying to avert even worse catastrophes and rethink what it means to be a society.

compelling story that paints a very bleak picture.

#92 bigrider on 09.30.11 at 10:29 am

#73 -Allister- Bang on.

Owning in Florida for your own use only is an excercise in losing money for sure. Renting is better.

However, owning for the purpose of renting out down there may have some upside as yield is enticing. This notion that RE always goes up has to stop however,…you would buy to rent out strictly for yield. Any property appreciation would be gravy.

#93 debtified on 09.30.11 at 10:42 am

#1 Smokin’ Man, dude, what the heck happened to you? That’s why it’s callled gambling. No such thing as mistakes in bets in gambling. Gambling itself, regardless of bets, is the mistake. Just enjoy it, no regrets. Otherwise, don’t even bother doing it.

Okay, you go back being funny now.

On other news, I’ve been following China closely and more evidence of its flaws are surfacing. Where China goes, we (Canada – and maybe even the rest of the world) follow. The effects of the rose-colored glasses is diminishing rapidly.

#94 Young Old Fart on 09.30.11 at 10:58 am

#71 Sky on 09.30.11 at 7:57 am
@ Beach Girl # 35 :

” I myself take the dog out at night. When the doggy poop spies have gone to bed. I don’t much like my neighbours anyway.

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

…and we don’t like you. I have a neighbour that USED to do that. Let his dog out late so it could come over and dump on my lawn. Big mistake… one day he shows up on my door with a copy of the poster…. “gee buddy, no….. I haven’t seen your dog….”

;o)

#95 Junius on 09.30.11 at 11:16 am

#55 Kimberly,

Tell your Vancouver friends they are nuts. Vancouver is way over priced on a global basis. It is way beyond its historical prices of 3-4 times salary. Don’t be fooled by the fools.

#96 aweb on 09.30.11 at 11:17 am

The BMO graph is fundamentally, intentially, dishonest. Comparing median to mean is a mistake so basic and so obvious, the only conclusion I can make is that they are trying to manipulate people with it.

The choices they made (mean US, median Canada) are the exact comparisons you would make to show Canada diverging as far as possible from the US. In a case like this, Median and Mean are closer for lower numbers, and diverge as they go up. They diverge beyond proportionality as well (i.e., median grows at a faster %). This basic property holds for virtually anything measured in $, whether it’s salaries, value of houses, etc.

There’s no reason anyone would believe me, but I do Stats for a living. Comparing mean and median like this is literally a Stats 101 mistake – for a professional, it’s not a mistake, it’s a lie (call it “misrepresentation” if you must be cautious).

There is not chance BMO thinks their choice is “unimportant”, they made it for a reason, since it is clearly the wrong one. It’s not clear why they made this choice, since the point of the graph would stand even if they chose a consistent metric.

#97 Junius on 09.30.11 at 11:19 am

#77 Stevenson,

You said, “Then they select the news they like to remember and if someone comes up with support explaining how the RE market is fine they ignore it.”

Have you considered that they just don’t accept it because it doesn’t make sense? Probably not.

Pot calling the kettle black.

#98 Junius on 09.30.11 at 11:21 am

#85 DA,

Would you expect a bank to conclude anything other than a “soft landing”. They would never publish anything that talks about a potential crash. Ever. Of anything.

#99 bigrider on 09.30.11 at 11:24 am

#83 Professor Stu Gatz to Bigrider. –

Ma che Gatz . Bang on. Exactly what I said.

#100 bigrider on 09.30.11 at 11:28 am

Ontario to open up colon cleansing clinics all over the GTA directly targeted at RE agents.

Turn on the hose full blast I say.

Gotta clean out the spew inside all of these RE parasites.

#101 not asian on 09.30.11 at 11:30 am

Since 87% of condos in Florida are owned by investors, I guess many of these could be Canadian investors. If our market takes a nose dive, a flood of these condos would go on the market pretty fast driving the prices even further south (if possible).

#102 disciple on 09.30.11 at 11:51 am

I don’t want to pay for foreign dictators any more. I don’t want to pay for evil wars anymore. Using violence to get what you want is wrong. Defense? That’s another story. We don’t follow the very advice we give to our children. The myth of the social contract that I gave Garth a hard time about the other day, is actually a gun to the head of our unborn children. That’s why his generation doesn’t care, because they won’t be around to clean out the trash.

But I do, and I will.

#103 Live Under Your Means on 09.30.11 at 11:57 am

#64 David B on 09.30.11 at 7:03 am
Good overview but health care costs in the USA is very complex and yes political to say the least. For those who want to retire and live in Florida there are a host of reasons to be well aware of health care rules.

……………..

Younger sis took a transfer to Atlanta many yrs. ago due to co. transferring their office. They had 1 yr to go to pay off their mtg. Co. paid for their trip to Atlanta to look at RE, etc. Sis did not want to go, but her DH (a real control & useless prick) thought it was a great opportunity, he’d find a great job & could golf year round. They rented for 6 mos. & then bought a lovely home (I visited them). Her DH ended up working as a part time consultant travelling huge distances & away most of the week.

I recall sis talking about how difficult it was trying to decide on which health insurance plan to go with. Thankfully, none of them had to actually use the plan.

But, during their time in Atlanta, we’d speak to sis who was down & didn’t know if she could pay the next mo. mtg. We sent her $500. & found out later they had bought a beautiful bedroom set. No, we were never repaid & didn’t expect to be. Anywho, they sold their home last year, bought a condo townhouse cause her hubby said RE will always go up. They only planned on keeping it for 3 yrs. Sis & I tried to convince her to rent. They live on CPP, a few investments and her hubby does a bit of sub teaching. Rarely speak to her as she’s so depressed.

PS – I belonged to several American forums years ago due to a health problem I had and a genetic health problem my DH inherited from his Mom. DH’s twin bro has not inherited the disease, but understand that’s not uncommon. Learned that Americans would not divulge (same as DG) their children’s genetic health problems ’cause their health plans would be cancelled. How sad.

#104 disciple on 09.30.11 at 12:02 pm

I assume it’s true that some people have gorged themselves out on debt acquiring things recklessly, but tell me, how is this different from any other time in history? Why do you stop at this observation and not continue in the analysis to realize that probably the majority of young families just were proceeding with the normal trappings of life in buying a home, wheels, gadgets, etc…

Was it their fault that cost of homes were over 4 times their incomes? No, it was the previous gamblers, shucksters, and fraud artists who snookered that. On the one hand you criticize the lenders and on the other hand you invest in them. Huh?

Who voted for Carney, anyway? Oh, that’s right, he’s one of hundreds of UNelected leaders running the purse strings of this country.

#105 disciple on 09.30.11 at 12:06 pm

But, you say: disciple, why don’t you stop complaining and just worry about yourself and shut the hell up?

Well, I dunno, because maybe that would be the psychopathic approach, you know, the one that isn’t working…yeah, that one.

#106 Waterloo Resident on 09.30.11 at 12:06 pm

#1 SMOKING MAN: you said ( “Garth …….., who cares his voice sounds like a girl. ” )

Hey, Garth’s doing something nice for us by having this blog here, don’t bite the hand that feeds you !!!

#107 timo on 09.30.11 at 12:26 pm

#101 bigrider

Ontario to open up colon cleansing clinics all over the GTA directly targeted at RE agents.

Turn on the hose full blast I say.

cannot resist,

Actually use a vacuum pump instead and bring in the bankers for flavour. Re-package the swill as a fertilizer and sell it as a commodity. Demand should skyrocket with the knowledge that what is being peddled can actually serve a useful purpose.

;-)

#108 JohnnyBravo on 09.30.11 at 12:31 pm

#107 Waterloo Resident on 09.30.11 at 12:06 pm

Re: Smoking Man’s comment: I missed that little spit ball. I can’t believe I actually took him half seriously for a moment.

#109 Waterloo Resident on 09.30.11 at 12:48 pm

#29: Worried Realtors ( “The facts are getting out that Canada is in a monster housing bubble never seen before.” ) = YUP !
( ” Once Greece defaults Canada housing will crash faster then 2008. ” ) = no, not quite rigth, its when CHINA slows down, that is when our exports of raw materials , etc will slow down, that is when our market will truly crash.

EVERYBODY !!! LISTEN TO THIS : Remember my next-door renters, the ones who were planning to buy a house next month ! Well, the Waterloo house they were planning to buy for $400,000 sold for $508,000 so now they are trying to get pre-approved for $700,000 so they can go house hunting next month. Can you believe that, and they only work part-time !

Bidding WARS are alive and well up here in Waterloo Ontario Canada !!!!

#110 Snowboid on 09.30.11 at 12:51 pm

#54 penpal on 09.30.11 at 1:52 am…

There isn’t a program that allows Canadians to ‘retire’ fulltime in the US, unless you invest a sizeable amount, so most spend the winters there as snowboids.

The actual purchase of property (at least in Arizona) was far easier than any we completed in Canada — and far less expensive.

After putting together the budget plan, the costs of maintaining the home in Phoenix as well as the renting in the Okanagan is about $ 1000 more annually (including medical insurance and travel) than maintaining our former home in Victoria.

We did provide an IRS form to indicate our ‘substantial presence’ is in Canada, and selling will require a bit more tax work.

There are an estimated 500,000 Canadians who winter in Arizona, there are dozens we met within our own 5000 home complex.

Many states have different rules, but Arizona, Maricopa County, and the city we live in welcomed us as Canadians. When we went to sign up for city utilities, the cashier was from Lethbridge! Moved with her parents about twenty years ago!

Maybe Florida is different, but we wanted dry heat so didn’t look there.

#111 Smoking man on 09.30.11 at 12:51 pm

Waterlo resedent. Did not mean girl should have said feminized tone just like every male grad I meet these days. So polite so softspoken. Its kind of creepy

#112 Buy Low Sell High on 09.30.11 at 12:55 pm

An American based websit but, none the less, the same principles apply here:

http://patrick.net/housing/crash1.html

The cartoon at the end is hilarious!

#113 Smoking man on 09.30.11 at 12:59 pm

Smokey is a fake
Obviously you missed my bit on the art of lying. Congrats you outed me lol. I’m just a drunk homeless 20 year old posting at the internet cafy

Brovo garsshopper

#114 Davey Boy on 09.30.11 at 1:01 pm

I’m a little confused about something. If Vancouver is the best place on earth, why do so many of the people that reside there need be stoned on a regular basis to get through the day? I would think that living in BPOE would eliminate the need for mind altered states of existence.

#115 Patiently Waiting on 09.30.11 at 1:07 pm

Check this out . . .

. . . the ECRI’s head told Bloomberg Radio that the U.S. is “tipping into a new recession.” “He added: “We don’t make these calls lightly. When we make them, it’s because there’s an overwhelming objective message coming out of our forward-looking indicators. What is going on with the leading indicators is wildfire; it’s not reversible.” . . . when it finally extracts its head from between its gluteui maximus, we expet the NBER to proclaim the re-recession as having started in June/July.

http://www.zerohedge.com/news/ecris-achutan-says-us-entering-new-recession

#116 Stevenson on 09.30.11 at 1:21 pm

Warren Buffett is going nuts shopping for stocks at dirt cheap prices. He predicts US is very, very, unlikely to fall into recession again. But then hey we can ignore that, I doubt he’s ever right. Actually I should of said I doubt he and the rest of the people in his company researching are incorrect. After all we are in the best position to judge.

Remember he is “shopping” not holding and trying to stimulate investor’s minds.

#117 Kris D. on 09.30.11 at 1:26 pm

Garth, you’re from my nook of this country – Burlington, remember this annoying little town? Well it’s not little any more. Construction everywhere, prices have ballooned more than most of the country. But unlike Vancouver, I don’t see FOR SALE signs here – As of this week, SFHs we ask about are Cond Sold one day after appearing on MLS. R/E is local – We keep hearing (from neighbours etc) that Burlington has a lot of demand (townhome owners wanting to move up to SFHs) but no supply – So the prices aren’t expected to level off any time soon. Your rebuttal, if you care?

I don’t. — Garth

#118 Blacksheep on 09.30.11 at 1:48 pm

Disciple #103,

“I don’t want to pay for foreign dictators any more. I don’t want to pay for evil wars anymore. Using violence to get what you want is wrong. Defense? That’s another story. We don’t follow the very advice we give to our children. The myth of the social contract that I gave Garth a hard time about the other day, is actually a gun to the head of our unborn children”
—————————————————————–
Careful now, most people don’t have the stomach to look beneath the thin veil, that is our accepted system.

We’ve got Dancing with the stars, Jersey Shore and hockey starting up again, Yay!!!

The Matrix IS real, yet given a choice, the masses won’t want the red pill.

take care,
Blacksheep

#119 robert james on 09.30.11 at 1:52 pm

#115 Davey Boy I am glad you asked..LOL We live in the Okanagan.. My wife worked in health care.. The realturds here love to to tell people how they are selling the “Okanagan Lifestyle”.. As I said ,my wife worked in health care and you probably would not believe how many people here are on anti-depressants… I believe I read recently that BC is the prescription drug capital of Canada.. There as been studies done and the people in Flin Flon are just happy as the people in Florida,, Vancouver or any other place.. I can just see people walking around Flin Flon or Regina or anywhere else,,, what the H*ll am I doing here ?? I am so unhappy and wished I had that “Okanagan lifestyle”.. LOL From what I can see of the “Okanagan lifestyle” it is borrowing enough money to look prosperious .. What am I doing here,,my wife was born here and it was a much better place back then..

#120 dddd on 09.30.11 at 1:54 pm

#115 Davey Boy on 09.30.11 at 1:01 pm
I’m a little confused about something. If Vancouver is the best place on earth, why do so many of the people that reside there need be stoned on a regular basis to get through the day? I would think that living in BPOE would eliminate the need…

some ppl like coffee, some tea, some puff a little herb – we all love living here and having the freedom to experience the stunning natural world around us as we see fit. last week i sat in the middle of a pod of dolphins as they jumped and chased their lunch around. the only ppl who fall in the drink here are drunks. (i rescued three of them that same wknd)

#121 TaxHaven on 09.30.11 at 2:10 pm

http://www.vancouversun.com/Canadian+investors+more+cautious+than+last+market+downturn+Survey/5482593/story.html

The herd HATES risk. Canadians uniquely believe in the free lunch theory of investing, where no one ever comes out behind the others, those who DO lose are compensated and every outcome is INSURED.

So here they are thundering off over the horizon into GICs, bonds, bank accounts and other fixed income peanuts.

Just when they should be hunched over their brokerage accounts and computer screens doing their RISK ANALYIS.

But Canadians are all, as usual, in denial…

#122 BC Bring Cash on 09.30.11 at 2:11 pm

More signs that China could be going broke. RE markets in bubble territory, Chinese private Banks involved in sub-prime lending practices etc… When China crashes it will be very bad news for Canadian resource industries. So much for our so called “fragile recovery”
http://www.24hgold.com/english/news-gold-silver-More-Signs-China-Is-Going-Bust.aspx?langue=en&article=3636276258G10020

#123 Spiltbongwater on 09.30.11 at 2:13 pm

What does seasonally adjusted mean?

#124 timo on 09.30.11 at 2:32 pm

#18 InvestorsFriend (Shawn Allen)

For retired Canadians with money, it’s the opportunity of a lifetime to buy a house in Florida or other southern U.S. locales.

hmmmm…..

Not quite yet

http://www.creditwritedowns.com/2011/09/no-bottom-in-sight-for-housing.html

What these analysts overlook is the “shadow inventory” which could be the key to understanding the direction of home prices. In early July, my data contact at CoreLogic provided me with the latest figures from their massive first lien database. It showed that roughly 60,000 first liens in Greater Phoenix were either in default with a notice of foreclosure sale date or seriously delinquent by more than 90 days but without a sale date yet. None of these properties has been foreclosed and repossessed by the banks.

If your planning to buy , wait till spring. It will give you time to watch the market and know that prices usually drop in the fall and winter.

#125 Ultraumatic on 09.30.11 at 2:33 pm

#91 Smokie is a fraud on 09.30.11 at 10:29 am
#50 penpal on 09.30.11 at 12:30 am
#68 Stu Gatz on 09.30.11 at 7:27 am

Lol – so true.. Smokie is likely a 20-something life flunkie with an investment habit and a need for attention.

His ‘fans’ on here are just as delusional as he is. This blog would be a helluva lot better if it was moderated, sorted, and peer ranked like most other good blogs out there. Pathetic indeed…

I honestly think his so-called fans are responding to him only to egg him on and get him to hang himself with his obvious lies even more.

And he falls for it every time. Seriously, this guy’s too stupid to know when he’s being insulted.

#126 Ultraumatic on 09.30.11 at 2:36 pm

I meant to add that I second the idea of moderating and peer-ranking the comments on this blog. At the very least, post the comments in reverse chronological order.

#127 bigrider on 09.30.11 at 2:36 pm

Hey TSX down 20% as of today on a 3 month basis .

Anyone of the RE bears on this site think we will ever see a similar performance out of residential RE market here in the GTA or Vancouver, ever?

Informal survey.

#128 bigrider on 09.30.11 at 3:05 pm

By the way the price action of copper, which has a PHD in economics, is a clear signal of where these markets are going near term and possibly long term.

So where is this elusive RE correction again ?

#129 neo on 09.30.11 at 3:15 pm

Canadian GDP question for everyone.

July came out at 0.3% and they are all but assuring us this means we will get a 2.3% print for Q3.

For Q2:

April 0%
May -0.1%
June 0.2%

Q2 -0.4%

Isn’t it a bit premature to “assume” Q3 is going to be 2% based on a number from 2 months ago that isn’t even taking into consideration all the volatility that has taken place since then?

#130 maxx on 09.30.11 at 3:17 pm

#19 Mr. Lee on 09.29.11 at 9:49 pm

“…some unexplained reason our housing market can defy the rules of physics and continue to propel to new heights. Well, that is at least what Global and the CREA would have us believe.”

And so many swallowed it whole. It’s embarassing. That sort of supercilious, self-satisfied petty arrogance will brand Canadians as the laughing stock of the planet- and rightly so.

#131 Bill Gable on 09.30.11 at 3:27 pm

This is a Real Estate and economics blog – some of the artless postings and multiple ramblings are starting to remind me of gaggle of geese.
Add something – drop the invective and keeping it on point, would be appreciated by us dawgs that are here to learn something.
Mr. Turner puts a lot of time into this – respect is not just a word, right?

Thanks.

#132 maxx on 09.30.11 at 3:29 pm

#40 Jody on 09.29.11 at 11:13 pm

Bullseye.

#133 The InvestorsFriend on 09.30.11 at 3:37 pm

Stevensen at 137 doubts if Warren Buffett is ever right.

Let’s see, he took over Berkshire Hathaway in 1965 when its shares traded at $14 to $15. After that he started investing Berkshire’s cash and put it into stocks and companies.

Now those exact same Berkshire shares trade at just over $100,000.

Yeah, it looks like he knows a thing or two.

Dude he has made more millionaires than the the New York Yankees.

And he made a few Billionaires as well (his early investors). Even star Yankee pitchers don’t become billionaires.

#134 maxx on 09.30.11 at 3:45 pm

#46 Wild Side on 09.30.11 at 12:08

“He simply said that his friend has said that 95% of the mortgages that he has done in the past couple of years have been refinancings and generally, these are people in the their Mid 50′s with a couple SUV’s in the driveway and homes worth $500,000-$600,000. Nothing extravagent, but he said that these homes are financed to the 9′s with little or no equity left.”

Visited a property this a.m. for pre-vultching purposes. It’s an estate sale, sold “as is, where is”. The place is well located but basically a dump. The Rtrd said that it had to fetch a minimum price as there is still a huge mortgage on it. Empty shell. Rtrd also said that a contractor might buy it. Empty shill.

Will now track it for a few months for entertainment purposes. If no takers (highly probable), I’ll give the bank that will have to take it for payment an offer.

70% home ownership…what a magnum farce…there is nowhere near that, just a steaming pile of debt.

#135 Waterloo Resident on 09.30.11 at 3:51 pm

NEWS JUST OUT !
THE U.S. ECONOMY TIPPING INTO RECESSION.

http://www.businesscycle.com/reports_indexes/reportsummarydetails/1091

That’s it folks, the U.S. is ‘Cooked’ !

A recession is a period of negative growth. I’m sure you’ve had one and survived. — Garth

#136 Waterloo Resident on 09.30.11 at 4:01 pm

#112: Smoking Man

( ” Waterlo resedent. Did not mean girl should have said feminized tone just like every male grad I meet these days. So polite so softspoken. Its kind of creepy. ” )

Okay.
‘Every’ male grad you meet ?
That’s office-politics, guys like me get fired because we speak our minds, we don’t suck up to the masses.

#137 maxx on 09.30.11 at 4:08 pm

#77 T.O. Bubble Boy on 09.30.11 at 9:00 am

To borrow from Jody with modification-

“I’m Canadian, rip me off.” I was beyond fury when I heard this today. Who the hell does he think he is? Even his chain of supply resisted, knowing it was WRONG and he still pressed ahead because of that sick ego of his. People are waiting far too long across the entire country for urgent medical care and this clown wants gold-embossed business cards.

#138 Onthesidelines on 09.30.11 at 4:20 pm

“People are welcome to wait to invest, until there is more risk and rising prices. That would be most Canadian, as you embody. — Garth”

Think you got that backasswards, guru. Waitng to invest until rising prices REDUCES both risk and potential return. In today’s market both are increased…. in other words, more of a gamble.

Nope. Risk rises with prices. Buy low. — Garth

#139 Junius on 09.30.11 at 4:20 pm

#127 bigrider,

Yes. Re in Toronto and Vancouver will drop more than 20%. A lot more. Survey says.

#140 maxx on 09.30.11 at 4:28 pm

#108 timo on 09.30.11 at 12:26 pm

Hee-hee….does that mean we might want to short Potash Corp.?

#141 Bill Gable on 09.30.11 at 4:54 pm

Jump the Shark Moment – as new tech finishes off old?

A Kodak share is now worth less than a can of soda.

A report that the company has hired lawyers for restructuring advice halved the stock’s value today, extending this week’s decline to 67%.

Shareholders are not buying CEO Antonio Perez’s turnaround talk or promises about Kodak’s future strength as a printing company.

They apparently took little comfort in the $3B valuation some analysts pegged on patents Kodak is hocking.

Shares closed at 78 cents, the lowest since June 1935 on a split-adjusted basis, according to Global Financial Data.

http://tinyurl.com/3nfwokz

#142 Mister Obvious on 09.30.11 at 4:54 pm

#125 Ultraumatic

This blog would be a helluva lot better if it was moderated, sorted, and peer ranked like most other good blogs out there.
————————–

I disagree. It would be a helluva lot better if this blog were not full of self important hangers-on who ride the coattails of Garth Turner rather than go through the effort of building traffic in their own forums.

#143 Bill Gable on 09.30.11 at 5:01 pm

As Mr. Lahey would say “The S**T HAWKS have really screwed up our number one trading partner and the place that grows us 75% of our GDP, through trade and commerce.

This makes for ugly reading > put down the sandwich, please. I was really floored.

“Figures from the U.S. Census Bureau’s annual American Community Survey, released in late September, reveal not only how deeply but also how broadly the economic downturn has scarred the nation. The new numbers on income, poverty, and access to health insurance capture how the past two years have both deepened the distress of metal-bending states such as Michigan and Ohio (which have long struggled with the decline of traditional manufacturing) and humbled many of the past decade’s highest fliers (Arizona, Nevada, Georgia, and Florida) where growth had long fed on itself in what looked like a cycle of perpetual prosperity.
Indeed, the starkest message may be that, with the partial exception of a few energy producers, practically no state has avoided serious pain. Median family income has declined in every state except North Dakota since 2008. “Everyone is under some type of water at this point,” says Chris Christopher, a senior principal economist for the consulting firm IHS Global Insight.”

http://tinyurl.com/3zwv7eu

Sorry to ruin your weekend. The Market TANKED in NYC.

#144 Stevie Why ?? on 09.30.11 at 5:09 pm

Robert James @ 119

ahhhhhh yes … Flin Flon Manitoba …… perhaps we should resurrect “Flintabbatey Flonatin” ( and his submarine ) and then we can finally put that Okanagan Lake Monster “Ogopogo” out of its misery ;-))))

#145 kim on 09.30.11 at 5:09 pm

Is there any doubt Canada is in a bubble? The realtor shills will lie for a dollar. The question is are you stupid enough to believe them?

#146 ts harpoon on 09.30.11 at 5:24 pm

Garth,

Got your “DRIFT”. 99% of it.

Hope everyone (Canadians) takes a moment to read the letters in the site below:

Thank you Metafilter.

http://wearethe99percent.tumblr.com/

#147 Beach Girl on 09.30.11 at 5:37 pm

#75 Bigrider

I didn’t know Anne Rohmer was still on TV. Used to love that show when my Real Estate was rocking. With that Italian Vince (something from Monster Mortgages was there). Was better than sex. Figured it out though, dumped all but 2 of the properties (2007). I thought I was Donald Trump’s sister.

#148 Sean on 09.30.11 at 5:43 pm

i love how BC is the bpoe… canada is the best country in the world.. etc… and yet so many discuss spending considerable portions of the year down south.. to the point of debating the maximum allowable number of days per year that we can be in the US… the contradictions are comical

#149 Sean on 09.30.11 at 5:45 pm

also, a “premium” to own in canada is more comical still… have we not all heard of the northern living allowance? we should be discussing “discounts” for canadian housing, maybe even subsidies

#150 Mr. Plow on 09.30.11 at 5:57 pm

#149 Sean

Just cause where you live is great doesn’t mean you don’t want to see other parts of the world.

Or perhaps spend your time in other parts that are also great.

#151 from kits on 09.30.11 at 6:02 pm

http://dailyreckoning.com/lower-lows-in-the-cat-like-real-estate-market/

#152 Ultraumatic on 09.30.11 at 6:10 pm

#143 Mister Obvious on 09.30.11 at 4:54 pm

You were actually quoting #91 there. But I’ll bite anyway:
I disagree. It would be a helluva lot better if this blog were not full of self important hangers-on who ride the coattails of Garth Turner rather than go through the effort of building traffic in their own forums.

So you’re saying you want this place to be empty, then?

#153 Brad Mitchell in Calgary on 09.30.11 at 6:12 pm

Nope. Risk rises with prices. Buy low. — Garth

Or don’t buy at all, of course.

Although I agree with you, I will add that many money managers (David Burrows, to name one) do an exceptional job of playing the momentum game.
Their style is different from yours.
And mine too.
Not wrong… just different. They minimize their risk by stopping out if their entry point was proven to be too high…

Buy at the middle, sell it higher. Their way.
Buy at the bottom, sell at the middle. Your way.

Neither is right or wrong. Just different styles.

#154 observer on 09.30.11 at 6:35 pm

BMO’s chart is completely useless. Average prices are diverging from median prices in Canada, and are way higher. Apples to apples comparisons. Check page 2 of this Vancouver report
http://tinyurl.com/3ojh7rg

Interesting but irrelevant. US houses cost half of Canadian houses. But not for long. — Garth

#155 Steven Rowlandson on 09.30.11 at 6:42 pm

Never buy a house and lot if it costs more than 6000 man hours of a single income. Less than 6000 man hours is better but not more than 6000 man hours and always make a 25% down payment or better and pay off the rest over 25 years. Never combine incomes to try to buy a house.
These old fashioned rules were devised for the protection of the consummer.

When society departed from following the rules excesses built up and here we are. In a financial HELL.

#156 Victoria Tea Party on 09.30.11 at 6:44 pm

CATALEPTIC INDEED…

#116 Patiently Waiting

When the ECRI speaks, it is worthwhile to listen. Translated into English its words can be translated thusly: “Listen dammit!”

And the NBER’s upcoming recessionary ramblings should make for some interesting responses from those who brought us 2008 and who are now busy bringing us 2009-2012 and beyond.

Such a reaction would go like this: “Shad-up already! You’ll get the peasants all riled!”

Europe’s intractable economic, gluey messes promise for some interesting times this winter for those who’ve hoovered up debts and are choking right now. By next spring they should be room temperature!

SPEAKING OF TROUBLED EUROPE…

In such times a whimsical trip back into (European)history is warranted.

From the outstanding Sir Martin Gilbert “First World War” volume, this following quote. Guess who wrote this and when:

“I wondered whether those stupid Kings and Emperors could not assemble together and revivify kingship by saving the nations from hell but we all drift on in a kind of dull cataleptic trance. As if it was somebody else’s operation.”

THIS WAS WRITTEN IN RESPONSE TO WHAT OCCURRED ON…

July 28, 1914 when Austria (then a key element of the Austro-Hungarian Empire) declared war on Serbia (following the June assassination, in Sarajevo, of Austrian Archduke Ferdinand and his wife by a Serbian malcontent.)

The quote is contained in a letter to Clementine, the wife of the writer, WINSTON CHURCHILL.

In 1914 Churchill was a Member of Parliament and First Lord of the Admiralty (essentially the boss of the indefatiguable Royal Navy).

So, what’s this marvellous few words got to do with anything ongoing right now?

HOW ABOUT THIS: EUROPE, 2011!

The way the urbane, demonic, arrogant SOBs now handling Europe’s deep, multi-layered economic crises and their horrific, for the rest of us, potential outcomes the quote goes down rather well, actually.

A shorter version of such a collection of excellent English prose might be something along the lines of:

“We’re so screwed!”

#157 Nostradamus Le Mad Vlad on 09.30.11 at 6:57 pm


#122 BC Bring Cash — “More signs that China could be going broke.”
— and —
#135 Bill Gable — “The Market TANKED in NYC.”

Both these great posts have one thing in common with the link posted earlier in post #37, re: Chronic Deflation and that is the withdrawal of money, a.k.a. The Withdrawal Method.

TPTB or the elite have many tools available at their disposal, e.g., market down- and upturns, FFs, etc. and use them all very well, to toy with sheeple’s emotions.

One of the best is The Withdrawal Method. Once money is removed from the system, companies begin having lousy balance sheets, and are unable to borrow to improve and better their services, thus employing more and placing less stress on govts.

Layoffs, factory closures and the like become ever more prevalent, m$m is kept artificially alive to spew their drivel forth, bamboozling sheeple that everything is fine over there, but not here and is reversed on the opposite side.

Guess that is what is happening now. The west is playing their role, by invading countries under false pretenses. It will be interesting once the cycle change is complete.
*
Protests – Revolutions It’s growing and won’t be stopped now, and AFL – CIO union joins in and Begging “Let them march all they want, so long as they pay their taxes.” — Alexander Haig.”; 4:08 clip One job opening in a diner, 47 applicants; Bernanke’s Clone “She is a lawyer.” Which says a lot about the economic system; Worse Of course it will get worse, not only because of the dickhead powerhungry politicos, but also the cycle change; Oblastitall and Solyndra, via Jon Stewart; Investor Confidence in Obomba tanks.

Breaking Away States breaking off from US Fed; Third World Status “A full 28% of the middle class in America have been reduced and literally forced into poverty, but they still do not get it.”; The same means the nazis used during WW2, sans money; 6:49 clip The Tiny Dot. Seen b4, a good understanding of what’s happening; 1:40 clip Protests spread to Lexington, Ky; GS Campaign contribution to both sides; 10:35 clip Gold — don’t sell it! Why the rich fear violence in the streets. Because they know there is nothing left to lose. French Revolution Part Deux?

Gluggle Censors Why? What do they have to be afraid of? Propaganda Sheeple fall for it continuously; Revolution Whatever happens in the world, this is a by-product; Oshit Former advisors turn against Obama; CC Snow, when GW is supposed to exist; Organics now owned by big biz.; Scrap Metal Russia’s Typhoon subs; Palestine European parliament endorses State of Palestine, and map of who supports / doesn’t support Palestine; These two links kinda go together, as it shows the complete hypocrisy of the west. 3:48 clip. 9500 killed in Mexico so far, because of US war on drugs.

#158 Smoking man on 09.30.11 at 7:11 pm

What kind of name is ultramatic. He calls me stupid. If I wasent so drunk right now and posting from the black barry I would so profile you but the girls here at the sundowner and the bozze means we will fight an other day

#159 ballingsford on 09.30.11 at 7:34 pm

The collapse has finally begun! Thanks for that! The ammunition to fight it has finally dried up! Take cover and head for the hills!

Your predictions were right on Garth, but they had to get through the stage where the upper echelons tried their utmost to prevent it or disillusion us that it wasn’t happening.

The truth is coming soon! How do you spell ‘double dip’ ?!?!?!

Scary and uncertain times ahead!

#160 Daisy Mae on 09.30.11 at 8:02 pm

Bill Gable on 09.30.11 at 3:27 pm “This is a Real Estate and economics blog – some of the artless postings and multiple ramblings are starting to remind me of gaggle of geese. Add something – drop the invective and keeping it on point, would be appreciated by us dawgs that are here to learn something. Mr. Turner puts a lot of time into this – respect is not just a word, right? Thanks.”

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

I agree…some of this ramblings are unbelievable. And Garth is not commenting. Which should tell us all something.

Indeed. — Garth

#161 Devil's Advocate on 09.30.11 at 8:18 pm

#99 Junius on 09.30.11 at 11:21 am

#85 DA,

Would you expect a bank to conclude anything other than a “soft landing”. They would never publish anything that talks about a potential crash. Ever. Of anything.

Generally I find BMO fairly unbiased in their presentation of such reports. And they do speak of the higher propensity for those “bubblier” locations like Vancouver to experience a more bumpy road ahead. Personally I have my doubts as the income gap is widening and people with money – or cash flow as it may be better put – are still spending. Saving? Apparently few are. Are they saving south of the boarder or just pulling back on debt? Anyway, I believe the whole global income gap thing is going to continue to throw a wrench into our historical paradigms. Where would you rather live India or Canada? Not that I’ve been there but I’ve had well enough people tell me about it.

Ya makes yer money where ya has at and ya spends it where ya wants at.

Again; 100 years ago 1 billion people… today 7 billion. More land? Not so much.

#162 45north on 09.30.11 at 8:27 pm

interesting interview with Mort Zuckerman:

The American consumer is not stupid, And he doesn’t want to buy assets that are going down in price.

Zuckerman makes the observation that it all depends on confidence. So who really knows what the Canadian market will do? My feeling is that once the Toronto market drops then the rest of Canada will quickly follow. BPOE will go silently into the night.

http://mcaf.ee/4ol6w

#163 Keeping the Faith on 09.30.11 at 8:44 pm

and in other news …

#78 Stevenson = Loser Real Estate Pumper

#164 Sky on 09.30.11 at 8:47 pm

@ Young Old Fart # 95:

” I have a neighbour that USED to do that. Let his dog out late so it could come over and dump on my lawn. Big mistake… one day he shows up on my door with a copy of the poster…. “gee buddy, no….. I haven’t seen your dog….”

;o)

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

You’re one sick puppy. How was any of that the dog’s fault?

I’d much rather have Beach Girl as a neighbor, dog poop and all. She’s got her rough edges but I suspect when push comes to shove she would give you the shirt off her back.

Actually we do have an anal retentive neighbor like you. She used to be head of the kennel club but now concentrates on raising show shephards and her dog training business. And she’s obsessed with her damn lawn.

Dogs and lawns don’t go together. It’s funny to watch her freak out whenever her dogs take a pee. Her way of solving the problem was to send her dogs into the lower part of OUR yard early in the morning or late at night.

We have 3/4 of an acre and my yard’s a work of art. It’s taken 20 years of hard labor to get it to this point. But my reaction to the neighbor’s dogs taking a pee/poop in my yard was a little different than yours. My reaction was – whatever.

This obsession with grass is just insane. Grass is just grass. And nobody uses their front yards anyway. Anybody that’s a real gardener will tell you it’s impossible to achieve perfection. Mother Nature wins everytime.

If it’s not aphids or leafrollers then it’s spider mites or Elm scale. I could cry this year. My 20 American Elm trees are so badly infested with scale that it looked like October in July with all the leaf drop. And my golden pfitzers, my pride and joy, got hit with some kind of fungus so I lost quite a few of them. What can you do?

We’re turning into a very intolerant society – socially engineered to bring out the worst in us. We’re a bunch of narrow minded nitpickers who focus on petty garbage instead of focusing on the LARGER issues that will have a devastating impact on everyone’s lives.

#165 Onemorething on 09.30.11 at 9:06 pm

An era of more frequent recessions. Garth I think this describes your term “slow melt” correct?

#166 Stevenson on 09.30.11 at 9:16 pm

#134 The InvestorsFriend

I was being sarcastic. Of course I know Warren Buffett knows what he is doing. I hope people are not just ignoring him and understand we should not be heading into another recession. Slow growth will not lead to a crash in Canadian RE market.

#167 Stevenson on 09.30.11 at 9:37 pm

A million people trying to immigrate to Canada. Maybe this is where the demand for RE is coming from?

http://www.theglobeandmail.com/news/politics/ottawa-takes-aim-at-immigrant-waiting-lists-a-million-names-long/article2186976/

#168 jess on 09.30.11 at 9:48 pm

Snitching is a growth industry in South Korea

By CHOE SANG-HUN
The New York Times
SEOUL, South Korea — With his debts mounting and his wages barely enough to cover the interest, Im Hyun-seok decided he needed a new job. The mild-mannered former English tutor joined South Korea’s growing ranks of camera-toting bounty hunters.

http://seattletimes.nwsource.com/text/2016349544.html
————————-
Timo: Look’s like New York is getting support from California

No Deal
Kamala D Harris state of california the attorney general
Her Letter September 30,2011
http://graphics8.nytimes.com/packages/pdf/business/MortgageLetter.pdf

8 out of 10 harest hit cities are in California.
2.2m underwater /foreclosures rising
…”she was running a full investigation into the creation and sale of mortgage securities. She said she did not want to participate in the deal partly because it would limit her investigation. Though she is the first state official to back out of the negotiations entirely, attorneys general from several states have expressed reservations about a broad waiver, including New York, Delaware, Massachusetts and Nevada.”

#169 jess on 09.30.11 at 10:26 pm

#155 observer

Faulty Quant Models
Discovery and Concealment of the Error

In April 2007, BRRC put into production a new version of the Risk Model. BRRC had assigned the task of writing the computer code that would link this new Risk Model with the Optimizer primarily to two programmers. Although BRRC tested the new Risk Model, it did not conduct independent quality control over the programmers’ work on the code. When these two programmers linked the Risk Model to the Optimizer, they made an error in the Optimizer’s computer code. Although BRRC conducted simulations involving the new Risk Model before rolling it out, these simulations did not detect the error. As a result, BRRC did not detect the symptoms of the error and did not discover the error itself until testing another new version of the Risk Model.

Starting in 2009, a BRRC employee began work as part of BRRC’s effort to implement a new version of the Risk Model. In June 2009, this employee noticed certain unexpected results when comparing the new Risk Model to the existing one that was rolled out in April 2007. He learned that the Optimizer was not reading the Risk Model’s assessment of common factor risks correctly because an error in the code caused a failure to perform the required scaling of information received from the Risk Model. Some Risk Model components sent information to the Optimizer in decimals while other components reported information in percentages; therefore the Optimizer had to convert the decimal information to percentages in order to effectively consider all the information on an equal footing. Because proper scaling did not occur, the Optimizer did not give the intended weight to common factor risks….

“Rosenberg chose concealment over candor, and in doing so selfishly served his interests over those of his clients,” said Robert Khuzami, Director of the SEC’s Division of Enforcement.
The SEC’s order found that due to Rosenberg’s misconduct, AXA Rosenberg and its affiliated investment advisers misrepresented to clients that the model’s underperformance was attributable to factors other than the error, and inaccurately stated that the model was controlling risk correctly. Rosenberg’s instructions to delay fixing the error caused additional client losses.

#170 jess on 09.30.11 at 10:43 pm

Taxhaven

What Does Free Rider Problem Mean?
1. In economics, the free rider problem refers to a situation where some individuals in a population either consume more than their fair share of a common resource, or pay less than their fair share of the cost of a common resource.

2. In the context of a brokerage firm, a free rider problem refers to a situation where a client has been allowed to purchase shares without actually paying for them, and then subsequently sells the shares (ideally for profit).
Investopedia explains Free Rider Problem
1. A commonly used example of the economic notion of the free rider problem is found in national defense. All citizens of a country benefit from being defended; however, individuals who evade taxes are still protected by the same common resource of national defense, even though they did not pay for their fair share of the resource.

2. The problem with this scenario is that the client, if allowed to free ride, can profit from a stock trade without actually using any of his or her own capital. This is illegal

Read more: http://www.investopedia.com/terms/f/free_rider_problem.asp#ixzz1ZUhV4x4U

Notice they used the word , “”Significant”
SEC Staff Issues Risk Alert on Master/Sub-account Risks
FOR IMMEDIATE RELEASE
2011-198
Washington, D.C., Sept. 29, 2011 — The staff of the Securities and Exchange Commission today issued a Risk Alert warning of significant concerns regarding trading through sub-accounts, and offered suggestions to help securities industry firms address those risks.
http://www.sec.gov/news/press/2011/2011-198.htm

#171 TJ on 10.01.11 at 10:56 am

A few people mentioned it, but I didn’t see anyone bother to look up the difference. The median price of a US single family home is roughly $50,000 lower than the average (mean) price. A difference of 29%. There’s still a huge gap between the two prices and I still agree with the conclusion, but the price gap certainly isn’t close to the claims of “200%”, more like 160%. If this type of statistical work passes as acceptable at the Canadian banks it makes you wonder what their true risk profile looks like. I wish there was a way to short the CHMC directly.

You can find the U.S. price data easily enough at http://www.realtor.org under “Existing Home Sales and Prices Overview”.

#172 M.T. on 10.01.11 at 2:29 pm

In my opinion anyone who thinks that there should be a premium for Canadian real estate because “we’re the best place on earth to live” is either delusional or doesn’t get out much (or both). Yes we have a fine democracy, we have freedom, many parts of our vast country are beautiful blah, blah, blah. But many other countries in the world have these same things, many of which have far better climates than ours, or if they’re part of the EU these warm parts are a short plane ride away, not to mention all the history, architecture and just general better quality of life and happiness quotients. How many choices do we have for short plane rides away to go somewhere warm versus say someone living in Norway or Sweden or Switzerland? And we think we’re different and special. Many countries in the world including Thailand and Mexico have laws to protect their citizens from rich foreigners coming in and snapping up real estate jacking up the prices. We have nothing like that. Why should we have to compete for local real estate with wealthy foreigners who come here unrestricted and jack up our local prices? Many of them don’t even live here full time and I don’t believe for many of them their loyalties, interests and values lie with Canada or are compatible. Shouldn’t the needs and interests of Canadians come first? Our governments seem more interested in everyone else except their own citizens. I would feel cheated if we ever have a North/South American union like the EU. Look at the choices members of the EU have and what we would have-U.S, Mexico and South America, whoopee.

#173 Popeye the sailor man on 10.01.11 at 7:06 pm

Forty-one states and the District of Columbia permit lenders to sue borrowers for mortgage debt still left after a foreclosure sale. The economics of today’s battered housing market mean that lenders are doing so more and more.

THIS IS A MUST READ;
Trouble in the USA can last as long as 5-20 years

http://online.wsj.com/article/SB10001424053111904060604576572532029526792.html?mod=WSJ_hp_LEFTTopStories