Occupy

On Wednesday many thousands of people swarmed Lower Manhattan. It was part of a movement called OccupyWallStreet. Some marched because they cannot find jobs. Some because they’ve lost their homes. Some because of debt, after costly education for work which doesn’t exist. Some because hope is gone.

This is a seminal movement. It’s harnessed the power of communication, so growth is infinite. Alienated people, in enough numbers, can change everything. So long as it’s apparent that getting a degree, working hard and playing by the rules gets you unrepayable debt, zero job security and no chance at the house or retirement your parents had, alienation will continue. The named target is corporate greed. But it’s a protest against failed expectations.

About the time this was happening, Doug in Vancouver read yesterday’s blog and sent me this:

We’ve been hearing the same fodder from “experts” year after year for the past 5 or 6 years about the unsustainability of Vancouver housing prices…and their apocalyptic opinions continue to be wrong. I assume you don’t live in Vancouver. If you did, you’d know that the local, national and international clientele who have decided to make this beautiful city their home really don’t care about anyone’s household income, or whether people can afford to buy a home here or not. Its not about them…its about those who can afford it here. Simple. Can’t afford it…move to Manitoba.

Kind of makes you want to occupy Yaletown and carry Doug’s head on a stick, doesn’t it?

After all, what gall people have, thinking they should be able to own houses in the city in which they live… It’s all about accumulated wealth, vested privilege and the inalienable rights of the old farts who scooped up cheap houses decades ago.

But this pompous poop is not restricted to accidental, unworthy millionaires in Canada’s most unbalanced city. It’s endemic. And dangerous.

This pathetic blog chooses real estate as a prime topic because that’s where most people have chosen to put almost all of their money and accumulate the bulk of their debt. Housing is now a powerful symbol of the wealth gap at the heart of the Occupy movement. Unless we find ways of narrowing that – instead of, like Doug, spitting into the faces at the barricades – this will not turn out well.

At this moment the average family in Toronto, Calgary or Vancouver cannot afford the average home, without borrowing excessively. And this is at a time of historic low mortgage rates. Those who take the plunge are soon caught in a financial vice, juggling the costs of real estate and child care while trying to save for runaway tuitions and then their own lengthy, often pensionless retirement.

I talk at length each day with couples in this quandary. When the dream of kids, house and happy life meets reality, hope dies hard. What was possible a generation ago is now gone. At the epicentre of this change for the worse is the cost of a house. It alone has screwed the financial outlook of an entire generation.

So while the cops were beating on kids Tweeting about it, and I was getting hate mail from Shaughnessy, so-called leaders and experts in our society were busy making the problem more intractable. I think they’ll regret this.

Royal LePage, for example, spewed out another price-pumping media release trumpeting that, “the average price of a home in Canada increased between 5.7 percent and 7.8 percent from July through September.” This was good news, of course, especially the part where LePage CEO Phil Soper declared that, “fears of a US-style correction are simply unfounded.” So long, hope.

The LePage ‘news’ was picked up verbatim by every media outlet in the country, including the Canadian Press, CTV, Global and (of course) BC’s house-humping popular press. “West Vancouver housing prices see massive jump,” CBC reported, adding that according to the realtors, the average detached bung has climbed 25% in value and now costs $1.2 million.

“We were seeing examples of properties that were listed for perhaps $1.4 million and selling with multiple offers for $1.6 million,” a source told the national broadcaster. And who was that? Royal LePage realtor Bill Binnie. In fact, the entire story was based around the hype of one company, whose employees make more money every time a houses sells higher. In the age of Google empowerment, endless information and competing opinion, this is a joke.

Not to be outdone, F stood before reporters, just a few New York blocks from where the people faced the establishment. There is no housing bubble, he said, even as the International Monetary Fund warned that Canadian families are sinking into a financial morass.

“There’s some demand in Vancouver in particular, particularly from the Asian people coming to Canada who are investing in real estate. So there’s some demand there that is unusual in terms of the entire country, but overall across the country there’s been some moderation, which is good,” F claimed.

In Toronto, about the same time, the real estate board was announcing a 10% annual increase in prices, while the average wage gain was zero. The average SFH in the 416 has climbed to $706,000, or nine times the household income – judged by global standards to be off the scale of unafforability.   “As buyers continue to take advantage of the affordable home ownership options in the GTA, we remain on pace for the second best year for sales under the current TREB market area,” crowed the board. Could this be any more remote from the reality most families face?

As the IMF reminds, the road to real estate also leads to danger. Debt has inflated along with house prices. Once prices retrench – and they will – family equity is wiped out, but mortgages remain. Households cut back to survive, making a tough economy worse.

How much better we’d be to realize this now. To have corporate and political leaders with the vision to see consequences.

Before they see the riot.

229 comments ↓

#1 mississaugasold on 10.05.11 at 10:24 pm

My friend is still renovating her old condo she bought and has yet to move in. She is getting anxious but I’m sure dropping a ton of money to buy and renovate will make it all better…

#2 East Van on 10.05.11 at 10:25 pm

Capitalism

R.I.P.

#3 shanks on 10.05.11 at 10:29 pm

1st and always last.

#4 Stevenson on 10.05.11 at 10:34 pm

So Royal Lepage is misleading the public and globe and mail is non credible? or maybe credible only when they have articles that fit our interest?

The market will crash soon!…lets just keep waiting. Hey when’s that religious dude with a J suppose to return to earth again?

I did not say anyone is misleading, not did I mention the G&M. But I did write about people like you. — Garth

#5 Victoria on 10.05.11 at 10:37 pm

So then why don’t these rich people move to Victoria so I can sell my house. The homes are just sitting, sitting and sitting.

I have said this before – WHY NOT HERE?????

#6 Real Estate Deal or No Deal on 10.05.11 at 10:38 pm

That is the beauty of the Centre political movement … give people enough socialism that they feel empowered in a middle class.

But it really doesn’t exist beyond the few that control it all.

#7 disciple on 10.05.11 at 10:44 pm

Sir Garth, epic post, man. You spoke to the heart with this one tonight. A nice, precise, description of the current quagmire. I had anecdotal hints of it before, when speaking with people who have left Vancouver for Toronto, but I now realize how haughty and petty Vancouverites can be. Obviously, it’s a sickness of the mind, you know…

#8 Seven Stars and Orion on 10.05.11 at 10:45 pm

I get laughed at by my colleagues for even hinting that the near-to-mid-term future might not be as rosy as the recent past. Hockey is gearing up, get with the program and make your fantasy pool picks jerk! And how about that Iphone 4S. Swwwweeeeeet!

#9 Smoking Man on 10.05.11 at 10:51 pm

Sir Garth said

So long as it’s apparent that getting a degree, working hard and playing by the rules gets you unrepayable debt, zero job security and no chance at the house or retirement your parents had, alienation will continue.

You get better everyday dude…………..

#10 TurnerNation on 10.05.11 at 10:54 pm

Metalheads are reeling (Garth, why not interview her for this weblog ;) )

Toronto-based Salida Capital this week reported a 37-per-cent loss in September, prompting rumours that the company was on the verge of imploding. Courtenay Wolfe, the fund’s chief executive officer, was quick to dispel them, calling them “unfounded.”

But she acknowledged the use of leverage has backed Salida into a corner, as noted in its October investor letter. The decisions to buy gold and energy stocks in mid-August “have been costly, as the market has moved against us,” the letter said. “We still believe that the reasoning was logical, but arguably ill-timed. In hindsight, we underestimated the short-term impact of forced selling

http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/hedge-funds-feeling-heat-from-market-turmoil/article2190233/

#11 Tim on 10.05.11 at 10:55 pm

“Kind of makes you want to occupy Yaletown and carry Doug’s head on a stick, doesn’t it?”

lol! we should occupy Yaletown to protest the God-awful design and architecture of those souless, dreary, characterless buildings, which have resulted in people living like sardines.

#12 Keeping the Faith on 10.05.11 at 10:55 pm

Doug, Vancouverites and the BC folk:
You’re a bunch of delusional misfits and the day of reckoning is almost upon us.

Doug, you’re right.
For 6 years now, Garth and people on this blog have been incorrect in the timing about the crash of RE but even a broken clock is wrong time twice a day … and our day is coming soon, to a neighbourhood near you. I hope you are leveraged through the teeth for RE and that you die a slow painful mortgaged death.
And even if you aren’t over-mortgaged and have a paid off residence or multiples, you will be taken down with the rest of the dropping valuations … bon voyage!

#13 Demos on 10.05.11 at 10:55 pm

http://news.blogs.cnn.com/2011/10/05/wall-street-protesters-coalesce-movement-spreads-nationwide/

#14 phinny on 10.05.11 at 10:57 pm

Jeez Garth- you nailed that one.

If it all unhinges and the pitchforks and torches come out, I’ll vouch for ya. Were you born a little later, you might have been leading the charge.

#15 MM on 10.05.11 at 11:00 pm

The dream is dead. Long live the dream.

You care about people, and that is greatly missed in politics, or any kind of prominent role these days.

#16 Maxamillion on 10.05.11 at 11:00 pm

It also doesn’t look very good for young graduates in China “ant tribes” without good jobs. Will they start to occupy Tiananmen Square.

http://youtu.be/KtfVxc2JBX0

#17 2deep on 10.05.11 at 11:00 pm

Doug has a point in that median family income in relation to the fundamentals means less these days. I’ve known people who have moved to Vancouver and bought their million dollar houses outright because they’ve built up there riches and are ready to go live where the weather is nice (and only pay themselves $40k/year out of their business, thus dragging down the stats, not to mention the massive underground economy of the drug trade having a similar effect).

This is illustrated in Saskatchewan as well. Confirmed in the video yesterday the median family income in Regina is over 4K/year higher than Saskatoon and yet the average home in Saskatoon is quite a bit higher. I think this aligns with the volume of high paying government jobs in Regina and the volume of entrepreneurs (using their business to boost your lifestyle but pay themselves less on paper).

As far as the much touted crash in Saskatoon goes, I’m beginning to be a bit of a skeptic. Even with a commodities crash there are enough long term projects committed to in our small economy that we won’t feel the turbulence as bad as everyone else (the government will take a haircut if needed to help the potash and oil companies keep people employed). There isn’t overbuilding like in the US (since 2006 there has been about one house built for every 3 new people, seems reasonable).

The three times median income argument is also somewhat in line. Interest rates will rise but only slowly so if you work that into the equation we are not currently far off:

Annual income of 80K = 240K house @ 8% interest x 25 years= $1852/month.

360K house (current average) @ 4% interest x 25 years= $1718/month.

Interest rates would have to rise drastically to cause a major shock. While debt fatigue still remains on the table, in this family centered low population province the boomers will continue to bail out their kids and help them stay afloat. Mass exodus of boomers isn’t going to cause waves here either as we are not overbuilt and generally boomers will try to stay in the province close to their kids (they may have to settle for a fifth wheel instead of a house in Arizona).

Sure glad it’s different in Saskatchewan. I’ll sleep better now. — Garth

#18 Marnic on 10.05.11 at 11:01 pm

Good post, Garth. Doug and the #4 Stevenson dude? Well, clowns like that are pretty commonplace, but generally slapped harder in the face than most when reality does its thing.

#19 Jeff in Victoria on 10.05.11 at 11:05 pm

Yesterday we saw that there is a big migration of 18 to 35 year olds from BC to elsewhere (my own daughter and fiance included) today I read 15% of boomers elsewhere in Canada that were interviewed are planning to move to Victoria.

Anyone else see a problem with that.

We used to be called the land of ‘the newlyweds and the nearly deads’, looks like we may be getting to the latter only.

The survey the article was based on is absurd. Victoria will be lucky to see a 1% migration. — Garth

#20 walter safety on 10.05.11 at 11:11 pm

Some are convinced their lack of hope or promise is somebody else’s fault. Usually this is harmless.
Now normally hopeful people have had enough. They are hopefully demanding change. The dishonest have to be brought to account.
The protests grow after 5 pm when people leave work!
“Let them eat cake” comments about Vancouver house prices are not helpful or smart.
Disappointment is one thing ,enrichment at others expense can be fatal.

#21 Waterloo Resident on 10.05.11 at 11:13 pm

Let me tell everyone a lesson that I learned yesterday while I was visiting my sister and her children in Newmarket (Ontario). I was walking with them from the car to the store and I passed by some storage sheds. The kids went running up to one of them that looked like a small house, it was about 8 feet by 14 feet in size. They were saying that they would love to have such a house for a ‘play-house’. 8 X 14 = 112 square feet. If you take 2 of these and join them side-by-side, you get the same sized living space as some of those new condos in Toronto !
So buy 2 of them for $3,000 , winterize them with electric heating, add plumbing, and plop them down out about 50 kms from the city on some country lot that you buy for about $30,000. Instead of spending $350,000 on a cubicle you spend only $35,000 for the same cubicle.
If you’ve got to live in a cubicle then at least do it “on-the-cheap”, don’t get into debt for such a lifestyle.

I’m sure as hell glad you’re not an urban planner. — Garth

#22 Smoking Man on 10.05.11 at 11:13 pm

What really sucks for kids today is expectation as Sir Garth pointed out.

My Dad a ww2 POW and slave labour Camp worker, totally different man from when he went in. Took out Nazi’s from the hills of Serbia, only to be caught and made a slave. And watch in horror atrocities against fellow humans that had little stars painted on the overalls.

On his 3rd attempt to escape, he was caught, the general was due in the camp the next day to personally shoot escapee’s in the head, pops was on the list. As luck would have it, The General hit a land mine and was blown to bits. Pops being such a fn nice guy, made friends with the low level guards, they just opened the door and let him out. He made it to France then to Halifax, then Toronto.

Totally ravage mentally from the war, the best he could find was a sweepers Job.

He bought a house a cottage, nice cars, mom stayed home while me and the sibs where small.

Today Kids with Masters Degrees, even PhD’s don’t get paid squat vs what shit cost. How the hell did this happen.

His name is John Crow. I never forget…………..and Teachers that don’t even know what damage they are doing cause they are refined products of the machine…………..That don’t or can’t know any better…..

#23 Dad on 10.05.11 at 11:15 pm

I misjudged your bravado about the little people out there in the world not making Six figures. Blessings to you and yours.

#24 Hovering on 10.05.11 at 11:16 pm

what recourse do we have against biased media?

they are private corps. they sell advertising. their clients are, often, real estate agents/corps.

if a lawyer lies their is a law society. a doctor must face the medical association.

these broadcasters aren’t breaking any laws when they present one sided stories claiming to be “news” (are they?).

is there a journalist society? isn’t CBC publically funded?

where do I turn? Garth, didn’t you used to be in that line of work ? Guide us Obi Wan..

#25 Dan in Victoria on 10.05.11 at 11:22 pm

@ 12
Get a new clock dude….

#26 NAGA on 10.05.11 at 11:25 pm

Garth – great post – and you did not mention the movement in the midle east nor riots in UK.

Someone mentioned recently (history major) that we are living through a period reminiscent to the days preceeding the French revolution – I guess this time could it be a “global revolution”? My question is what will be at the other side when the revolution is over?

Fortunately the pain so far has missed most Canadians – and unfortunately most Canadaians do not really appreciate this good fortune – but will it last?

I am personally a positive type, motivated and not afraid of the future. I have tried to instill this in my kids (still in school) – but I feel for a lot of the 18 – 35 year olds canadian born. Most have been spoiled, over-educated, but hardly any life or work ethics and skills.

#27 sam.i.am on 10.05.11 at 11:26 pm

Some marched because they cannot find jobs. Some because they’ve lost their homes. Some because of debt, after costly education for work which doesn’t exist. Some because hope is gone.
==

Canadians have been doing this march for generations. It’s called ‘going down the road’.

#28 45north on 10.05.11 at 11:27 pm

Housing is now a powerful symbol of the wealth gap at the heart of the Occupy movement. Unless we find ways of narrowing that – instead of spitting into the faces at the barricades

The concern for the common man is dismissed in favour of the pursuit of wealth. The present real estate cheerleaders will simply change sides and advocate for the destruction of private property. When the wolf attacks the sheep, the hired hand runs away.

The good shepherd by contrast even goes to Weyburn Saskatchewan: Because here I was last night, hurtling through the prairie blackness, as the wind and snow gathered force against the hulking grille, trying to find Weyburn.

Enough of this charade! Raise interest rates and lending standards and let housing prices fall where they may. And if my generation must sacrifice for the next, then so be it.

#29 Karlhungus on 10.05.11 at 11:33 pm

I still dont know how you can blanket all of canada as one real estate entity when Vancouver is over 11 times income, Toronto is at 9 times income yet Edmonton sits at 3.5 times income.

#30 pulse on 10.05.11 at 11:34 pm

Capitalism has been violated by corporate consolidation. Ethics are now obsolete in the minds of the currently powerful. “He will do anything to get ahead” has replaced duty and honour.

http://caracommunity.com/sites/default/files/hbb.gif

When government and financialization have coupled to this degree, America no longer has representative government.

http://www.youtube.com/watch?v=2PiXDTK_CBY

It will be no better here as people recall the fines paid by Canadian banks to settle that little Enron fiasco, or learn that our banks have gleefully made us ‘richer than we think’ while they sacked the virgins with insurmountable debt (remember – bank has ZERO risk if you are required to purchase CMHC) or that little stuffed envelope incident with a former Prime Minister, or the current ‘Conservative’ government who plan to balance books……. say in 2015 as they stimulate themselves at the expense of unborn Canadians.

As information flows, many will recall the rehearsed brutality displayed in my city last year as peaceful protest in the presence of the Cartel of International Banksters became an excuse to impound hundreds of Canadians.

Hey Boomer! – Is it morally acceptable to leave the next generations with a debt created by your indifference, your excess and your self serving notions of leadership?

The youth, without hope or ambition will not forgive us until we apologize for the burden we are leaving them.

Perhaps some ‘economic guru’ will appear and advise people that the wisest thing to invest in is their own family, their own neighbour, their own Country. Yes, we are responsible for these. Indeed, we are the 99%.

Or, we could just buy preferred bank shares rather than worry about the lazy offspring we raised.

Legacy has never been more lacking.

#31 Mark on 10.05.11 at 11:35 pm

the article published by the Vancouver sun
“Vancouver home prices lead nation; bungalows average $1.02 million. Written by By Derrick Penner, Vancouver Sun October 5.

Derrick Penner calls himself reporter and that is what he does; reporting what somebody else is saying, or repeating exactly what somebody else is saying (like a parrot). Derrick is just publishing a servey on real eastate prices by the most not independent researcher. It is the same as asking the owner of 100.000 apple stocks if the stock will go up…??
It is a shame to see that a newspaper does not use facts and figures from an independent researcher instead. Most people just read headlines.

*

Read more: http://www.vancouversun.com/business/Vancouver+home+prices+lead+nation+bungalows+average+million+survey+finds/5508562/story.html#ixzz1Zy6A1v9Q

ealty firm Royal LePage’s

#32 Entropy on 10.05.11 at 11:39 pm

@#19 Jeff in Victoria

The survey refers to 15% of boomers. How many people are we talking about? Given Victoria’s large population of nearly deads, the Times Colonist already has the most extensive obituary section in the Country. We need lots of boomers to move here just to maintain our present population.

#33 Whattodo on 10.05.11 at 11:40 pm

Garth, do you think people from Van who are moving to TO will say something like: holy cow, houses are very cheap here in GTA…. I’ll buy one! and pump more air to the bubble..LOL.

#34 SophieZombie on 10.05.11 at 11:41 pm

Since I moved to BC, with a real professional degree in demand and income of 80-90K in health, I started to thing that only not-so-clean activity will help me to buy a place bigger than a sardine box. Drug dealing ? … too dangerous and I don t like guns or Ed Hardy t-shirt. Evading tax? Can t. I have no business and no tip. I even though about doing porn online being a Sassy character such a goth-zombie realestate agent. But I did not do it, so I am still hoping and saving. And right now, owning is more of a fantasy. Going back to Montreal for a visit soon. I am already feeling sick about visiting new condo and houses of friend who paid 1/3 or 1/4 of BC and thought it was expensive with 10% cashdown with cashback. BC sucks if you are less than 35 and don t have dirty money or a sugar daddy. Not as Best place on Earth as on the Olympics add. Thanks Garth for your blog. I feel better 6 days per week arround 19:00-19:30 UTC-8. :)

#35 not 1st on 10.05.11 at 11:43 pm

Only one way to protest wall street and thats to keep your money out of that ponzi casino gulag. Invest in your family and yourself first. Take a course, upgrade your skills, start a business, invest in local opportunities via venture funds. Hell put the cash in your mattress if you have to, but don’t give it to dishonest scumbags who have never worked a day in their life and have no problems with losing your hard earned money.

#36 timo on 10.05.11 at 11:49 pm

http://blogs.villagevoice.com/runninscared/2011/10/we_are_the_1_percent.php

We Are the 1 Percent, Say a Few People

lol
I wonder if that will go viral?

#37 Meth Place on earth on 10.05.11 at 11:49 pm

I am buying every dip in the markets.

#38 Soylent Green is People on 10.05.11 at 11:51 pm

iphone free new app

MagicJack

– call anywhere in Canada and/or the USA

http://the-gadgeteer.com/2011/09/29/magicjack-gets-an-ios-app/

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.

#39 Junius on 10.05.11 at 11:53 pm

#25 Hovering,

Canada’s media is one of the most consolidated in the world. 4 companies; Bell, Shaw, Rogers and Quebecor control more than 80% of our broadcasting system. Our print media is also heavily consolidated. It means everything is highly commoditized and there is less and less professional journalism. It also means that coordinating a national release like this is child’s play because every outlet is looking for easy headlines.

The slow down in the economy means lack of advertising which means that financial institutions and the real estate cartel are essential clients. No need to question the veracity of their information.

#40 martin on 10.05.11 at 11:55 pm

dear garth!!!

your pictures are a million dollars !!!

#41 Soylent Green is People on 10.05.11 at 11:56 pm

Tony Clement uses his personal email account to hide federal business information.

While married Bob Dechert, Mississauga neocon uses his official MP email address to send love notes to his married mistress.

WTH SHEEPLE?

http://www.winnipegfreepress.com/canada/breakingnews/tony-clement-a-no-show-at-international-freedom-of-information-event-in-ottawa-131180323.html

http://www.cbc.ca/news/politics/story/2011/09/09/pol-tory-mp-china-journalist.html

http://www.unseatHarper.ca
.
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#42 Victoria Tea Party on 10.05.11 at 11:59 pm

#22 Smoking Man

A very moving tribute to your brave father, Smoking Man (the fact he survived the Nazis while being imprisoned in the Balkans speaks to his amazing courage. My God).

Therefore, what you wrote is extremely important and very instructive.

It reflects legions of what Garth has so purposely written on this date. As I have been noting, on this blog from time to time recently about the Occupy Wall Streeters, aka OWSers, our society has been bent entirely out of shape by greed whose foundation is unbridled debt.

Greed is part of the behavioural structure of any age group or cohort. But I think many of the Baby Boomer segment should take a large portion of blame this time out.

The atmosphere of greed encompassing this self-serving generation defies description. They “won” their place in the sun by default (the outcome of WW2) and millions have been arrogantly strolling on the spinal columns of many other of the less fortunates since.

Oh, yes, there are similar examples, of such greed, extant elsewhere in dusty history books.

A couple of examples:

–include the work-up to the Fall of France, the subsequent revolution and Reign of Terror ;

–and, of course, the Bolshevik Revolution which may have had half a chance of destroying world capitalism but for the advent of Mr. Stalin.

To those greedy SOBs, of all current generations out there, kindly read Mr. Smoking Man’s comments, over and over, until you damn well get it.

To shake out your greed you first need a backbone of steel, like Mr. Smoking Man’s dad. He got the steel the hard way.

I hope many of you do too, but most will fold like cheap suits in the process, I estimate.

I cannot wish you well, because I bloody well don’t.

#43 timo on 10.06.11 at 12:00 am

http://www.huffingtonpost.com/2011/10/04/lily-new-sesame-street-mu_n_994026.html

The upcoming season of “Sesame Street” is packed with cameos from the biggest names in glitzy Hollywood, but it is a 7-year old, food insecure girl that will perhaps make the biggest impact for the show.

Did we mention that she’s a Muppet?

I never thought in my life I would see that….sad.

#44 Devil's Advocate on 10.06.11 at 12:00 am

“At this moment the average family in Toronto, Calgary or Vancouver cannot afford the average home, without borrowing excessively. And this is at a time of historic low mortgage rates. Those who take the plunge are soon caught in a financial vice, juggling the costs of real estate and child care while trying to save for runaway tuitions and then their own lengthy, often pensionless retirement.” – GARTH

As sad and true as that is Garth there is simply no denying that facts are facts and as amazing as it is that there are people willing to pay those lofty prices the reality of it is, clearly, there are. And they are not doing so in the heat and euphoria on the way up in the markets. These people are doing this with good warning of the realities of a weak economy and not just those of your own warnings Garth. These people have heard the word. Yet they continue to do it anyway. Don’t you have to ask yourself “Why?”

Might it have something to do with the continuing widening income gap? A widening income gap causing discontent and civil unrest like that leading to the occupation of Wall Street in protest?

Get used to it people. The income gap will continue to widen and there will continue to be people willing to pay a whole lot more for what you think is worth less only because you can’t afford it. They disagree and are willing to put their money where there mouth is. I’m not saying it’s right. I’m saying it’s what’s happening.

The best thing you can do for yourself is learn to be content with what you do have. Even the most paltry of us lives a life others in the world would give their right arm for. If you cannot find content in what you have improve yourself that you might attract something better.

Prices haven’t capitulated as Garth warned they would in the three years since he started telling you they would. Actually they have.

Garth has always, to the best of my recollection, called for a 10 to 15 percent price capitulation nationally and I’m here to tell you that is about exactly what they have done. It’s just that most on “this pathetic blog” (Garths own words I remind you) read between the lines information that is not there.

So now here we are three years later and we have seen that on average 10 to 15% price capitulation Garth warned us of us already. He was right. It happened as he foresaw it would. We are now closer the bottom than the peak we left three years ago. Closer to the bottom than you think, if not at the bottom already.

#45 nonplused on 10.06.11 at 12:01 am

Knock out post today Garth! I cannot even find one line to disagree with. Good because I don’t have much time tonight.

I would like to embellish on the Occupy Wall Street thing though. I think this is the most dangerous form of social unrest, because there is no specific goal or timeline. Just disgruntled people. We don’t know how this movement, if it persists, will metastasize. We don’t know who the eventual leadership will be or what they will want. These are dangerous times.

Will it be like Greece? Iceland? Germany (1934)? Russia (1917)? The USSA (2008)? For those who haven’t followed history much, remember that Hitler was in jail for high treason when he wrote My Struggle (English translation, I can’t spell the original), but he got let out way early. Did the guys who paroled him know what was coming? Do we? During the Russian revolution, I am very certain that the vast majority of the protestors did not know that overthrowing the Tsar would lead to Stalin. They overthrew a minor daemon, and got Satan himself. And that comparison does a disrespect to Satan, Stalin was far worse.

#46 Devore on 10.06.11 at 12:04 am

“There’s some demand in Vancouver in particular, particularly from the Asian people coming to Canada who are investing in real estate. So there’s some demand there that is unusual in terms of the entire country, but overall across the country there’s been some moderation, which is good,” F claimed.

Can someone rewrite this in English please?

When central bankers start blubbering like idiots, they’ve run out of positive things to say.

#47 timo on 10.06.11 at 12:05 am

http://www.youtube.com/watch?v=rPILhiTJv7E

very good doc on China and the housing bubble. I hope they can keep building empty cities because that is what is holding up growth in asia.

this is delusional.

#48 Devore on 10.06.11 at 12:05 am

And by central bankers I mean.. whatever, you know what I mean ;)

#49 45north on 10.06.11 at 12:05 am

naga: we are living through a period reminiscent to the days preceeding the French revolution

http://mcaf.ee/a5216

#50 Kevin on 10.06.11 at 12:07 am

#17 2deep on 10.05.11 at 11:00 pm

That $79,000 median income stated for Stats Canada for Saskatoon is All census families ( not all households)
From stats canada
“1. Census families include couple families, with or without children, and lone-parent families.”

This of course does not include persons not in census families who could be living alone.

http://www40.statcan.ca/l01/cst01/famil107d-eng.htm

Two different entities (Demographia and the City of Saskatoon) have estimated that Saskatoon’s median household income for 2010 was between $60,000 and $65,000.

According to Stats Canada the median household income for Saskatoon in 2005 was $49,313.
In 2001, it was 41,991. So the 60k to 65k is probably in the ballpark for 2011.

#51 Nostradamus Le Mad Vlad on 10.06.11 at 12:08 am


“Some because hope is gone. Alienated people, in enough numbers, can change everything. It’s endemic. And dangerous. So long, hope.” — Then what was the point of paying plenty in tuition fees, when the jobs have gone elsewhere? Or evolved into new, quicker jobs which need less training?

I do get their point, because when I did my apprenticeship, there were so many printing shops anyone could cross the street and start anew. Now, there’s hardly any left.

When people have nothing, they have nothing left to lose. It’s gonna be a lot nastier out there shortly.

“. . . so-called leaders and experts in our society were busy making the problem more intractable. I think they’ll regret this – this will not turn out well. Before they see the riot.” — Hmmm. Are these the same ‘xpurts’ and ‘leaders’ who implored us to buy Bre-X and Nortel shares at the top of the market? Will they regret it? Possibly, yes. Probably, no.
*
US land is collateral for their debt, which gives rise to the situation whereby the US and China are both deteriorating rapidly, and when both flatline, China, Russia and Japan cash in all US Treasuries / IOUs and take the country on the cheap; From Argentina to Greece Default big; Printing DMs in case Euro tossed; Aid to Greece? Maybe that’s why Germany is printing DMs again.

The ‘D’ Word It loves me; it loves me not; Border Fence Another billion; Improving “This is your government on drugs. Any questions?” wrh.com; Derivatives “JPMorgan, topping all commercial banks, holds nearly $78 trillion of the industry’s $231 trillion in derivatives . . .”; Good question on credit, in- and deflation; Infinite Wealth is collapsing, mainly because nothing lasts forever; Pension ignorance is widespread.

Libya and Pakistan NATO attacking just about everyone, to help shift focus away from Wall St.’s protests; 3:19 clip US govt. using Twitter, etc. to spy on citizens. CSIS probably does the same here; Daily Job Cuts “Posted for DNC hacks, presstitutes, and money-junkies trying to claim the economy is doing great!” wrh.com; Obomba The dragons are beginning to close on him; The NYT Distorting and suppressing truth; 3:39 clip Florida county stops fluoridation; The Mouse That Roared AfPak?

Whoops “CNN has now openly admitted a massive brown dwarf star 4 times the size of Jupiter is in our solar system.” Is this Nibiru? Comet hits Sun Sun’s okay, not sure about the comet, and Asteroid slightly larger than Mt. Everest; ‘Quake Swarm continues in the Canaries.

#52 Jeannie on 10.06.11 at 12:09 am

#21 Waterloo resident…your creative idea gave me the best chuckle of the day, and Garth’s retort… even funnier.

#53 palebird on 10.06.11 at 12:09 am

#17 2deep Keep telling yourself it will all be good…too much.. do you not understand that the huge amount of new housing that was added to the market plus the “never experienced before” aggressive appreciation of housing values in Saskatoon and Regina is not because you are special?? It is because of events which are beyond your reach and which are rapidly spinning out of control and gaining momentum every day..hold on this is gonna make your head spin..

#54 Jon B on 10.06.11 at 12:11 am

Well stated General McGarthur.

#55 penpal on 10.06.11 at 12:12 am

As each day, week, month and year passes without a substantial correction in Canadian RE prices (in most markets), the danger of a larger decline in prices grows.

Most people in this country can not only not do the math, but have no critical reasoning skills. These shortcomings are displayed daily on this blog by an alarming percentage of the total number of postings.

Such ignorance can only be described as a “willing suspension of disbelief” which is the fundamental psychological posture of someone viewing a fictional movie in a theatre.

In the real world, however, the arithmatic ALWAYS asserts itself, and usually at the worst possible time.

There is no other result possible.

Patience is a virtue.

#56 Roland on 10.06.11 at 12:13 am

Garth, thanks for writing something that needed to be written.

I don’t know if the current New York protests will prove “seminal.” But if we continue along the present trend towards wider and more lasting divisions among us, there can only be more and more unrest.

What happens in another generation or two, when most people won’t have any first-hand memory of a time when our society didn’t have big divisions between rich and poor? That’s when the alienation will really be felt.

#57 JohnnyBravo on 10.06.11 at 12:21 am

“[…]it’s a protest against failed expectations.”

You nailed it, Garth. Those of us who have studied the socioeconomic developments of the last several decades knew that this generation would be the first in modern times to have a standard of living lower than their parents. In fact, I believe that the turn would have come sooner were it not, at least in part, for the massive inheritances bequeathed from the current “matures” to their children. It is likely the largest generational transfer of wealth in history, and the perhaps the last vestiges of a time when real wealth was actually still growing in our society.

We all grew up with the expectation that tomorrow would be better than today. It was a meme forged in the machinery of the industrial revolution, inculcated via our educational system, and realized via our modern credit-based monetary system. In so many ways, it is still true, but financially we’ve reached a breaking point.

The rate of creation of real wealth has been slowing for decades, peeking, by some measures, believe it or not, in the ’60’s. In 1971 America declared she was bankrupt, and the age of inflation descended upon us in full force. The creation of “wealth” became something of a sham or ponzi, whereby we took more and more wealth from the future in order to consume today. This required the continual devaluation of our money, resulting in a perpetual game of financial catchup. We were all placed on an economic treadmill that ran faster and faster, causing more and more people who couldn’t keep up to fall off.

Nothing in life is arguably more devastating than unrealized expectations. When the fault is our own, the result can be debilitating disappointment, or worse. (Someone said that the cause of all mental illness is the refusal to experience pain.) But when one can place the blame for dashed expectations on others (whether legitimately or not) the result is seeking anger.

Surely, much of this anger is well-placed. Yes, we have most certainly as a society developed a sense of entitlement that would make our rugged, independent ancestors shake their heads disapprovingly. It’s one of the less than beneficial consequences of the “welfare state” inaugurated during one of the most devastating economic periods in history, and which became increasingly bloated, along with our dependance on it.

But there is another side. Also during this period, and particularly in the last 30 or 40 years, we have seen a growing concentration of wealth in our modern industrial economies in the West. The disparity has now reached a point which should be viewed with shame and horror–a regression of historical proportions, which has introduced terms into our vocabulary like ‘neo-fuedalism’ and ‘debt slave’. There is the sense that this regression was not a natural one. That it was somehow engineered, a belief finely crystallized in the aftermath of the financial collapse of ’08 when the tax payers saved the too-big-too-fail banks. While the banks gorged on the people’s money, the people themselves starved.

The protests have many positive attributes. Americans may be finally waking from their media/substance/video game/fast-food-induced catatonia. And perhaps this is the start of something positive for society in general. (Canadians are comatose by comparison.) But this movement, if that’s what it is, also has ugly tendencies and potentials to make things even worse than they are. Think Weimar Germany.

One of the unfortunate consequences of the protests is a growing backlash against capitalism. Michael Moore, whom I used to respect for bringing legitimate social and political messages to the masses, says that capitalism is to blame. When one understands that at the core of capitalism lies the precious concept of individual freedom (yes, life, liberty and the pursuit of happiness), which we should all cherish, you can understand how more ignorant words have rarely been spoken. But unfortunately it’s a sentiment that is gaining traction. No, capitalism is not perfect. Even the good kind of capitalism can engender human exploitation, thanks to that almost primordial human trait we call “greed.” But human exploitation did not start with capitalism. And it would not end with capitalism’s demise.

History has shown that popular uprisings or revolutions have all too often replaced one tyranny with another that is even worse. Not to mention that such mass movements can easily be co-opted by its own very enemies. Rather than being the start of positive change, “revolutions” are often the coup de grace of a failed society. That’s why I’m not so sure I like what’s happening down there on Wall Street and other financial centres. But I have hope.

#58 Joe on 10.06.11 at 12:26 am

News is funny isn’t it. On the BC Global news tonight they had a clip about a new study that says a majority of us are feeling worse off than a year ago and expect to be even worse off a year from now. The highest stats came from BC and Atlantic Canada. And in other news house prices continue to climb and we’re all getting a pony and an ice cream cone. How many papers do we need to read and newscasts must we listen to to even begin wrapping our minds around what the truth possibly could be.

#59 604x on 10.06.11 at 12:28 am

@Smoking Man.

John Crow. There is a name I haven’t heard in a while. Makes me wanna spit. That lunatic kept the dollar high right as we entered a free trade zone with the USA and resulted in a huge sucking noise of jobs going south. But Crow’s holy bible was zero inflation….at any cost. How do you pin higher prices today on him? Or is it the job losses that bug you (and me)?

#60 daughter on 10.06.11 at 12:33 am

My father escaped death ten times during the war and lived to tell the tales. Somehow, just the way he tells the stories, he can make a distant and unfamiliar thing like ‘war’ relatable to the rest of us.
Fifty of his fellow PoWs in Stalag Luft III were murdered by Hitler in revenge for their great escape in 1944.
He’d strafed Gen. Rommel’s column and later saw the old desert fox himself. He was shot down and injured and crashed his fighter plane in the Libyan desert.
His prison ship was torpedoed off the coast of Tripoli while he was held prisoner in the hold below deck and the torpedo blasts blew him clear. The ship sunk and nearly pulled him under in the dark, he floated semi-conscious in the debris and oil for hours in the Mediterranean Sea.
After years as a fighter pilot and years in prison camps he weighed the odds of surviving an escape, and chose to wait for the Allies.
Despite years of bad living conditions in the prison camps he returned home a happy, grateful and very smart man, and immediately married Mom, she’d toughed out the five years waiting for his return.
Garth, I remember 3 years ago reading your blog to Dad, having discussions with him and we’ve both agreed for several years now that the greed at the top was unsustainable, and that a revolution was simply inevitable. Dad sure is smart..
Garth, I’m thinking maybe you’re “the smart ‘dad'” whom many advice-seekers need in order to really ‘see’ the real world and put it into financial and economic context.
You’ve been through a helluva lot, and you’ve never steered ’em wrong.

#61 NFN_NLN on 10.06.11 at 12:35 am

#27 NAGA on 10.05.11 at 11:25 pm

… but I feel for a lot of the 18 – 35 year olds canadian born. Most have been spoiled, over-educated, but hardly any life or work ethics and skills.

That’s odd. I feel for the > 35 crowd. Most are self-entitled, under-educated douche bags who are the cause of the political, financial and environmental problems we are experiencing today.

#62 Bailing in BC on 10.06.11 at 12:38 am

Meet you in Yaletown. I’ll bring the stick…
…you bring Doug

#63 timo on 10.06.11 at 12:48 am

http://www.theglobeandmail.com/news/national/new-canada-us-trade-tensions-loom-over-west-coast-ports-as-inquiry-launched/article2192606/

unfair ,tariff ?
Canadian opponents says that could amount to a tariff of about US$140 per container coming into the United States from Canada.

http://www.bloomberg.com/news/2011-10-06/u-s-apartment-vacancies-drop-to-five-year-low-as-demand-begins-to-slow.html

finally good news. this might just help
U.S. Apartment Vacancy Drops to Five-Year Low as Rents Increase

#64 Trying to stay hopeful on 10.06.11 at 12:51 am

Garth,

Excellent post — thank you. As I watch the protests, I sometimes dispair of change — thinking that the people who have (often by sheer luck and/or timing and/or greed) risen to positions of money, power and privilege will stop at nothing to protect their positions…….that the people in the banks and Wall Street simply have too much to lose to ever allow reform/change to occur.

However, this piece from Bill Moyer about “The 8 stages of successful social movements” reminded me that things can, and do, change….and that there is a path.

http://paceebene.org/nonviolent-change-101/building-nonviolent-world/methods/eight-stages-successful-social-movements

In the meantime, your excellent website helps inspire and educate us as individuals to make important changes in our own lives, until such time that we can make larger changes at a societal level.

Thanks again,

Brad.

#65 Timing is Everything on 10.06.11 at 12:56 am

What was possible a generation ago is now gone. – Garth

Try a decade ago.

#66 Adam on 10.06.11 at 1:00 am

Oakville, ON and Milton, ON prices dropped in September 2011.

#67 Makaya on 10.06.11 at 1:08 am

When the game is over, this is what happens:
http://wonderhussy.com/wp-content/uploads/2011/10/IMG_2112.jpg

#68 Ben Nevis on 10.06.11 at 1:09 am

Garth; you seem sadly alone in stating publicly exactly what we see; all media (and today, government) colluding in real estate industry hype while substantial sections of the under 30s, particularly in Vancouver, are increasingly disenfranchised by the cost of housing. The more government and the real estate industry act to support the housing market, the more they continue to disenfranchise youth. Disenfranchised youth are a common thread in the Arab Spring, the U.K. riots and yes, even those in Vancouver…. and we fully agree, ‘Wall Street’ is just beginning. Meantime, the last realtor we met drove a Range Rover.

#69 Tamsen on 10.06.11 at 1:16 am

Garth’s not wrong – he’s just early. Time will tell …

#70 Axehead on 10.06.11 at 1:23 am

Doug is a pompous Ass, most of that province is. I’ve stopped vacationing there – the country side is gorgeous, but the cities and towns are overrun by drugs, bikers, and ex hippies. It’s unbelievable when you cross the BC border, how people seem to be so self centered and have a sense of entitlement. Doug is just a symptom of the problem – a financial and social corrections is sorely overdue.

#71 new-era on 10.06.11 at 1:24 am

Garth F is right technically we don’t have a housing Bubble.

We have a credit bubble. Cheap money is fueling Canada ecomony. Resulting in rising housing prices and people’s ability to buy lots and lots of un-necessary toys. F is an idiot, sounds like Bernanke.
Its like an elastic band the more you wound out Debt the more it will Swing / Overswing back and find it’s equalibrium.

Look at the US now. With the squatters refusing to pay their mortgages, the banks will have a hard time loaning money to anyone. I can totally see interest rates rising because of the risk of lending.

#72 Math is Fun on 10.06.11 at 1:33 am

Q: How do you tell the market has topped?

A: When people driving ford escapes abbreviate million dollar home prices (ie. $1,600,000.00 as “one-six” or $2,400,000.00 as “two-four”) in a suave tone.

It is just as scientific as F claiming foreign buyers are (for which there are no stats btw) the backstop for prices in Van.

#73 The thing in the basement on 10.06.11 at 1:59 am

12 Keeping the faith

“And even if you aren’t over-mortgaged and have a paid
off residence or multiples, you will be taken down with
the rest of the dropping valuations … bon voyage!”

Where am I going? If the valuations drop, I still own what I own – a house and a share of a rental.

What are you going to have?

#74 Michelle on 10.06.11 at 2:02 am

Sigh… It’s 2 am and I still don’t know who to vote for here in Ontario. This is almost as bad as the last federal election!
Voting seemed so much easier when I was younger. Everything was so black and white, and I actually believed that the party leaders would follow through on their election promises.

@#27 NAGA- I so agree with you.

#75 Jody on 10.06.11 at 2:17 am

“Before they see the riot.”

When the riots start the boot licking banker servants (the police) will start firing bullets, and so the civil war will begin anew. I don’t think the majority of sheeple in North America understand how bad things are in countries like Greece, how bad the riots are getting over there. People who say it can’t/won’t happen here have their heads shoved so far up their own arse’s they can watch themselves swallow. Below is a good article on Greece, warning, some graphic images are present.

http://www.dailymail.co.uk/news/article-2045628/Greece-strike-Debt-ridden-country-starts-24-hour-walkout.html

#76 Not Wondering Anymore on 10.06.11 at 2:32 am

The “OccupyWallStreet” movement is quickly spreading to other cities world wide and is being modelled after the recent Egyptian revolution, which,by utilizing social media directly, was successful in effecting a relatively non-violent power change.

Additionally,this current movement is intentionally leaderless,operating by consensus, and is therefore effectively circumventing existing governments.

This is the future. We are witnessing how a new, more direct and more truly democratic system is evolving.

You can be assured that our own government’s current emphasis (dicated to as it also is by the financial and corporate sectors) on increasing funding to broaden crime legislation, and “security” measures and to expanding the prison system, has everything to do with these global actions.

These measures are not being initiated with the intent of protecting citizens from external or internal threats, but to enable government to protect itself from its own people.

However, like Egypt, these attempts will not prevent the necessary and inevitable outcomes of movements such as OccupyWallStreet and others to come.

#77 scib on 10.06.11 at 2:37 am

Why is it our weak kneed embassy staff can’t filter out these crooks who are absconding with the wealth of other people in China then bringing it to Vancouver to pump up the housing market.
The average person in the street in China can identify these cheaters. A few years ago the embassy did a careful audit of the business class applicants. More than 90% of the applicants had no job or no business as stated on the application. Now at our expense we must go through rigorous examination of all business class immigrants.
Well an immigrant lawyer I know said recently there are over 30 ways to immigrate to Canada. When one is gone they just move on to another one.
For example many “nanny class” immigrants from the Philippines are University grads who are just looking for an easy way in. Many just “work” for their Family who are here and Somehow scrape up enough to pay the taxes on the minimum wage declared salary that is never paid. After 3 years they are free to work anywhere. After 5 years they get citizenship.
This is what my Uncle died in WW2 for!?
Think about this for a minute…
What right do we have as a first world nation to harvest the brightest and best from a poor struggling nation that needs their best in order to grow and provide for their own poor.
Also Those that are looking for democracy are the very ones that should have to stay and fight for it in their own countries’ Just like our forefathers did.
When you think about it we are pretty selfish by taking the best from their homelands and pretty foolish by allowing the criminals and cheaters in as well.

#78 Foggy on 10.06.11 at 2:48 am

Was watching CBC’s Lang and O’Leary the other night, and they had a guest on from Capitol One Realty. When it was suggested by Amanda that real estate is somewhat risky these days, this guy said that there was opportunity out there because Toronto and Montreal still have to “catch up” to Vancouver. Catch up…
Like Vancouver is the benchmark of normality in real estate these days, and we’re well behind them.

I’ve heard a lot of spins of logic from these guys, but this was a first…

#79 BPOE on 10.06.11 at 2:52 am

Average???Who ever said anything about average. Vancouver is for the creme de la creme. Come visit. If your night driving a Mercedes, Porsche, BMW , Lambo or Ferrari then you should scram out of town. Something is happening and you don’t know what it is do you Mr Turner. Shell shocked Canadians in their Hondas and Chevrolets don’t get it. What has happened they say!
&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&
At this moment the average family in Toronto, Calgary or Vancouver cannot afford the average home, without borrowing excessively

#80 European on 10.06.11 at 3:02 am

Garth you have captured my twenties cynicism in a few paragraphs. Kudos to that

And like your pointing out, you don’t need to be jobless and in a financial disaster to be cynical to this entire situation. You just need to be in your twenties from an average family.

Throw it to the ground!!

http://www.nbc.com/saturday-night-live/video/digital-short-on-the-ground/1163268/

I’m not gonna be part of this damn system!

#81 Calgary Bubble on 10.06.11 at 3:54 am

Good to see a few good realtors out there that that at least try to inform the public of what is actually happening in the market, and provide a more neutral medium, rather than just blowing smoke up everyones ass.

http://calgaryrealestatereview.com/2011/10/01/september-2011-calgary-real-estate-statistics/

http://calgaryrealestatereview.com/2011/10/05/imf-canada-needs-to-monitor-housing-closely/

#82 I'm stupid on 10.06.11 at 4:08 am

Food for thought

The banks have effectively screwed themselves. Here is why:

Let’s say you have a mortgage of 500k but you can only afford 350k. This is the trend take a heloc for 200k intrest only pay your mortgage with it. Now you have a heloc of 200k intrest only and a mortgage of 300k intrest and principal. This effectively increases your amortization past 40 years but only 300k is backed by chmc if any at all. The liability on banks balance sheets once the market turns is going to be epic.

#83 wtf????? on 10.06.11 at 4:23 am

Thia is the fourth time in a year that the IMF has put Canadian debt under the microscope and chastised the Conservative government for encouraging unsafe levels of debt. Is Flaherty just stupid?

#84 E on 10.06.11 at 4:25 am

Garth, what is your definition of middle class?
Thanks.

#85 gtrz4peace on 10.06.11 at 4:48 am

Great post today. As an ex-pat we can say we were never prouder than to see Americans standing together, Labor and the laborless. Doug who Garth wrote about is a shallow jerk, but unfortunately too many here in Vancouver share his delusions. My reply, “don’t let the house hit you too hard on its way down.”

#86 Robert Dudek on 10.06.11 at 6:04 am

Detached homes, or SFH, are a North American obsession. Only here (and perhaps Down Under) do people view a SFH in a major city as some kind of right.

Try to find an affordable SFH in a major European or Asian city.

#87 Robert Dudek on 10.06.11 at 6:12 am

So buy 2 of them for $3,000 , winterize them with electric heating, add plumbing, and plop them down out about 50 kms from the city on some country lot that you buy for about $30,000. Instead of spending $350,000 on a cubicle you spend only $35,000 for the same cubicle.

If you could plop down that cubicle in downtown Toronto for $35000 then you would really be on to something. Location is the key factor, bud.

#88 john m on 10.06.11 at 6:30 am

“How much better we’d be to realize this now. To have corporate and political leaders with the vision to see consequences.”

Before they see the riot…. <<< how very true but sadly their lack of vision created this mess.

#89 not so rosie on 10.06.11 at 6:35 am

In late 2000 I was looking at this strange new product in an ad. I thought this thing would take off and maybe I should buy some shares. The company was still in bankruptcy and the .com thing was still unraveling. The shares were around $10.00. 11 years later the ipod, imac, ipad, and iphone rule the geekiverse. The shares split and are worth over $400.00. Icoulda been a somebody. Alas, Steve jobs was really a somebody.

#90 bigrider on 10.06.11 at 6:56 am

I was in a local Indigo yesterday night and read(skimmed) through your book ‘after the crash’.

From bottom of page 186 on how much gold to own I quote” There are two answers to this. First, if you share the concerns listed above, and think gold is a good insurance policy on dark days to come, a return of out of control inflation,or a simple caving in of the world’s financial system, then a consensus view is a minimum of 10% of your liquid net worth should be in gold.If you’re really freaked out. double that.This is gold you hold permanently, never sell, and only add too.Stroke it every night if you find it reassuring,,more than you can do with a life insurance policy ”

In the next paragraph you go on to say that if you are holding gold for profit quote ” if that’s the goal, a third to half your portfolio in gold is not outrageous.. after all we have been holding 80% of our net worth in an asset we thought would rise forever, residential RE”

I will be surprised if you have the cajones to post this comment from me and not censor it, but you really have to explain this in light of your recent opinion that “5% is the most you should have in gold anymore is too much”.

Because it’s not 2008 any more. Did you buy the book, or just stand there and copy the words? — Garth

#91 David B on 10.06.11 at 6:57 am

It now appears our American cousins only thought they could walk away from their homes is not completely correct. News agencies are reporting that the banks have now begun to sue them for the differences couple d to new nickle and dime fees.

But here in Canada it gets better by the day so go for it, we have “The Canadian Shield” backing our government CHMC fully world secured with a majority backed leader who has the world’s smartest finance minister ever! Soon Vancouver Toronto and Calgary will be cities of call above New York London and Paris ….

Get your home or trade up their now and become somebody!

LOL!

#92 bigrider on 10.06.11 at 7:08 am

By the way Garth, I really have to admit that your story of your 3 and a half hour trip home to Caledon during the energy brown out we experienced a few years ago really drove home the point of just how vulnerable we all our and how unprepared for even a few days we are to a loss of our energy grid/providers. You had me hooked and I actually read that excerpt twice.

Great advice. We all need to be better prepared and I am going to do a few things around my place along those lines.

Now, here is my point. Concrete based generators, guns and a couple of dogs aren’t gonna keep you and your lovely wife safe for long. I stood beside you once at bellfountain biker corner , hand to hand I would overpower you in about 10 seconds..tops. Us unprepared idiots gonna come for your shit…you can keep your 400 ounce bar of gold , I need the canned food ,matches propane ,blankets everything but the yellow brick..LOL

Just saying.

If one makes such preparations and no one else does, I doubt he/she is any more safe than the rest.

#93 big T on 10.06.11 at 7:08 am

this is a big country, why not relocate, move from
areas of high inflation to more reasonable locals, cant
see the logic in compeating against the children of
the worlds economic elete, time to think outside the
box, and move on…

#94 househornyhousewife on 10.06.11 at 7:34 am

Ah come on Garth,

Are you serious ? Whatever happened to living within your means ? I think that the snob is partially right (although rather “insensitive” for lack of a better word .. “let them eat cake” as some other insensitive historical personality stated .. and look what happened to her).

There is some truth to this though. If you cannot afford to live in the big city then don’t. It’s all about survival. Rent something and start looking for work in a place that is affordable.

People are not “trapped” into living in Vancouver or Toronto. They do have choices. They can either rent in these exorbitantly expensive cities or they can take the plunge and try to move elsewhere and own a nice home for a decent price. Even if they make less money elsewhere, the cost of living is cheaper so they will actually be better off. People seldom look at the entire picture .. only the salary numbers as opposed to what it can buy them. A $70,000.00 salary means you are poor if you live in Vancouver but if you live in a much smaller city or a mid-size town, this salary is more than sufficient and will enable you to realize your dream of owning a home and raising a family.

Where I live, $700,000.00 (which will get you a crappy 60’s bungalow on a teensy lot in Mississauga somewhere between the car fumes of the Gardiner Expressway and the yuppie Sherway Gardens mall .. yuck !) will buy you a 4 bedroom 2.5 bathroom house with gorgeous landscaping, a pool and a beautiful view of the mountains .. on a ten acre lot.

I made the choice of moving out of the larger city of Montréal about 15 years ago and I have never regretted it. When people come to our house they always say that our place would cost over a million in Montréal or Toronto (we bought it for $260,000.00 in 2003 and today it would sell for around $420,000.00). The house is paid off whereas if we had bought something in Montréal we would still be paying for it.

Of course not everyone has the option of moving but I do think that if it is possible then the huge amount of trouble is definitely worth it. It will give you peace of mind because all of your bills are paid and you have something extra to play with, and it will also give you tremendous hope for the future because you can see a future with a paid off property that is yours and a nice nest egg for retirement, that is separate from the real estate, in an investment which is growing and earning money for you (that is, when these investments actually start to do that eventually).

There are ALWAYS choices …. ALWAYS ! Choices mean consequences and people have to start to look at alternative choices and their respective consequences before making any decision. I am not sure this is done often enough when it comes to real estate and lifestyle. Most people tend to do what they know and are familiar with, in addition and what they see their friends doing. Break out of the Vancouver/Toronto metropolis mold people.

HHHW

#95 cash is king on 10.06.11 at 7:36 am

#4 – Stevenson

The dude with the J did come back, took a look at what is going on and decided this is far worse than anything he could do so he left us to our misery.

#96 Kevin on 10.06.11 at 8:03 am

Great post, Garth. When you put it that way, isn’t the solution to simply build more houses?

I mean, houses are a commodity that obeys the supply/demand curve, just like everything else in a capitalist economy. If prices are rising out of step with inflation, then it’s because demand is rising faster than supply. If 6 people all want the same house, then you get a bidding war. But if there are 5 more houses just like it in the same neighborhood, then demand is met, and rational prices prevail.

The question is, can new houses be built for the same or less than the cost of purchasing an existing home? I believe they can. Back in the 70’s, when home prices were a reasonable multiplier of average income, the cost of materials and labour were still in step to create affordable homes. If material and labour costs have only risen at the same rate as inflation, then a reasonable multiplier should still be possible in the current economy. Obviously, it doesn’t cost $1.2 million to build a 1200 sq. ft. shack, so Vancouver prices could be relaxed if more homes were built. Of course, Vancouver has other aggravating factors at play here, such as constrained geography (ocean on one side, mountains on the other) and a sub-par transportation infrastructure, but in general, I think it’s possible.

So, isn’t the answer to simply build more houses and improve mass transit infrastructure? Nobody wants to live an hour away from their job, so they bid on the limited supply of homes near their employer. But if transit made the trip shorter and less painful, or more jobs encouraged telecommuting, or even if cities simply spread the jobs around a little more (instead of concentrating employers downtown, and surrounding the core with a ring of ever-expanding suburbias), then couldn’t home prices be brought back down to simply the cost of materials and labour?

#97 uklurker on 10.06.11 at 8:04 am

One of the reasons I left the UK was because there was no hope of ever buying a reasonable sized home in a decent neighbourhood. I saw successive governments feed the bank/realtor led hype of ever increasing house prices. I got stuck on the middle rung of the ladder, and the only way to climb up was to take on huge debt. Thankfully I am very well qualified in a high demand industry, so I could leave and go to a country where I can buy a home (not in the GTA or Vancouver) for less than 3 times my income that I am happy with. But what about those that can’t leave…we saw that in London two months ago, and that was just the beginning.

Governments and financial institutions are detroying western society, and the dreams and hopes of millions of ordinary people. The occupy movement has loose objectives, and unless it clarifies its demands on a series of attainable goals (banning of corporate funding for politics and gains after political office from corporations; a one time windfall tax on all individuals globally who have made excessive salaries/bonuses and serious criminal prosecutions for those who have abused political and corporate power to further their own ends at the expense of others) it will fizzle out.

But, the feelings that inspire this movement and the other growing movements around the world will not go away, and they will find voice again as times get harder and harder, but the voice may become more ugly and manifest itself in extreme nationalism.

#98 Moneta on 10.06.11 at 8:07 am

Yesterday we saw that there is a big migration of 18 to 35 year olds from BC to elsewhere (my own daughter and fiance included) today I read 15% of boomers elsewhere in Canada that were interviewed are planning to move to Victoria.
——-
Yes and just a few years ago 99% of boomers still believed in Freedom 55. Now most still believe in freedom 65 and in a few years that will be Freedom 75.

#99 Moneta on 10.06.11 at 8:10 am

So buy 2 of them for $3,000 , winterize them with electric heating, add plumbing, and plop them down out about 50 kms from the city on some country lot that you buy for about $30,000. Instead of spending $350,000 on a cubicle you spend only $35,000 for the same cubicle
———
That’s why I laugh when someone buys a house > 350K with the excuse that you’ve got to live somewhere.

#100 Ron on 10.06.11 at 8:11 am

#94 big T

Yeah Big T, why don’t half of Canadians move to Nunavut to start a new life.

That will solve everything.

That way the Inuit can move to Greenland when they can’t afford house prices due to bidding wars from the population explosion.

#101 Moneta on 10.06.11 at 8:18 am

this guy said that there was opportunity out there because Toronto and Montreal still have to “catch up” to Vancouver. Catch up…
Like Vancouver is the benchmark of normality in real estate these days, and we’re well behind them.
——-
I keep on hearing this from Montrealers but obviously people just can’t seem to grasp how everyone is connected.

If you go to statcan and look and spending patterns in Vacnouver vs. Montreal you will quickly see that Montrealers spend a lot more money on clothes, furniture, restautants than Vancouverites.

This means the local economy is quite different. Since housing has ballooned in Montreal and they have been using their houses as ATMs, you know they’ve been spending more on renos, clothes, restaurants… This means that all the workers in these sectors have been buying houses with bubble money.

Of course CMHC calls these homeowners prime and assumes this income is permanent but when the bubble bursts and houses can not be used as ATMs anymore, their income is going to drop like a rock.

Montreal prices can not match Vancouver prcies without creating huge economic dislocations first.

#102 Peter on 10.06.11 at 8:22 am

One percent growth rate in Victoria would double the population in 70 years.
Why do most people think that is a good idea?
Why do some people think it should be more(Langford?)
Will having twice as many people make it a better place to live?

#103 John on 10.06.11 at 8:27 am

When there is trouble in the cottage the palace is not safe.

#104 C on 10.06.11 at 8:41 am

#80 BPOE “Average???Who ever said anything about average. Vancouver is for the creme de la creme.”

You are such a wanker.

Come to London, UK when you grow up and see how a real world class city is run and what people drive.

You couldn’t even afford a downpayment on a flat here with your vancouver home.

#105 Bill C on 10.06.11 at 8:45 am

Forbes said Canada best place to do business in world. Ireland was #4. Ireland used to be #1 and top 5 for years. They are not making anymore real estate in Ireland and its smaller than Nova Scotia. Irelands Real Estate prices have fallen 50% . Heres Dublin prices which just a few years ago was best City in the World. They also had a Condo Boom Like Toronto is right now. North County Dublin – 41.5%West County Dublin – 44.5%South County Dublin – 45.5%North Dublin City – 45.7%Dublin City Centre – 53.2%South Dublin City – 46.8%Dublin City Centre has seen the largest drops in the entire country at 53.2%. The area covers large shopping district of Dublin 1 and Dublin 2 but also spreads out to the docklands, where a large number of apartment blocks would have been built in the boom years – both north and south of the river. Now all these Condos are empty and you better get ready as Toronto will no doubt be in same position within a year.

#106 Ron on 10.06.11 at 8:46 am

Shit, I forgot about the people of Greenland.

Africa too hot??

#107 young & foolish on 10.06.11 at 8:49 am

“First we take Manhattan, then we take Berlin”

—- Leonard Cohen

When the economy stops working for the majority
of the people, then imminent change is in the air.

#108 The Other Doug on 10.06.11 at 8:50 am

Garth, well said. Your post last night was a clarion call.

The movement is struggling to find its voice and message, it needs sober logic based supporters. I’m glad to see you sympathise with what I think is one of their central issues.

The occupation isn’t just in the states, it’s here in Canada as well.

#109 fancy_pants on 10.06.11 at 8:56 am

Papa F. says there is no bubble. Phew ~ that takes a load off knowing Papa has our back. (tongue in cheek)

http://ca.finance.yahoo.com/news/Canada-see-housing-bubble-no-reuters-2363780819.html

#110 2deep on 10.06.11 at 8:59 am

@54 Palebird

“do you not understand that the huge amount of new housing that was added to the market … in Saskatoon and Regina is not because you are special?”

No, it has nothing to do with being special, it has everything to do with statistics. As I outlined, there is not an overbuilding problem here as housing to population increase is at 1:3 (let me know if that is a bad ratio).

In 1997 I moved to Alberta and rents/vacancies were ridiculous. We thought it wouldn’t last and sure enough over 14 years later the market has not crashed (steadily increased and plateaued). As people continue to exit BC and Ontario because there are no jobs and real estate is unaffordable, places like NF and SK will stay buoyant because our populations/economies are smaller and take less to be stimulated. Prices likely won’t increase but will stay at this level until the inflation curve catches up.

That is unless the bigwigs at PotashCorp, BHP, Mosaic and Cameco all realize that they shouldn’t have started their expansion projects and their projections on commodities were way off and they lay everyone off tomorrow. Now THAT would be different.

#111 penpal on 10.06.11 at 9:02 am

@ # 90 Rosie

Apple was never in bankruptcy.
The stock never traded at 10.00
Company cash book value was 12.53 USD at the absolute nadir of its share price.

I remember it well.

#112 Farmer Fred on 10.06.11 at 9:09 am

In farming circles we have a saying, “yah gotta make hay when the sun shines”. The young grads and those just starting out have indeed been screwed over but those of us older folks who have had decades of economic growth under our belts should have something to show for it. Many don’t because they thought the sun would always shine. Should have been reared on a farm… The late Canadian economist John Kenneth Galbraith, a good farm boy if there ever was one, often would tell his Harvard colleagues, “your problem my friend is that you never lived on a farm”.

#113 TurnerNation on 10.06.11 at 9:12 am

The Middle Class was possibly a post-WW2 marketing creation. Previously you had the indentured working poor (their means of production and craftmanship skills were taken away decades earlier), and the Capital Class (bankers, factory and landowners).

Then we were sold the dream of detached suburban houses, fenced yards, gleaming kitchens, latest model car in the driveway, radio or TV, family vacations, and 2.5 kids. All on one income! That did not end well…

#114 Aimhigher on 10.06.11 at 9:17 am

What about accepting responsibility?
These folks that are protesting and the picture of the lady holding up her financial stupidity card; did anyone FORCE them to buy the houses that they paid a premium for? They went into bidding wars and lottery draws for the right to overpay for a house. Now that the value has shifted they look at the law makers with dumb look on their faces.

Its akin to anyone picking an equity stock, overpaying for it, getting burned by it and then taking to the streets so that ‘someone else’ can make it right.

#115 Incubus on 10.06.11 at 9:30 am

A Conversation With a Home “Owner

http://www.youtube.com/watch?v=engKtLw0JTM&feature=related

#116 TurnerNation on 10.06.11 at 9:35 am

Building permits drop for second straight month in August: StatsCan

Largest declines occurred in Ontario and Quebec
Thursday, October 6, 2011
By Canadian Press
Source: The Canadian Press

Municipalities issued $5.9 billion worth of building permits in August, a 10.4% drop from July and their second straight monthly decline.

Statistics Canada reports the value of permits fell in both the residential and non-residential sectors, mainly in Ontario.

Quebec, Saskatchewan and Nova Scotia also slipped, with the declines more than offsetting increases in the six other provinces.

In the non-residential sector, the value of permits fell 16.6% to $2.3 billion, a second consecutive monthly decrease.

In the residential sector, the value of permits dropped six per cent to $3.6 billion after three straight monthly increases.

The largest declines occurred in Ontario and Quebec, particularly in construction intentions for multiple-family dwellings in Ontario.

#117 TurnerNation on 10.06.11 at 9:37 am

Do not worry…our morally sound, caring, fiscally responsible CONservative govt will lead us out of it! A few other no-bid contacts, combined with fear mongering, flag waving, and bible thumping is all we need!

Confidence crisis: Half of Canadians say worse off
Business confidence remains weak
Wednesday, October 5, 2011

By Julian Beltrame
Source: The Canadian Press

Canadians have been shaken to the core by the global financial crisis and fears of another recession, a new survey of consumer confidence suggests.

The online survey of consumers done recently for Bensimon Byrne found that half of the 1,500 respondents believed they were less well off than a year ago and expected to be doing even worse next year.

Only six in 10 said they believed the economy was growing, a sharp decrease from three months ago when 73 per cent felt prospects were improving.

#118 cata on 10.06.11 at 10:01 am

#67 Adam on 10.06.11 at 1:00 am Oakville, ON and Milton, ON prices dropped in September 2011

Really??? Prove it. I hardly believe with the bunch of nuts who want to live there!

#119 Alex on 10.06.11 at 10:09 am

Financial Warfare: “Sheared by the Shorts”. How Short Sellers Fleece Investors by Ellen Brown

Must read:
http://www.webofdebt.com/articles/shear_short.php

#120 Kaganovich on 10.06.11 at 10:14 am

2 Deep wrote with regards to the inflated housing markets in Saskatchewan:

“That is unless the bigwigs at PotashCorp, BHP, Mosaic and Cameco all realize that they shouldn’t have started their expansion projects and their projections on commodities were way off and they lay everyone off tomorrow. Now THAT would be different.”

Bingo!

#121 cliffard on 10.06.11 at 10:14 am

Real estate at this point in time is a cult and the practitioners need an intervention and the deprograming is to come . Afterwards shame.#21 waterloo resident best and most practical analysis of real estate .so that’s the practical taken care of #56 takes care of the arithmetic and psychology and when that turns to the extent of owning a house is like holding a turd then ? And hopes for the revolution not good when most think it was a good idea to bail out banks and insurance companies .

#122 SKRenter on 10.06.11 at 10:17 am

That last picture infuriates me just a little. Some may feel sorry for her and i do empathize somewhat. But the picutre really follows along with the post. Yes, the realtors pump their marketing. This is not the problem though, it is more an issue with the medium. Yes, F and C put there best foot forward, but i do agree we should expect more from our elected officials. But the real problem with our upcoming crisis in Canada and the existing one south of the border falls with the individual. The only one who mandates that you take a giant loan for a house in a market where the economic warning signs are lit up in bright neon is yourself. Yes banks make it easy, feds make it cheap and the media encourages it all, but are we truly that stupid (answer is probably).

If the feds step in and halt this mess, well i forecast that we will just see ourselves in the same place 10 years from now. I think the best solution is just to hammer those people who over borrowed and then mandate an econ 100 course. At least that way we won’t find ourselves in the same mess until our kids grow up and do it all over again, because heaven forbid we teach our kids a thing or two.

Hey but at least shat cleans up much easier on granite than laminate.

#123 not so rosie on 10.06.11 at 10:19 am

#112 penpal
You missed the point.

#124 Dad on 10.06.11 at 10:21 am

@114

They were the Petit Bourgeoise in Marxist writings. Before that they were clerks and craftsmen, but ‘Middle class’ is a term that is less than a century old. Likely to create a false split between the “poors” and the “middles” where none exists.

Class consciousness is the enemy of the parasites.

#125 Lisa on 10.06.11 at 10:35 am

@ Smoking Man and Daughter

Thanks for sharing your Dads’ war stories. Very enlightening indeed. How would we ever know how good we have it without people to tell us how bad it could be? Thanks again!

#126 Stevenson on 10.06.11 at 10:49 am

#96 Cash is King

That was a good one. Have faith in the return just as much as having faith in the tanking of the RE market here. It may take the same amount of time though.

#127 Mr. Lee on 10.06.11 at 10:57 am

Mr. Turner, your words hold true now more than ever. Over the past two years I have read you preach moderation, balance and prudence. I have also witnessed you being heckled on this blog for your views. Which brings me to the Wall Street protest, we see people decrying the end of Capitalism and the beginning of getting “things and benefits “for free like health and tuition. This without any bit of reality that there is nothing for free and someone always pays. The same attitude on Wall Street to some degree exists on Main Street as well. Get in over your head, fail, and get a bail out or ask for one. The reason that home prices exploded is because the consumer bought these homes knowing full well that they were inflated, but expecting a large pay out as long as there was the GREATER FOOL. Just like the consumer rushes in to by overvalued stocks ……Bre Ex to name just but one. Then invariably the crash takes place and all run for cover. Why would we expect anything different in mentality for Wall Street and Bay Street.
Real Market Capitalism has always been about self interest tempered with responsibility. The Moral Hazard of risks being weighed against Reward. Caveat Emptor, buyer beware, and picking one -self up from the ground when things do not work out. No bail outs, no loan guarantees, no subsidies, no promises just prudence.
So my point is this, how can we expect the Financial Centres to act in a way that is different to how we as a populace act.

#128 Renters Revenge on 10.06.11 at 11:03 am

My MP won’t read links I send him so I’m going to print this post up and mail it over to him.
Great post.

#129 TurnerNation on 10.06.11 at 11:04 am

History repeating! USA tent cities (google that one) and occupation camps. The Dirty Thirties all over again? Riding the rails to protests.

How about: Bushville. No Child Left Behind! Home ownership for everybody. He is of the robberbarron class.

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

A Hooverville was the popular name for shanty towns built by homeless people during the Great Depression. They were named after the President of the United States at the time, Herbert Hoover, because he allegedly let the nation slide into depression. The term was coined by Charles Michelson, publicity chief of the Democratic National Committee.[1] The name Hooverville has also been used to describe the tent cities commonly found in modern-day America.

#130 penpal on 10.06.11 at 11:12 am

@ # 124 Rosie

How so?
Did you miss Microsoft on its IPO as well?
Such a shame!

#131 MadDog on 10.06.11 at 11:14 am

All: Remember to “stay hungry, stay foolish.” – Steve Jobs

#132 Q on 10.06.11 at 11:33 am

Doug is an idiot! Who does he think will serve his coffee, play secretary, do municipal jobs, paint his house, fix his plumbing or roof, pick him up in a cab, etc.? There have to be more homes that are affordable to the “working poor” (about 80% of the population) to support all the morons that think a box perched on a West van cliff is worth $1.5. Vancouver has always been the worlds’ largest granola bar (take away all the fruits & nuts and all you’re left are the flakes) with city center housing only affordable to either the very wealthy or the entitled bums. Unlike Dougey, I remember 1981-2 (saw it coming and made a ton) and foresee it being much worse this time. My prediction was a collapse by August (made in October 2009), but I couldn’t possibly have factored in all the stupidity and greed, not to mention the horsesh#t & hot air factor that would prolong the inevitable. Hang in there Garth, nobody could have predicted a correct timeline by using logic and common sense. As for the Wall Street protests….one more nudge and our politicians, brokers and bankers may be wishing for something as passive as the “Arab Spring”….think Mussolini.

#133 Q on 10.06.11 at 11:37 am

…of course it doesn’t help that Vancouver is being run by the poster children for the “Peter Principle”. Methinks the boy mayor has fallen off his bicycle one too many times.

#134 Hicksville Alberta on 10.06.11 at 11:43 am

This one speaks for itself on the Wall Street protests

Occupy Wall Street Protestor End the Fed – Best Rant
http://www.youtube.com/watch?feature=player_embedded&v=rQow0Fhua1A

Maybe there is some hope for the future.

#135 AACI Home-dog on 10.06.11 at 11:44 am

#97 (Kevin) says…”couldn’t home prices be brought back down to simply the cost of materials and labour?”

I think you forgot to include the land factor….the largest variable in new home costs.

#136 realitybytes on 10.06.11 at 11:55 am

Ahhh, the training in political spin never really leaves you…

How to change your stance without ever admitting it.

Occupy Wall St. From “non-event” to “seminal moment”
Recession from “it’s not going to be another 2008” to “it could be as bad or worse, but just for different fundamental reasons.”
From holding 10-50% gold to no more than 5% gold, because it’s not 2008 now…. A general financial guide set forth in a book you hope to keep selling shouldn’t be so termally dated so fast.

Love ya Garth!

The Occupy movement is now a force. It wasn’t just weeks ago. This is still not 2008, nor will it become such. And that book about the financial crisis was written to be read when it was written – during the crisis. That may all be too much for you to digest at once, but try. — Garth

#137 not so rosie on 10.06.11 at 12:09 pm

131 penpal

Its not about the money, stupid.

#138 Jesse Livermore on 10.06.11 at 12:10 pm

A couple of days ago, Big Rider asked how much a balanced portfolio should be down year to date. Well here is an answer by Marc Faber.

Marc Faber : “I think we’re moving into an environment where if you lose only 50% of your money, you may actually be lucky.”

A good reason you should ignore Mr. Faber. While the TSX fell 20%, well-managed balanced portfolios were off a quarter of that. And now they are ready for this. Silly Marc Faber. — Garth

#139 Victoria Tea Party on 10.06.11 at 12:23 pm

#77 Not Wondering Anymore

I AM wondering anymore, actually, about Occupy Wall Street (OWSers) AND the “Arab Spring”.

There is nothing democratic about a mob. And it is a mob down there in NYC, just as it was, and is, in the Mideast.

But I do support some of OWSer’s aims and objectives, specifically demands to bring more fairness to a “system” that is manifestly unfair and ossified for about 99 per cent of the American population based on overall wealth distribution and other special interest considerations.

CYBER MOB’S SO-CALLED “FUTURE”

OK. Fine! But…this American “Cyber Mob” calling itself “Occupy Wall Street” cannot really do anything except blow steam, wreck things and destroy people.

It is therefore manifestly UNDEMOCRATIC, even though the arthritic US labour movement gives it its full support (Big US Labour BTW is also Obama’s biggest financial supporter using members’ union dues to fill Democratic Party campaign coffers).

OWSers cannot formulate anything “democratic” because whom does one vote for, and why, when the dust settles? After all the group prides itself in having “no leader”!

History shows, however, that at some point a “New Messiah” DOES appear, and then things can get extraordinarily ugly.

DISAPPOINTMENT OVER THEIR OBAMA “MESSIAH?

Perhaps, some of these protestors thought that Mr. Obama was THEIR New Messiah, following the Bush years.

SO, is anger at Mr. Obama the OWSers REAL raison d’etre, because they are panicked about the prospect of a Republican president being elected next year?

The truth is, Mr. Obama is human and, therefore, subject to making mistakes now and again, like everyone else.

Yes, the movement is historic and meaningful and a direct reaction to the US power structure’s greed.

SO THIS MEANS

It’s time for American lawmakers to listen and to try and get in front of this appaently well-meaning mob or they will have only themselves to blame when the “New Messiah” shows up and his pliant wrecking crew downs picket signs and picks up weapons.

THAT “REAL ESTATE” PHOTO

It is instructive to view the photo of that miserable woman’s complaint about the bank balance she owes on her former home.

This member of the 99 per cent group has mainly herself to blame.

She should have READ THE FINE PRINT, when she signed herself up to a life-long relationship with one of the Devil’s chief agents, the BANK!

ARAB SPRING TURNS TO SAND

As for the Arab Spring in Egypt, for example. Where is there ANY democracy in that muck ANYWAY?

What happened after the deadly Cairo riots was simply a further strengthening of the government which IS STILL a military dictatorship, and STILL FINANCED by the US and Israel! So, what was all the fuss about? Nothing!

There is still no democracy anywhere in the Mideast, except for Israel.

The Arab Spring has been a total catastrophe, simply destabilizing further an already unstable mess.

OH, YES…

And, watch the protests going on in eastern Saudi Arabia where the oppressed Shia majority, probably aided and abetted by the Shia-dominated Iran, are “resisting” the non-Shia Saudi dictatorship. Oh, did I mention that eastern Saudi Arabia is where ALL of that country’s oil and gas fields are situated? Is THAT why oil prices are suddenly a few bucks higher in the last couple of days?

Just askin’.

#140 jess on 10.06.11 at 12:31 pm

Asymetric Info how does the financial institution know you will default?

March /2011
The Atlanta Fed research for not writing down principal
http://realestateresearch.frbatlanta.org/rer/2011/03/seductive-but-flawed-logic-of-principal-reduction.htmlMarch 09, 2011
The seductive but flawed logic of principal reduction
=========
To put numbers on this story, suppose the borrower owes $150,000 on a $100,000 house. If the lender forecloses, let’s assume it collects, after paying the lawyers and the damage on the house, etc., $50,000. However, if it writes principal down to $95,000, it will collect $95,000 because the borrower now has positive equity and won’t default on the mortgage. Lenders could reduce principal and increase profits!

The problem with the principal reduction argument is that it hinges on a crucial assumption: that all borrowers with negative equity will default on their mortgages. To understand why this assumption is crucial to the argument, suppose there are two borrowers who owe $150,000 but one prefers not to default (perhaps because she has a particularly strong preference for her current home, or because she does not want to destroy her credit, or because she thinks there’s a chance that house prices will recover) and eventually repays the whole amount while the other defaults. If the lender writes down both loans, it will collect $190,000 ($95,000 from each borrower). If the lender does nothing, it will eventually foreclose on one and collect $50,000, but it will recover the full $150,000 from the other borrower, thus collecting $200,000 overall. Hence, in this simple example, the lender will obtain more money by choosing to forgo principal reduction.

The obvious response is that the optimal policy should be to offer principal reduction to one borrower and not the other. However, this logic presumes that the lender can perfectly identify the borrower who will pay and the borrower who won’t. Given that there is a $55,000 principal reduction at stake here, the borrower who intends to repay has a strong incentive to make him- or herself look like the borrower who won’t!

option arms
http://www.nytimes.com/2011/07/03/business/03loans.html?_r=2&scp=1&sq=big%20banks&st=cse-

#141 Kevin in Winnipeg on 10.06.11 at 12:32 pm

Sept 2011 Winnipeg real estate numbers..
http://www.winnipegrealtors.ca/Resources/GetDocument/96

Supposedly, people are buying because of the Jets and Ikea. Who knew.

No mention of the 5.8% price decrease from the June peak.

#142 Marnic on 10.06.11 at 12:34 pm

If it were only still 2008…the good old days.

#143 Aussie Roy on 10.06.11 at 12:39 pm

Aussie Update

European financial crisis to blame for lending clamp-down

http://www.news.com.au/money/property/european-financial-crisis-to-blame-for-lending-clamp-down/story-e6frfmd0-1226160162581#ixzz1a1KLHARJ

Rather than paying off the mortgage and other debts, those nearing retirement in Sydney and Melbourne are often still lumbered with them. There’s no hard numbers but some financial planners say they are seeing more clients not far from retirement who still have a substantial mortgage over the family home.

http://www.theage.com.au/money/planning/debtfree-to-retire-in-comfort-20111004-1l5q0.html#ixzz1a1KWTg5h

“Negative gearing on an unproductive asset? Does it just go on for time immemorial or is it time to actually put some limits on it – to say, OK for the first five years, but if it’s not producing an income after that why are you there?

“It’s done purely for the attraction of letting the taxman pay half. I’m not saying get rid of it all together, but there’s got to be a limit – it just can’t go on forever.”

http://www.smh.com.au/business/little-positive-about-negative-gearing-20111005-1l9qa.html#ixzz1a1KhTnAP

#144 Macrath on 10.06.11 at 12:41 pm

Tried to vote! Bogged down in bureaucracy. You are not on the list. Fill out this two page form, swear an oath to Royalty. No your high security valid drivers license is not good enough. ” But I check all the Elections Canada boxes on my Income Tax Forms and I`m not on the list ? ”

The government knows more about you in their data bases than you could possibly remember your self. But they can`t get you on the list.

I`m beginning to understand why people are rioting around the globe.

#145 Doctore on 10.06.11 at 12:43 pm

Just got finished of reading 3 good books that help explain the economic mess all around us:

1)Manias, Panics, Crashes : Kindleberger
2)The End game : Mauldin
3)This time is different, 8 centuries economic folly : Reinhert, Rogoff

Basically the tenent of all of them state that everything can be merrily going along when all of a sudden BANG! some event occurs and all hell will break loose, just out of the blue. That has happened and is happening all around us. Off course there is much more in these books as well. But without going into too much dry detail, I believe that at some point, if not already the HAM that has been supporting the Vancouver market and several others in Canada is about to end. Once the BANG! event occurs that is it, the capital inflows will stop and all of a sudden as fast as the price went up, it will head down on the other side. Off course the mortgage brokers, the real estate agents and media that all gain from real estate increases will deny or fight this to their last breath. But alas there is nothing that they can do, once the buck stops. We just have to wait and see it unfold.

#146 sam.i.am on 10.06.11 at 12:43 pm

My own standard operating procedure during stock market turmoil 1) stop watching cnbc 2) continue buying beaten down stocks in solid companies (i.e. stable or increasing earnings and dividends, reasonable p/e, low or no debt) with new money 3) fortify mental sustenance in re-reading Graham ‘Intelligent Investor’. I think that 30 years from now the stock market period 2008-present will be viewed as the opportunity of a lifetime – for those who planned soundly and executed on that plan.

#147 totalchaos on 10.06.11 at 12:44 pm

#115 Aimhigher

#123 SKrenter

I’m with both of you. I do feel empathy for the position some are in, but really, what did they expect?

The support in Canada of the protest on Wall St seems odd to me. If out current government sat up tomorrow morning and said “holey cow, we need to fix this!”, brought back 25% down payments, shrunk ammortizations to 25 years max and did away with emergency interest rates, we would all be hooped. Yes, it needs to happen, but it will be long and ugly changing back.

Smoking Man,

I find you too synical and a raging misogynist, but I agree that the education industry is making a mess of the kids/young adults. I appreciated your father’s story, too. When my dad was 15, he was at sea as a Merchant Marine and his ship was disabled and adrift as the crew wondered who would find them first, Germans or Allies. My kid is 15 and not one of her friends has a job as parents worry about them taking the bus to and from. (My kid is self employed making $30/h) Oh yes, and the friends are talking about going away to Uni to get away from the parents… umm… who is paying for all this? The entitlement is frightening.

#148 Bill Gable on 10.06.11 at 12:52 pm

Mr. Turner, this was a killer column.

People – we have a couple of generations, Boomers being the worst – that feel “entitled”.

Gosh – my Dad was in the RCN – we had one car, never went to Hawaii – had clothes, nice enough, if small home and we were happy. We were “middle class”.

Now all these kids come out of University wanting 100 K gigs, new cars and the life that people spent 40 years building.

Sorry. No free lunch. Oh, the Bankers gave out enough cheap CREDIT to get folks mainlining it through HELOCS and BOOM – game over.

Now – with the big bills and the Escalade, no savings, a home that has heating costs about those of Kingston Ontario, maxed credit cards, no savings, maybe some lovely taxable RRSPS – I have a surprise for you.
You will be living hand to mouth. Soon.

Prudent people, *working since I was 14 – won’t be really keen to bail you idiots out either.

When Sesame Street introduces a character that is food challenged – this ain’t the 80’s anymore.

#149 young & foolish on 10.06.11 at 1:03 pm

Imagine leaving a city just so you can “own” real estate.
Unbelievable, and just one of the reasons RE buyers will always be around no matter what the price.

#150 jess on 10.06.11 at 1:08 pm

C your said, “world class city is run”
you mean {(the city )within the city}

carbon credits + land grabbers
A report by Oxfam found that more than 22,000 people have been evicted from their homes and land in central Uganda to make way for a UK-based forestry firm, which is licensed to use the land for the next 50 years. Many of the villagers who have been evicted say they were forcibly removed and have been left destitute, and their children can no longer go to school. The World Bank has called for the company to open up a full investigation. Simon Rawles speaks to some of those affected
=

We’re creating money because there’s not enough money in the economy,”

The latest move raises QE programme to £275bn. QE effectively puts money into the markets through asset purchases, mainly of UK government bonds, made by the Bank of England. Between March 2009 and January 2010 it bought £200bn of assets, equivalent to about 14% of GDP to help breathe life into the UK economy following the credit crunch.

#151 Dave_in_vancouver on 10.06.11 at 1:10 pm

@80

Vancouver is for the creme de la creme? Hah hah hahaha. Vancouver is a regional backwater. It rains 200 days a year and has no sustainable economy, beyond marijuana. Lousy job opportunities and smug people make this city quite a contrast from the world’s Alpha cities. Vancouver has small p#nis syndrome – it’s that simple (and I can say that after having lived and traveled all over the world.

#152 Devore on 10.06.11 at 1:13 pm

#69 Ben Nevis

Meantime, the last realtor we met drove a Range Rover.

Leased.

#153 Kris D. on 10.06.11 at 1:19 pm

#87 – Dudek. Makes one wonder – Prices in Europe went beyond the avg person decades ago, and held that level – So much so, at least a couple of generations in the UK simply wait to inherit mom/pop’s pad rather than save to buy their own. That happened at least partly due to demand driven up by affluent foreigners.
Doesn’t that support the prospect of insane prices in Vanc staying that way, or at least, not collapsing US-style? (I hope prices moderate, just taking Devil’s advocate here)

#154 Book and Weblog – Authored by Garth Turner — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate | Ron Mendelson on 10.06.11 at 1:20 pm

[…] Book and Weblog – Authored by Garth Turner — Greater Fool – Authored by Garth Turner – The T… […]

#155 disciple on 10.06.11 at 1:22 pm

#46 nonplused…. you don’t have to wonder any longer what will happen. I’ll tell you. History repeats itself or rhymes as they say. Cycles. Just like your real rulers took over the Tea Party movement, and the Eastern Socialists, and the American Revolutionaries, oh yeah, also the French Resistance of the past, they will also commandeer this new movement.

#58 JohnnyBravo… don’t make the classic mistake of blaming someone else, like the boomers. You would have done the same things they did…

#78 scib… it’s called corruption. Were you born yesterday?

#83 I’m Stupid… I doubt there are a substantial number of people who have acquired a 200K HELOC, but I could be wrong, either way, the banks won’t lose, trust me.

#89 John M… not a lack of vision, it was one of their better visions, don’t you see that the destruction of hope is all intentional? The ends justify the means, to these evil people you call your leaders.

#115 Aimhigher… see, now this is an example of classic stupidity of a simple mind. Would you say the same thing about the financial parasites in the US who got BAILED OUT for over a trillion dollars? How about the Canadian version who got BAILED OUT for about a fifth of the same? Where is the social responsibility there? Obviously you need some more education, and a trickle of compassion wouldn’t hurt, either. Most of what was purchased today was overpriced, including stocks, which will follow real estate. We’re talking about a roof over your head, not a stock, not the same at all.

#156 Jack Williamson on 10.06.11 at 1:29 pm

When corporate hacks and politicians busily affirm that there is no housing bubble, look out!

In my neck of the woods, the outer edge of the acreage belt NW of Edmonton, it is very, very difficult to sell any
sort of property at all. It is pretty obvious what this signifies.

#157 Junius on 10.06.11 at 1:31 pm

Good article from Der Spiegel called, “Why Obama is Wrong and Europe is right:

Here is the best part:

“The real problem, though, is a different one. The US economy doesn’t lack money. Rather, it lacks products that can compete in the global marketplace. The country has a deep trade deficit, yet the Obama administration is borrowing money at the same rate as near-bankrupt Greece.”

Full link here:

http://www.spiegel.de/international/world/0,1518,789624,00.html

#158 Andrew on 10.06.11 at 1:34 pm

Toronto and Vancouver’s real estate prices are insanely high because of Ontario’s Places to Grow Act and BC’s Agricultural Land Reserve respectively. Of course, rampant speculation adds fuel to the fire. Thus, the suggestion of buying sheds and putting them on rural land outside of the GTA (also known as a “trailer park”) is probably illegal.

#159 disciple on 10.06.11 at 1:38 pm

#125 Dad… you don’t know your American history, or perhaps history of societal hierarchies in general. The middle class is a modern term to describe an ancient phenomenon. Let’s look at the acceptance of slavery in the Virginia colony of early America. The elites mind-controlled the “white” indentured servants to feel superior to the “black” indentured servants, creating a class consciousness. The Middle Class illusion is just another tool in the briefcase of mind-control.

#160 Working Class Zero on 10.06.11 at 1:39 pm

Everything’s fine.

Keep shopping.

#161 Mister Sanity on 10.06.11 at 1:41 pm

@SmokingMan

Re: “Today Kids with Masters Degrees, even PhD’s don’t get paid squat vs what shit cost. How the hell did this happen.”

You want to know why? One word – globalization. Why has America been so prosperous over the last 200 years? 1) Lots of land, taken from the Natives I may add, and 2) Slavery. Our high (North American) standard of living has been based on primarily the imbalance in the standard in other peoples. Historically, slavery, essentially zero-cost labour, drove this high standard of living. After the abolishment of slavery, the middle class was there – and in a lot better shape than today – because the standard of living and EXPECTATIONS were both LOWER – not everyone had a humungous house with 2+ cars, $hitloads of TV’s, electronics, and other nonsense. They had a simple home paid for with a decent (but not extravagant) wage, that provided for their family, in most cases with just 1 person (typically the male) working.

What’s happened since then? Well, we want lots of crap and we want it cheap. We don’t want to pay $1000 for a 14″ TV. We want our 50″ monsters for half that. How do we deliver that? Outsource to China. So all of our decent jobs are leaving because people are too self-centric and want their cheap $hit without realizing that they’re sealing the job coffin locally.

As we outsource, the standard of living grows overseas. As it grows, our standard shrinks. We now need to employ 2 people to make ends meet. We lose our manufacturing jobs – ok let’s face it, not everyone can be a university-educated professional – there’s nothing wrong with that, except the problem is that we’ve shifted all the lower-skilled jobs overseas, breeding unemployment, poverty, crime, and civil discourse like is now occurring. Unemployment among professionals isn’t the problem – for example, engineers in the USA have <3% unemployment nationally. It's the lesser-educated that get left behind..

Now on to debt. Debt has been maintaining our standard of living, making the outsourcing of our livelihoods to the Far East more or less invisible. When the bubble bursts, as it has in the USA in many areas, it will expose our new 'steady state' standard of living, and it's going to look ugly.

What's the solution? Bring back manufacturing – use protectionism if you need to, make laws if you need to. For example, the prior law that for every car you sold in Canada you had to build at least one here as well. Look what it's done for Ontario's auto manufacturing in the past. THAT'S what we need more of. You want a cheap a$$ trinket from Dollarama? Move to China. You want prosperity in our great nation (applies to both USA and Canada)? Pay for what something is worth if it's MADE HERE. Pay $4 for a crate to hold your trinkets from the store, NOT 2 for $1 at Dollarama – you may be helping yourself with buying cheaper crap, but it's not helping the country.

It won't change. Why? It means shrinking the gap between rich and poor in North America. As we pay more for our Dollarama items, now made in Canada/USA, we with higher incomes can buy less crap, which of course we interpret as lower standard of living. People won't go for that, because for the most part they are morons. Is my approach socialist? Possibly. But look at the more socialist countries – you might pay $14 for a beer in a bar in Norway, but the waiter is making $40k per year, feeding his family without working additional jobs, spending time with them, keeping the kids on the 'right track', etc. You will still make your six figures, they just won't go as far.

I might be a six-figure-earning professional that's affected by this, but bring it on – we, and especially our children, will be much better off in the long run. Charge me $3 for my double-double, pay the barista $20 an hour, and watch how the overall 'standard of living' shifts to something more reasonable.

Greed is not just at the corporate level – it's in all of us. Who here has the integrity to stand up and give up their mentally-ingrained entitlements though for the good of all? Nobody – because after all, we're greedy, and why should we help anyone but ourselves, right?

MS

#162 disciple on 10.06.11 at 1:45 pm

#128 Mr. Lee… you usually write sensibly, although in a sky-is-blue kind of way, today’s post is way off base. Let me explain: the Occupy movement is not like the Greek one. These are not people who expect anything, because these young people never had expectations of anything their whole short lives, so your argument to that effect is simply wrong.

I believe in the ideals you speak about, caveat-emptor, pick yourself up if you fall, etc…, but I offer you the premise, that this is EXACTLY what these people are doing. Don’t you see that? They have finally awoken and ARE DOING SOMETHING ABOUT IT. Get it? Don’t let your ageism prevent you from observing this truth.

#163 Devore on 10.06.11 at 1:50 pm

#120 Alex

Financial Warfare: “Sheared by the Shorts”. How Short Sellers Fleece Investors by Ellen Brown

What they’re describing is “naked shorting”, which is miraculously either perfectly legal or in an a-ok grey zone, depending on jurisdiction. Were I to do this with anything other that shares, I’d be in jail.

Shorting is a vital market operation and critical to price discovery and providing a check to speculative manias.

#164 Andrew on 10.06.11 at 1:51 pm

“Detached homes, or SFH, are a North American obsession. Only here (and perhaps Down Under) do people view a SFH in a major city as some kind of right.

Try to find an affordable SFH in a major European or Asian city.”

Not true. It depends on whether a city has strict land use restrictions or not.

In the Rhine-Ruhr metropolitan area (population 10,100,000) in North-Rhine Westphalia, Germany, houses are quite affordable. Notice how spread out and decentralized the urban area is, and how it has a freeway system that rivals any American city. Fewer land use restrictions = cheaper housing.

On the other hand, in London or Paris, which also have about 10 million people, which have extremely strict land use restrictions, houses are obscenely expensive. Most people live in tiny apartments in these cities and rent, like Vancouver and to some extent Toronto.

#165 HAM sandwich on 10.06.11 at 1:55 pm

“We’ve been hearing the same fodder from “experts” year after year for the past 5 or 6 years about the unsustainability of Vancouver housing prices…and their apocalyptic opinions continue to be wrong. I assume you don’t live in Vancouver. If you did, you’d know that the local, national and international clientele who have decided to make this beautiful city their home really don’t care about anyone’s household income, or whether people can afford to buy a home here or not. Its not about them…its about those who can afford it here. Simple. Can’t afford it…move to Manitoba.”

Why should international clientele have a right to buy up our homes, land, and resources, just because they can? We are being sold out!

To add insult to injury, our jobs are going to China and those who profit from the economic activity that should be carried out here, through slave labour – working 12 hour shifts without bathroom breaks – those are now taking their gains and coming here and buying our land and forests and oil. We are being sold out! Don’t get me wrong – I’m not a racist – I married an Asian, but I hate to see my own country and the future of my kids usurped by globalist banksters and the govts that do their bidding.

#166 disciple on 10.06.11 at 1:59 pm

The President of the U.S. killed a U.S. citizen, in violation of due process, in contravention of the ultimate human right, and sets a precedent for the atrocities to come.

I just thought you should know…

#167 Devore on 10.06.11 at 1:59 pm

#130 TurnerNation

The term (Hooverville) was coined by Charles Michelson, publicity chief of the Democratic National Committee.

And that’s all you need to know about that.

Hoover undertook massive public spending, the likes of which America has never seen or imagined. It must have taken lots of “political capital” to accomplish it. FDR merely expanded and doubled what was already there. The idea of Hoover idly standing by while the country was crumbling is a popular myth, but it is just that. Just like the 20s being anything other than a credit fuelled leverage bubble, and the great crash being anything other than the popping of said bubble.

#168 Bill Gable on 10.06.11 at 2:02 pm

So? What maketh thou of these numbers, fellow dawgs?

“There are currently 132 highrise buildings under construction in Toronto, according to the figures. Mexico City ranks a distant second with 88 and New York City is in third with 86. The field drops off dramatically after that: fourth-ranking Chicago is building 17 highrises, while Miami rounds out the top five with 16.”

“There is little fear among industry experts that Toronto construction is outstripping demand, despite Bank of Canada Governor Mark Carney’s warning about a national condo price bubble back in June. In fact, some are worried about the opposite.”

Ben Myers, executive vice-president of market research firm Urbanation, which tracks condo development in T.O., told the Star there are more than 39,000 condo units under construction in the region “and 88 per cent of those are already sold.” Another 118 buildings are in pre-construction and three-quarters of those are sold too.”

Whoa Nellie!!!
http://tinyurl.com/6hxdw6d

#169 disciple on 10.06.11 at 2:09 pm

#162 Mister Sanity, you are insane. You don’t go far enough in your analysis, stopping just far enough along such that you benefit and the lower classes don’t.

Lower prices are the GOAL of capitalism, and is why you make your six-figures. You are shooting yourself in the foot trying to argue that the consumer is the problem. WRONG. There are no trinkets made in Canada except maybe in Nunavut on a reserve, or maple syrup anyone? Your argument is pointless. You don’t put the blame squarely on the shoulders of the leaders you voted for, that’s where it belongs, and you continue to vote for the same bastards, year in, and year out. It’s the system, stupid.

No, my friend, I will buy the $1 paper plates, rather than the $5 variety anyday. To argue otherwise is well, insane.

#170 Victoria on 10.06.11 at 2:19 pm

On the other hand, in London or Paris, which also have about 10 million people, which have extremely strict land use restrictions, houses are obscenely expensive. Most people live in tiny apartments in these cities and rent, like Vancouver and to some extent Toronto.

Many people in Paris and London also live outside. In the burbs and have detached houses. Many or the apartments are huge (and some are very small). There is a huge amount of money in both cities. London is still the financial capital. Most people have to live outside.

#171 Wage Slave on 10.06.11 at 2:55 pm

The latest article from Michael Lewis in Vanity Fair details some of the budget crises that are contributing to the loss of confidence of the 99%:

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

#172 Coho on 10.06.11 at 2:57 pm

Ahh, we’re mere cattle on a spread owned by the Cartwright’s (we wish…at least they were decent folk not like the ruling class) and herded and penned by their ranch hands (our governments). Of course even the Cartwrights are beholden to those above them and so it goes. Who knows who or what exactly is at the top of the “food chain”. Whatever it is or they are, it sure aint benevolent.

This is quite the system where for most the financial “gains” are illusory. This is what keeps us interested and engaged in the game. However, the inevitable losses are all too real. It is a win lose situation where 99% are losers.

It’s beginning to look like the 1% will need to invest some of that loot into building higher fences. This is what more lawmaking and restricting peoples’ liberties does. It builds a fence separating those with no money from the ones who have all of it.

#173 Trebeck on 10.06.11 at 3:12 pm

I am relatively new to investing, but I found it interesting how on Tuesday, everyone was saying SELL. I made the comment on the G&M that people say the time to buy is when everyone’s saying sell, and everyone, including some long time bulls were telling me no, now is the time to sell.

Now I know this might be premature to call this a rally since we might have another leg down, but I found it interesting how Tuesday everything was total doom and gloom and since then we’ve had a nice little rally.

Unfortunately I jumped the gun and put in all of the money I’m willing to invest so far in August.

#174 Bill Gable on 10.06.11 at 3:24 pm

#61 – your Dad would probably modestly have said, ‘I was just doing my job’. Thanks for sharing, it touched me like the post about POW experience.
How many generations have NOT had to put on the Uniform. Now you know why I say a large prayer for all those that were that selfless.
Blessed? You bet.
Sorry, Mr. Turner – but boy there are some amazing people that hang around here. Hummer looks great – btw.

#175 JohnnyBravo on 10.06.11 at 3:31 pm

#156 disciple on 10.06.11 at 1:22 pm

“don’t make the classic mistake of blaming someone else…”

Did you actually read my comment?

#176 Dad on 10.06.11 at 3:33 pm

Discpline

you live in a world where everyone is wrong and only you are right. Read my post again, I am AGREEING WITH WHAT YOU WROTE.

#177 Aimhigher on 10.06.11 at 3:33 pm

#156 disciple

Son, I have a degree in business & I read things you wouldn’t understand. In the end everything is a commodity and you ARE responsible for the purchase price. To cry for help after spending borrowed money is not what adults do. what school did you go to?

Lets analyze your logic: Because govt made errors in handing out free money to those who should have been buried under the weight of their mistakes, you think it is OK to also extend the same to everybody else who makes mistakes with their money. Lets just drop money from helicopters and help out anyone who screwed up their finances. Where is the lesson in that? Why would our kids want to save & give up instant gratification if we bail out everyone that screws up?

Also, if you have a shred of decency, learn to attack the idea instead of the person.

#178 Mr. Plow on 10.06.11 at 3:44 pm

#21 Waterloo Resident

What an awesome idea! Go for it! I think you will be very successful and make large amounts of money.

#179 Mr. Plow on 10.06.11 at 3:51 pm

#30 Karlhungus

Agreed. My thoughts exactly.

And frankly, what F has been saying for years. Yes Van is out of control, the rest of Canada has remained for the most part, fairly calm.

#180 Mister Sanity on 10.06.11 at 3:56 pm

#170 disciple,

Ok, yes I agree it’s the system that’s broken – because individuals won’t make a choice to buy something that’s more expensive just because it’s made in Canada/USA than an identical option made in China. In many cases, that option doesn’t even exist anymore – as you said, noone makes trinkets in Canada anymore.

So what the government needs to do is bring back protectionism to bring back local manufacturing. When you say:

“Lower prices are the GOAL of capitalism, and is why you make your six-figures.”

That is the broken thinking that gets us into this mess. Lower prices are the BANE of capitalism – it lets the rich get richer (because those that have money to spend can buy more things, or spend less per thing) and hurts the poor (because to make things cheaper, either their salaries have to go down to compete, or their manufacturing jobs are outsourced somewhere cheaper).

Capitalism good for the upper-middle and upper classes? Sure! Good for society in general? Nope. Again, I’d rather pay $5 for my paper plates in return for low crime, low poverty, and equality. We’re a touch closer to this in Canada than the USA – down there, the rich are richer and the poor are poorer, but would you let your wife walk down the street alone at night? I wager that in Canada the ‘yes’ answers far outweigh those in the USA, the almighty MODEL of capitalism. Europe rightfully scoffs at American capitalism, as does Canada to a degree – I don’t want to live in a world where I’m comfortable but the underpaid guy who serves me donuts has 3 kids who will mug me given the chance.

Raise the minimum wage, bring back manufacturing. If people and our government just stood up and did things for the GREATER OVERALL GOOD, not just the good of those stuffing their political coffers, we’d like in a much better place. Of course, most of you self-entitled fools out there wouldn’t go for it. Perhaps if you knew what our elders lived with and how they valued their life and goods, a world of $5 paper plates might appeal to more of us.

But of course, noone on here is in that boat, are they? Ask the >50% of people in North America that are currently struggling if they’d welcome bringing back manufacturing, and raising the minimum wage, in return for a better standard of living for themselves and a lower standard for the rich. It’s a shame that no political party out there is able to bring this to bear, because after all, there’s no money in it, is there?

#181 Mister Sanity on 10.06.11 at 4:05 pm

As a follow-up to my previous rant, consider the paper plate example, & extend to plastic as well. Say the government dictated: all disposable dishes and cutlery MUST be manufactured in Canada. I don’t think a $1 set of plates would go up to $5. Those plates probably cost $0.10 from China with a $0.90 markup. Make them in Canada and they’ll cost say $0.50 so the markups go down.

Who wins?
– Manufacturing jobs are brought BACK to Canada – decent jobs for lower-educated people that need the work
– Society! Perhaps now we’ll be less wasteful and less of a consumer/disposer society. Those plates will cost more so we’ll use them more sparingly, or (GASP!) use re-usable plates, helping the environment as well.

Who loses?
– Dollarama makes less per plate. Boohoo – a corporation makes less money.
OR
– Dollarama increases prices. We pay more, but we shift more of the wealth to lower-income earners due to that rise in manufacturing jobs in the plants producing those plates.
– Chinese manufacturers. We’re thinking about ourselves here, right? I don’t want to wish harm on others in other countries, but we need to employ our poor HERE not help China by sending them our labour.

#182 Mr. Plow on 10.06.11 at 4:15 pm

I am back in the blog world cause it is fun to watch Bob Truman and Squidly piss on each other through their respective blogs.

Its like reality TV but via the internet.

#183 JohnnyBravo on 10.06.11 at 4:24 pm

#182 Mister Sanity on 10.06.11 at 3:56 pm

http://www.ocanadagear.com/party-paperplates.htm

#184 timo on 10.06.11 at 4:29 pm

http://www.businesswire.com/news/home/20111005006777/en/Fitch-1-3-U.S.-Prime-Mortgage-Loan

“Recent analysis by Fitch shows that more than a third of all prime borrowers in private-label securitizations are currently in a negative equity position, or as it is commonly referred to, ‘underwater’, on their mortgages.

Despite some recent modest gains, home prices have further to fall before any sustained recovery takes hold, according to Managing Director Grant Bailey. ‘With home prices likely to decline another 10%, roughly half of prime borrowers will wind up underwater on their mortgage,’ said Bailey. ”

things are slowly turning but that is one ugly debt burden to dig out from.

http://politics.salon.com/2011/10/05/erin_burnett_voice_of_the_people/singleton/

http://www.huffingtonpost.com/2011/10/06/occupy-wall-street-erin-burnett_n_998494.html

objective reporting my eye. How is Citigroup Erin?

#185 jess on 10.06.11 at 4:31 pm

145 Macrath
glad i use a pencil to mark my X today

For extensive writings on elections machines /voter fraud etc see (brad blog)

National Security Lab Hacks Diebold Touch-Screen Voting Machine by Remote Control With $26 in Computer Parts: My New EXCLUSIVE at Salon
Hack team leader: ‘Can do similar things on pretty much every e-voting machine’

Greg Palast says:
“Langone likes to be known as the founder of Home Depot, just your local tool guy in a blue apron with a little bag of screws.

But he was also the man, with his right-wing partners, behind Database Technologies (DBT). It was in my first investigation of Langone in 2000 that I discovered that DBT had created a list of several thousand “felons” – most of them black, all of them innocent, all of them purged from Florida’s voter rolls by DBT’s client, Katherine Harris. And Langone’s company knew exactly what was going on.
===================================
purge and block
Problems in the cleansing processAt first, Florida specified only exact matches on names, birthdates and genders to identify voters as felons. However, state records reveal a memo dated March 1999 from Emmett “Bucky” Mitchell, a lawyer for the state elections office who was supervising the felon purge, asking DBT to loosen its criteria for acceptable matches. When DBT representatives warned Mitchell that this would yield a large proportion of false positives (mismatches), Mitchell’s reply was that it would be up to each county elections supervisor to deal with the problem.[4]

In February 2000, in a phone conversation with the BBC’s London studios, ChoicePoint vice-president James Lee said that the state “wanted there to be more names than were actually verified as being a convicted felon”.[5][6]

[edit] James Lee’s testimonyOn 17 April, 2001, James Lee testified, before the McKinney panel, that the state had given DBT the directive to add to the purge list people who matched at least 90% of a last name. DBT objected, knowing that this would produce a huge number of false positives (non-felons).[7]

Lee went on saying that the state then ordered DBT to shift to an even lower threshold of 80% match, allowing also names to be reversed (thus a person named Thomas Clarence could be taken to be the same as Clarence Thomas). Besides this, middle initials were skipped, Jr. and Sr. suffixes dropped, and some nicknames and aliases were added to puff up the list.

“DBT told state officials”, testified Lee, “that the rules for creating the [purge] list would mean a significant number of people who were not deceased, not registered in more than one county, or not a felon, would be included on the list. DBT made suggestions to reduce the numbers of eligible voters included on the list”. According to Lee, to this suggestion the state told the company, “Forget about it”.

“The people who worked on this (for DBT) are very adamant… they told them what would happen”, said Lee. “The state expected the county supervisors to be the failsafe.” Lee said his company will never again get involved in cleansing voting rolls. “We are not confident any of the methods used today can guarantee legal voters will not be wrongfully denied the right to vote”, Lee told a group of Atlanta-area black lawmakers in March 2001.[8]
=

#186 Two-thirds on 10.06.11 at 4:38 pm

The troublesome implication of the 99% movement is that (arguably), many of us here are not part of it. Any and all who have not mortgaged themselves to the hilt, or have abused credit, or simply are into saving, living under one’s means, and building wealth by financial discipline, are in the 1% (or somewhere in-between, perhaps.)

If “this does not end well” as this recalcitrant blog’s mantra goes, what is to happen to those savers, financially “prudent”, contrarians, with money, savings, and investments?

If the 99% goes Bastille on the rest, is it wise to be financially prudent?

Catch 22, it seems.

#187 Im lovin it on 10.06.11 at 4:44 pm

People like Doug and the rest of BC’s metro sexual yale town boys,(educated, arrogant, no kids and whats up with the hair style pee wee) are plenty in this province. They didn’t grow up with men like Archie and my dad.

The home we were raised in had something very few houses have today. “Warmth”… A genuine loving enviroment. We call this “Home”..

Remove this and its just a “house”. A bunch of small boxes within a larger box with a triangle on top..

Ya sure you can hire me and I’ll bling your place out to impress your shallow friends. Yet, its interesting how I’m constantly asked to create a sense of “warmth” for their little kingdom.

I pity these unfourtunate souls… All that money, picture perfect rooms yet a heart so empty. This obsession for recognition from their peers may temporarly satisfy them. My belief is they are brokers and or have realtors as friends…

When we as a nation, take the one element which is the foundation of every family and turn it into a commodity rather than a previllage, this generation has lost its sense of value.
It will collapse. Just like all the other empires before us.
The political, economical and moral fundlementals are identical today as they were in times past.

We will all be draged through these parilous times including people like D and his reatlor friends.. The differnce is, when the riots do begin, I wouldn’t want a sign with my name on your lawn. Especially if Im smiling. All you have to do is google their name and viola.

Who really knows, maybe those old barn burning days in Manitoba, will be heading west in just a few short years. So D. next time you open your big mouth remember, fire does create more than just “warmth”.

I bet you have a bust of Nero ontop of your baby grand.

Peace.

#188 Adam on 10.06.11 at 4:48 pm

#67 Adam on 10.06.11 at 1:00 am Oakville, ON and Milton, ON prices dropped in September 2011

#119 Really??? Prove it. I hardly believe with the bunch of nuts who want to live there!

cata,

Just look at the Oakville real estate boards August and September 2011 Market Report, at http://www.omdreb.on.ca/

You will see that average and median prices for instance in Oakville dropped between August and September.

#189 timo on 10.06.11 at 4:55 pm

#175 Trebeck

Now I know this might be premature to call this a rally since we might have another leg down, but I found it interesting how Tuesday everything was total doom and gloom and since then we’ve had a nice little rally.

a rally is brewing

http://www.bbc.co.uk/news/business-15196078
http://www.euronews.net/2011/10/05/dexia-rescue-underway/
http://www.businessweek.com/news/2011-10-05/commodities-rebound-from-10-month-low-on-fed-s-stimulus-signals.html

when you print money to cover the banks all is good. Only problem is the next generation is going to be paying for it, something like r/e.

#190 maxx on 10.06.11 at 4:56 pm

#58 JohnnyBravo on 10.06.11 at 12:21 am

Always an excellent post, today in particular.

IMO, the inherent psychopathy of capitalism always requires strong and civic-minded government. Balanced (and I use the term with care) capitalism works well for the most part, allowing for regular nips, tucks and the occasional kick in the teeth to miscreants by TPTB. The number one job of government is the protection of people and property. Period. It is now, however, squarely in bed with private enterprise and is losing it’s power at a rapid rate of knots. It’s being led by the nose and is frequently intimidated into making cash injections whenever the markets stamp their little feet, at the expense of those who would be in a position to resuscitate this feeble economy, given half a chance. We are STILL in a recession, bordering on depression.

#191 888realtor on 10.06.11 at 5:25 pm

The modern monetarist strategies are based on assumptions that:

1 Consumer demand can only grow;
2. There will always be increase to country’s money supply;
3. Price of the credit can always be pushed down

These assumptions probably are taken from MBA courses our politicians and leading financial analysts have gone through. But the fact is that those “pillars” are now down to the ground. And what’s the next step that has to be taken? Are there any suggestions from the financial gurus? They only can pretend that everything is still fine, there is “… no sign of RE bubble…” , media creates the same picture, which is absolutely detached from the reality, it makes more and more people make a very bad decision with regard to their financial situation. The worst thing is that politicians are very well aware of that but they are doing nothing… in fact, they are simply do not know what to do…

#192 SRV ES339 on 10.06.11 at 5:34 pm

Garth, you need help… I agreed with every word in this piece!

Hope to see you on Bay Street next weekend!

I’ll be holding the ‘EAT THE REALTORS’ banner. — Garth

#193 jess on 10.06.11 at 5:34 pm

I had no idea one could get a
master of science in real estate development?

The MIT Center for Real Estate was founded in that same multidisciplinary spirit. In a setting of rigorous academic inquiry, we offer a Masters program that balances real estate theory and practice — applying research to real-world problems in a disciplined intellectual framework.
Global Results
Since the program’s inception, MIT has awarded hundreds of MSRED degrees to students from twenty-five countries, and the results speak for themselves.
==========================

188 Two-thirds
Where is the purchaser of last resort?
the contagon is the lack of jobs depression

Robert Reich says:
Republicans claim businesses aren’t hiring because they’re uncertain about regulatory costs, or their taxes are too high, or they can’t find the skilled workers they need. But if these were the reasons businesses weren’t hiring – and consumer demand were growing – we’d expect companies to make more use of their current employees. The average number of hours worked per week by the typical employee would be increasing.In fact, the length of the average workweek has been dropping. In August, it declined for the third month in a row, to 34.2 hours. That’s back to where it was at the start of the year – barely longer than what it was at its shortest point two years ago (33.7 hours in June 2009

#194 timo on 10.06.11 at 5:44 pm

#158 Junius

That was a very good read.

We have moved from economies that produced something to a debt dependent self feeding monster.

Prices are artificial and only represent buying power that can only be supported by more and more debt because true incomes would dictate a fall in price.

That fall cannot happen because wealth is concentrated so borrowing continues to prop up a model that cannot grow due to a higher and higher burden of debt. The borrowing that happened by the private sector cannot be supported by deposits in the banks so it is forcing governments to tax future revenues with bailouts.

Cuts are coming to social programs to make up for the tax loss because wealth must be maintained and wealth elects. Interest rates are low because banks are now backed by taxpayer income which takes the risk out of speculation. Bubbles are the order of the day , not true growth because it is all about short term investment.

Greece will show sooner or later that this vicious circle must end and then all taxpayers will be covering losses because banks are to big to fail. Maybe then we wake up.

In the end banks will own all property and the public will own all the debt unless light bulb’s go on.

now that is a rant and very extreme. life will get better…i hope ;)

#195 jess on 10.06.11 at 5:52 pm

The Trolls are being scolded

September 8th, 2011
Judge Shuts Down Another Mass Copyright Case, Characterizes Lawsuits as “Massive Collection Scheme

Judge Bernard Zimmerman of the Northern District of California severed 5,010 Doe Defendants from a single case—effectively dismissing all but one defendant. EFF participated in the case as amicus.

This case, like many we’ve seen around the country, involved a pornographic work. Plaintiff sued more than 5,000 individuals anonymously based only on their ISP addresses, for allegedly exchanging an infringing file over a BitTorrent network. The copyright owner claimed that participation in BitTorrent “swarm” was a form of conspiracy, meaning it could sue everyone at once in California.

The court disagreed, vehemently, but that may not be the most notable aspect of the ruling. At least as remarkable is the court’s concern that mass copyright litigation is not really “litigation” but rather gaming of the judicial system to extract settlements. Discussing various public reports about copyright troll practices, for example, the court noted…”

https://www.eff.org/deeplinks/2011/09/judge-shuts-down-another-mass-copyright-case

#196 JohnnyBravo on 10.06.11 at 5:53 pm

#192 maxx on 10.06.11 at 4:56 pm

Hey, maxx. Generally speaking, I don’t see capitalism (real capitalism, not the mutant, cannibalistic variant we currently have) as suffering from psychopathy. Perhaps you are alluding to the ersatz psychological test conducted in the excellent movie The Corporation in which they found that if a corporation was a human being, based on its behaviour, it would be diagnosed as a psychopath.

You say that TPTB should punish the miscreants, and I agree with you. However, TPTB should be “we the people.” But that requires a constant struggle that we seem to have forgotten.

Thomas Jefferson said, “The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.” I’m not calling for violence, but Jefferson reminds us that freedom and justice require constant vigilance, constant struggle, lest we let our freedoms be eroded by tyranny.

I like your views on government. Keep it simple and restricted to the things that we truly need government for. While I whole-heartdely agree that society must take care of those who cannot take care of themselves, whether in perpetuity or temporarily, I think the welfare state has gotten out of hand––to our own detriment. We now expect government to solve every problem for us. Many of us even expect government to outright support us financially. It’s a growing paternalism that I find troubling. We used to have a system that was based on strong paternalism. We call it feudalism.

#197 daughter on 10.06.11 at 5:55 pm

@ #126 Lisa on 10.06.11 at 10:35 am
re: ” Daughter …… Thanks for sharing your Dads’ war stories. Very enlightening indeed. How would we ever know how good we have it without people to tell us how bad it could be?

Lisa, in a few months there’s going to be some shows coming up on the History Channel, productions focusing on our Canadian Veterans. One will be in November..
.. but a more elaborate show will air later this winter, a Canadian and UK co-production (depending on the editing there may be interviews with some Canadians who were in Stalag Luft III and The Great Escape).
The escape documentary does a professional archaeological dig which tries to figure out how on earth those prisoners dug a 300 foot tunnel, over 30 feet below the ground. They actually went to Germany to dig out the very same escape tunnel! I was told the multitude of experts came away from Stalag Luft III with an unexpected and whole new respect for the impossibility of digging such a deep and long tunnel, through sand, with utensils. The modern day ‘experts’ with all their big modern equipment found out the hard way that they couldn’t do it. It makes you even more proud of our Canadians who planned, designed and dug that tunnel.
This link previews it:
http://www.channel4.com/info/press/news/channel-4-digs-the-great-escape

#198 Devore on 10.06.11 at 5:58 pm

#182 Mister Sanity

That is the broken thinking that gets us into this mess. Lower prices are the BANE of capitalism – it lets the rich get richer (because those that have money to spend can buy more things, or spend less per thing) and hurts the poor (because to make things cheaper, either their salaries have to go down to compete, or their manufacturing jobs are outsourced somewhere cheaper).

That’s right, things never get cheaper because technology makes them cheaper to make, they only get cheaper because the man needs to increase dividends by paying you less.

#199 Nemesis on 10.06.11 at 6:06 pm

“I’ll be holding the ‘EAT THE REALTORS’ banner.” — Hon. GT

Careful what you wish for GT, you’d be surprised how many of them would actually enjoy it/line up for that(admittedly, I was thinking of YVR’s ’boutique’/YaleTown RE crew).

PS – great piece.

#200 Devil's Advocate on 10.06.11 at 6:11 pm

#166HAM sandwich on 10.06.11 at 1:55 pm

“We’ve been hearing the same fodder from “experts” year after year for the past 5 or 6 years about the unsustainability of Vancouver housing prices…and their apocalyptic opinions continue to be wrong. I assume you don’t live in Vancouver. If you did, you’d know that the local, national and international clientele who have decided to make this beautiful city their home really don’t care about anyone’s household income, or whether people can afford to buy a home here or not. Its not about them…its about those who can afford it here. Simple. Can’t afford it…move to Manitoba.” – unknown

Why should international clientele have a right to buy up our homes, land, and resources, just because they can? We are being sold out!

To add insult to injury, our jobs are going to China and those who profit from the economic activity that should be carried out here, through slave labour – working 12 hour shifts without bathroom breaks – those are now taking their gains and coming here and buying our land and forests and oil. We are being sold out! Don’t get me wrong – I’m not a racist – I married an Asian, but I hate to see my own country and the future of my kids usurped by globalist banksters and the govts that do their bidding.

Are you going to tell those sellers they cannot sell to the highest bidder? Tell our First Nations people your tale of woe and see how much sympathy you get. Get it?

Are you willing to pay more money for items because they are manufactured in North America? Are you going to tell Canadians they can’t shop at Walmart anymore?

It is as it is, learn to work within the system or change it.

#201 Kilby on 10.06.11 at 6:31 pm

We stopped going to Wal Mart years ago and try to buy North American goods when possible. we don’t mind paying a little more to help keep the economy going and keep a few more locals working. Wal Mart is easy to avoid…….

#202 timo on 10.06.11 at 6:36 pm

http://www.zerohedge.com/news/bbc-does-it-again-absence-credible-plan-we-will-have-global-financial-meltdown-two-three-weeks-

just when I thought it might get better….

BBC Does It Again: “In The Absence Of A Credible Plan We Will Have A Global Financial Meltdown In Two To Three Weeks” – IMF Advisor

that’s it, back to finishing the bunker.

#203 rower on 10.06.11 at 6:36 pm

Garth, this is your best blog post ever. You get it.
Thanks.

#204 Randy on 10.06.11 at 6:50 pm

CBC’s coverage of Royal LePage’s report….sickening

http://ca.finance.yahoo.com/video/economy-22350848/house-prices-up-26835376

#205 Macrath on 10.06.11 at 6:51 pm

#187 jess
I found this interesting on another blog.

” Who do we vote for?

Those who end up on the ballet.

Who ends up on the ballet?

Those who are nominated.

Who does the nominating?

The political parties who are already in office… Thus the same people who we want out… Are basically picking who we can vote for. Anyone else who steps forward is basically a lone man / woman and chances are doesn’t have the funding to get themselves noticed, without selling out.”

#206 maxx on 10.06.11 at 7:28 pm

#198 JohnnyBravo on 10.06.11 at 5:53 pm

Absolutely agree. Phenomenal waste due to lack of perspective.

#207 APM on 10.06.11 at 7:41 pm

http://youtu.be/EZYfeYhQ9eU

JFK on America

#208 jess on 10.06.11 at 7:45 pm

Private Equity LBO’s and conflicts of interest

clubby and cozy bidding

…”stapled financing” within the industry, the practice was increasingly common during the leveraged buyout boom — but led to accusations that banks had conflicts of interests between their private equity clients and the companies they were trying to sell.

http://dealbook.nytimes.com/2011/10/06/del-monte-and-barclays-settle-investor-lawsuit-for-89-4-million/?ref=business

http://www.sec.gov/Archives/edgar/data/1259045/000119312511265457/d239179d8k.htm

#209 Nostradamus Le Mad Vlad on 10.06.11 at 7:55 pm


Wowzers. Tons of first-class posts today. The current situation in the west reminds me of this, ‘coz that’s where we are headed.
*
#186 timo — You mentioned — Erin Burnett Who dat? No link, but: “So, the Bank of England has done more QE, implying that it thinks the banking sector may be about to collapse, inducing money stock contraction.”; 2:57 clip Jakpak. The inventors of the Jackpack has donated $6,000 worth of their product to the protesters, who are Occupying Seattle. “A Jakpak is a coat that turns into a backpack or a tent. It is virtually impossible for Seattle Police to literally take the clothes off of our backs.”; US – WTO Seeking action, which will backfire on them; 10:35 clip When your country goes broke, told from the trenches; Dexia Bank Belgium hasn’t had a govt. for a while now, and France may be teetering; TARP and the elite m$m; Obummer Increasing the debt a little?

Failed State Defined by food stamp use (map incl.); 4:22 clip IMF big cheez says there may be a WW banking meltdown; 10:18 clip Madrid, where protesters did take a large square; China Return to real money.

Cdn. Sovereignty Crumbling and Occupation Canada; Hoax “The US was using Zainab to sell war with Syria, so now that it turns out her story of mutilation was as much a fantasy as Kuwaiti incubators and Saddam’s nuclear weapons, Russia and China are the international heroes for blocking the US Syrian resolution at the UNSC!: wrh.com; Erdogan Good call; CC “He (Al Gore) was and still is a profiteer from toxic zinc mining, living on a large estate, and burning as many light bulbs as he wants to.”; Libya Quadaafi calls for mass protests. Indeed, he is alive and well, signifying another NATO failure; MEast Democracy in action? I don’t think so.

Medical Marijuana “Because big pharma told us too!” — Official White Horse Souse; 3:08 clip Cashew Cheese. Never heard of it; 6:36 clip Can TPTB control what we eat?

#210 Smoking Man on 10.06.11 at 8:28 pm

#211 Nostradamus Le Mad Vlad on 10.06.11 at 7:55 pm

You have the best links

#211 Smoking Man on 10.06.11 at 8:31 pm

#204 timo on 10.06.11 at 6:36 pm

Well Timo I say no guts no glory, good to for some shorts x 4

#212 Keeping the Faith on 10.06.11 at 8:31 pm

#74 The thing in the basement

Correction:
You’re going to have an asset that has just dropped 33% in value.

I will have a well diversified portfolio that continues to pay my monthly expenses while I sleep well at night. I will also have the opportunity to negotiate lower rent payments with my negative equity landlord who subsidizes my pathetic existence and is scared stiff that I will walk and rent one of the other 1000 new rentals coming online in Toronto in the next 3 months.

…. Good Luck on the Ace!

#213 I'm stupid on 10.06.11 at 8:44 pm

I’ll be holding the ‘EAT THE REALTORS’ banner. — Garth

Lol

#214 Steven Rowlandson on 10.06.11 at 8:50 pm

Who ever dreamed up the concept of real estate speculation and tax free profits through real estate capital gains and investing in real estate is going to need a secure place to hide and soon. Infact I don’t think being a banker, stock broker, investment advisor or realtor will be a safe and respectable group of professions either. They may need a place to hide out for a long time soon to. There is no telling what the priced outs and disposessed might do if they got mad and got together and decided to kick butt.
The possibilities could be rather unpleasant for some to say the least.

#215 I'm stupid on 10.06.11 at 8:52 pm

Is it the drug dealers fault, one is a crackhead?

I don’t think so. I guess freedom is only worth something when their are no consequences of your actions. The funny thing is the people who come here pumping real-estate are the ones going to hold up banners when it corrects. Saying it wasn’t their fault they are under water. Boohoo boohoo nobody cares.

#216 Steven Rowlandson on 10.06.11 at 9:00 pm

Try three times one income and quit cheating by combining incomes and helping to drive up housing prices! Quit being part of the problem people.

#217 45north on 10.06.11 at 9:19 pm

199 daughter: she’s missing an end tag, everything that follows is in italics

nothing against italics, my brother-in-law is one

Fixed. Tks. — Garth

#218 TurnerNation on 10.06.11 at 10:19 pm

4 more years of Dolton McG in Ont? Oh well, at least we avoided the mini-Harperite Who-dat. Better the devil you know…

#219 westernman on 10.06.11 at 10:24 pm

Mister Sanity:
Are you ten years old? Money goes where it is treated BEST. And that isn’t Canada. Those manufacturing jobs are GONE and gone for good. Why would any corporation want to open a factory in a socialist,high tax,over regulated frozen country with a bunch of under achieving,whining,self-entitled dummies for a work force? Would you?
Those jobs are gone to Asia where they are much smarter and work a lot harder and cheaper and complain a hell of a lot less. You need to get your belief systym aligned with reality.

#220 The thing in the basement on 10.07.11 at 12:08 am

214 Keeping the faith

“I will have a well diversified portfolio that continues to
pay my monthly expenses while I sleep well at night.”

Me too. I actually sleep quite well now.

Good luck to you too.

#221 Roland on 10.07.11 at 12:35 am

@Victoria Tea Party,

The revolutionaries in Egypt accomplished a great deal in a short period of time. Ousting the elder Mubarak was the least of it.

More important was that Hosni’s son Gamal is now disinherited and will never hold power. Gamal spent most of his time trying to sell Egyptian public assets to foreign banks (and taking a nice cut off the top for himself and his cronies). Now that entire neoliberal agenda, which most Egyptians never wanted, has been solidly checked.

So seen simply in terms of what it prevented, the Egyptian Revolution was probably worth the effort and risk. The Egyptians have managed to avoid serious violence so far, compared to the marred efforts in neighbouring Libya.

Moreover, whoever governs Egypt now has to respect the possibility of effective mass public protest. The public, for its part, now has more self-confidence in asserting itself.

The Egyptians are not the students when it comes to political progress in our time. They are now the teachers, and the rest of the world can learn from them.

#222 M.T. on 10.07.11 at 2:29 am

What right do foreigners (whether they’re from Hamburg or Hong Kong) have to come here to our country and effect our local housing prices and costs. I think the Vancouver Stanley Cup riot was a symptom of this. People who are invested in their society and feel connected to it don’t riot and destroy their city. But they do if our government is more concerned with the interests of foreigners than it’s local tax paying citizens. Local kids who where born and raised here are seeing their city being over run by foreigners with their dirty money and having to compete with them financially. Do some people really think that a Canadian should move to Manitoba, squeezed out of their home and city, to make way for some rich foreigner?

#223 Mister Sanity on 10.07.11 at 8:05 am

#221 westernman

Read a little more carefully, dimwit. I said we need to bring back protectionism – meaning government intervention along the lines of tarriffs, duties, and laws requiring domestic manufacturer. Of course a corporation isn’t going to build something here voluntarily. That’s why I gave the example of the auto industry – it’s cheaper to build in Tennessee than Ontario, so why do they build here? Because the government said “if you want to sell here, you have to build here”. Do the same for other industries.

I don’t think the great swath of Americans that could make a decent livelihood at this work (and upon which the American ‘dream’ of the mid 20th century flourished) would appreciate your comment about this type of work being for an “under achieving,whining,self-entitled dummies for a work force”. Not everyone has the capacity to be college-educated. A responsible, progressive nation needs to take care of these people and ensure ALL of society benefits, not just those at the top. Who do you think is attending these Wall Street marches? Doctors and lawyers? Bullshit – it’s all mainstream America, including those who have lost their livelihoods due to sending jobs overseas.

Service industry is the same story – think call centers. Who benefits? The corporation for spending less and making more $$ for it’s upper class investors. Who hurts? The local Average Joe who loses his job to someone from India.

Perhaps you should get off your high horse and think about your fellow man every now and then and you’d realize just how bad things are in this country and even more so with our neighbours to the south. We in the upper-middle and upper classes have seen a great increase in our standard of living over the last 20-30 years, but the other 80% of the country has seen it drop (although not so noticeable YET due to the masking effects of all this damn debt we’ve all been gobbling up). Wait until the debt dream bursts and see what’s left. My heart goes out to all Canadians and Americans, whose politicians and corporations have sold them out for nothing more than satiating their own greed.

Protectionism is the refuge of failing states. — Garth

#224 disciple on 10.07.11 at 9:09 am

#177 JohnnyBravo… I’m pretty sure I did read your comment, particularly the part where you blamed boomers. I reserve the right to be mistaken. Did you read mine?

#178 Dad… okay, thanks…I was just checking, it’s when you implied that the middle class is a recent creation, I said to myself: Self, did Dad just say that?

#179 Aimhigher… Don’t insult me by calling me son…you thought you would get away with your comments, didn’t you? I simply asked whether or not you made the same comments when the banksters got bailed out. Uh-huh. Did they have to take to the streets in protest? No, they did it the cowardly way. And you are WRONG that I think it is okay for anyone to be bailed out, so the last portion of your response is pure fluff. Good job. If you say stupid things, I will call a spade a spade, sorry it hurts, but it doesn’t mean I am attacking you personally, so get over it.

These protesters that you are criticizing just want their money back, you know, the stuff that your gov’t stole from them and gave to the bankers. They’re not asking for handouts, they’re asking for what was theirs to begin with. But of course, you missed that part. I wonder why? Oh yeah, I also have a degree in business, and one in the HUMANITIES, as well of course, one in the sciences… but what does that have to do with anything, right? If you stick with the idea, I will stick with it…only fair.

#225 Yvonne on 10.07.11 at 9:24 am

Please take a look at those articles by the same author and six years apart:

http://www.vancouversun.com/business/Vancouver+home+prices+lead+nation+bungalows+average+million+survey+finds/5508562/story.html

http://www.skyscrapercity.com/archive/index.php/t-264829.html

I strongly believe prices in Vancouver are crazy and will correct but who knows when? We can see that some people thought so SIX years ago. Notice the price in Richmond at $355K … This is a total “irrational exuberance” and we all know how that one ended.

#226 disciple on 10.07.11 at 9:41 am

Devore and Mister Sanity…

Both of your commentaries are an excellent read. I definitely agree with your insights, especially on manufacturing, but the method to bring it back to Canada beyond the 4% it is now, is a little more complicated than the protectionism that at first looks okay, but in the end will surely lead to horrible problems that only bigots pursue.

As you may or may not know, I am from the manufacturing field here in Toronto, I watched it disappear over the last two decades. I am a firm believer in labour as the fabric of society, and as one of the pillars of wealth alongside technology. Central banking has proven to be the sucking octopus on the face of humanity and is in my estimation, completely unnecessary, and those who invest willingly with its interests, should rightly suffer the consequences of doing so in the develeraging (de-risking) that is unfolding.

Only those who Dream, Build, Work, and Create are wealthy and that does not mean only in terms of money. You could be employed as a sidewalk power washer (as I once was) and still be more wealthy than a billionaire in Monaco, because if you are creating something and working towards it, you have found God, and He will richly reward you.

If you don’t grasp the things I am speaking of, then you are part of the problems, the very same problems you blame others for.

#227 disciple on 10.07.11 at 1:38 pm

#223 Roland… you’ve outed yourself. Or if you actually believe anything you wrote, then you need to get your info outside of the MSM, brother. Everyone knows the Arab Spring was a Western media production. Social media revolution? Hardly…Less than 10% of Egyptians have internet access, TO THIS DAY. Media’s Western audience were replayed images and photos that were decades old, much like the Anglo-Saxon pre-planned invasion of Libya.

#228 disciple on 10.07.11 at 1:49 pm

Protectionism is the refuge of failing states. — Garth

The first lesson of statehood is security. The next lesson is protectionism. So you see, a state begins to fail right after it is formed. The problem then, is the act of statehood, or government itself, which I hold to be largely unnecessary.

#229 Mister Sanity on 10.07.11 at 1:53 pm

Protectionism is the refuge of failing states. — Garth

We’ve got a long way to go until we fail, but we are on the right trajectory at this pace..

#228 disciple – agreed. We should not be a nation of just technology and finance. Labour is that missing piece that is sorely needed to sustain the entire demographic of society.